Money Coaching tip, Jan 29, 2010
Canadians:

Look.  There’s no downside and all kinds of upside to the Tax Free Savings Account. Become a saver, already!

Here’s how it works:

1. Set up a Tax Free Savings Account at any Canadian bank you like.

2. Every year, you can put in up to $5000. But $100 is just fine too.

3. Whatever that $5000 earns, you are never taxed on.  So you can go conservative and just have a high-interest savings account within your Tax Free Savings Account or you can invest in Stock  (*cough* Apple anyone?) and again if that stock doubles, triples, you don’t pay tax on whatever you make.

4. You can withdraw money with 24 hours notice whenever you like, and there is no penalty or tax implications.

5. The following year (or the following or the following til death) you can not only put in another $5000 all over again but you can also put in the same amount you took out earlier (per #4 above).

Personally, I’ve set mine up with ING Direct with a savings account currently paying 3%.   Every payday, $50 automatically transfers into it, plus I throw lump sums in throughout the year as I can.

I’m using this as my Emergency Fund.

Some people argue that 3% isn’t much (only $150 a year if I managed to throw in an entire $5000) and that Tax Free Savings Accounts should be used for something like stocks which could do a Whole Lot Better.  (The reasoning is What’s The Point of saving taxes on a paltry $150/yr when I could double my money – one can hope – and then all *that* money is tax free).  My thinking is that capital gains (in normal English = how much a stock increases in value) and dividends (in normal English = profits at the end of the year and divided up, some of which ends up in my pocket) are taxed the least, so I might as well do that kinda investing somewhere else.

I digress.  The point is, for heaven’s sake, get one set up already.  Every last Canadian one of you.

Oh and if you use ING like I do (shameless pitch here), quote 14641937S1 and we’ll each get a $25 bonus.

I’m investing in my health.  Unless an entire medical profession is lying to us, things like losing weight, getting more exercise and eating more nutritional food will increase our odds by a long shot of avoiding expensive health issues.  Diabetes would require insulin and a highly specialized diet – what would that cost us?  Stressing out causes high blood pressure and can lead to depression or stress-leave from work – what are the lost wages?

So I’m investing money in my health and wellness.  I’m buying snowshoes and will use them regularly.   I signed up at the local racquet club and take their Nia and Spin classes.  I subscribe to Prevention magazine.  I go ahead and buy lots of produce despite the fact that it may go bad before I use it, because I want to be in the fridge for me when I’m smart enough to include it in my meals.

I don’t know about you, but I’d rather spend the money now and live to a good old age than have to start dealing with the long term effects of being overweight and out of shape.

So if you need to hear it, here goes:  Go ahead and spend money on your health and wellness.  It’s an investment unlike any other.

Readers – it’s been a while since I heard from you!  What’s the best health/fitness item you’ve spent money on?

I subscribed for years to The National Post (yes me.  progressive me.  progressives like to be financially savvy too, you know!).

When I was a n00b to the world of high finance, I started this habit:  Every Saturday I would dive into the financial pages for a half-hour.  Over time  they evolved from gibberish to English.   Amazing, that!  I didn’t force myself to read anything that was too frustrating or jargon-filled.  Rather, I would find any headline which caught my eye, and give it a shot.   And now I’m an addict.

So give it a shot yourself.  Just to prove it’s not all serious, here’s a starter-article for you poker players out there.

2009 is the only year in which we can claim renovation expenses on our Cdn income tax returns.

The deadline to have the work completed is Feb 1, 2010 so if you’re thinking of any of the following, time to make it happen!

• Renovating a kitchen, bathroom, or basement
• Windows and doors
• New flooring – carpet, linoleum, hardwood, floating laminate, etc.
• New furnace, woodstove, boiler, fireplace, water softener, water heater, or oil tank
• Permanent home ventilation systems
• Central air conditioner
• Permanent reverse osmosis systems
• Septic systems
• Wells
• Electrical wiring in the home (e.g., changing from 100 amp to 200 amp service)
• Home security system (monthly fees do not qualify)
• Solar panels and solar panel trackers
• Painting the interior or exterior of a house
• Building an addition, garage, deck, garden/storage shed, or fence
• Re-shingling a roof
• A new driveway or resurfacing a driveway
• Exterior shutters and awnings
• Permanent swimming pools (in ground and above ground)
• Permanent hot tub and installation costs
• Pool liners
• Solar heaters and heat pumps for pools (does not include solar blankets)
• Landscaping: new sod, perennial shrubs and flowers, trees, large rocks, permanent garden lighting, permanent water fountain, permanent ponds, large permanent garden ornaments
• Retaining wall
• Associated costs such as installation, building plans, permits, professional services, equipment rentals, and incidental expenses
• Fixtures – blinds, shades, shutters, lights, ceiling fans, etc.

I retiled my bathroom.  Wish I had cash to do more …almost makes me wonder if I should hold off on my trip to Italy ….

For the full details, visit CRA.

Canadians wanting to donate to help efforts in Haiti -

super easy via your cel phone.

Text 45678

Type: HAITI

$5 will be added to your cel phone bill, and all proceeds go through Salvation Army to relief efforts in Haiti.

I just did it and it was as easy as that.