Canadian Personal Finance Blog

A special Friday this week, given it is February 29th, the bissextile day, an extra day for our year, so enjoy this extra day. Have a Leap today!

• With this extra day you have today to finish up your 2007 RRSP purchases if you wish.  Given how down the markets have been, you might find some deals (or you might be buying tainted meat too, I can’t tell).
• Tomorrow is Saint David’s Day (the patron Saint of Wales). Buy a leek and watch a Rugby game.
• You are supposed to have received all of your relative tax forms by now as well (T-4’s and such) so you can now do your taxes. My employer waits until the very last day before sending my tax forms out.
• The Federal Budget passed a confidence motion yesterday, so TFSA’s are a step closer to coming into laws.
• CIBC took a massive write down from the Low Rate Mortgage scandal in the U.S., which means their stock is tanking even further. TD on the other hand announced a tidy profit and an increase in their dividends. A tale of two Banks?
• I am attempting to get back on the horse and STOP spending money at work again, due to another announcement this week.
• I continue to fill in my net income on financial aid questionnaire’s for various universities, which makes me wonder, what do THEY do with all this information? Once they tell me, “You are too stinking rich to deserve financial aid”, do they simply shred my information? I really hope so, because they ask some very SPECIFIC questions (values on specific lines of my tax forms).

Have some mushy peas and maybe some leek soup and enjoy your Saint David’s weekend.

My interim tax assessment arrived yesterday in the mail and it is about what it was last year with the exception of a 1 line addition that has me wondering:

SWC - 50% Solid Waste Curbside Service $41.00

So this is a surcharge on top of what I normally pay for my Garbage Collection, I guess. Why am I paying this new “fee”? I need to do some investigating because it shows up as a Special Charge, not as part of my regular charges. My concern also is there may be more of these kind of “Special Fees” that will appear on my taxes as Ottawa City Council wants more money too.

TFSA the Follow On

So most of the Canadian financial blogging community seized on this part of the budget and there were some excellent reviews of what it might be used for. My question about whether you should use the TFSA or the RRSP was kind of addressed by Michael James in his posting: Tax Free Accounts vs. RRSPs so have a read of that posting too.

My bottom line is if I could find $5000 extra (say by cutting my discretionary spending, like I keep telling myself I should) my retirement pay ins are fairly good, so I might take advantage of this capability, but I’d need to make a solid plan for it as well.

RRSP Times Up!

Remember Friday is the cut off for your 2007 RRSP contributions, keep that in mind. I believe some banks are staying open late for you to do your last minute RRSP shopping and such. For those of us who buy a little at a time, we’ll drive by the banks and chuckle quietly knowing you are having fun.

Wow, now given most of the budget was kind of blah, but there were a few things that affected me personally:

• RESPs are now 35 years in life, which is good to hear (I think). Does this mean my kids can lounge around the house claiming they are getting ready for University?
• More money for the Canadian Student Grant system, which is good, if my kids can get the money, I hope.
• They are paying down the National Debt which is not just for me, but still a good thing to do.

The TFSA A Real Interesting Twist on Things

This was the big funky twist that I didn’t see coming, and neither did most other financial pundits, but it looks and sounds like an interesting idea. Here in a nutshell is what this little financial jewel is (from the Budget 2008 web site):

Tax-Free Savings Account (TFSA)

Canadians need all the help they can get to save money.

The TFSA will allow Canadians to watch their savings grow tax-free throughout their lifetimes.

Canadians can contribute up to $5,000 every year to their TFSA and carry forward unused room to future years. There is no lifetime limit and no tax on investment income earned, including capital gains.

The TFSA can be used any way you like—for example, to buy a new car, pay for an emergency, finance a child’s wedding or bankroll a dream family vacation.

The Canadian Capitalist points out that this account can be used for Income splitting as well, good idea! Now all I need to do is find $5000 a year I can invest… hmmm….

So do you put your money in your RRSP first until it is full and then you put your left over moneys in your TFSA, or vice versa? Interesting question, any theories out there? Who will be the first financial institution to have a TFSA account? Self Directed, of course! Do you put money in your TFSA instead of paying down  your Mortgage?

Election?

Not likely, if the Liberals, BQ or NDP brought down the government on the basis of this budget, I think they’d look pretty darn foolish (but then again, we are talking about politicians too).