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THE STEPPING STONES TO THE EVALUATION OF VARIOUS SAVINGS PLANS...

BY ELISHA CALLERY

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Money is a wonderful thing, and it is easy to spend it once you get it! I will be showing you the fantastic plans in order to save your money and watch your bank account flourish! This will help you to save for things like, travelling, buying a house and when it comes time, retirement!

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This video talks about using the automatic contributions that you can set up on your bank account to take out a specific amount monthly or even bi-weekly. This money then can be transferred into a TFSA because there is no tax and you can actually make money through interest on those contributions. The video then goes on to say that even lower income people can still put smaller amounts into that account using this method, but paying off your debts first before using this savings plan or any other savings plans is more of a priority.

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Most people realize that saving their hard-earned money is essential to ensuring a comfortable future. It's just the actual execution of a savings plan that eludes them. But trying to save without a concrete plan can leave you feeling directionless and lost, both of which seriously hinder progress. On the other hand, implementing a savings plan that is too stringent could lead to feelings of discouragement, which may drive you to abandon your path.

So what are the best ways to create a savings plan and stick to it?

Set a goal

First, identify what you're saving for, says Noel D'Souza, a certified financial planner with Money Coaches Canada in Toronto. Whether it's a trip to Italy you hope to take in a few months, a down payment for your dream house, or the big one-saving for retirement-having a very specific goal will help you stay motivated and on track.

The truth is, society has gotten away from the saving habit because we now all have easy access to credit. But saving takes the stress out of wondering if you have enough money or not.
How to track your expenses "
Open an account for your savings

Second, it helps if you open separate savings accounts dedicated to your goals, rather than having one account for all your funds. "It's very hard to tell what your money is meant for when you have it in one big pile," explains D'Souza. "We have so many demands on our lives...It's really hard for people to figure out if they have enough money and if they're actually saving or not." It helps if you have saving accounts like RRSPs or TFSAs because they're separate accounts that earmark money for a special goal, whether it's retirement, an emergency fund, or saving for a home.

Start tracking and trimming

You can't escape having to run the numbers and tracking your expenses to determine how much you're truly able to save. Calculate your monthly basic expenses and see if there are ways to trim down bill payments-whether it's the utilities, heating or cell phone bills. Then, subtract your fixed expenses from your monthly net income and take a look at what's left over. One tip is to focus in on your discretionary expenses (restaurant meals, coffee, clothes, fitness club, etc.) and see if there are ways you can cut back. For instance, instead of eating out for lunch every day at work at $10 a meal, it may make more sense to bring your lunch from home and enjoy a meal out with friends for $30 on Friday nights.

Have a 'fun fund'

Cutting back on discretionary expenses is not about total denial. Instead, it's about making sure you're getting maximum pleasure from some of the day-to-day expenses you chose to spend your spare change on. For some people, it also helps to set up a 'fun fund' adds D'Souza so that they always have some fun money set aside for entertainment every month, keeping your savings plan from feeling too restrictive.
Budgeting tips for students "
Set it, don't forget it

Once you've done this initial planning, the best way to stick to your savings plan is to automate the transfer of funds to your various savings accounts. You can do that by setting up monthly pre-authorized payments to your bank accounts on the first of every month. This way, it's not a question of finding the willpower to save every month. "Save first for the goals that you have and then spend what's left over," says D'Souza. "It's amazing how we adapt to what we have."

Eliminate temptations

While automating your plan takes much of the work out of saving, the best way to resist temptation is to avoid it altogether. Instead of walking aimlessly through the mall after work, where you may be tempted by storefront displays and clearance sales, take a walk outdoors instead, join a book club or whip up some homemade meals so you don't have a chance to spend unnecessarily.

And start thinking big

Once you've learned how to free up funds, and have the basic framework for your savings plan, you can start saving for longer-term goals, such as retirement. The golden rule is that you need to save 10% of your gross income to live comfortably in your retirement years. While this is a good jumping off point to your journey to savings (some savings is better than none, after all), it's best to figure out what kind of lifestyle you really need in retirement and to personalize your savings plan accordingly, says D'Souza. For instance, the basic 10% rule is best for those in their 20s who are just starting out. If you're starting to save for retirement later in life, this percentage would have to be bumped up to account for lost time-perhaps to as much as 20% to 30% of gross income.
And finally, the key to any savings plan is to stick with it. Even if you overspend some years or miss a savings target here or there, remember that you'll still have much more in savings than you would have had you not taken the time to put together a basic plan. You'll reach your goal a few months later, but you'll still get there in good time.

Plus one more:

Get ahead of the crowd

Many people feel pressured by their peers to live a lifestyle that they can't necessarily sustain, says D'Souza. If you're going out to a restaurant with friends for dinner, you may feel the need to match their orders in terms of expense. That could be pricey and break your budget. Instead, to keep expenses in check, place your order first, so that you get what you can afford without feeling the need to compete. Your wallet will thank you.

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Most people realize that saving their hard-earned money is essential to ensuring a comfortable future. It's just the actual execution of a savings plan that eludes them. But trying to save without a concrete plan can leave you feeling directionless and lost, both of which seriously hinder progress.

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Spending your money is easy but saving your money is worth it!

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When navigating through this website there is a lot of great information about the different types of savings accounts, choosing a financial advisor, how to invest your money, etc. There are also articles about how to be flexible with your savings plans based on changes in your priorities and responsibilities as well as a calculator and tools for planning your financial future!

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Savings and investment types, setting goals and choosing a financial advisor.

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This video talks about registered savings plans meaning that they are registered with Revenue Canada and in some cases you can save on income taxes and in some of the registered savings plans there are government contributions. The main types of registered savings plans are RRSP, TFSA, RESP, and RDSP. This video then goes into detail and breaks down the main types of registered savings plans.

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We could all really use help saving money. After paying taxes and our basic living expenses, there never seems to be anything left over. There are a lot of plans (and acronyms) available, though! This video will introduce you to some of the saving plans you can use to put money away for the future.
Segment 2: Registered plan introduction
For most people, the simplest way to start such a saving/investment/saving plan is with a registered plan like a tax-free savings account or a registered retirement savings plan. They are well known, widely available, and there's one to suit every savings goal.

(voiceover)

Registered plans are different from other savings and investment plans because they can give you income tax savings, and, in some cases, the government will even add money to your plan. These savings plans are registered with Revenue Canada and let you reduce or defer income tax.

The main types of registered savings plans are RRSP s (or Registered Retirement Savings Plans)

TFSA (Tax Free Savings Account)

RESP s (Registered Education Savings Plans)

RDSP s (Registered Disability Savings Plans)
Segment 3: Saving strategy
Let's take a look at the different plans and how they can help you save.

(voiceover)

RRSP s are designed to help you save for your retirement. The benefit of this plan is that the money you invest in the plan is deducted from your income, so you don't pay tax on it, right away. And you don't pay tax on earnings in the plan until you withdraw them.

When you decide to use your savings, then you will pay income tax on the money you take out, including any income the savings have earned.

You may pay lower taxes on the money in the plan when you take it out in the future, as most people enter a lower tax bracket after retirement TFSA s can be used for any savings goal and you can hold cash, stocks, bonds or almost any type of investment in a TFSA. The income the plan earns is not taxed.

RESP s are designed to help you save for your child's education.

Money in an RESP can receive grants from the governments of Canada, Quebec and Alberta, which are added to the savings. When the money in the plan is used for the child's education, the money the plan has earned and the grants are considered the child's income, which is often tax-free or taxed at a lower rate.

RDSP s are designed to help you save to support a person with a disability. Money in an RDSP can also receive grants from the Government of Canada, which will add to the savings. And the money the plan receives or earns that is used to support someone with a disability is often taxed at a lower rate.

Many conditions apply to registered savings plans, so be sure you understand them so you can decide if they are the best way for you to meet your savings or investing goals.
Conclusion
Whatever you are saving for - your retirement, a costly item, a child's education, or support for a person with a disability - registered savings plans can help you achieve your goals, while reducing the current taxes you pay.

Most financial institutions offer a variety of registered savings plans. Talk to your financial institution or to an independent financial professional to decide which plan is best for your savings goals.

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3.2.5 Video: Saving with registered plans

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We could all really use help saving money. After paying taxes and our basic living expenses, there never seems to be anything left over. There are a lot of plans (and acronyms) available, though! This video will introduce you to some of the saving plans you can use to put money away for the future.

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Make savings goals to motivate yourself!

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Challenge your savings skills with a budget!

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This website gives you the breakdown of how to create your own budget. If you did not want to calculate all of your expenses, etc. on a website, this one tells you how to do it on your own. This way you can come up with a more personalized budget that fits your lifestyle.

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budget template
excel budget template
personal budget template
household budget template free
home budget template

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Everyday Finances: Financial & Investment Planning | TD Canada Trust

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Create a household budget that can help you track your finances and start saving, in just a few simple steps.

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This website helps you calculate your cash-flow and will tell you if you have a good cash-flow or if it is time to look at your savings plans. you can see your annual cash-flow and your monthly cash-flow.

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TD Canada Trust - Personal Cash Flow Calculator

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Based on the information you filled in, you are spending more than you're bringing in. You'd be surprised how many other TD Canada Trust customers are having trouble making ends meet.

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This video talks about the big question.. why save? It talks about creating good savings goals, not just "pay my debt" or "save my money" it really goes in depth about savings goals and this video also talks about how to expand your money by investing.

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Transcript

Narrator: Saving and Investing.

Save regularly and start saving early. Set specific savings goals, make your money grow, and reach your financial goals through saving and investing.

Saving puts you in control. It allows you to have choices in life. And investing gives opportunities to make your money grow.

Let's begin by asking: Why save? Then we can talk about setting savings goals, learning the four steps to saving, and finally, how to increase your savings.

We will also discuss three things every investor should know.

Twitter conversation (on screen):

Theo: @Max my man! How awesome was the boyz weekend #goodtimes

Max: Was amazing @Theo! So glad I saved up to go. Worth every penny!
Why SAVE?
Narrator: The reasons to save are many.

You can save for a sense of greater security and control, to be prepared for unexpected events, to reduce stress, or to provide for a major expense. Whatever your reason, use it as a source of motivation.

Twitter conversation (on screen):

Theo: Ya @Max, now you just gotta keep up the saving habit!!!!

Max: I'm ahead of you buddy, @Theo Two words #stock #market

Theo: Okay big roller @Max! Careful you don't lose your shirt...
Setting savings GOALS*
Narrator: Research shows that, on average, Canadians save less than 5% of their income. Ideally, you should try to save at least 10% of your income. To motivate yourself, set savings goals such as a specific amount you want to save and the period of time it will take to get there.

An example of a vague and not very helpful goal is, "Get rid of my debt and save money." Without being specific, we don't know how much to save or how long it will take.

Let's try something more specific: Reduce debt by $1,000 and establish an emergency fund of $2,000 over the next eight months. Be even more detailed with your goals by identifying the steps to take to reach them.

For instance, you can add: By saving $200 every paycheque for eight months. Keep yourself motivated and focused on your savings goals. Write down your goal. It helps you to remember what you are saving for, and it makes it more real. Track your progress regularly. If you are saving for something specific, like a trip, keep a picture of your destination on your fridge or in your wallet.

Twitter conversation (on screen):

Max: @Theo Naw man, ever heard of #wallstreet? Those dudes are killin it!!

Theo: @Max ya man, those guys are pros! you gotta know what you're doing! You can win big or LOSE BIG.
Four steps to SAVING*
Narrator: Savings don't just happen. You have to make an effort and a plan to save. Here are four steps to effective saving.

Step 1: Build an emergency fund. You should save the equivalent of at least three to six months of take-home pay so you can deal with anything unexpected. Keep the money in a savings account or an investment that can be easily cashed and will not be touched unless in an emergency.

Step 2: Pay yourself first. Consider your saving as any other bill you have to pay regularly every month. Put aside a set amount, say 10% of your take-home pay, every paycheque.

Step 3: Set up an automatic transfer of money to a savings account. This can help to make saving easier.

Step 4: Make your money grow. Be sure to put your money in the savings vehicles that will offer the best possible interest rates at a risk level you are comfortable with. Give yourself time to take advantage of compound interest. Compound interest is interest that's paid on the initial deposit and also on any interest that's been earned in previous periods, so you earn interest on interest, which helps your money to grow faster.

If these steps seem challenging, just remember: you need to make saving a habit to see long-term results. Think about how you can start using the four steps today.

Twitter conversation (on screen):

Max: @Theo, Losing my money is not part of the plan.

Theo: One word @Max - #Diversify.

Max: @Theo Love the internet... "Diversification involves having a mix of investments. It's one way to reduce risk."

Theo: @Max exactly. Don't put all your eggs in one basket. Knowing you and your luck, this might be the only way you won't lose everything. LOL.
Grow your SAVINGS*
Narrator: Now we will look at different ways to invest.Every investment comes with a risk. You may not make any money, or you may even lose money. Generally, more risky investments have a higher potential return, and less risky investments have a lower return. Before choosing an investment, you need to decide how much risk you can handle.

Basically, if you are willing to risk losing your money for the potential of a higher payback, you have a high tolerance for risk.

You must also set your investment objectives and determine when you will need access to the money. You can do this on your own, or speak with an experienced financial advisor. There are four major types of investments.

Type 1: Investments that pay interest, such as savings accounts, Canada savings bonds and guaranteed investment certificates.

Type 2: Shares in a company, such as stocks and mutual funds that invest in stocks.

Type 3: Property. That includes real estate, precious metals, and art.

Type 4: Direct investment in a business.

Let's discuss a few investment options from some of these categories.

Savings accounts with interest.

You can set up a savings account with a financial institution. Interest rates vary, depending on the type of account and the institution. Use the Financial Consumer Agency of Canada's Savings Account Selector Tool to help you shop around for the account with the best rates and best features for you.

Now let's look at the guaranteed investment certificate, often referred to as a GIC.

Typically, GICs guarantee the principal - or the amount you invested - and usually guarantee the return - or the amount you earn - on your investment. Rates and terms vary by GIC type. In general, a longer-term GIC pays a higher interest rate. However, longer-term GICs may limit your access to your money or charge penalties if you withdraw your money before the term ends.

Another investment option is a mutual fund.

Mutual funds pool money from many investors. A professional fund manager invests the money in various investment products, taking into account the objectives of the fund. You must buy and sell mutual funds through a financial professional or an online brokerage account. You can generally buy and sell mutual funds at any time.

It is important to understand the mix of investments in the fund as well as the fees charged. Both with affect your rate of return. Next, we'll talk about registered savings plans. These plans allow you to save for a specific purpose while offering tax benefits.

A registered retirement savings plan, or RRSP, helps you save for retirement.

Contributions to your RRSP are tax deductible, meaning the contribution value can be deducted from your taxable income for a specific tax year. In addition, your savings can grow tax-free until you withdraw the money.

A registered disability savings plan, or RDSP, helps families save for long-term care of relatives with disabilities. Contributions to an RDSP are not tax deductible but the money in the plan grows tax-free.

A registered education savings plan, or RESP, helps you save for a child's post-secondary education using after-tax dollars. Similar to an RDSP, contributions are not tax-deductible, but the money in the plan grows tax-free.

There's also the tax-free savings account, or TFSA.

Contributions are not tax deductible, but any interest you earn on money in the account is not taxable. You could hold cash, bonds, GICs, stocks, and mutual funds in your TFSA.

Learn more about registered savings programs by visiting the Financial Consumer Agency of Canada's website.
ItPaysToKnow.gc.ca
Twitter conversation (on screen):

Max: Oh, that's so cool @Theo... there are so many options for #investing. Who knew?!

Theo @Max Welcome aboard the investment train! It pays to do your research, huh?

Max @Theo Big time! #itpaystoknow
The three "KNOWS"*
Narrator: Regardless of where you decide to invest your money, there are three main things you need to know.

1: Know yourself.

Understand your risk tolerance, your investment goals, and your timeline.

2: Know your investment.

Is it right for you? Will it help you meet your goals? What fees apply?

3: Know your financial advisor.

If you choose to work with a financial advisor, make sure that the person understands your risk tolerance and your savings goals. Verify that he or she is qualified to give you investment advice. Ask about the advisor's background, and do some research of your own.

Twitter conversation (on screen):

Theo @Max There are a lot of choices. Just be careful of investment fraud.

Max @Theo Thanks man. #toogoodtobetrue
What did we LEARN?*
Narrator: To conclude, let's summarize what we have learned.

We have discussed the different reasons why we should save, and how to motivate ourselves to save by setting goals.

We went through the four steps to savings. We also looked at different ways to make your money grow.

And finally, we discussed the importance of the three "knows": Know yourself, know your investment, and know your financial advisor. If you're not saving yet, start soon. Save regularly, and watch your money grow.

Remember to choose different types of investments, and choose investment options that fit within your risk level and help you reach your life goals.

I wish you financial success.

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educational materials; personal finance; lifestyle; money management; savings; investments

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Transcript Narrator: Saving and Investing. Save regularly and start saving early. Set specific savings goals, make your money grow, and reach your financial goals through saving and investing. Saving puts you in control. It allows you to have choices in life. And investing gives opportunities to make your money grow.