Tax Free Savings Accounts (TFSA) Info

The Tax-Free Savings Account (TFSA) is a flexible, registered general-purpose savings vehicle that allows Canadians to earn tax-free investment income to more easily meet lifetime savings needs. The TFSA could be best described as a Tax Free Investment Account because you can invest in stocks, term deposits, and mutual funds as well as applicable savings accounts.

The TFSA was started in 2009 allowing an investment of up to $5,000 per Canadian who is 18 years old or older.  The $5,000 amount is cumulative, meaning that if you haven't invested in a TFSA before, as of 2011 you could invest up to $15,000 ($5,000 for each investible year).  In January, 2012 you will be able to invest up to $20,000.

How the Tax-Free Savings Account Work:

Risky Market News

Stock markets have dropped a lot in the past 2 weeks.  Term deposit and savings account interest rates are dropping as well.  What do you do when the world seems crazy?

Evaluate your risk tolerance - The markets go up and down, sometimes rather dramatically, but over the long term they tend to go up.  If the ups and downs of the current market keep you awake at night, your investment portfolio is probably too heavy in the markets.  Everyone wants a great return, but a great return also means a great risk.  Low risk means low returns, so you want a balance.  You need some risk if you want to earn better than inflation returns.  Before you invest anything a financial advisor should go over what kind of risk you are comfortable with for your investments.

Look at your time frame - If you are retiring in less than 5 years, than you should not be putting much of your portfolio at risk because you may not have enough time to recover if the markets have a bad few years.  A good financial advisor will warn you of this.  If you are planning to continue to invest or do business for at least 10 years then your portfolio can be in the riskier investments (with higher potential return) because it is more likely if the markets go down that your portfolio will have time to recover.  By looking for returns over the next 10 or 15 years you can afford to take a little more risk today.  Concentrating too much on the short term means you will be constantly anxious about what is happening.  Investing is best done over the long term, not in a short burst of a couple years before retirement.

6 Ways to Save $ at College

Going to college or university costs money.  Tuition and books prices have been increasing at about 2 to 3 times the annual inflation rate for the decade and a half.  In Canada tuition is kept relatively low because universities and colleges are heavily subsidized by the federal and provincial governments.  Usually the greatest costs for students are not directly related to school: rent, food, vehicle and entertainment.

Here are 6 ways that students can save money while going to school:
1.   Room mates.  A 2 bedroom apartment can cost over $700/month, plus some utilities, meaning just living quarters are about $450 per month.  If there are 2 people per bedroom, you cut the cost per person down below $250.  I once shared a house with 6 guys, and our rent was down to $150 a piece.  It worked well for us since most of us were at the library, lab or work most of the time anyway.

Save Money On Summer Vacation

Summer provides us with an opportunity to spend time with family, but it is also a time when we spend more on driving, camping, hotels and restaurants.  With so many people taking a hit in the wallet the past 2 years there are many who are looking for ways to have the family trips without blowing their budget.

Hotels:  Hotels have a wide variety of costs.  Sometimes paying for the most expensive hotel does not mean the nicest stay (although the service is usually better), but choosing the lowest priced hotel can often lead to a bad experience.  There are many websites that allow former customers to rate their hotel stay.  People will submit their opinions on location, service, cleanliness...  It's a great way to see if a hotel is worth staying at.