RRSPs – Time to crunch the numbers

RRSPs – Time to crunch the numbers

Yes its RRSP time again. If you have a TV and have turned it on lately you, probably already know. Crunching the numbers again and again to get to the same conclusion, where is the money going? If you are those few like me who can contribute at the end of the year, RRSP time is great.

When you crunch the numbers you could at some point think and say hey could I do something to prevent this from happening next year. Yes you can, will you. That’s up to you.

My girlfriend never did a budget before meeting me. Living day to day and only stopping spending when the wallet was empty (like we all did at some point).

I started at eleven as a paperboy and my first lesson in personal economics was from my dad. It was simple, start with saving money and after that you can spend the rest according to your needs.

When I turned fourteen I had enough to buy my scooter, a black Suzuki. My father probably thought that teaching me how to save money was a mistake at that point.

For getting your licence at sixteen, the philosophy in my family was that you had to pay for it (licence and the courses, five hundred dollars at that point). At sixteen and one day I was borrowing the second car of the family a blue Gremlin that my friend us to call the aquarium.

Learning how to save a little to get what you want is fun when you know how to do it. Easier when it’s an object and that you can finally have it in your hands. But when we talk about RRSPs and retirement, the immateriality of the object in question is often hard to handle. More fun to go on a cruise for a week (I would say do both if you can).

Household finances are often a stress factor in a relationship. Some of my friends don’t even know what the other person in the relationship is earning. Jack was surprised last year to find out that his wife was actually making more than him. It was funny when we went to the restaurant; he was not so enthusiastic this time to pay for her.

We live in a society that will talk about sexual positions at the dinner table with friends but is still shy to talk money or should we say debt (debt to income was ratio is 163% for the average Canadian household in October 2012 according to Stats Can).

So for the next year take ten minutes to do an overall budget (yes it’s that easy). Make a target for savings without hurting your lifestyle. Don’t wait until the end of the year for lost change, do an automatic cut from your pay, and live on the rest knowing things are taking care of.

Find something to reward you with if you hit your target, sometimes it helps (for me it’s going to be my favourite restaurant). If you get a bonus during the year I would advise the 10%/90% rule, have fun with the 10% and save the rest.

Having a life that is fun and also will get you with money in your pocket later in life is called economic intelligence. Like any intelligence you have to use it to grow, little by little.

So start now with something that motivate syou (for me a yellow Porsche would do the trick) and start using you money in a way that will be fun and sustainable in the long run.

Time to go and crunch those numbers.

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About the author:

Martin_LalancetteMartin Lalancette – Career and Lifestyle consultant (Eureka career) you can find Martin on his bike in the summer, on skis in the winter and playing guitar, writing a movie (or playing in one) and appreciating good food with his friends the rest of the time. Peak performances in sports, arts and business are a passion that he loves to share with anybody that has five minutes to listen. Travelling around the world is also a hobby, to discover a new city or simply lounging on the beach for a week.

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