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CALGARY, AB, Jan 16, 2015/ Troy Media/ You may have noticed that Cutting Corners was on hiatus over the holidays. No, I didn't spend my winter break shopping or visiting - although I did a little of those things. I spent it getting my book manuscript to the publisher.
As I was fine tuning those footnotes and finessing that last paragraph, I could not help but notice that writing books and turning family budgets into financial masterpieces have a few things in common: Just as it takes several drafts to finish a book, our family budgets may need multiple revisions until it works for our families.A family budget will help you meet your financial goals
Editing pays for both books and budgets, and January is a great time to edit the family budget.
What do I mean by editing your family budget? Editing your budget is taking a look at what you spend your paycheque on, deciding what needs cutting, what needs to be added, and what you really want to highlight as spending priorities.
In other words, you need to figure out how to create a financial happy ending. In accounting speak, happy endings translate as financial goals. If you financial decisions aren't getting you closer to the life you envision for yourself, it's time to change the plot.
Fortunately, the tools we need to plot our own financial stories are probably already on our computers. If you are a MAC user, check out your Numbers software. The budgeting tools in Numbers allow you to edit your financial plot as you go. You will find templates for personal savings, loan comparisons, education savings, net worth, and monthly goals. If you are a visual thinker, you will love these tools because they let you see your progress in charts and graphs. As you watch your progress, your confidence that your hard work and savings habits are taking you toward your happy ending grows stronger.
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Tax-free savings accounts (TFSAs) should be on your personal savings radar. Since they were first introduced by the federal government in 2009, TFSAs have been acknowledged as a great vehicle for tax-free savings growth. To make sure you get every TFSA benefit, here is what you need to know about TFSAs.
Every Canadian resident over 18 years of age is eligible to open a tax-free savings account.
Contributions to investments held within a TFSA are not tax deductible but do grow on a tax-free basis.
The annual TFSA contribution limit is indexed to inflation in $500 increments. In 2013, the Canada Revenue Agency increased the limit to $5,500, where it remains for 2015.
Youll maximize the value of your TFSA by making the most of all available contribution room. But even if you dont use all your contribution room every year, it accumulates year after year, so you can use it in the future.
If you have never had a TFSA account and have been a Canadian resident and 18 years of age since 2009, you will have $31,000 in unused TFSA contribution room.
If you already have a tax-free savings account, your 2015 annual contribution room is calculated by taking:
The annual dollar limit for 2015 of $5,500.
Plus the amount of withdrawals from 2014 (excluding withdrawals of excess contributions, qualifying transfers, or other specified contributions).
Plus any unused contribution room from 2014.
If you make a withdrawal, the earliest you can lsquo;earn back your TFSA contribution room is the first day of the year after the TFSA withdrawal was made.
If you contribute more than your allowable TFSA contribution room at any time during the year in which you made a withdrawal, you will be considered to have over-contributed and will incur tax penalties.
TFSA investments are generally the same as those available for RRSPs; including mutual funds, guaranteed investment certificates (GICs), securities listed on a designated stock exchange, and government or corporate bonds.
Withdrawals from a TFSA do not affect eligibility for income-tested benefits such as Old Age Security (OAS).
A tax-free savings account can be a good choice for both short- and long-term financial goals building emergency funds, saving for everything from a new car to a dream vacation or a down payment on a new home, saving taxes on your non-registered investments, and adding to your retirement savings. A TFSA works best for you when you work with your professional adviser to make it a vital element in your overall financial plan.
This column, written and published by Investors Group Financial Services Inc., presents general information only and is not a solicitation to buy or sell any investments. For more information on this topic please contact Audrey Dakin at 519-686-7400 ext. 238. Twitter.com/audreydakin.
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A panel of finance professionals from multiple disciplines met at Vine Memorial Baptist Church, at 56th Street and Girard Avenue in West Philadelphia, to address the financial concerns of the community.
Issues included estate transfer, retirement planning, life insurance and how to manage it, and other concerns related to financial planning.
"We are doing this because we believe that this information, which is available to all, may not be reaching areas of the community that it should reach," said Tony Smith of the Society of Financial Service Professionals (FSP).
Given the current transfer of wealth happening among Baby Boomers, Smith said such information is even more critical.
"It's never too late for any of the issues we are discussing today," Smith said. "The only time it is too late is when life is over, and even then you have family members who will go on after you have passed on -- so these issues are perpetual."
Joe Frack, the CEO of FSP, said the group is a national organization with some 11,000 members and consists of professionals.
"Virtually all of our members have a credential of some sort -- maybe they are attorneys, maybe they are certified public accountants or etc.," Frack said. "Our members really are geared toward offering the public the very best advice they could render, given the circumstances."
Smith said the group did not expect to turn attendants into professionals, but the panel would provide practical information and be aware of those things which will inevitably affect them over their lifetime.
Glen Coral, financial advisor, insurance professional and incoming president of the Philadelphia chapter of FSP, said the group wanted to reach out to the community to let it know resources are available.
"There's nobody who cannot benefit from talking with a financial service professional and planning; and because of the complexity of the law, the complexity of planning in general and investing, it is important that they talk to a financial professional to help guide them," she said.
Panelists discussed the role of budgeting and saving as the foundation of wealth creation.
"It really starts, grassroots with budgeting; and as you start building some wealth and attaining financial independence, it makes it easier to start investing and to do some more complex stuff down the road," Coral said.
Pastor of Vine Memorial Baptist Church the Rev. James S. Allen said the seminar was comprehensive, with topics such as personal savings, age and handling aged loved ones.
It was a member of Vine Memorial, Ralph Blank, who suggested the presentation to Allen. The church met to discuss the possibility and agreed to do it.
No one expected the seminar would be so well attended.
"What we try to do is identify needs of the people and whatever those needs are we try to deal with them," Allen said.
Blanks is an associate pastor at Vine and a financial adviser with Prudential Life Insurance, a co-sponsor of the seminar. Blanks would not take credit for the idea of suggesting the seminar and said he was approached by a representative of FSP.
"The FSP has made a commitment to focus on the under-served, the community ... informing them and educating them along the lines of financial services and how to protect themselves," Blanks said.
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WASHINGTON, DC -- Microbusiness owners are starting 2015 in higher spirits and with higher expectations than one year ago. According to the Sam#39;s Club/Gallup Microbusiness Tracker, fewer business owners find themselves letting employees go or worrying about cash on hand, and more express confidence in the future of their business. Even as microbusiness owners are feeling more confident, those with strong growth ambitions are more optimistic about business growth than other owners and are more likely to be hiring, but they also have more concerns and higher dissatisfaction with their current circumstances.
Owners of US microbusinesses, defined as those running a business with five or fewer workers, have significantly improved their expectations for how their personal income from their business will change over the next year. Microbusiness owners#39; expectations for higher personal income in the next year are up six percentage points from this time last year. Meanwhile, the percentage expecting less personal income from their business has dropped by half since December 2013 -- from 24% to 12%.
Microbusiness owners also reported fewer concerns about their cash reserves or bottom line at the end of 2014 than they did a year ago. While a slight majority, 52%, said in December that having cash reserves was a major issue for their business, this was down from 58% in December 2013. Similarly, fewer now report having dipped into personal savings to make ends meet (36% vs. 44%).
Microbusiness owners#39; growth expectations have improved from September 2014, though they are steady with March 2014, when the Sam#39;s Club/Gallup Microbusiness Tracker first began asking this question. The percentage of owners saying they expect to grow their business#39; sales and revenue in the next year is up 10 points from September, though only two points for the year. This in turn appears to translate into improving confidence in the future. The percentage strongly agreeing they are confident in the future of their company is up seven points from September and four points from this time last year, to 44%.
Owners With Strong Growth Ambitions More Likely to Hire, Have More Worries
Despite an improving outlook, not all microbusiness owners are eager to grow their business much larger than its current size. Almost half (47%) of all microbusiness owners want to keep their business the size that it is now, while another quarter (26%) would only want to grow two to five times larger than where they are now. Fewer than one in five (18%) have ambitions to grow their business as large as possible.
Growth ambitions track closely with growth expectations; 43% of those who say they want to stay the same size also say that they expect next year#39;s sales and revenue to remain flat, while 46% of those who say they want to grow as large as possible also say they expect strong growth in the next year (10% or more). Perhaps unsurprisingly, owners with strong growth ambitions are also much more likely to be hiring than those seeking to maintain their current size.
At the same time, microbusiness owners who want to significantly grow their business are more dissatisfied and have more concerns about their business than owners with lower aspirations. They are more likely to express concern over a range of issues, such as having healthy cash reserves, saving for retirement, finding qualified employees and finding more customers.
The improving financial picture among microbusiness owners in December 2014 mirrors rising spirits and stronger economic signals in other economic metrics Gallup regularly tracks. Economic confidence is up, unemployment is down and consumer spending is strong. The rising tide appears to be lifting these smallest of boats as well.
There is a strong connection between microbusiness owners#39; aspirations and their outlook for financial growth, with owners who want to grow being the most optimistic. But these owners are also more likely to be dissatisfied with their standard of living and their access to the human and financial capital needed to grow a business. While microbusiness owners#39; financial concerns generally have eased over the past year, owners who are looking to grow are still very concerned about cash reserves and savings, and dissatisfied with their standard of living. Whether this indicates they are in distress or merely expressing healthy frustration with their current status as they seek to grow is unclear, but this dissatisfaction with the status quo may be a big part of where their ambition to grow comes from.
Results for the Sam#39;s Club/Gallup Microbusiness Tracker are based on telephone interviews conducted on a quarterly basis with a random sample of microbusiness owners aged 18 and older, living in all 50 US states and the District of Columbia. Business owners selected were those who reported owning a microbusiness with five or fewer workers, including the owner. Results from the Quarter 4, 2014, study are based on 1,007 interviews conducted Nov. 24-Dec. 15, 2014. For results based on the total sample of Quarter 4, 2014, business owners, the margin of sampling error is ±4.2 percentage points at the 95% confidence interval.
Interviews were conducted with respondents on landline and cellular telephones. All interviews were conducted in English. Respondents were chosen at random from a group of people who had completed a previous general Gallup telephone interview and indicated they were a business owner and were willing to be contacted for a future survey. The sample was stratified by businesses size and weighted for business size and region.
Learn more about how the Sam#39;s Club/Gallup Microbusiness Tracker works.