Financial Tools 101

Some Financial Tools that can help your Money Grow? Who Knows Discuss Some Financial Tools that can help your Money Grow?

Remember, Your success takes Financial Planning!

Learning Goals To understand an overview of the Who, What, Where, When, Why and How of: RESP, RRSP, TFSA Will, POA This will be tomorrow: Mutual Funds, Stocks , GICs

How not to be a Money Moron Gail Vaz-Oxlade Canadian Financial Expert (6 minutes) https://www.youtube.com/watch?v=9BFWxnQLtqc

Financial Tools 101 Matching [handout required] Let’s see what you already know!

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6 months of essential expenses (e.g. rent or mortgage payment, basic food, basic utilities, transportation, minimum payments on debt)

E) Emergency Savings 6 months of essential expenses (e.g. rent or mortgage payment, basic food, basic utilities, transportation, minimum payments on debt)

A document listing the legal decisions about what you want done with your assets when you die

G) Will A document listing the legal decisions about what you want done with your assets when you die

An investment tool Money that helps you save tax-free for your child’s education, and government grants give you extra help. For every $1 you put in, the government will put in $.20, so if you put in $1000 the government will put in $200. Available for children just born to 17 years old. When the child goes to post-secondary, s/he is taxed on the money (but at a low rate due to the student’s low income

A) RESP An investment tool Money that helps you save tax-free for your child’s education, and government grants give you extra help. For every $1 you put in, the government will put in $.20, so if you put in $1000 the government will put in $200. Available for children just born to 17 years old. When the child goes to post-secondary, s/he is taxed on the money (but at a low rate due to the student’s low income

What is an RESP?

7 things to know about RESPs

#1 Your savings grow tax free #1 Your savings grow tax free. There is no tax on the investment earnings, as long as they stay in the plan

#2 If you save for a child age 17 and under, the federal government also puts money into the RESP as a grant or bond. In some provinces, the provincial government may contribute too

#3 You can usually put money in whenever you want, up to a lifetime maximum of $50,000 per child. Some plans require set monthly or annual contributions.

#4 The contributions are not tax deductible. But you can withdraw them tax free from the plan at any time for any reason.

#5 There is a wide range of investment options available for RESPs #5 There is a wide range of investment options available for RESPs. Examples: stocks,bonds, mutual funds, GICs. Some plans let you decide how to invest your savings. Others invest your money for you.

#6 Your child can take money out of the RESP when they enrol in university or college or another qualifying education program or specified education program.

#7 An RESP can stay open for up to 36 years #7 An RESP can stay open for up to 36 years. Under specified plan rules, the plan can stay open for up to 40 years for beneficiaries eligible for the disability tax credit.

The act of setting aside money that could have been used to buy stuff and set it aside for some future need.

I) Saving The act of setting aside money that could have been used to buy stuff and set it aside for some future need.

A method of setting and tracking monetary goals via income and expenses

H) Budget A method of setting and tracking monetary goals via income and expenses Gail's thoughts on Budgeting

Is an account that provides tax benefits for saving in Canada Is an account that provides tax benefits for saving in Canada. Investment income is not taxed, even when withdrawn.

C) TFSA - Tax Free Savings Account Is an account that provides tax benefits for saving in Canada. Investment income is not taxed, even when withdrawn.

Helps you save for retirement with tax benefits along the way.

B) RRSP Helps you save for retirement with tax benefits along the way.

5 Reasons to Open an RRSP

#1 Contributions are tax deductible

#2 Savings Grow Tax Free

#3 You can convert your RRSP when you retire to get regular payments

#4 A Spousal RRSP can reduce your tax burden

#5 You can borrow from your RRSP to: Buy your first home or pay for education Up to $25,000

Amy: Amanda: • Starts saving at age 20 • Puts $1,000 a year into her RRSP to age 34 • Total she saved: $15,000 Amanda: • Starts saving at age 30 • Puts $1,000 a year into her RRSP to age 64 • Total she saved: $35,000 Fromhttp://www.getsmarteraboutmoney.ca/en/managing-your-money/investing/rrsps-for-retirement/Pages/how-saving-early-in-your-rrsp-helps-amy-and-amandas-story.aspx

Who will have more money?? Amy or Amanda??

Amy: $141,700 Amanda: $118,100 Saving early pays off!! From http://www.getsmarteraboutmoney.ca/en/managing-your-money/investing/rrsps-for-retirement/Pages/how-saving-early-in-your-rrsp-helps-amy-and-amandas-story.aspx

The process of using your money to buy an asset that you think has a good probability of generating a safe and acceptable rate of return over time, making you wealthier even if it means suffering volatility (prices increasing & decreasing), perhaps even for years.

D) Investing The process of using your money to buy an asset that you think has a good probability of generating a safe and acceptable rate of return over time, making you wealthier even if it means suffering volatility (prices increasing & decreasing), perhaps even for years.

a legal document that authorizes someone else to act on your behalf. 1 for legal/property matters and 1 for health/medical

F) POA - Power of Attorney a legal document that authorizes someone else to act on your behalf. 1 for legal/property matters and 1 for health/medical

Tools needed for these false statements What have you learned so far?? Tools needed for these false statements

Bad things don’t happen to good People

Bad things don’t happen to good People Emerge ncy Savings Bad things don’t happen to good People

You need Emergency savings? Why might Discuss You need Emergency savings?

My partner knows what I want

My partner knows what I want Will or POA My partner knows what I want

Only the rich need an estate plans

Only the rich need an estate plans Will Only the rich need an estate plans

Wants come before needs. I don’t need a plan

Wants come before needs. I don’t need a plan Budge t Wants come before needs. I don’t need a plan

When I earn “enough” money I will start this habit

When I earn “enough” money I will start this habit Savin g When I earn “enough” money I will start this habit

Where do you want to be in Start with the big picture Where do you want to be in 5, 10, 20, 30 years? Then work Backwards

Part 1 of 3 Gail Vaz Oxlade with Fanny Kiefer https://www.youtube.com/watch?v=JGShGqN5b-o

Part 2 of 3 Gail Vaz Oxlade with Fanny Kiefer https://www.youtube.com/watch?v=x-Ec3ujq560

Part 3 of 3 Gail Vaz Oxlade with Fanny Kiefer https://www.youtube.com/watch?v=w_FKE8XpxFc

Information Credits Get Smarter About Money http://www.getsmarteraboutmoney.ca/en/Pages/default.aspx The City https://www.themoneybelt.gc.ca/theCity-laZone/eng/login-eng.aspx

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