Planning Archives - Investamp

A Strong Strategy Goes Beyond Investments

Annie Rodrigue — Mon, 23 Mar 2026 10:30:45 +0000

When we talk about wealth management, the conversation almost always comes back to the same place: markets, returns, investment choices. That’s normal, those are the most visible elements.

But they are rarely the most decisive.

Over time, we come to realize that a solid strategy does not begin with a product or a portfolio. It begins with a clear understanding of the reality it needs to support. Because at its core, managing wealth is not simply about growing assets. It’s about structuring a set of decisions that must coexist over time, despite changes, uncertainties, and cycles.

Investments are certainly part of it. But when they become the starting point of the conversation, we often confuse tools with strategy. And that’s where many approaches quickly reach their limits.

What we’ve observed over the years is that the strongest strategies are not the ones trying to optimize each variable in isolation. They are the ones where everything holds together where tax planning, structure, protection, liquidity, and objectives all work in the same direction.

In other words, a 360-degree approach.

At Investamp, this approach is not about multiplying solutions, but about integrating them intelligently. That may mean adjusting tax planning, revisiting a structure, or incorporating protective elements like insurance when relevant. Not to add layers, but to ensure that everything doesn’t rely on a single lever.

Because a strategy that depends solely on markets is, by definition, fragile.

This kind of work is rarely spectacular. It doesn’t come down to one decision or a defining moment. It is built through conversations, scenarios, and adjustments that often go unnoticed. Yet, it is precisely this coherence that allows a strategy to hold steady through more uncertain periods without needing to be constantly reworked.

Over time, the question naturally evolves. It’s no longer just about which investment to choose, but whether the overall strategy can truly support the goals, projects, and reality of the person it is built for.

Because a decision can be excellent on its own… and still weaken the overall structure if it’s not properly integrated.

That is often where the difference lies between a strategy that performs on paper… and one that holds in real life.

In summary

Strong wealth management is not built on investments alone. It relies on a coherent structure, thoughtful planning, and a deep understanding of the client’s reality.

At Investamp, we believe a strategy should first be built to endure, before it tries to impress.

Wealth management in Boisbriand and across Montreal’s North Shore

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Help your child purchase a home with an FHSA

Annie Rodrigue — Mon, 25 Mar 2024 10:30:19 +0000

Today’s housing market remains challenging, leaving many first-time home buyers hard-pressed to come up with a down payment. So, quite often, parents or grandparents want to help out. As of April 1, 2023, a new avenue has opened to help fund a down payment: the First-Home Savings Account (FHSA).

Although you can’t contribute directly to an adult child’s FHSA, you can gift funds to that child so they can make a deposit into their FHSA. There is no attribution of investment income back to you.

How the FHSA works

You must be at least 18 years old to open an FHSA, or the age of majority in your province. Account holders can contribute up to $8,000 a year to their FHSA, to a $40,000 maximum—which means a couple can contribute a maximum of $80,000. As with a Registered Retirement Savings Plan (RRSP), contributions can be claimed as a deduction against taxable income to reduce the amount of tax payable. The account can remain open for up to 15 years. Investments grow tax-free in the account, and withdrawals for a down payment are tax-free—the same treatment as for investment growth and withdrawals in a Tax-Free Savings Account (TFSA). So, an FHSA provides some of the best features of an RRSP and a TFSA.

Giving your child a head start

Parents who help children buy a home typically gift funds for the down payment at the time of purchase. An advantage of starting earlier by gifting funds for the child’s FHSA is that your money goes further, thanks to the FHSA’s tax deduction, tax-free growth and tax-free withdrawal. You can make a greater impact.

Also, note that an account holder can defer their tax deduction to a future year—saving more tax by claiming the deduction when they’re in a higher tax bracket.

Source: CI | Assante

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RESP withdrawals—strategies and tax

Michel Prévost — Mon, 02 Oct 2023 13:30:20 +0000

Investment insight

After spending nearly two decades saving for a child’s post-secondary education, it’s time to start paying for it. When money is paid out of a registered education savings plan (RESP), the various types of payments and tax treatment can cause confusion. There’s also the question of what to do with RESP savings that aren’t used to pay for post-secondary education. The good news with withdrawal options is that they provide opportunities to implement strategies to reduce the associated tax cost.

RESP withdrawals for a post-secondary education

Once the RESP beneficiary has enrolled in a full-time or part-time qualifying post-secondary education program,¹ money can be withdrawn from the RESP to help cover the costs. There are two types of withdrawals:

post-secondary education (PSE) withdrawal – a return of the contributions made to the RESP that aren’t taxable
educational assistance payments (EAP) – includes various government grants (federal and provincial where applicable) and the Canada Learning Bond (CLB), as well as investment earnings on the grants, CLB, and RESP contributions. These amounts are taxable to the student beneficiary of the RESP.

For full-time or part-time studies, EAPs are limited to a maximum of $8,000 ($4,000) during the first 13 consecutive weeks of enrollment. The limit won’t apply after that time unless the student leaves their studies and doesn’t re-enroll in a qualifying educational program for 12 months.²

Strategies for tax efficient RESP withdrawals

Students can have a few income sources, ranging from scholarships and grants to employment income and EAPs from an RESP. To help determine annual EAP payments from an RESP, consider the following:

composition of the RESP – Find out from the RESP provider how the RESP is allocated between contributions, grants, CLB, and investment earnings.
duration of study – Having an idea of how long the student will be pursuing a post-secondary education can provide a time horizon for RESP drawdown.
cost of education – This provides an annual withdrawal estimate for the RESP. EAPs can be used for a variety of expenses and can be paid up to six months after enrolment ceases.
other sources of income – This can include taxable and non-taxable sources.

While it’s possible to have enough income to have tax payable, there are options to reduce or eliminate that tax bill. These options come in the form of refundable and non-refundable tax credits and deductions against taxable income. Consider utilizing these tax savings options in the following order of priority:

refundable tax credits – If you’re eligible, claim these credits. They’ll provide you a refund regardless of whether you have tax payable for the year or not.
tax deductions that can’t be carried forward – Given their use it or lose it nature, these deductions should be fully utilized each year, where possible. Since deductions directly reduce income, they can be very valuable if they reduce income enough to be eligible for refundable tax credits.
non-refundable tax credits that can’t be carried forward – Like the deductions above, these credits should be fully utilized each year, where possible. Since credits reduce tax payable and not income, they won’t help with eligibility for refundable tax credits.
non-refundable tax credits that can be carried forward – Since tax credits save tax at the lowest tax rates, their savings don’t change if your marginal tax rate is higher in the future. As such, if there’s still tax payable after using the first three options, why not further reduce your tax bill and get that valuable cash in hand to put towards ongoing education expenses?
tax deductions that can be carried forward – Tax deductions reduce taxable income and, therefore, the tax savings is based on your marginal tax rate. So, if your future marginal tax rate will be higher (i.e., during your working years), saving the deductions for those years can yield higher tax savings than in the present.

Some common federal tax credits and deductions for students

Careful planning can help a student maximize RESP withdrawals while paying the least amount of tax possible, allowing for the maximum amount of income to go towards the cost of pursuing an education. Ideally, the RESP would be fully depleted when studies are complete. But what if it isn’t, or what if the beneficiary doesn’t pursue an education at all?

For more information, see the Government of Canada web page, Common deductions and credits for students.

RESP withdrawal for non-educational purposes

When an RESP beneficiary doesn’t pursue a post-secondary education or has completed one with a balance remaining in the RESP, eventually the RESP will have to be closed. Before reaching that point, consider:

leaving the RESP open – An RESP can remain in place for up to 36 years (40 for a specified plan) before it must be closed. If there’s a chance the beneficiary will pursue a post-secondary education later, taking advantage of this long time horizon would allow the assets to continue growing tax deferred.
replacing the beneficiary or transferring to another RESP⁴ – Replacing the beneficiary of an individual plan or transferring to another RESP for a different beneficiary can potentially conserve grants and CLB for the new beneficiary to put towards their post-secondary education. The replacement beneficiary or beneficiary of the receiving RESP must be a sibling of the current RESP beneficiary. Failure to meet this and other conditions related to a beneficiary replacement or RESP transfer can result in a repayment of government incentives, RESP overcontributions, and tax penalties. For family plans, one beneficiary’s earnings, grant, and CLB can be used to fund the other beneficiary’s post-secondary education, subject to each beneficiary’s maximum lifetime amounts. This can also be accomplished by transferring to another RESP family plan.

While the subscriber’s contributions can be withdrawn tax free at any time, subject to repayment of Canada Education Savings Grants (CESGs),5 the investment earnings that have accumulated on those contributions and government incentives must wait to be withdrawn. Specifically, such amounts can be withdrawn when the RESP has been open for at least 10 years, and the beneficiaries are 21 or older and not pursuing a post-secondary education. These payments are known as accumulated income payments (AIPs). AIPs are taxable to the subscriber at their marginal tax rate plus an additional 20% penalty tax (for residents of Quebec, 12% federal plus 8% provincial).

When an AIP is requested, the RESP must be closed by the end of February of the following calendar year. Fortunately, there are two options for eliminating tax on AIPs:

transfer to a registered retirement savings plan (RRSP) – A subscriber can transfer up to a lifetime maximum of $50,000 ($100,000 for joint subscribers) to their RRSP or spousal RRSP. Each individual must receive separate payments (no joint payments allowed) and each must have enough available RRSP contribution room. While the AIP is reported as taxable income, it’s fully offset when the RRSP deduction is taken in the same tax year.
transfer to a registered disability savings plan (RDSP) – If the RESP beneficiary has an RDSP, is a resident of Canada, and is under 60 years of age, an AIP can be rolled over to an RDSP. The maximum amount for rollover is $200,000 (lifetime RDSP limit) less the contributions already made to an RDSP. In the case of a family RESP, the AIP can include earnings for other beneficiaries of the RESP. It’s important to note that AIP rollovers to an RDSP will be taxable to the beneficiary when withdrawn in the future and won’t be eligible for the Canada Disability Savings Grant (CDSG) when transferred.

Finally, if the beneficiary is no longer eligible for an EAP and the subscriber doesn’t qualify for an AIP, a payment to a designated educational institution can be made. The institution must be in Canada. These payments are tax free but are considered a gift by the RESP trust and not the subscriber; therefore, no donation receipt is issued.

Case study

Jada is the subscriber on her 22-year-old son Andre’s RESP. She’s also the planholder on his RDSP. The RESP has been open for more than 10 years and Andre won’t be able to pursue a post-secondary education. Jada would like to close the RESP after making an AIP. She’s considering her options and the tax implications. The total AIP would be $10,000 and her RESP contributions remaining in the plan are $20,000. Jada has $15,000 in unused RRSP room. She recently opened the RDSP, despite Andre being eligible for the disability tax credit for the past 10 years, and hasn’t contributed yet. She was promoted earlier in the year and is now in a 40% marginal tax bracket. Her advisor prepared the following table showing the tax implications of taking the AIP in cash, contributing to her RRSP, or rolling the amount over to Andre’s RDSP:

The cash withdrawal is the least desirable option since it results in the lowest net AIP for Jada. While the RRSP contribution and rollover to the RDSP have the same net AIP amount, the rollover to the RDSP doesn’t attract CDSG. Given the attractive matching rates, Jada would like to maximize RDSP contributions that’ll be eligible for CDSG. As a result, she decides to contribute the $10,000 AIP to her RRSP, keeping that amount tax deferred. She then uses $3,500 of her RESP contributions, which are paid to her in tax-free cash, to make an RDSP contribution for Andre, receiving the maximum annual CDSG (including carry-forward) of $10,500. The remaining $16,500 of RESP contributions are returned to Jada tax free.

Tax treatment of RESPs

Withdrawals from an RESP can either be taxable or non-taxable. When contributions are withdrawn, the subscriber can receive them tax free. Taxable payments include RESP investment earnings and government incentives when they‘re paid in an EAP. These payments are taxable to the student beneficiary. To reduce or eliminate tax, students can claim any tax credits or deductions that they’re eligible for. When an AIP is made, it only includes investment earnings and is taxable to the subscriber. For subscribers, tax savings can be realized when an AIP goes to their RRSP or a beneficiary’s RDSP, or when a gift is made to a designated educational institution in Canada. With a little foresight and knowledge about the allocation of funds in an RESP, money can be withdrawn tax efficiently when the time comes.

1 Includes a full-time (part-time) course of study that’s at least three weeks long with 10 hours of instruction per week (12 hours of instruction per month). Full-time study outside of Canada must be at least 13 weeks in duration. Programs that qualify include apprenticeships, CEGEPs in Quebec, trade schools, colleges, universities, and other institutions certified by the Minister of Employment and Social Development. See the List of designated educational institutions for more information. 2 As long as the payment qualifies as an EAP at the time it’s made, there’s no maximum limit after the first 13 consecutive weeks of enrolment. There’s a yearly EAP threshold that’s indexed annually. This threshold was established to assist financial institutions in determining the reasonableness of an EAP request. For the current and past years’ EAP thresholds, see the Annual EAP threshold limits table in RESP Bulletin No.1R1. 3 The federal education and textbook tax credits were eliminated in 2017. For more information, see Line 32300 – Your tuition, education, and textbook amounts. 4 See “Implications when transferring funds to another RESP” (in the “Transfers and payments” section of the CESP – RESP provider user guide), or RC4092 Registered Education Savings Plans (RESP), or IC93-3R2 Registered Education Savings Plans for more information. 5 Unless a withdrawal of an RESP contribution is made to correct an overcontribution less than $4,000 or the beneficiary is eligible to receive an EAP, the CESG will have to be repaid. In addition, RESP contributions for the remainder of the year of withdrawal and the two calendar years after the withdrawal won’t be eligible for matching CESG payments. For more information, see “Repaying the CESG” (in the “Education savings incentives” section of the CESP – RESP provider user guide).

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Transferring the family vacation property: now or later?

Michel Prévost — Mon, 17 Jul 2023 13:30:18 +0000

Across the country, a vacation property may be known as a cottage, cabin, chalet or camp. One thing they all share is a looming tax liability.

When a vacation property is sold or transferred, the owner must pay tax on the capital gain. If an individual purchased a vacation property for $300,000 and sold it for $800,000, they would realize a capital gain of $500,000. Fifty percent of the gain is taxable, so their taxable income would increase by $250,000 in the year of the sale or disposition.

When sooner is better than later

The larger the potential capital gain, the more important it is to manage the resulting tax, including when to make the sale or transfer. Let’s say a vacation property owner plans to hand down the property to their children. The tax liability is manageable today, but could become a burden in the future as the property’s value continues to increase. In this case, the parent can sell or gift the property now, and cover the tax amount while it’s affordable.

Using a lesser-known strategy. You can make the tax liability even more manageable with a strategy that uses the capital gains reserve—a provision that allows you to defer a capital gain over a period of up to five years. The property is technically sold, but the children pay with promissory notes, structured so that you pay a portion of the tax each year during the deferral period. This means you can make five smaller payments instead of paying the entire tax bill in the year of the transfer. You can forgive the promissory notes in your will, making the vacation property a gift.

Choosing your principal residence. If the value of your vacation property is expected to appreciate more than the value of your home, you can designate your vacation property as your principal residence. You only need to “ordinarily inhabit” the property at some point during the year. Thanks to the principal residence exemption, after you make this designation capital gains won’t be a factor when transferring the vacation property during your lifetime or through your will.

Waiting until the will

When you leave the vacation property to your children in your will, it’s prudent to plan how you’ll cover the tax liability. You can leave it to your estate administrator to liquidate estate assets. Some individuals purchase a permanent life insurance policy to cover the estimated tax bill. Another option is to establish a dedicated savings account, such as your Tax-Free Savings Account (TFSA), to cover or help offset the eventual tax on capital gains.

Additional choices are available to transfer a vacation property and cover the tax liability. Contact us to discuss the pros and cons of all options relevant to your situation.

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Ways to save for a child’s education

Michel Prévost — Mon, 10 Jul 2023 13:30:02 +0000

A Registered Education Savings Plan (RESP) is widely acknowledged as the number one way to save for a child’s education. However, many Canadians use an RESP as the foundation and complement the plan with another investment vehicle.

Why would parents or grandparents choose an additional way to invest? Usually, it’s to accumulate more savings or gain enhanced flexibility.

When costs may escalate

You could plan your education savings goal around expected costs, only to experience the unexpected. Perhaps throughout their school years a child always talked about being a teacher, but in Grade 12 they decide to become a physician—at three times the tuition. Or after a couple of years in university or college, they want to begin a different program, requiring extra years of funding. A student might complete a college program and then decide to enrol in a university program, or vice versa. Your child or grandchild might receive a bachelor’s degree and decide to pursue a graduate degree. Perhaps they want to attend a higher-tuition university in the U.S. or abroad.

If you plan for average education costs and the actual costs exceed your education savings, you may need to cover the difference with funds from somewhere else.

Vehicles to get you there

Several options are available to save for post-secondary education. Here are the most common vehicles.

RESP. You can contribute up to $50,000 for each child, with no annual limit. RESPs offer tax-deferred growth, but for many investors the most compelling benefit is the Canada Education Savings Grant (CESG). The first $2,500 you contribute each year triggers a $500 deposit into your plan. That’s like getting an immediate 20% return on your investment. You can receive up to $7,200 in CESG money per child.

Tax-Free Savings Account (TFSA). With tax-free growth and withdrawals, your TFSA can be an ideal way to supplement education savings. In addition to withdrawals being tax-free, they don’t require special planning. Withdrawals from an RESP, some of which are taxable, can involve planning in two situations. One is when pay from a summer job or co-op placement places a student’s income beyond the personal exemption amount. The other is when the child doesn’t pursue post-secondary education or if unused funds remain in the plan.

In-trust account. An in-trust account, also known as an informal trust or “in-trust for” (ITF) account, is a non-registered account that a parent or grandparent can set up—quite easily—for a minor child. Typically, it’s used for investing in equities—as capital gains are taxable to the child, which usually results in little or no tax to be paid. Interest and dividend income are taxable to the contributor, unless that income is realized from contributions of Canada Child Benefit payments or an inheritance. Note that you must file a T3 return each year to report trust income. Also, be aware that the account’s assets belong to your child or grandchild upon reaching the age of majority.

In-trust accounts with investment earnings taxable to a minor are not available to Quebec residents.

Non-registered account. A simple option is to dedicate a non-registered investment account to education savings. If a parent with low income opens an account, this choice could offer investment growth with little or no tax payable.

Talk to us if you’re thinking about supplementing your RESP with another investment vehicle. We can discuss the various options and recommend one or more choices that suit your personal situation.

Undergraduate tuition fees

Dentistry : $23,963

Medicine : $15,182

Law : $13,222

Pharmacy : $12,291

Engineering : $8,527

Business : $7,207

Computer science : $7,012

Agriculture : $6,031

Humanities : $5,889

Education : $5,158

Source: Statistics Canada, “Canadian undergraduate tuition fees by field of study,” 2022/2023

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The comeback is on: Why bonds are back

Michel Prévost — Mon, 13 Feb 2023 14:30:36 +0000

Manulife Investment Management’s co-chief investment strategists on the three phases of fixed income’s return and why shallow recession is firm’s base case

A new year has started, the traditional 60/40 portfolio split is alive and well, and bonds are back. That was the clear message from Kevin Headland, and Macan Nia, co-chief investment strategists at Manulife Investment Management.

After a long period in the unfashionable doldrums, fixed income has come roaring back with some tempting offerings that could be music to the ears of wealth managers. There are three parts to the asset class’s comeback. First, bond yields have normalized and are looking attractive. Indeed, as Macan Nia observed, investment grade yields have not been this high in either Canada or the US since before the financial crisis.

Nia said: “We’ve gone almost 15 years without seeing these types of yields. They haven’t been seeing these type of income opportunities in the last 10 or 15 years, especially as Canadians are getting older.”

He added: “A lot of the issues in the financial markets and for financial advisors was [around] this search for yield and how we drive income for our clients that are retiring. The good news is right now we simply clip the coupon. We believe they are attractive opportunities just in yield.”

The following two phases hinge on economic weakness. In the second phase, recession should start to be priced in and yields on longer duration and higher quality tend to fall. This will contrast with what happened in fixed income last year, when yields rose and prices declined. This year the reverse will be the case and fixed income strategists will be gifted with positive tailwinds should both yields fall and prices rise.

Nia said:

“We should see an increase in fixed-income prices, which drives longer, higher returns, and you want to raise quality and longer duration in that environment, especially looking at Treasury bonds that then do well during recessions.”

The third phase will be when the markets are pricing in the end of the recession and pricing in the riskiest assets at risk of default. Nia believes this will be the point to embrace risk and take advantage of dislocation, finding good businesses that are priced attractively relative to their maturity value.

“The prices of those risky assets tend to go up and high yield perform very well, even as well as equities, often coming out of recession,” Nia said.

In their outlook, the team says the geopolitical and economic outlook is less foggy than it was months ago, a boon for markets that hate uncertainty. There is better visibility for the path of inflation, which is downwards, although the conflict in Ukraine is still a wildcard when it comes to geopolitical risks. No one really has any idea what or how it may play out but the effects on inflation seem to have waned in the second half of last year. Finally, after three long years of its zero-tolerance Covid policy, China is opening up, which should be positive for global growth.

Manulife Investment Management forecasts a shallow recession, which it defines as a drop in GDP of up to – 2 percent, with the odds of a severe recession and of Canada being worse hit than its southern neighbor by an economic downturn being low.

Headland and Nia think the first part of the year will be choppy, with the main challenge this year being earnings in the first couple of quarters. However, that in itself provides an opportunity because not all companies are going to be treated the same, with some companies better able to navigate a high-inflation, high-interest rate environment. They forecast a reacceleration of the global economy in the second half the year as it adapts to higher rates as China reopens. This sets a backdrop for a positive year for equities that was not experienced last year.

Bonds and equities, it’s an old dance and it remains a good one. For quite some time, its demise has been predicted, but the traditional 60/40 portfolio split is alive and well and bonds are, or should be, back in fashion.

Yet, despite the positive outlook for fixed income, many people have fled for the safer shores of Guaranteed Investment Certificates (GICs), a move that Headland and Nia say could be lost opportunity.

They also point out that comparing GICs to fixed income can be misleading because it means comparing the yield but without realizing the optionality of capital gains and price appreciation in fixed income bond funds. Canadian bonds have since their inception outperformed GICs 80% of the time and that outperformance has been greater than 5% nearly 40% of the time.

Kevin Headland noted that there are other advantages to bonds, which do not necessarily expose clients to the reinvestment risk that a GIC does up to three years later.

Headland said: “Even when you look at GIC rates, the long term GIC rates are lower now, in anticipation of what the financial institutions are expecting. So, I think when we talk with clients today, not only are bonds back, but [we’re] not looking at GIC as a replacement for bonds.”

The fog of economic uncertainty is lifting, old tunes are back in fashion and bonds and equities are dancing in step together again. Spring is round the corner.

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Aligning your TFSA with Financial Goals

Michel Prévost — Mon, 26 Sep 2022 13:30:19 +0000

For 2022, you can contribute $6,000 to your Tax-Free Savings Account (TFSA), bringing the cumulative total of TFSA contributions to $81,500, or $163,000 between a couple. This means that a TFSA can help meet any investment objective.

Your first decision

You need to look at all components of your financial plan and decide where TFSA investments can help you the most.

Education Planning

To meet today’s increasing education costs, a TFSA can boost savings from a Registered Education Savings Plan (RESP), and a couple with more than one child can dedicate both accounts to the goal.

Retirement Planning

As a retirement savings vehicle, a TFSA builds an income source that’s tax-free and doesn’t affect eligibility for Old Age Security (OAS) benefits.

Estate planning

TFSAs have great flexibility for estate planning purposes. You can use your TFSA to:

Provide heirs with a tax-free inheritance
Offset taxes payable by your estate
Leave a charitable gift and claim the charitable donation tax credit.

To name a few…

Tax planning

As an income-splitting strategy, funds can be gifted to your spouse, children or grandchildren which they can contribute to their own TFSAs.

Savings

A TFSA is always ideal when saving for a short-term purchase, as withdrawals are added to contribution room the following calendar year. Some people even use a TFSA as an emergency fund.

Remember, how you want to use your TFSA is the first step to deciding what sort of investments you want to hold. Once the use is determined, we can recommend which investments suit your objective and risk tolerance.

Future steps

Your TFSA investments may change when your objectives or time horizon shortens. For example, a TFSA for education savings typically becomes more conservative as secondary school graduation approaches. And once your child graduates from university? Your TFSA may become a growth-oriented account for your retirement.

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5 steps to organizing your finances

Michel Prévost — Mon, 21 Mar 2022 13:30:28 +0000

By Sylvie Tremblay

Organizing your finances can help you feel less stressed and more relaxed about your money – and more secure about your future.

Decluttering and organizing your finances can help you save money and track your progress. And help you feel more relaxed and secure about your finances.

“When you’re dealing with disorganization, you can’t pinpoint exactly where you are financially in your life, because everything’s in disarray,” explains Varsha Singh. She’s a Toronto-based professional organizer and the manager of operations and client care at ClutterBGone.

“We often find that clients are losing money because they’re paying bills late and paying interest that could have gone into savings,” she says.

Ready to roll up your sleeves and get started?

Use a budget calculator to help you manage your spending and understand if you’re falling short.

1. Sort and categorize your finances

It’s important to set up and maintain an organized system that works for you. That might be paper, digital or both.

Begin by sorting through your documents. Singh recommends creating broad categories to use smaller and more manageable collections of documents. Some suggestions:

bank, mortgage, and credit card statements
utility bills
contracts
important receipts

2. Know which financial documents to keep and which you can throw away

Next, purge. Singh says there’s an easy way to prioritize which documents to keep. Decide how difficult they’ll be to replace. For example, that signed mortgage statement is a must-keep. But the bank statement that you can download online is probably safe to shred.

Once you’ve sorted your financial documents, set up your storage system. Labelled hanging folders work best, says Singh. Store them in a filing cabinet or a 32-litre file box. You can find either at most office supply or home goods stores.

As new documents come in, drop them in the appropriate folder. Once you set up your system, you’ll be able to find any document you need in 15 seconds or less.

Want to prevent paper clutter from piling up throughout the year? Go paperless whenever you can.

3. Create a digital filing system

You might also have a handful of financial documents and bills hanging out in your inbox as well. But you can use the same organizing steps applied to your paper documents for your electronic ones.

Use folders and subfolders in your inbox or cloud storage to keep track of your financial documents. Try setting up inbox filters to help automate the process.

If you’re storing both paper and digital documents, be sure your filing systems match. That way you can easily find what you’re looking for.

4. Know how long you need to keep financial documents

Keeping your financial statements organized can be very helpful around tax season.

“Canada Revenue Agency says we need to keep financial documents for seven years. That’s why a lot of people feel they need to keep all their receipts and documents for that long,” Singh says. “But the reality is that if we need to keep our documents for seven years, so do financial institutions.”

Shred older documents that you could easily replace. Declutter old receipts regularly throughout the year, including at tax time. If the item is out of warranty or no longer returnable, throw out the receipt.

- Which investments can reduce your tax bill?

5. Get help with your finances when you need it

Organizing your finances and setting yourself up may feel overwhelming. Don’t be afraid to ask for help from a professional.

Look for an organizer associated with the Professional Organizers in Canada (or POC), advises Singh. The POC sets ethical and training standards to ensure organizers can help you sort through your financial documents safely. That way, your information will feel manageable and secure.

You could take one more step, after you’ve got your paperwork and digital files in shape. You may find it useful to speak to an advisor to review your financial situation.

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When’s the best time to invest?

Michel Prévost — Mon, 27 Dec 2021 14:00:43 +0000

The year just ended demonstrates how different investors can react to the same market conditions. Starting in early 2021 and well into the summer months, stock markets surged overall. Some people wondered if they should boost their investment amounts to capitalize on the booming markets. But others worried about buying into the market at all when prices are high.

Investors can also react in opposite ways when markets are in the midst of a severe or prolonged downturn. Some people want to increase their investment amounts, buying in the dip, to profit when markets recover. Others wonder about halting their contributions or even selling some investments.

A tried-and-true method

Most long-term investors are best off by sticking to a schedule of investing regularly, regardless of market conditions. This practice ensures that you won’t overinvest when prices are higher, and you’ll take advantage of buying opportunities when prices are lower.

You also benefit in several other ways. Psychologically, you won’t worry about how you’re supposed to react to the market cycle and volatility. You avoid the temptation of trying to time the market – guessing the right time to buy or sell. Also, it matches up nicely with your paycheques or other regular income.

Theory versus reality

In theory, investing when prices are low offers more chance to profit the most. But the reality is that attempting to buy low presents a couple challenges. When prices fall, you never know if you should wait another day, week, month or longer. In a bear market, you could get caught waiting on the sidelines – and it’s time in the market that matters in the long run. That’s why investing the same amount regularly works in practice. You do buy low, and you benefit from time in the market.

L’article When’s the best time to invest? est apparu en premier sur Investamp.

Seven financial mistakes to avoid in a separation or divorce

Michel Prévost — Mon, 29 Nov 2021 14:00:41 +0000

Getting divorced or going through a separation is hard, it can disrupt your life and your finances. It can be overwhelming to keep your finances in order when you’re dealing with a lot of change in your personal situation; however, you could risk making things harder for yourself in the future if you don’t pay attention.

Here’s what you should consider to help keep your finances stable at this critical time:

1. If you can afford to, hire a lawyer whose only job is to safeguard your best interests.

Retaining an impartial mediator or arbitrator, without first checking in with your own counsel may be a less-combative route to an equitable settlement, but depending upon your unique circumstances, it may not be in your best interest financially. A mediator’s primary goal is to have the parties reach a settlement—not to negotiate for what you need or are entitled to. A lawyer that you hire will keep your best interests in focus.

2. The most expensive advice is not necessarily the best for your situation.

Take the time you need to find a qualified lawyer that’s the right fit for you and your budget. Ask friends for a referral; knowing something about the lawyer first can help your relationship.

3. Separate your finances right away if possible and feasible.

You don’t want any negative emotions surrounding a separation or divorce to influence how you or your ex-spouse may use your joint accounts or credit cards. Keep things simple and reduce the potential for further conflict by separating your banking and getting your own credit cards – if you don’t already have separate ones.

4. Consider whether you should keep the family home or move.

Keeping up a home on a single-income could set you up for financial hardship even if you feel there are short-term benefits such as maintaining stability for kids or yourself. You may want to downsize now in order to be able to save more for any unanticipated expenses that could come up because of the separation or divorce and being a single income household.

5. Prioritize what really matters to you then spend less and try to save more.

It may be harder to live the lifestyle you and your family were used to if you’re now a single income household. Take stock of your critical needs and look for ways to streamline your discretionary spending so you can continue to save for your future.

6. Have a detailed separation agreement.

Include as much information as you can about future considerations and situations that may come up in your separation agreement. Have a plan for each item to avoid having to go back to court or spending money on more legal fees.

7. Consider changing your will and insurance policies if possible and feasible.

If your spouse is a beneficiary in your insurance policy or heir in your will you may want to immediately change them so that your money goes where you want it to if something happens to you. Update your will as soon as possible; if you don’t have a will yet, this would be a good time to set one up. Also, be sure to check any policies to update your beneficiaries. However, all of this should be done only after the advice of counsel , as these kinds of assets sometimes figure into marital settlements.

L’article Seven financial mistakes to avoid in a separation or divorce est apparu en premier sur Investamp.