Valley First

Simple RRSP tips

Simple tips to navigate the RRSP season and emerge on top

As we move through another investment season, many Canadians continue to wrestle with tough financial decisions—is it best to contribute to an RRSP, pay down debt or sock some cash away for the proverbial rainy day.

With the scores of financial messages flying at us every day, it’s easy to be left feeling frustrated and alone when it comes to financial planning—and, no one wants to be alone with the most romantic day of the year looming. According to Valley First financial expert Luke Ellis, the best remedy is to make a date with your financial planner this Valentine’s Day and fall in love with your finances.

“There aren’t a lot of people that will say they love dealing with their finances,” says Ellis. “A lot of this stems from not knowing where to start or a lack of understanding about their options. If that’s your situation, I say make a date. It may be out of your comfort zone to approach a financial planner, but they want to talk to you just as much as you need to talk to them. Someone has to make the first move.”

With a date set, it’s time to start thinking about what you want out of a financial relationship. Ellis says everyone is looking for something a little different, but there is a common thread to all love stories—commitment and compromise.

“Many people have a fear of commitment when it comes to their finances,” says Ellis. “It’s easy to focus on what they may be giving up rather than what they can gain. Spending is easy, saving is hard. As with any relationship, you need to be committed for the long haul if you want to see results.”

“It’s essential to the success of any plan to be committed but also be willing to compromise. While you may have to may some sacrifices in the short-term, in the long-term, these sacrifices can really pay off. Just ask anyone who has lived by the save early save often mantra.”

As the RRSP contribution deadline draws nearer, Ellis says another strategy to maximize investment dollars is to go Dutch.

“A lot of employers offer RRSP matching contributions as part of their employee benefits package,” says Ellis. “The only condition is you must contribute first to receive the matching amount. If you’re employer offers matching, take advantage of this whenever you can. You’re essentially doubling your contribution immediately.”

 

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