Tax Season is here! That time of year when those tax slips come in, filling your mailbox. That time where you gather all your papers, drag it over to your accountant and pay an unknown fee when he's done with it and wonder "Why did he charge me extra for a 15 minute phone call!? I just wanted to know how much I should put in my RRSP next year..."


Well, we feel you.


We've never enjoyed the traditional process the other firms have been doing.


At Aryandale Financial, we're changing the game with other firms leveraging technology to connect us better. This, we believe, will elevate and simplify the process in order to provide you with more time for quality advice and planning to meet your long term financial goals.


Remember: we are your financial partners in all of this. Convenience, trust, expertise, and quality guidance is what we strive to provide.


Come join our family and see the difference!


CRA allows for the first tax returns to be filed starting February 26th, 2018. We have great early bird discounts waiting for you on our website here under the pricing tab. Take advantage of locking in your discount and let's make this tax season a smooth one together!


See you soon,
Ary

RRSP 2018: Contribution Deadline, Limits, Need to Know

Oh boy, today marks exactly two weeks before your RRSP Contributions for the 2017 tax year are due! March 1st, 2018 is the last day you can contribute to save on taxes this year. And if you're like the many other Canadians looking to save on their taxes, invest for your future and diversify your ways to produce wealth, then this post is for you!


What is an RRSP?


Registered Retirement Savings Plan. You must have seen RRSP, RSP, etc mentioned around at your banks, investment advisors and more. But many confuse this account for an investment product!


So what is it really?


An RRSP is simply an investment vehicle, an account, that your financial institution opens and registers with the CRA. That allows you to contribute your savings into an account to invest in a range of different products like bonds, stocks, real estate investment trusts, and more.


What's special about it?


By registering it with the CRA, your contributions can be deducted from your taxable income so you pay less tax! But don't be confused: RRSP contributions will eventually be taxed when you withdraw it from the account. But when you retire, you'll probably be in a lower tax bracket than today, so over time you're saving so much money!


How am I saving so much money though?


Think about a $5,000 RRSP contribution when you're paying 25% in taxes because of your income.


If you put it in a normal savings or investment account, at tax time, our team will have to calculate the tax you owe, and if we simplify this, you'd owe, say, 25% of that $5,000, aka $1,250 is for the tax man. So when you invest, $3,750 is left to buy all your favourite companies.


But when you contribute to your RRSP, we can deduct this $5,000 from your income that year or in future years so that you pay less taxes! How? You'll actually reduce your tax bill by $1,250 and have the full $5,000 sitting in your RRSP investment account so you can buy more of your favourite companies!


Imagine a business with shares costing $10. If you didn't contribute, you could buy just 375 shares. But if you did contribute to your RRSP account, you could buy 500 shares! That will, in the long term, help you grow your wealth by using more of your cash today rather than having it taxed!


So I should always contribute to my RRSP then?


Well, no. That's where we come in with the consulting and advice. Sometimes investing in a TFSA is a more efficient account to invest with. But it all depends on your financial situation, so talk with your accountant and they would be able to help you tax plan to efficiently save on taxes and grow your wealth.


Ok, so how much should I contribute this year then?


Gotta be careful here: contribute too much, and you could go over your limit and get hit with CRA penalties!


But here are the rules:


Maximum of 18% of last year's earned income (employment income, for example) is allowed to be contributed for the following year. The maximum for 2017 was $26,010. Any unused amounts can be carried forward.


So if you make $50,000 last year, max you could put in is $9,000. $200,000 income? Max would be $26,010.


Your accountants at ADF will let you know how much you can contribute to your RRSP each year during tax time so don't worry, you'll know what your limit is each year with us!


In summary, the RRSP is a great tool to use to save on your taxes while investing for your future. Talk to your bank, financial advisor or our team at ADF if you're looking to contribute in these last two weeks.


March 1st, 2018 is your last day so don't wait!

Wow, can you believe that the end of 2017 is fast approaching?

With the holidays coming in December, you're probably fighting to get those last minute gift ideas out of your head and into your Amazon shopping cart.

You're busy, I get it. You have to find the time to finish your shopping, see family and friends for the holidays, go on those cute winter dates with your partner and enjoy all of the hot chocolate and cookies! But let me be your friendly financial advisor and remind you: don't forget to review your finances before year end!

With almost a full year of spending, investing and saving, you'd be surprised at what's been happening in your accounts!

Here are some questions to ask yourself before we wrap 2017 up to ensure you have a solid financial footing for 2018:

• Did I spend more than I could afford this year?
• What is my emergency fund looking like? Do I have enough funding to cover 3-6 months of expenses?
• Have I considered investing my extra savings into my TFSA and/or RRSP?
• How's my credit card, car loan and mortgage looking today? Can I pay down one of my debts fully to eliminate that burden?
• Did my investments do well this year compared to the market?

Spending more than I can afford

Sometimes, we overspend on things we can't afford. Can you get out of it? For sure. In 2018, consider starting a budget. Track your average monthly income and see how many dolla dolla bills you must allocate to each expense category: groceries, transportation, entertainment, clothing, insurance, rent, cellphone, utilities, etc. This will help you be more disciplined in saving and spending within your means.

Emergency Fund

​Haven't established that emergency fund yet? It's okay, turn a new page in 2018 and re-adjust. After you build your budget, ensure you set up a percentage of your paycheque to pay yourself first and establish that emergency fund. Seeing the numbers laid out will help you understand where the inefficiencies are in your spending.

TFSA or RRSP?

I get this question a lot, and it really depends. If you do have some extra savings, you want to consider investing and growing these funds tax free and tax deferred. Depending on your income and savings, a mix of both or simply one of the two could be the most efficient. Plan it out with your accountant and financial advisor for the best results.

Pay off that Debt

Best advice: pay your smallest debts first and eliminate them. If you owe $250 on your credit card, tackle it. Eliminate it.

​When it comes to loans like your mortgage, if you have extra savings, paying off a little more on your mortgage (depends on your mortgage rules) can help you reach a mortgage free home sooner!

Or, you could stick to the normal payments if you see better investment opportunities in the markets. This is a whole other topic to discuss, so we'll leave that for another time.

​The markets have been hot hot hot!

I really hope you were invested in the markets in 2017! It was a hot one!

Overall, equity markets killed it worldwide. Bitcoin had an amazing 800%+ return since January 2017 (and I'm still crying about not getting in when I had a chance). Real estate prices continued to boom, regardless of government intervention. It was a crazy, awesome year to make some money.

Ask yourself if you're in the best position to grow your wealth. If you aren't happy with your past investment performance, consider better options to grow your investments.

All in all, we have a new year fast approaching with wonderful opportunities ahead of us. Take initiative to control and understand your finances. We'll be here to guide you along the way.

​-Ary

Yay! You graduated! Congrats! You've worked very hard to complete your degree and that is a huge accomplishment. I just recently witnessed my sister's convocation and I couldn't be more proud.

For many of us, the transition from school to the workplace full time will be a scary change! But rest assure: it is a new chapter you'll learn a lot from.

Now that you're looking for or have found a job, you'll be making some money! Time to splurge and enjoy that pay cheque, right?

Not so fast: you still got that OSAP money to pay back, remember?

Don't wait to start paying it off.

Yeah, don't.

You remember how you have that "six month grace period" after graduation? Who cares: you still owe money. If you can start paying off some of your loan now or even before graduation, you'll be ahead of the game!

Interest accrues daily on each dollar owed even during the six month grace period. Those dollars will add up. Instead of leaving that money in the bank to make zero interest (unless you read my previous post here), put it towards paying down your loan. Those summer job earnings you saved could be put to work right now. This way, you will reduce the original loan amount, meaning, you will owe less interest moving forward.

Make extra payments (no matter how little) and pay a little more than the minimum.

Every bit counts.

With OSAP loans, there are no penalties to paying down your loan more than the monthly stated amount.

After six months, the National Student Loans Service Centre will send you a statement with the principal owing, accrued interest, and estimated monthly payment plan to pay off your student debt.

​When you get this, you know it's time to keep up with those monthly payments. But if you can, why not double or triple the monthly payment? Or make that minimum payment, but twice a month on the 15th and 30th, or on each pay day?

With online banking, you can set up recurring bill payments. You can set up a system where $20 every week is paid to your OSAP loan, on top of your monthly minimum.

Whether it's weekly, biweekly or monthly, the point is to try to make a few extra payments when you can to pay your debt off sooner. The faster you are to pay it down, the less you'll owe in interest later.

Use your tax refund to pay down your OSAP loan.

Since you paid tuition over the past years, you've most likely accumulated quite a bit of tuition tax credits. The Government of Canada allows you to refund some of your taxes already paid with tuition tax credits.

For every dollar you spent on tuition, you'll be able to recover $0.15 of the taxes you already paid for that year. So when you get your first job after college/university, get ready: our team at Aryandale Financial will be making you smile come tax season, letting you know to expect a nice, juicy tax refund.

When you get that refund, pay down some more of that debt, okay? You'll be happy to see those hundreds or even thousands come back into your bank account come tax season, but sad to see it go to pay off your OSAP... But in the long run, you'll thank yourself.

​There are no magic tricks when it comes down to paying off student debt.

Honestly, you just gotta pay them down fast.

Time is everything. Starting sooner rather than later for paying off debts will hurt less in the long run. It's about using time and money effectively and efficiently.

Pay sooner, pay often. Don't let time and interest grow that balance to a beast you cannot tame. Student loans don't disappear from bankruptcy in most cases, too... They are with you for life. So tame the beast and pay it off.

You can do it.

It's time to have the talk about bank fees.

Why are you still paying them? Really, why?

Why It Doesn't Make Sense For Me To Pay Bank Fees

• I expect to earn interest if I lend you my hard earned money, not pay fees.
• Why should I park thousands of dollars in my account just to get free banking?
• I do all my banking online on my mobile and laptop. Don't need a branch to help.
• Why should I pay for a bank account when I know how to get one for free?

So, as you can tell: I don't think you should pay for bank fees when you're a millennial, like me. Let me explain.