Personal finance perks that make you sing O Canada!

By | Finance

In wake of Canada’s 150th birthday, it’s time to review our good fortune of living in this country. There is a lot to be thankful for – a reputation for politeness, poutine, universal healthcare, a dreamy PM, and equally dreamy (if not more) natural beauty of the True North strong and free. When it comes to personal finance, Canada has lots of reasons to command true patriot love in all her sons and daughters.

Below are a few reasons we should be thanking our home and native land.

Canadian Personal Finance Savings

The blessed Tax-free Savings Account

The Tax-free Savings Account (TFSA) is something all Canadians can get behind. It’s simple and universally helpful for everyone’s personal finance. If you’re a millennial, you can use TFSAs to save for near to medium-term life goals like travel and home-buying. For Gen-Xers and Boomers, you can use them along with registered retirement savings plans to save for a happy retirement.

If you’ve already retired, TFSA will allow you to generate a constant tax-free income without clawbacks on income-tested benefits, Old Age Security (OAS) or the Guaranteed Income Supplement (GIS). While the TFSA’s annual contribution limits won’t satisfy all your savings needs, it’s still a favourite savings program. RRSPs don’t even come close.

Pillar of retirement savings – the Canada Pension Plan

The CPP may be the most important social safety net for Canadian next to universal health care. The Canadian Pension Plan is one of the pillars of retirement savings and a personal finance gem. Combine that with OAS and personal savings through RRSPs, TFSAs and company pensions or group RRSPs – your personal finance game seems pretty strong.

Overall, the CPP is a well-regulated pension plan that offering a good start to a sizeable retirement income. It’s  not uncommon to wonder if this program will be around when we retire. You should still think about how saving up enough to add to the CPP and OAS.

Canadian personal finance retirement

The ultimate bailout: Canada Deposit Insurance Corp.

The CDIC is a well-funded, pro-active organization that exists to maintain people’s confidence in our banking system. It’s always good to keep an eye on the stability of any bank or trust company you deal with to manage your personal finance. But, if you stick to the coverage limit of $100,000 in combined principal and interest for eligible deposits at a CDIC member bank, you are definitely protected from bank failure.

Keep in mind though, credit unions have their own provincial deposit-insurance plans.

The great Canadian dividend stocks

When it comes to blue-chip dividend-growth stocks, Canada pales in comparison to the United States both in numbers and diversity. But we have a steady list of companies with a good record of paying a rising dividend to shareholders over the years. Owning stocks in these companies results in a strong total return of both dividends and share price gains over time.

These stocks include stable Canadian companies, such as the Royal Bank of Canada, Canadian National Railway, Canadian Tire and TransCanada Corp.

Canadian loonie and toonie savings

An ever reliable national banking network

Banks are such an integral part of our financial culture in Canada. Branches and ATMs can be found in every corner of the nation. It’s often too easy to think of them as public institutions rather than businesses selling financial products, given their steady presence.

Regardless of what city you’re in the great wide North, you have a good chance of finding your bank or at least your bank’s ATM, ready help avoid fees associated with using other bank machines.

The Loonie-Toonies

Say what you will about our pet-names for our coins, but this is the height of practicality – Canadian style. These two coins are excellent for the vending machine. Small, efficient and useful. The loonie and toonie are the foundations of an essential savings program – a fact it rarely gets enough credit for. Here in Canada you start your first exercise in personal finance management not with a nickel-dime strategy, but a $1 and $2 coin. Start putting your pocket change in that piggy bank every night and watch those loonies and toonies add up. Count the coins once a year and you can somewhat understand why Scrooge McDuck would take a swim in coins. Coins up North mean something, eh?

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