Unimor Capital Corporation

Tag: invest

  • Maximizing Your Tax Return

    Maximizing Your Tax Return

    If you filed your taxes and found you’re getting a refund this year, you might be wondering how to use the money. Once you’ve determined you’ll be getting a tax refund this year, you’ve got options when it comes to using your extra cash. It can be tempting to spend the sudden windfall on a shopping spree, but if you’d rather play it safe this year, we’ve put together seven sensible — but satisfying — ways to use your tax return.

    1. Pay Down Your Debt
    If you’re carrying personal debt, you’re not alone. The average household debt hit $72,950 at the end of 2019, up 2.7% from the previous year, according to a recent consumer debt study. By using your refund to pay down your debt, not only will you lower your current balance, but you’ll also reduce the amount of interest you’ll pay on your remaining balance — and that will put more money in your pocket down the road.

    2. Open or Contribute to a Tax-Free Savings Account (TFSA)
    A TFSA is a great savings tool for both short- and long-term goals. It’s a flexible savings plan that lets Canadians who are 18 years and older save and invest tax-free, with competitive interest rates. Anything you contribute to a TFSA, as well as any income earned in the account (such as investment income and capital gains), is generally tax-free, even when it’s withdrawn.

    3. Boost Your Registered Retirement Savings Plan (RRSP)
    If you’re getting money back in the form of a tax refund, a smart way to use the money is to stash it away in your RRSP. An RRSP is one of the most effective retirement saving tools available to most Canadians. And since your money is sheltered and doesn’t get taxed until you withdraw it, your funds can grow even faster.

    Another benefit is that RRSP contributions are tax-deductible, which means they lower your annual taxable income for the next year. To find out your RRSP deduction limit, look at your latest notice of assessment or check with the Canada Revenue Agency (CRA).

    4. Spend a Little, Save More
    If you’d really like to treat yourself to something new with your tax refund, there’s a way to do it without feeling guilty. A good compromise is to buy one (reasonably priced) treat and put the rest of the money into your savings. Where you save the money is up to you. You’ve got plenty of options: a regular savings account, a Tax-Free Savings Account (TFSA), or an RRSP. Putting a good chunk of your tax return in your savings is a smart move, especially during tough financial times.

    5. Save for Your Kids’ Future
    If you have kids, you can use your tax refund to boost their education funds. The cost of university is steadily rising, and the sooner you can start saving for it, the better. A four-year degree is likely to cost more than $100,000 — making a Registered Education Savings Plan (RESP) one of the best investments you can make in your child’s future.

    6. Invest in Your Home
    We’re spending more time at home than ever, so why not use your tax refund to improve where you live? You can do this in a couple of ways. If you’re thinking of buying a new home, you can use your refund to save up for your down payment (you may even be eligible for a first-time home buyers’ tax credit). Or if you already own a home and you’re content, consider investing in renovations, whether it’s a big project like giving your bathroom a total refresh, or a smaller investment like creating an office nook to make working from home more enjoyable. It may seem like an indulgence, but by upgrading your home, you’re actually adding value to it for the future.

    Getting a tax refund can feel like an unexpected gift. To make the most of the money and bring yourself peace of mind, it’s a good idea to resist the urge to spend it all, and instead take the time to think about how you can use your refund to make the biggest impact.

  • Money Management Tips for 2021

    Money Management Tips for 2021

    Have you made your New Year’s resolutions? You might have already dusted off some of those perennial favourites: lose weight, drink less, travel more, etc. But what about resolutions for your wealth? Just as “lose 10lbs by visiting the gym twice per week” is a better goal than “get fit,” setting specific, measurable goals for your finances is an important step in achieving them. If you’re unsure of what to focus on beyond “spend less, save more”, let these 6 money-saving tips guide your resolutions to make 2021 a financial game changer.

    1. Invest in Yourself
    One of the best investments you can make is in yourself. The best areas to focus on are your earning potential, financial literacy, and mental health. 2020 was a difficult year for most, and caused significant upset to people’s careers, savings, and lifestyles. While no one could have prepared for a global pandemic, we can fix any vulnerabilities it identified. Now, more than ever, people are understanding how big their Emergency Fund should really be and why investing in the stock market is essential to financial security.

    This is a great time pursue extra education and credentials that can increase your earning potential. You might even want to switch to a new career entirely. Likewise, the stress of the past 12 months has emphasized how important it is to take care of your health. Go ahead and adjust your budget to fit essentials like a gym membership or therapy to ensure you can really go into 2021 ready for whatever the year has in store.

    2. Get Rid of Your High-Interest Debt
    Carrying multiple balances, especially at varying interest rates, can feel like death by a thousand paper cuts when your bills come in the mail. If one of your goals is to get your debt under control in 2021, consolidating that debt on a low-interest loan or line of credit might be the answer.

    Debt consolidation means moving all or most of your debt to one place, so that you can experience the joys of having only one interest rate, one minimum payment, and one repayment term. You can do this by taking out a line of credit, debt consolidation loan, or credit card and using it to pay off all your existing balances. Not only will credit consolidation alleviate the headache of managing a number of different payments, it can also reduce the carrying cost of your debt and even get you out of debt faster. It’s also likely to give your credit score a boost right off the bat!

    3. Start Saving for a Big Goal
    If you really want to start the New Year off right, take your first steps to accomplishing something big with your money. This can be anything from saving up a down-payment for your first home or finally starting a retirement savings account. Whatever your goal, make sure you know exactly what you’re saving for and the specific dollar amount you need.

    Once you know your money wish and the price tag, it’s time to plan. If you want to hit your target by the end of 2021, all you need to do is divide the amount you need to save by 12, and that will tell you how much you need to set aside each month. For example, this might be the year you finally make good on your promise to yourself to have an emergency fund. If you want to have $2,000 saved by the end of the year, you’ll need to set aside $167 per month to accomplish this goal.

    Once you know what you’re saving for and how much you’ll need, open a dedicated high-interest savings account, and start saving right away. Bonus points if you open the account with a financial institution other than your primary bank, so you don’t see the cash and are tempted to spend it every time you log in to your online banking. To give your goal an extra boost, don’t wait until your first paycheque in January to start saving. Even if you only have $10 to spare right now, deposit it in your new savings account to give your goal some momentum.

    4. Introduce Good Financial Habits
    The best way to ensure your meet your financial goals in 2021 is to set up good routines and habits that ensure your success happens automatically.

    Commit to “No-Spend” Days
    One of the best things you can do is commit to 1 or 2 two “no-spend” days per week. These are days where you don’t spend any money. You make coffee at home, you don’t order-in dinner, and you definitely don’t make any online purchases or visit any stores. No spend days help get you identify what spending is really necessary and how much you do just out of habit.

    Check Your Finances
    Another great thing you can do is set aside 1 or 2 hours each week to review your finances. This is a great thing to do Sunday night before the start of your week. Block off some time to review your spending, pay any outstanding bills, and check up on the performance your investment portfolio. Even if you have a budgeting app that tracks all your spending, you still need to go over everything and make sure there are no mistakes that are costing you.

    5. Reduce Your Financial Stress
    Managing your debt, saving for the future, and trying to earn more money all at one time can be exhausting, and make it difficult to do any one of those tasks well. To free up the emotional and mental energy you need to tackle big financial goals, focus on optimizing the little things first.

    Here are some quick ways to reduce the mental load of regular financial housekeeping, so you can focus on bigger tasks at hand:

    • Sign up to receive your credit report emailed to you monthly so you always know exactly where you stand
    • Automate all your regular bills to a single cash-back or rewards credit card
    • Set up a weekly transfer from your chequing account to your retirement investments to ensure you’re always saving for the future
    • Look for discounts by bundling services from one provider
    • Review your insurance coverage, and make sure you have the often-neglected but always-needed coverage, like disability insurance
    • Rid yourself of subscriptions

    6. Plan for the Future
    As soon as you have assets, whether they be in the form of property, stocks, investments, or a vehicle, you should start thinking about putting together a legal will. If anything were to happen to you, this is the only way to ensure your wishes are respected and your assets are disbursed how you want them to.

    Every day is a chance to start fresh with your finances, but there’s something about the New Year that can inspire that extra boost to get your bank account in order. There’s never been a better time to remedy old mistakes and reach new money milestones, so when you sit down to make your 2021 resolutions, make sure to include a few that will put more money in your pockets–now, and for many years to come!