Ask the Experts: February 2018
Talking about money is important. For many people, however, discussing money is considered impolite or rude. Other people just don’t feel comfortable discussing finances and they’d rather not talk about salaries, budgets, or savings. Unfortunately, this tendency in our society leads to a lot of misinformation and confusion.
That’s why we believe in talking about money. By asking questions and seeking information, people can get more informed and gain the knowledge they need to create strong financial plans and build a more stable future.
The questions here have been condensed or rewritten for clarity and simplicity.
Tax time is coming up, what do I need to do to prepare?
The first two things to know is that the filing deadline for 2017 taxes is April 30, 2018 and that you can file online as early as February 26, 2018.
You’ll also want to make sure that you keep the Canada Revenue Agency up to date about any major changes in your life. For example, if you got married, had a child, or moved, make sure to let the CRA know as soon as possible.
You’ll also want to confirm that you have all of your applicable documents, receipts, etc. This will make it easier to prepare your taxes. Keep bills, credit card statements, business expenses, investment records, and any other important documents on hand and organized. You’ll also want to make sure you have receipts for your RRSP contributions and charitable donations, as well as tax information slips such as your T4 slip. Remember that you’ll need to keep tax returns, receipts and supporting documents for six years.
It’s also a good idea to decide if you need help with tax preparation. If your tax return is fairly simple, you can likely complete it yourself using a compatible software program, but if your situation is more complicated, you may want to seek professional help.
If you think that you’re going to owe money to the CRA, start budgeting to make sure you can pay your tax debt as quickly as possible. This will save you on interest charges and penalties and keep you out of trouble with the CRA. If you believe you’ll be getting a refund, come up with a plan for the best way to use this money, such as saving for retirement or paying down debt.
I lost focus on my New Year’s resolution to spend less and save more. How can I get back on track?
The first thing to remember – and it’s good that you did – is that even if you falter with a savings or spending goal, you can always get back on track. Too often, people fall into the trap of believing that there’s no point to trying anymore once they’ve “broken” a resolution. But this isn’t the case. If you lose focus on your resolution, take stock of your situation, adjust your plans, and keep going.
So, it’s very good that you want to get back on track despite falling off.
The first thing to do is to look at your spending over the past little while. Look at your bank statements and credit card statements for the last 30 days or so and see where your money has gone. This can help you pinpoint the areas where you can make changes.
The next step is to come up with an easy and convenient way to track your spending. Some people use an app on their phones, some use a spreadsheet on their computer, and some use pen and paper. No matter how you decide to do your tracking, make sure you keep a record of everything you spend. This will make it easy for you to analyze your spending, create a budget, and stick to it.
Another thing you’ll want to do is review your actual resolutions themselves. While you probably had good intentions when you set your goals, there’s a chance that you didn’t set realistic expectations. Review your plans and goals and make sure they apply to your current situation and that they’re reasonable.