Financial Spring Cleaning: Reviewing Your Budget and Setting New Goals for the Next Quarter
April 24, 2025
As the days get longer and the flowers start to bloom, spring is the perfect time to refresh more than just your home—it’s also an ideal moment to tidy up your finances. A financial spring cleaning can help you reassess your budget, track your progress, and set new financial goals for the next quarter. Here’s how to get started:
Step 1: Review Your Budget
Your financial situation may have changed over the last few months, making it important to revisit your budget and ensure it still aligns with your income, expenses, and financial goals.
Assess Your Spending: Look at your bank statements and categorize your spending. Are there areas where you can cut back?
Identify Unused Subscriptions: Cancel any services or memberships that no longer add value to your life.
Adjust for Seasonal Changes: With warmer weather ahead, consider upcoming expenses like travel, outdoor activities, or home maintenance.
Step 2: Check Your Financial Progress
Reflecting on your financial habits can provide insights into areas where you’re succeeding and where there’s room for improvement.
Compare Against Your Goals: Did you save as much as you planned? Have you paid down debt?
Check Your Credit Score: A strong credit score is essential for financial health. If your score isn’t where you’d like it to be, focus on strategies to improve it.
Update Your Emergency Fund: Ensure you have enough savings to cover unexpected expenses.
Step 3: Set New Goals for the Next Quarter
With a clear understanding of your current financial situation, set realistic goals for the months ahead.
Prioritize Savings: Whether it’s for a summer trip, a home renovation, or retirement, commit to increasing your savings.
Pay Down Debt: If you carry a balance on credit cards or loans, create a plan to make extra payments and reduce interest costs.
Increase Investments: If possible, allocate more towards your investments or retirement accounts.
Build Better Financial Habits: Consider automating savings, setting spending limits, or learning more about financial planning.
Final Thoughts
Spring is a season of renewal, and your finances should be no exception. By taking time to review your budget, assess your progress, and set new goals, you’ll be better prepared to make the most of the coming months. Financial wellness is an ongoing journey, and small changes today can lead to a more secure future.
Are you ready to refresh your finances? Start your financial spring cleaning today and set yourself up for success in the next quarter!
How to Protect Yourself from Phone Scams: Verifying Calls from Your Credit Union
April 9, 2025
Have you ever received a call from someone claiming to be from your credit union? In today’s world, it’s important to know how to verify these calls to keep your personal and financial information safe. Fraudsters often pretend to be financial institutions to steal sensitive details, so staying informed is your best defense.
What is KYC and Why Does It Matter?
KYC (Know Your Customer) is a process that Ontario credit unions use to confirm the identity of their members. It helps prevent fraud and financial crimes, keeping your accounts secure. While it’s normal for a credit union employee to ask for some information when they call you, it’s equally important to make sure they are who they say they are.
How to Verify a Caller’s Identity
If you get a call from someone claiming to be from your credit union, follow these steps to stay safe:
Pause Before You Share – Never give out your account number, PIN, or passwords right away. A real credit union employee won’t ask for sensitive details out of the blue.
Ask Questions – A legitimate employee should be able to provide their name, department, and the reason for their call.
Hang Up and Call Back – If you’re unsure, politely end the call and dial your credit union’s official number from their website or the back of your debit card. This ensures you’re speaking with a real representative.
What to Do If You Suspect a Scam
If something doesn’t feel right, take action immediately:
1. Do not share any personal or financial details.
2. Hang up the phone.
3. Call your credit union directly using an official phone number.
4. Report the suspicious call to your credit union so they can warn other members.
Staying Safe in the Digital Age
Your credit union will never ask for passwords, PINs, or one-time verification codes over the phone. Being cautious and verifying calls helps protect you from fraud. If you ever have concerns, don’t hesitate to visit your local branch or check your credit union’s website for more fraud prevention tips.
By staying alert and informed, you can keep your personal and financial information secure. If you have any questions, reach out to your credit union—we’re here to help!
Filing taxes can be a daunting task, but with the right approach, it can be a smooth process. Here are some best practices to consider when filing your taxes in Canada:
Gather Your Documents Early
Start by collecting all necessary documents:
T4 slips (employment income)
T5 slips (investment income)
T3 slips (trust income)
RRSP contribution receipts
Receipts for tax credits (e.g., charitable donations, childcare, medical expenses)
Details of any government benefits (e.g., Canada Child Benefit, GST/HST credits)
Records of any business income and expenses (if self-employed)
Other relevant tax documents (e.g., student loan interest, union dues)
Having everything in one place will save you time and stress.
Know Your Deadlines
The deadline for filing individual tax returns in Canada is usually April 30th. If you’re self-employed, you have until June 15th, but any taxes owed are still due by April 30th.
Use Tax Software
Tax software: Many Canadians use tax software (like TurboTax, SimpleTax, or UFile) to file their taxes. These tools are user-friendly, often guide you through the process, and can help you maximize deductions and credits.
Tax professional: If your tax situation is complex (e.g., you’re self-employed, have rental income, or claim multiple deductions), it may be worth hiring a tax professional or accountant to ensure you’re getting all the deductions and credits you’re entitled to.
Maximize Deductions and Credits
Take advantage of available deductions and credits, such as RRSP contributions, medical expenses, and education credits. These can significantly reduce your taxable income.
Double-Check Your Return
Before submitting, review your return for accuracy. Ensure all information is correct to avoid delays or penalties.
File Electronically
Filing electronically is faster and more efficient. The Canada Revenue Agency (CRA) processes electronic returns quicker than paper ones, and you can receive your refund faster.
Keep Records
Maintain records of your filed return and supporting documents for at least six years. This is important if the CRA requests further information or audits your return.
Be Aware of Tax Scams
Be cautious of tax scams, especially during tax season. The CRA will never ask for personal information via phone or email. Always verify requests for information directly through the CRA’s official website or phone number.
By following these best practices, you can make tax season less stressful and potentially save money. Happy filing! YNCUniversity is here for all your financial literacy needs. Need one-on-one help? We got you! Reach out to our advisors. Don’t forget to follow us on Instagram and Tik Tok for more Honest Money Talk tips!
Power of Attorney vs. Joint Accounts: What You Need to Know
March 11, 2025
Managing money isn’t just about budgeting and paying bills—it’s also about making sure the right people have access when you need them to. Whether you’re planning for the future or assisting a loved one, you may be considering a Power of Attorney (POA) or a Joint Account. While both provide financial access, they serve very different purposes. Let’s break it down so you can make the best choice for your situation.
What is a Power of Attorney (POA) in Ontario?
A Power of Attorney is a legal document that allows someone you trust (the attorney) to act on your behalf (the grantor) when it comes to financial matters. Depending on the type of POA, your attorney can help with tasks like paying bills, managing investments, and making banking transactions. However, they do not become an owner of your assets.
Types of POAs in Ontario:
General POA – Gives broad financial authority but ends if the grantor becomes mentally incapacitated.
Continuing (Enduring) POA – Remains valid even if the grantor becomes mentally incapacitated.
Limited POA – Covers specific tasks or time periods.
Springing POA – Takes effect only when certain conditions are met (e.g., a medical diagnosis of incapacity).
What is a Joint Account?
A Joint Account is a bank account owned by two or more people. In Ontario, most joint accounts come with rights of survivorship, meaning that if one account holder passes away, the surviving holder(s) automatically take full ownership of the funds. Unlike a POA, all joint account holders have equal access and control over the money in the account at all times.
POA vs. Joint Account: Key Differences
Feature
Power of Attorney (POA)
Joint Account
Ownership
Grantor retains full ownership
Both parties share ownership
Decision-Making
Attorney acts on behalf of grantor
Each account holder acts independently
Survivorship
Ends upon grantor’s death
Surviving account holder retains full ownership of funds
Control Over Assets
Grantor can limit attorney’s powers
All account holders have equal access
Financial Risk
Attorney has a legal duty to act in grantor’s best interest
Each holder can withdraw/spend without consent
Legal Termination
Ends when revoked, upon death, or if not continuing
Ends only if the account is closed or modified
Which One Should You Choose?
Go with a POA if:
You need someone to manage your finances but don’t want them to own your assets.
You want control over what they can and can’t do with your money.
You’re planning for a time when you might be unable to manage your finances yourself.
Consider a Joint Account if:
You want shared financial access with a spouse, partner, or family member.
You’re comfortable with the co-owner using the funds freely.
You want to ensure seamless access to funds after one holder passes away.
When to Become a POA or Joint Account Holder
You might need a POA when:
A loved one requires financial assistance due to illness, aging, or incapacity.
You want a backup plan for managing your finances if you become unable to do so.
You want financial control without giving away ownership.
A Joint Account makes sense when:
You share household expenses with a partner.
You want easy access to joint savings or emergency funds.
You need a practical way to share financial responsibilities with a family member.
When Does Access End?
For a POA:
When the grantor revokes the POA in writing.
Upon the grantor’s death (POAs do not survive death in Ontario).
If it was a limited POA, access ends once the task is completed.
If it was not a Continuing POA, it ceases when the grantor becomes mentally incapacitated.
For a Joint Account Holder:
Access remains unless the account is closed or ownership is changed.
If an account holder passes away, the surviving holder(s) take full control unless otherwise specified in estate planning.
Choosing between a Power of Attorney and a Joint Account depends on your financial goals and comfort level with access and control. If you need assistance managing money but want to retain ownership, a POA is the way to go. If you want shared access and control, a Joint Account may be more suitable.
Before making a decision, consider speaking with a legal or financial advisor in Ontario to ensure you choose the best option for your specific situation.
YNCUniversity is here for all your financial literacy needs. Need one-on-one help? We got you! Reach out to our advisors. Don’t forget to follow us on Instagram and Tik Tok for more Honest Money Talk tips!
Mistakes You Can Make with an RRSP & How to Avoid Them
February 20, 2025
When it comes to RRSPs (Registered Retirement Savings Plans), there are a few common mistakes that can negatively impact your savings or tax strategy. Here are some of the most common mistakes and tips on how to steer clear of them.
Exceeding Your Contribution Limit (Over-Contribution)
Mistake: Going over the RRSP contribution limit, even by a little, can trigger a penalty. In Canada, the over-contribution penalty is 1% per month on the excess amount, which can add up quickly.
How to Avoid: Always check your RRSP contribution room before contributing. You can find it on your Notice of Assessment from the CRA or through the CRA My Account portal. If you go over by up to $2,000, you won’t face penalties, but anything above that will incur a 1% monthly penalty.
Failing to Carry Forward Unused Contribution Room
Mistake: Not utilizing unused contribution room from previous years can be a missed opportunity. RRSP contribution room is carried forward indefinitely, so if you didn’t use the full limit in one year, you can make it up in future years.
How to Avoid: Make sure you track your contribution room each year, which the CRA reports on your Notice of Assessment. If you missed contributing in prior years, try to catch up in later years, particularly in high-income years to maximize tax savings.
Withdrawing RRSP Funds Early Without Considering the Tax Implications
Mistake: Withdrawing funds from your RRSP before retirement means the withdrawal is taxed as income, which can be a significant hit, especially if you’re in a high tax bracket.
How to Avoid: Avoid early withdrawals unless absolutely necessary. If you’re buying your first home, use the Home Buyers’ Plan (HBP), where you can withdraw up to $35,000 tax-free to buy a home, provided you repay it over 15 years.
Not Taking Advantage of the RRSP Deadline (Contribution Deadline)
Mistake: Missing the contribution deadline for the year. In Canada, contributions made before the March 1st deadline count for the previous year’s tax deduction.
How to Avoid: Set a reminder well in advance, as missing the deadline means you’ll miss the chance to claim a tax deduction for that year.
Not Considering a Spousal RRSP for Income Splitting
Mistake: If you and your spouse have significantly different incomes, not using a Spousal RRSP can be a missed opportunity for tax planning.
How to Avoid: If one spouse has a higher income, contribute to a spousal RRSP to help balance retirement income between both spouses. This can help reduce overall taxes in retirement since withdrawals from the spousal RRSP are taxed in the hands of the lower-income spouse.
Investing Too Conservatively (or Too Aggressively)
Mistake: If you’re too conservative with your RRSP investments (e.g., holding too much cash or low-interest bonds), your returns may not outpace inflation over time.
How to Avoid: Make sure your RRSP portfolio is diversified. Review your asset allocation periodically and adjust based on your retirement timeline and risk tolerance. If you’re young, you might want to take more risk in your RRSP by investing in equities. As you near retirement, gradually reduce the risk by shifting towards more stable investments.
Using RRSPs for Short-Term Goals
Mistake: RRSPs are meant for retirement savings, so using them for short-term needs, such as a car or vacation, is a mistake.
How to Avoid: Stick to using your RRSP for retirement purposes. If you need short-term savings, consider a Tax-Free Savings Account (TFSA), which offers more flexibility without the tax penalties of early RRSP withdrawals.
Neglecting the Impact of RRSP Withdrawals on Government Benefits
Mistake: In retirement, RRSP withdrawals can push you into a higher income bracket, potentially reducing your eligibility for government benefits like the Guaranteed Income Supplement (GIS) or Old Age Security (OAS).
How to Avoid: Plan your withdrawals strategically to avoid large lump sums that may push you into a higher income bracket. You may also want to consider converting your RRSP to a RRIF (Registered Retirement Income Fund), which provides more predictable income in retirement and potentially lower taxes.
Not Taking Full Advantage of RRSP Tax Deductions
Mistake: Many people contribute to an RRSP but fail to take advantage of the tax deduction in the year they contribute. The RRSP deduction reduces your taxable income, which can lower the amount of tax you owe.
How to Avoid: Always claim your RRSP contribution on your tax return in the year you make the contribution. This will result in a lower tax bill for that year.
Forgetting to Convert Your RRSP into a RRIF (Retirement Income Fund)
Mistake: By the time you turn 71, you must convert your RRSP into a RRIF (or another retirement income product). Failing to do so can result in a large lump-sum taxable withdrawal.
How to Avoid: Ensure you convert your RRSP before the deadline at age 71. The conversion can be gradual (via a RRIF), allowing you to receive regular payments from the account while continuing to benefit from tax deferral.
By avoiding these mistakes and taking a proactive approach to managing your RRSP, you can maximize your retirement savings and minimize your tax burden. Haven’t opened your RRSP yet? YNCU has more than one RRSP investment option for you. Check out which option would work best for you.
YNCUniversity is here for all your financial literacy needs. Need one-on-one help? We got you! Reach out to our advisors. Don’t forget to follow us on Instagram and Tik Tok for more Honest Money Talk tips!
