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Pug MONEY MANAGEMENT Wednesday February II 1M7 Friday February Time to make a RRSP choice You have Monday March to put part earnings into Ibe tax shelter most widely used by a Registered Retirement Savings Plan RRSP The basic idea in this You forego the use of part of your earnings for the time being letting a trustee handle it in an and you take it back when you reach retirement age For its part the government fore goes he income tax on that portion of your earnings also for the lime be tag as an Incentive to you to make VINCENT On Business provision for a comfortable retire- meat When you your usually at retirement and neces sarily before the end of the year in which you turn it becomes sub ject to income tax By then If your annual con have been invested suc cessfully your neategg is much higher and your tax rate is likely to be lower than it is now during years Currently changes in the rules pertaining to are being phased In Some take effect with the tax while others wont kick in until later Generally speaking the changes are to the benefit of the taxpayer expanding toe limits on annual con tributions and he range of ties for postretirement payout For and for the current year as well the selfemployed and people who members of any company pension plan are allowed a higher contribution than previously The lesser of per earned income or up from S500 Otherwise your contribution limits won start increasing until taxation year The same limits as before still apply for 1966 and If you belong to a Registered Pen sion Plan or a Deferred Profit mg Plan you may contribute per cent of the year earned income to a maximum of lesa your contri bution to the pension plan That part Is fairly simple Calcu late the amount you are eligible to contribute and prepare to contribute ft no later than March to trim this springs tax bllL Not so simple is the decision as to the trustee and the choice of invest vehicle The financial institutions who are authorized to accept your ton and to Issue the official receipt that you will need In order lomake the deduction from your taxable Income and trust companies and their cou sins the mortgage and loan firms banks insurance companies broker age credit unions i warm mm You And Your Bank One In A Series Personal credit how to make it work for you w do you know about credit Before taking out a loan check your knowledge of credit and jour own financial to ensure thai credit works for you not you win of the different kinds of credit such is a charge account credit rani or consumer loan Do you w the jxirces ran which department credit or financial in The can mean Credit costs money in the form of interest charges true cost of a credit purchase is the pnee phis the interest charges Ask jour self tich you make credit decision how much tin product or service is costing and whether it really worth tint much to jou Are you prepared if your financial circumstances change flunk about jourincome expenses and savings Is jour fob situation What if the economic due or renewal and if so what will this mean in terms of dollars Can you estimate jour other expenses during the period you will be paying off your loan Do savings to joy caw an emergency Cut afford it Do jou haw other debts people know much they bring liome but iindert ornate their expenses Cm handle lit idditional expense of Hie rule of thumb is that than 10 to of take pi be used to pay debt other than a Before miking you should take a clow look it our economic it jour knowledge of credit only wny to ireairt credit works and not ignnsl jou is to make in honest of your financial circumstances in njition to your needs tor information I booklet Crvdst Mix The Canadian Bankers Assoaa turn Box A Toronto changes Is jour lease or mortgage Tips on getting a loan re nothing mysterious about applying loan Its up to you to shop around for the best viluc but keep in mind you have the right to ask questions recent reasonable answers and take tune to make up your mind Here arc some guidelines Shop around for the best interest rate Find out how the interest rate is calculated and dollar cost to 2 Make sun you read the entire loan agreement that you understand ever thing Ask questions and consult a lawyer if necessary Add up tlie dollars and cents of the choices and then if this the right type of credit for the purpose you mind Should use your charge a bank card or a con sumer loan the lender a also assessing you So keep these points in mind Any financial notary you haw will be considered Be realistic about the money ind conditions you want Be willing to abk alternatives Be prepared to provide mentation such as a budget plan or a statement of earnings If jou are asked personal lions keep in mind that with respect to credit the Canadian Human Rights Act forbids ds crimination on grounds of racial national and ethnic origin colour religion age sex marital or con for an nee for which i pardon has been You should not be penalized for refusuiR to answer questions about planning but if jour plans will haw a signifi cant on jpurincoiiK the is something jou and jour lender consider when rev wing the should not be penalized for refusing to answer your spouse income or status or about unless spouse income I be to lielp repay the debt are obliged to disclose the facts truthfully and fully If you ire tempted to hold something back or to things sound better than they are This could work when llic facts are checked The unvarnished truth may also reveal that it is unwise for jou to take on a debt If jour financial position is may be better off with out more debt The Canadian Bankers ban Box 1500 Station A money is sometimes easy to forget that what buy you have to for Here are some guidelines for keep ing control of your financial affairs especially your debts Make a budget for stick to it Mike sure jou know what is coming in and what is Avoid impulse buying Ask your self If I had to pay in cold hard cash Mike a liabrt of comparison shop ping Dung that includes without comparing costs ind read ind make sure understand ipplication forms Man jou them Be careful of cosigning loan or pi innteemR loan on behalf of could end up pacing off the loan if cannot liandle it Ask the wine questions of the bef that die would ask Be know about the cost of credit Arc using the right type for jour purpose Are using more expensive form of credit than necessary Be sensible about number of credit cards you use How many do really need Are you using simply because hare them Keep track of all credit purchases Save the receipts for checking monthly statements and for keeping a running total of jour obligations A an extra cheque register part of the cheque book where keep track of deposits ind withdraw Use the cheques column noting credit pur nd deposits column fir notinj credit meats Tie Balance could record how in total Ke member use casJi i cheque i card or loan to forjourxinhasjs checkout reputation of the sum s reium policies product Using credit does not of your con nKT about avail unit for the five booklet Cnxhi Wise The Canadian Bankers tow Box A Toronto Buying your first home what can you afford you begin to look for home of jour dreams takeartabsue at the price you can afford One way is to use the annual income rule of thumb lb establish tlie price you can multiply your gross before tax annual income by Include income only such is your salary or secure investment income If your spouse or other ipplicarit working add his or her assured income as well example together you bring in a gross annual income of price you can con is i general guide only up to 5i Another general rule of is the monthly mortgage payment The assume must cover the difference between your down payment and the pnee A general rule for tlie monthly mod gage payment is in he range of to 30 of jour gross monthly income Using the gross income example this indicates a maximum monthly payment of Now take a close look at your current budget Are you putting aside savings Do you have other major debts such as a car loan or How about food clothing transportation entertainment and so forth Deduct what you are now spending from jour take pay Expenses in your new liome will include heating electricity water minor repairs special supplies lor older homes major repairs are more likely Condominiums have monthly maintenance fees of thumb Calculate of tht value of the and divide by This will an idea of your montjily expenses So add up what it will cost to in your new home and deduct that from what you have left of your take home pay iter allowing for continuing expenses What you are left with tat can reasonably expect to haw available to carry as a monthly mortgage payment Com pare that with the monthly mart gage jou got by using a rule of thumb Depending on your financial cucumstances you may be able to afford more or less than the income multiplier suggests There in many other factors to consider when buying your first Iron is possible will make you better able to mate the best choice to suit your own circumstances r