How to make your money work harder for you

by Eric Mass and Dave Hodgson

Need a good financial tip? Here are ten common sense financial tips that can help you keep more of your money and reach your goals faster.

1. Treat you’re money as if it were going into three separate buckets.
   • The first bucket is for the money you need to cover your immediate expenses such as loan payments and other household costs.
   • The second is your short-term savings bucket. This should contain enough money to cover at least six months worth of your fixed expenses.
   • The third bucket is for the money you regularly contribute to retirement savings such as an RRSP.
2. Pay the least amount in taxes possible. Consult a qualified expert to help you pay less tax. For many people, the cost of their advice is more than offset by the savings.
3. Don’t invest your money in things you don’t understand. Take the time to learn about an investment before you jump in.
4. Make monthly contributions to your RRSP rather than a single annual amount. Many investments see an increase in value brought about by significant last minute contributions near the end of the RRSP season. The value of these funds can sometimes decline once the season ends leaving you with less than the alternate value had you spread out your contributions.
5. Don’t procrastinate about your investment choices. If you know you need to do something about your money, be proactive. Time can be your friend, but if you wait too long, it will be your enemy.
6. Be aware of your investment fees and reduce them whenever possible. Even a small decrease in your investment fees can add several thousand of dollars to your savings over time.
7. Ignore investment hype. There is a ceiling to how high any investment can go and eventually the bubble will burst and values will fall. It is often better to wait until the hype passes and then buy the investment while it’s low.
8. Never get into any financial arrangement with friends or relatives unless all terms and conditions are clearly understood and in writing. Nothing can drive people apart like a disagreement over money.
9. Never take your good health for granted. Purchase protection like life and disability insurance. Age and health factors will increase the cost and the older you get; the greater the likelihood you’ll not be able to buy this coverage.
10. Surround yourself with trusted experts. Be realistic about your own knowledge and skills and seek out companies and people who have proven themselves trustworthy with others you know.

Eric and Dave are your CBIA Authorized Representatives for the province, and are available to assist you with your insurance and retirement needs. You can reach them in Vancouver at 604-688-8790 or toll free at 1-888-477-5630. For more information about the CBIA visit their website at www.barinsurance.com. For CBA Financial, please visit www.barfinancial.com.

This article was published in the December 2006 issue of BarTalk and is subject to the copyright by the British Columbia Branch of the Canadian Bar Association, 2006, all rights reserved.