Consumer Tips
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Frugal Living
The four frugal living suggestions listed below are but a small sampling of what you can do. For a far more extensive list of tips and tricks, see the websites listed under Links.
Do It Yourself
You can hire someone or you can try to do it yourself. You may not know how to do it but google is the friend of DIYers.
Make It Yourself
As with Do It Yourself, you can buy it or you can make it. Once again, google is the friend of those who want to make it themselves. For example, a colour printer and google will let you make your own Christmas cards. Include all of the other card occasions and the savings add up. If you like salads with dressings, why not make the dressings? Odds are that you have all the spices and condiments you need. Just add imagination and save yourself dollars, clutter, and cupboard space.
These may seem like small savings and they are but cumulatively over time, they are not.
Making rather than buying gifts, especially at Christmas, could easily save you hundreds if not thousands of dollars.
Reduce Convenience Foods
Anything that's packaged and prepared for your convenience will cost you more that something that you prepare yourself. A quick look at the contents of a convenience food suggests that it might not be as healthy as something that you prepare yourself.
Brown Bag Your Lunch
The food court will run you $35/week or $1250/year; a restaurant, $50-75/week or $2500-3750/year.
Links
Consumer Protection
Free Online Classifieds
Online Bargain Hunting
Low Income Government Benefits[1]
Since it looks like you may qualify, I'll add some comments about the GIS, Allowance and provincial benefits. It's been a few years since I looked into this, so my knowledge is a bit rusty. And I never did look at the situation where one spouse is younger than 65. So doublecheck everything I say and let me know if I make any mistakes! I'm not collecting GIS, so I haven't doublechecked some of the following myself.
The number of changes you make to maximize your benefits is up to you. But I wouldn't go overboard. Make sure you keep a low cost, diversified portfolio that you're comfortable with.
The first thing to know is that every dollar of Net Income, other than OAS, on your joint tax return up to the cutoff reduces your benefits $.50 or more, depending on the province. But every dollar of income is not the same. Some types of income reduce it by more than others. This is because of the way the different types of income are added to Net Income on your tax return. The types of income from best to worst are:
- capital gains.
- REITs and other types of income trusts (for the next four years) with return of capital.
- interest, CPP and RSP withdrawals.
- foreign income.
- Canadian dividend income.
Owning your own house is very good. And the fact that you have a good proportion of your money in RSP's gives you more flexibility. You probably want to withdraw money from your RSP first. It will be the first one you have to convert to a RRIF or annuity.
The thing you want to avoid is having your joint income just above the cutoff every year. So you never collect any benefits. It would be better to maximize your income one year. And then have a few years of low income and collect benefits. Even if your income is quite a bit lower than the cutoff, once in a while it will be higher, over the cutoff. When that happens, you could withdraw some extra dollars from your RSP. If you know you have a high income year coming up you could borrow some money for expenses during the current year.
Since this is your last year working, your joint income is probably over the cutoff. If you want to change your portfolio, you could realize some capital gains without much additional tax cost. It might be good to realize gains even if you don't have to.
My guess is that you should have investments which generate mostly capital gains in your nonregistered portfolio. And draw down this first.
At some point, you may want to convert some of your RSP into an annuity. It may be better to withdraw the money from the RSP, pay the income tax, and buy a prescribed RSP with the nonregistered money.
References
- ↑ Financial Webring Forum, Adapted from Qualifying for GIS, viewed May 25, 2009.
