Here I sit at a local coffee shop writing my semi-monthly blog submission on a screaming-hot, gleaming, brand-new laptop. This thing is a serious piece of technological bling and it should serve me well for a couple of years.

In my fiscally conservative way, this was an easy purchase to make (although the purchase has been in the works for almost a year). I’m not sure if this is a guy thing, but I love toys, electronic or otherwise.

Therefore, I live by a couple of rules that serve to keep me out of financial hot water when it comes to toy acquisition.

Rule number one: research, research and more research. This serves a couple of purposes including a check to slow me down from making rash decision and to make sure I get the toy that best suits my needs for the money on hand.
It also surprises me how many planned purchases drop off the list after being left to age a while. And keep in mind, the research phase is fun.

Rule number two: have the cash on hand. No credit and no debt for toys.
That way one is free to enjoy the toy rather than how to pay for it. Toys are important. But housing, food and raising a child are essential. All purchases must be ranked appropriately.

Rule number three: only when the first two rules are met to the letter can one make the purchase.

That happened yesterday and I’m a happy camper. Next up? Christmas.

Cheers,

Jack

Oy. So much to think about between Jack’s blog and the Financial Planner’s comment!

I don’t have a will (nor do I have dependents) but I do have financial assets and personal property that would need to be disposed of in the event of my death. I suspect a Do-it-Yourself kit would actually suffice in my circumstances. I’ve looked into this in a cursory way before but need to do some real research here…add it to the list!

As for the LLP, I do have RRSPs & looked into it when I started school, but my program either isn’t qualified or there was some glitch about not being in school frequently enough (I do one course at a time while I work full-time, not 2 or 3 at once), but I can’t actually recall what the stumbling block was. So now I’m going to look into it again - who knows, maybe something has changed since I first checked?

When I started this phase of my education, I applied for the only scholarship I could find that I was qualified for, checked into the LLP, hunted down all sorts of options but at one turn or another, no help was available. Basically I either earn “too much” income (ha!), don’t go to school “enough”, or my investments disqualify me. So basically, I don’t earn enough to afford school without going into debt (ironic since I’m already paying off debt - which is where much of my “too much” income goes!). In other words, I’m expected to cash in my RRSPs (since as far as I know I don’t qualify for the LLP to simply draw from and then replace them) and give up what savings I’ve managed to put away for my future.

Because the education I’m gaining doesn’t guarantee a high return of income, I’m not willing to let go of my future in case the earning potential doesn’t make it worthwhile to have surrended those RRSPs. It feels like a big gamble to me. Those RRSPs are secure and are earning well. I’ve already surrendered part of my investments to manage debt in having made my career change (taking a significant pay cut) and moving to this province. For now, I prefer to incur debt and pay it off rather than let money that has been compounding for 10 years be used to pay for education costs. I’m interested to hear some feedback from either our resident financial planner or from the Coach about whether I’m being ultraconservative…it’s just what feels good to me intuitively, but maybe it’s not the best financial decision? Honestly, I dunno.

I’ll get on that LLP to see exactly what the problem was so I can explain the situation here. I’m sure others are in this boat and it would be good to brainstorm some solutions for those of us trying to find money to pay for education while paying off debt, trying to invest (long-term) and save (short-term) and still have some semblance of lifestyle. That’s a lot of financial balls to juggle and it’s no easy feat!

Jack: The will to write a will

Several months ago I wrote about finding myself studying ceiling tiles from an emergency room stretcher as my body was wired into a variety of machines that, to quote Monty Python, go ping.

At that time, I declared my intention to get my posthumous financial life in order while I still have a say. I’m assuming I still have a good four decades in front of me, but the ER visit was a reminder that things don’t always go as planned. (Why is it so difficult to acknowledge there is always a possibility we may not live to see another day.)

So, last night I started chatting with a lawyer to get the ball rolling.
Because I have a ten-year-old son, I want the will to pass whatever tests it would need to go through following a untimely demise, so my assets would be applied to his needs as quickly as possible. That’s why I’m not leaning towards the do-it-yourself version.

This is all very new to me and I know a few big decision will need to be made about trusts and estate planning. I do the a term-life insurance plan that would payout to my former wife should I pop-off. I know that she would use the funds for raising the lad. I also have my RRSP and pension plan set to go to my son.

I need to figure out the rest, including how to pay for a funeral (employer
insurance) and what to do with all of my stuff. And little things like when does my son get the cash and how can he use it.

I’m open to comments and suggestions if you have any. Nancy will pass them along. And I plan to let you know a little of what I learn as I move through this process.

This is for Kat’s education plans and putting them on a credit card.

Don’t know if Kat has set aside RRSPs for herself; if not, then don’t read further.

If Kat has contributed to her RRSPs, then there is a program called, the Lifelong Learning Program (LLP), which is an exception granted by CRA (Canada Revenue) that allows us to withdraw a sum of money without getting a tax-ding for a “qualified” education program. Not only is this withdrawal interest-free and has no withholdings upon withdrawal, but it’s also tax-free, and you can put it back into your RRSP without losing the precious room available. RRSPs are not only for retirement or the first-time Home Buyer’s Plan. For basic guidance, the maximum amount that you can withdraw is $20,000, there is an annual limit of $10,000. There is no limit on the number of times you can participate in the plan over your lifetime. What’s more? You have 10 years to repay it back, 1/10th per year. Worst case, if you don’t pay it back, it becomes part of your taxable income in the year. For the finer details, go to: RRSP Lifelong Learning