Are you leaving money on the table?
LIFESTYLE WEALTHDon't miss out on what should be yours.
We all work hard for our money, so the thought of letting free money slip through our fingers is almost inconceivable. Yet every year Canadians do just that by not taking full advantage of value that is rightfully theirs. Here are some ways to help ensure you’re getting all that you’re entitled to.
AT WORK
Embrace employer-sponsored plans
Canadians could be losing out on as much as $3 billion by not taking full advantage of the retirement savings plans offered by their employers.[1] Most defined contribution pension plans allow employees to contribute a percentage of their paycheque, which is then matched by the company – that’s free money towards your retirement! As an added bonus, these plans often have lower management fees than individually held investments. Ask your human resources department if your company has a retirement savings plan and how you can start contributing.
Take a vacation
Who doesn’t love vacations? Apparently, we don’t – a recent survey found Canadians forfeit 31 million vacation days every year.[2] There are several reasons why employees don’t take time off: a heavy workload, precarious employment or fear of missing out on a promotion. However, choosing work over play can backfire. Without time off to re-energize themselves, workers actually become less productive and more prone to burnout.[3] And don’t forget that vacation days have monetary value – for example, a worker making $50,000 a year who doesn’t take two weeks of vacation is essentially donating $1,923 to their employer. Make it a goal to sit down with your calendar and book some time off. Whether it’s a two-week getaway or several long weekends, you owe it to yourself to recharge.
Perks at work
If you are a full-time employee, chances are your employer offers a group health and dental benefits package. Coordinating benefits with your spouse can help you get more money back for your medical expenses. For example, if your plan covers 80 per cent of a dental treatment, you can submit a claim through your spouse’s plan for coverage of the remaining 20 per cent.
EVERY DAY
Cash in on rewards
Endless reward programs are offered by retailers, hotels, airlines and gas stations. The key to racking up points is to join a reward program that fits your spending habits, rather than trying to change your habits to maximize rewards. A recent poll found that Canadians belong to an average of 12.2 loyalty programs and are active in at least half of them. The result is that the average cardholder is sitting on 50,000 points, which may be worth hundreds of dollars.[4] A cash-back credit card that automatically credits money back to your account can be a simpler option – look for a card that pays a higher percentage on items you normally purchase.
Bank smart
Almost as disappointing as leaving money behind is frittering away dollars on banking fees. Look for an account that works for you – such as one offering a high interest rate on your savings or allowing free unlimited everyday transactions. If there’s a minimum balance involved, consider whether you can maintain it easily. Financial institutions often offer attractive promotions for opening a new account – read the fine print to confirm that the account will suit you even after the introductory offer expires.
Use your gift cards
Gift cards make an easy and convenient present – but many of them end up lost in the depths of a wallet or handbag, or never even leave the envelope they came in. If you have gift cards for stores you don’t typically shop at, consider using them to purchase gifts for others, and then treat yourself with the money you save. Or find a reputable gift card resale site where you can exchange or sell gift cards for as much as 70 to 90 per cent of face value.[5]n
IF YOU HAVE KIDS:
Contribute to an RESP.
Opening a Registered Education Savings Plan allows you to save for a child’s education while also benefiting from the Canada Education Savings Grant, which matches 20 per cent of your contributions up to $500 per year. That’s like a guaranteed rate of return on your investment. Ask your advisor about opening an RESP and setting up regular contributions to take full advantage of government grants.
Knock some money off tuition fees.
Almost $200 million in scholarships, grants and bursaries is available to Canadian post-secondary students every year[6] – money that doesn’t have to be paid back after graduation. If there’s a budding scholar in your home, check out the following websites that help connect students with available awards:
- www.scholarshipscanada.com
- www.yconic.com
- www.canadian-universities.net/Scholarships
By examining your habits and doing a little research, you could reap some financial rewards. Ask your advisor for more ways to ensure you’re getting all that should be yours.
© 2018 Manulife. The persons and situations depicted are fictional and their resemblance to anyone living or dead is purely coincidental. This media is for information purposes only and is not intended to provide specific financial, tax, legal, accounting or other advice and should not be relied upon in that regard. Many of the issues discussed will vary by province. Individuals should seek the advice of professionals to ensure that any action taken with respect to this information is appropriate to their specific situation. E & O E. Commissions, trailing commissions, management fees and expenses all may be associated with mutual fund investments. Please read the prospectus before investing. Mutual funds are not guaranteed, their values change frequently and past performance may not be repeated. Any amount that is allocated to a segregated fund is invested at the risk of the contractholder and may increase or decrease in value.
[1] https://business.financialpost.com/personal-finance/retirement/canadians-losing-out-on-as-much-as-3-billion-in-free-money-defined-contribution-pensions
[2] https://nationalpost.com/travel/canadians-leave-31-million-vacation-days-unused-each-year-study
[3] www.usatoday.com/story/money/personalfinance/2017/07/31/never-use-your-vacation-days-this-is-why-you-should/104014486
[4] https://business.financialpost.com/news/canadians-failing-to-capitalize-on-their-reward-points-cibc-poll-finds
[5] https://globalnews.ca/news/3917651/exchange-gift-card-for-cash