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It’s not the disability that defines you; its how you deal with the challenges the disability presents you with.

Jim Abbott

Smart Planning

Credit Cards

Credit cards are not necessarily bad and even have important advantages, but you must handle them responsibly to ensure that you do not run into problems. When you use a credit card, you take home something now that you will pay for in the future. Credit cards offer not only convenience and can be useful in emergencies when you encounter unexpected events (such as car repairs); they also help you build a credit history. If you pay your bills on time and in full (avoid paying the minimum balance!), a positive credit history will help you in the future. You have to borrow to prove that you can borrow responsibly.

Your credit record shows how well you pay your bills. Credit records are kept by credit reporting agencies. They sell your credit information to banks and other lenders. By looking at your records, the person or company making a loan can decide whether they should lend you money. A positive credit history will be essential in getting a car loan or home mortgage in the future. Your credit score can even affect your chances of getting a job or renting an apartment. Many employers and housing providers now check your credit history.

Avoiding Debt

If you have more expenses than income, you have a debt problem. Debt is like quicksand- it keeps pulling you down deeper unless you do something about it. It is so easy to get into debt, and it is much harder to get out. Answer the following questions to determine if you have a debt problem:

  • Is more than 20% of your income used to pay off car loans or credit cards? (That is $100 for every $500 you earn.)
  • Are you unsure of how much money you owe?
  • Do you make only the minimum payments required?
  • Do you miss payments or pay your bills late?
  • Are you receiving letters, phone calls, or visits from creditors (a person or business to whom you owe money)?

If you answered yes to any of these questions, you may have a debt problem.

There are options when you find yourself in debt. It will take time and commitment, but taking action now is far easier than watching your debts grow. The temptation to just ignore your bills and stop paying them can be strong. If you feel overwhelmed by debt and need help, consider working with a nonprofit debt counselling service, such as O.A.C.C.S.-Ontario Association of Credit Couselling Services http://oaccs.com/

Employment Benefits and Taxes

Your salary or wages are just one of the things your employer may provide. Employee benefits can be worth hundreds- and possibly thousands- of dollars each year. These benefits might include:

  • Health care insurance
  • Life or disability insurance
  • Paid time off for illness, holidays, or vacation
  • Retirement or savings plans
  • Child care

Many companies have dedicated Human Resource (HR) personnel that can help you navigate your employee benefits. This should also be an important consideration before you agree to take a job.

Most of your taxes are taken out of your paycheque before you receive it. The largest amounts taken out are for federal and provincial income taxes. Smaller amounts are taken out for health care and worker’s compensation taxes.

There are various tax credits available to help low-income individuals or families reduce their taxes and possibly get a refund.  For more information, check out Revenue Canada online. 

Investing for Your Future

So you may have accumulated some savings and want to think about ways to best invest in your future. Investing can make your money work harder for you. Before beginning to invest, remember that investments generally are meant to pay for your long-term needs- such as your education, a home, or even retirement. In contrast, savings accounts and emergency funds can be used for short-term goals. Most investments have more risk (meaning that you could lose some of the money you put into them) than savings accounts. However, they also offer more opportunity to make money on your savings. , The longer you have an investment, the more the risks are reduced. You may want to consider some investments like these:

  • Mutual Funds. When you put your money into a mutual fund, you join a large number of other people who are putting their money into the same fund. A mutual funds manager invests all the money that people put into the fund. The manager may use your money to buy stocks, bonds, or other investments. It depends on the mutual fund. If the fund's investments do well, you and all the other people who put money into the mutual fund will make money. If the investments do not do well, you could lose money.
  • Stocks. Owning stock means you own part of a company. In general, if your company does well, the value of the stock rises. Of course, if the company does not do well, the value of the stock goes down. In addition, stock values can be affected by outside factors, such as political events. Therefore, stocks can be risky. However, over time, many stocks do increase in value. To lower your risk, it is a good idea to own stock in more than one company. It is also good to own stock in different industries because the value of a stock can go up and down a lot. This is known as "diversifying your investments".
  • Bonds. Companies and governments issue bonds. When you buy a bond, such as a savings bond, you are lending money to the issuer. The bond is a legal promise to pay you interest for the use of your money. Your principle (the original amount you paid for the bond) also will be repaid to you.
  • Retirement Accounts. Retirement may be many years away. You may feel you are too busy or young to think about it. The good news is that the earlier you start saving for retirement, the more money you will have. Your employer may offer a way to save for retirement, but if not you can start saving on your own through an Registered Retirement Savings Plan (RRSP). The major advantage of an RRSP is that your savings can be deducted from your taxable income, so you pay less in taxes each year.

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