SOWINNG FINANCIAL SEEDS

 

Sowinng Financial Seeds

I would like to dig a little deeper into my last blog SETTING UP THOSE SPECIAL SAVINGS ACCOUNTS. There was a flood of questions about setting up multiple saving accounts.

In gardening a seed represents growth, development, and strength. If you don’t tend to that seed and give it attention which it needs, the seed won’t grow. It doesn’t matter how small the seed is, only that you tend to it, water it and encourage it to grow.

When I was setting up my multiple savings accounts, I was planting many tiny seeds and I knew that I needed to invest in them in order to see them grow.

In this blog I will address 2 of the top questions from my previous blog.

  1. Why would I only save between $3.75 & $11.75?
  2. What can that small amount of saving do for me?

In order for me to answer those questions, I have to first give you a background on those five savings accounts.

When I opened those accounts in 1970, we had very little money to spare and our income in those days was not bountiful by any stretch of the imagination. Cost of living was also significantly less expensive than it is now.

After paying our bills, all we had left to save was $18.75 bi-weekly. I had to divide that into the five categories, which I convinced my husband was perfect for our future financial needs. Now my husband was not in favour of five accounts, he too thought that only saving $18.75 was meager and useless. He had no idea how to tame me, so he shrugged his shoulders and left me to my own financial devise.

And so I tended to my financial garden.

Here’s how the funds were divided:

  1. Buying a home   = $3.75
  2. Vacation               = $3.75
  3. Emergency           = $3.75
  4. Starting a family = $3.75
  5. Buying a Car       = $3.75

Total                                         $18.75

The next step was making sure that each raise we received was placed into those accounts. Seven years & several raises and job changes later, we were eventually able to save $82.00 bi-weekly.

At that time, our home buying account had $7,000.00 in it. We purchased our home with $5,000.00 down, paid our legal fees and shopped for used appliances on Queen Street with the rest. We bought a stove with a solid white door but no glass, a fridge, and a washing machine but no dryer. We hung our clothes out to dry in the basement. We bought nails and twine at Honest Ed’s, and used a brick as our hammer to set up our dryer line.

Honest Ed’s was our shop of choice – we were there every two weeks. We also frequently shopped at Knob Hill Farms, Bargain Harold’s and Bi-Way because back then they had the best deals. We kept saving and being cautious with our money.

All that I have financially today comes from that $3.75. Without it I could not be here in my present financial situation.

My small bi-weekly savings didn’t seem like much, but I was sowinng my financial seeds. My small savings were lettuce seeds.

As an avid gardener I can tell you lettuce seeds are tiny, but from that miniscule seed grows this huge head of lettuce.

I’m reaping what I sowed and I am helping thousands of people start their successful financial journey.

We’re all inherently gardeners in some form or another, but ask yourself, are you sowing your financial seeds?

Give it a try: make note of where you are today, date the page in your notebook and write the exact amount of savings you have today. The next step is setting up automatic transfers into a savings account. Calculate whatever amount you’re able to put away bi-weekly for one year. At the end of the year, compare your savings to what you had at the start. I can guarantee a big a-ha moment and a huge smile on your face.

To answer your question “what can a small amount of saving do for me? It can eventually give you financial freedom. Such a simple concept, with monumental results.

Let me know if you are going to take on the challenge. I will be here for you every step of the way.

Send me an email if you want to talk further about growing your financial lettuce.

tessamarieshillingford46@gmail.com

Thanks

Tessa-Marie

 

 

 

 

 

 

 

 

 

 

What is a Tax Free Savings Account?

Recently I have noticed a trend that many Canadian and especially new Canadians are not taking the advantage of owning a Tax Free Saving Account.

With this in mind I have decided to write about a TFSA .

Who Can Open a Tax Free Savings Account?

Any individual who is 18 years of age or older and who has a valid social insurance number is eligible to open a TFSA.

What is a Tax Free Savings Account?

A Tax Free Savings Account is a special account where an individual is able to save money over their lifetime without any tax implications.

The Tax Free savings account started in 2009. The government of Canada created the account to encourage Canadians to save money and no matter what the growth of that account no interest will ever be paid.

This account started in 2009. The limit from 2009 to 2012 is $5000.00

From 2013 – 2014 it increased to $5500.

Then in 2015 the government increased it to $10,000.

The amount was decreased by the new governmentin2016 back to $5500.00

If an individual has not made any contributions and was 18 years or older in 2009 they may make the contributions from 2009 to 2016. You do not lose the contribution if it was not done in the prior years.

The money contributed to a Tax Free Savings account is NOT tax deductible.   The contributed amount cannot be deducted from your taxable income.

Any amount contributed or any investment income made is non-taxable.

You may have more than one TFSA but the amount between the account may not exceed your annual contributions.

Withdrawals

Depending on the type of investment held in your TFSA, you can generally withdraw any amount from the TFSA at any time. Withdrawing any amount from the TFSA does not reduce the total amount of contributions you have already made for the year.

Replacing withdrawals

If you decided to replace, or re-contribute all or a portion of your withdrawals into your TFSA in the same year, you can only do this if you have available TFSA contribution room. If you re-contribute but do not have contribution room you will have over-contributed to your TFSA in the year. You will be subject to a tax equal of l% of the highest excess TFSA amount in the month, for each month that the excess amount remains in your account. Before doing a re-contribution talk with your financial institution about your re-contribution.

After following all the rules a TFSA is a wonderful savings vehicle to assist you in meeting your future financial goals.

Tessa-Marie