Archive for July, 2010

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These days, it’s tough to fund education, whether the kids are in primary, secondary or post-secondary school. From new clothes and running shoes, to school supplies, books, post-school activities and the tuition itself, after-tax cash flow tends to flow. . .right out the door at a fast pace, particularly in the months of August and September. 
The tax system can help—either now or at tax time—to shore up the bottom line for families. Over the next few weeks, we’ll be talking about the tax provisions you can and should take advantage of to help you get the best return on your educational investment. 
On a high level, there are a variety of things to think about when it comes to intelligent strategies for education planning:
Investing for an Education: Many people know about the Registered Education Savings Plan and the Canada Education Savings Grant and Bonds the government provides to sweeten the pot on savings for post-secondary education. However, I find lots of people are unaware that tax free withdrawals can be made from an RRSP under the Lifelong Learning Plan. This is a great way to leverage your RRSP accumulations when educational opportunities arise. Of course, the RRSP deposit itself will generate tax savings that can be used for education funding too, provided the contributor was taxable. 
There are many other savings strategies that can help you accumulate money for school. For example, you can use your Tax Free Savings Account. Remember the savings are tax free and you never lose the TFSA contribution room, so you can replenish the deposits when you get your big job later.
If you pull money out of a non-registered savings account, you may wish to think about tax efficiency. For example, if you generating capital gains, can they be offset with prior losses? 
Or perhaps you should be transferring the gains to your favourite charity for a tax free gain, and a donation receipt to fund more education?  
Receipt keeping is really important too, as it can help you maximize your tax savings during tax season. Following are some tax saving tips on what’s claimable and what’s not, for those in primary and secondary school. In another article, we’ll tackle post-secondary school:
Tuition Fees and Textbook Expenditures. Unfortunately these costs, including fees paid to private school are usually not deductible, however, a couple of exceptions exist for tuition fees paid to religious and secular schools, explained below.
Charitable Portions of School Fees Paid: Tuition fees paid to religious schools are not considered to be a qualifying expense for a charitable donation in general, but there are two exceptions: 
  1. Religious schools. Fees paid to schools that teach religion exclusively are considered to be a charitable donation if the school is a registered Canadian charitable organization which issues official charitable receipts.
  2. Secular schools.   Certain schools which operate in a dual capacity providing both secular and religious education. They may issue a charitable donation receipt for a portion of the fees paid under certain circumstances.

Private Lessons or After School Activities. Generally private piano and dance lessons are not deductible, however those students taking lessons at a post-secondary educational level may be able to claim tuition fee, textbook and education credits.

Child care. Costs of child care may be deductible for parents who go back to school or carry on research for which a grant was received.  Expenses are deductible for the care of dependent children who were under the age of 16 (at any time during the year) or who are physically or mentally infirm.

Summer Time Off: A Good Way to Take Responsibility for Daily Stressors

On Sunday, my family and I returned from our annual fishing trip to the beauty of the pristine Manitoba lake country. Sitting in a boat on a lake so still it looks like glass, there is plenty of time to de-stress.

Stress, I’ve heard, happens when there is a disconnect between what you believe in and what you do. There are some, who might say they have a disconnect in their relationships—perhaps with other individuals in their lives. Many others also have a disconnect in their relationship with time and money.

What do we believe in? It’s an important question we should ask more often of our selves, and perhaps our clients, too. How much money does it take to live a life in balance with our beliefs?

If we believe in family, then why do we work so much?

If we believe in healthy living, why do we pass on sleep and exercise in favor of making more money?

If we believe in enjoying the fruits of our labor, why do we postpone holidays?

Imagine, sitting in the middle of the lake, so still, you can hear the nearby loon glide masterfully into the water. . .only to shriek it’s eerily beautiful call of vitality moments later. . . Our annual family fishing trip is always a lovely wake up call for me. The calming power of nature simply fills the senses and restores balance.

To have downtime, to spend it with those you love the most, to eat well, sleep well and exercise with an invigorating hike in the Canadian back woods—yes, it brings it all brings life back into focus. If you have the freedom, the good health and the good company to enjoy the spectacle of nature, I would highly recommend it. . .whether or not the fishing is any good!

The Knowledge Bureau instructional team will close for its annual staff vacation week July 26 to 31. Our assistant registrar, Carol, will be available that week to answer your questions about the right continuing educational program for you. Rest assured, Carol is taking her time off the following week!

It’s your money and your life. . .when you match valuable time with precious personal values—the result is priceless!

How Do You Measure Your Wealth?

By Evelyn Jacks

How do you measure your wealth?  There are three key financial documents available to help you do so.  Are you using them to your advantage in understanding your money and it’s relationship to your life?  Consider the following:

Three key financial documents are required to plan and measure your wealth management progress over time: 

  • The personal net worth statement, which is a snapshot of acquired wealth
  • The tax return, which defines disposable income 
  • The financial plan, which enables future decision-making on an ongoing basis

Creation of these documents is one thing. . .it takes time to do them well and it takes time to understand and interpret them.  Your professional advisors can help.

However, it is the management of decisions based on the results in these documents which is really helpful, especially if you want to make joint financial decisions over time, with your family members and your professional advisors.

This is important because your behavior around your money is as important as the performance of the money in the marketplace.   In order to make wise choices about the use of their money over time, investors must use best practices to manage income and capital.  Those best practices can be taught at school, in the family, or in the financial services.  You need access to financial education and principles at various decision-points in your lifetime.  Sometimes it’s worth paying for that, too.

In the end, what is needed is a strong focus on the stewardship of sustainable wealth according to your own plan for your family.  Are you leading that process for your family and with your financial advisory team?  Should you be? 

Think about it.  It’s Your Money. Your Life.

Evelyn Jacks is President of The Knowledge Bureau, a national educational institute focused on excellence in financial education, and a member of the federal Task Force on Financial Literacy.  For information about self study courses and books visit

Think of Your Money as a Business

By Evelyn Jacks

An interesting way to think about investing on an after-tax basis is to bring a strategy and process to the use of your money.  Think of your money as a business, especially if your investable assets are in the high net worth range (over half a million dollars).

If you did this, what would you say is your vision for your capital?  How would you like it to grow?  How will you measure results over the longer term?  These questions can help you develop a thinking process around the financial results you want.  Following are some additional thoughts on developing a strategy and process for your investment activities.  

Strategy.  As people age, the amount of money required to fund needs and wants generally grows—to a point.   In the early years, the emphasis is on basic survival; later on consumer wants; still later on self-actualization—that enviable stage when the client’s resources allows for the caring of others.  At the end of life, health vulnerability can come into play—for yourself or your loved ones.    

And so the purpose or use of your money, changes with different lifecycles.  Readiness is key when it comes to those uses of money, which we at The Knowledge Bureau have broken down into four stages: 

  1. Non-Discretionary Spending
    • The funding of basic needs–food, clothing, shelter
  2. Discretionary Spending and Saving
    •The satisfaction of consumer wants; and savings for emergencies
  3. Creation of Capital
    •The use of money as a building tool: to earn income and create wealth
  4. Management of Sustainable Wealth
    •The preservation of sustainable wealth from one lifecycle to the next

What stage are you in today?  How is this influencing your investing and spending activities?  What should you do be doing differently to prepare for Stage 4?

Remember:  It’s Your Money. Your Life.  Let us know what you think.

Next time:  Planning and measuring your wealth

Evelyn Jacks is President of The Knowledge Bureau, a national educational institute focused on excellence in financial education, and a member of the federal Task Force on Financial Literacy.  For information about self study courses and books visit