It was scary but I did it!

iVillage Member
Registered: 11-14-2008
It was scary but I did it!
14
Thu, 02-04-2010 - 4:28pm

For those of you paying off debt, you know how hard it is part with money. I am also not very good with change.

Well today, I opened up an RRSP account and put in $500!! I also set it up to contribute $25 a month. I cashed in my visa points and am being sent a $250 voucher to add to this. Perhaps I will up the contributions next year.

I feel like a big girl that has moved from diapers to pull ups. LOL!

I also asked about RESPs for my kids. I need some more information from my ex as to what he is contributing. If he is maxing it out (which I doubt) then I will have to come up with other investing options. I am thinking about GICs. One step at a time.

I know people here are big Dave Ramsey fans and they say retirement before helping kids with secondary education. I am wondering if this applies to people that haven't had kids yet. I know I should have started this a long time ago and am just doing my best. I suppose I am already investing in myself by building equity in my business. My kids are very soon to be 13 and ten and I don't have a lot of time left. I am not planning on paying for their entire education but want to help. I suppose I am playing catch up. For me this works. One day at a time.

I am excited but scared at the same time. It was not a huge lump sum and I am not through the winter yet(worried I may have to contribute funds to my business)so I hope this does not bite me in the butt!

I am very excited for my forced flake. Debt going down, investments going up!

Look out February, I am in a positive mood!


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iVillage Member
Registered: 01-12-2010
Fri, 02-05-2010 - 9:43pm

Awesome! All that money makes such a difference.
Did you do the RESPs through the bank, and did you read ALL the fine print?
I only ask because we had RESPs for our 3 oldest and then we couldn't afford the payment anymore - ONE NSF sent the entire account into chaos....End result was that we put $300/month into RESPs for over 1.5 yrs and we got NOTHING out of it. Our account was closed, and everything we put in is now their company profit. I absolutely don't want to scare you, but please be aware that since the RESPs came into play, so many investment companies popped up and they prey on ppl....Obviously it's not like I was uneducated or unaware...it was when both DH and I were very gainfully employed and I looked at the fine print and thought "well that would never happen to me...." Famous last words...

Melissa
~ Mom to 5 ~
~ Melissa ~ ‎"We need to find the courage to say NO to the things and people that are not serving us, if we want to rediscover ourselves and live our lives with authenticity." - Barbara de Angelis
iVillage Member
Registered: 08-04-2008
Sat, 02-06-2010 - 9:52am

As you know from my posts, I totally believe in college for kids and that you should help. I think things are different tax wise in the US so my perspective is from there.

First I do believe in DR steps and you need to get out of debt first, you do no one any good with debt, as more money goes to interest than could go to your family.

Second you need to have funds for things like emergencies and a saving for 3-6 months because the bottom can and does fall out.

You should also save for your retirement and I am glad you did. I have always put at least 3% in from EVERY job I have ever had and DH and I do have a good sized fund so far.

I started college funding when DD was born, it was small. First it was all the money from her Christening, then I bought savings bonds from work, then I got into the Ohio Tuition trust and put in $25 per month, then a stock fund for kids, another $25 per month. When the bottom really fell out of my world in 2006, I stopped putting money in but left it all there. She has about $5k in the Ohio fund and another $5k in stocks and some in bonds. I will give her a graduation party and there will be money from that and she did inherit a bit from her grandfather. She basically has enough with scholarships for about 1 year of school. If she gets loans and works and we can get anything else it will only help to stretch these funds out longer, maybe 2-3 years.

However what a co-worker of mine found out was that saving for his kids was a detriment to getting them the help they needed. When you do financial aid they look at what the kids have in their name, and assume 50% of that is to be used for college. If there is savings in your name, the assume 10% or less will be used for college. We don't get much of a tax break and no one gives us 20% matches on college funds here in the US. There are plans you can join where you get a bit of a tax break for putting money in and it grows tax free, but have you seen the markets lately? DD's one fund lost 28% of it's value last year and the other fund stopped paying interest and could not keep it's commitments. Many state plans have done that!

So the lesson is to put it in your name here in the states. The tax savings might not be worth the financial aid you could loose, or the bad management of the state funds.

I did not go broke saving for her and had her put most of her paychecks in savings too. She will work all summer and that money will go in too.

I think doing something is good, and I would not have ever in my life gone on a vacation before knowing I had put at least some money in her college fund, but if you can't pay the bills as they are, and have a ton of debt, than college savings goes way down on the list.

I chose to have a child, I feel very obligated to helping that child become what she dreams to be, I want to leave my next generation and my legacy with hope and ability to succeed in the future. But part of that future is not handing them everything and allowing them to participate so they gain an understanding of the value of it.

-Marie




iVillage Member
Registered: 06-02-2009
Sat, 02-06-2010 - 11:11am

Just a point of information for us in the states


529 accounts do not count toward Financial Aid -- so that savings does not hurt the student

Lila
iVillage Member
Registered: 07-14-2008
Sun, 02-07-2010 - 9:13pm
Good for you for starting these savings. Even when we were paying off our debt, we did not stop contributing to RRSPs and purchasing Savings Bonds for our girls. It feels great to have money in savings, doesn't it? I am glad you are feeling so positive.





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