Your top 5 financial ‘to-dos’ for spring
The days are getting longer, the weather is finally warming up, and the end of another school year is just on the horizon.
Yes, it’s spring.
The season of new beginnings and a mile-long list of to-dos—such as tuning-up and switching the tires on your vehicle; replacing the batteries in your smoke detectors; and finally cleaning out that attic/closet.
But that spring to-do list doesn’t stop there.
There are also 5 important financial ‘to-dos’, according to our very own financial experts:
#1: Tax return filing (Matthew Dang – Senior Financial Advisor)
This annual financial task may be an obvious ‘to do’ for many. However, according to the CRA, two-thirds of Canadian taxpayers file their returns within the final days and weeks of the deadline.
Yet there are many advantages to filing your tax return early including:
- Ensuring benefits (such as the Canada Child Benefit, and HST/GST credit) remain uninterrupted
- Having more time to check (and double-check) that you haven’t missed any eligible tax credits
- The ability to access any tax refund you may have coming your way, sooner—rather than later
(a reason that should really ‘light the fire’ to file early)
If you’re not a tax filing ‘early bird’, that’s okay—just don’t be late if you have a balance owing because it will cost you.
In fact, if you filed your return after the deadline and had a balance owing, you would be hit with a penalty fee equal to 5% of the taxes you owe. Plus you would pay an additional 1% for every month your return is late (up to a year). If you are consistently filing late, your penalty fee would almost double. So be sure to get on top of your tax to-dos by April 30th.
On the flip side to owing money, don’t forget to claim your refund.
As of 2022, the CRA is sitting on over a billion dollars in un-cashed tax refund cheques and benefits.
If you’ve moved during the past several years (particularly around tax time), there’s a chance any refund you had owing to you was lost in the mail. That’s why it’s important to immediately notify the CRA of any change in address. However, the good news is those refund cheques and benefits do not expire. To see if you’ve got any unclaimed money collecting dust, be sure to check out your CRA account online.
Matthew’s suggested tax-related reading: The deadline is May 2nd: here are some tax time tips to maximize your return.
#2: Financial maintenance (Graham Walker – Certified Financial Planner professional)
With RRSP season behind us and tax season about to wrap up, personal finances are definitely top of mind. Which is why I suggest adding financial maintenance to your list of spring-cleaning tasks.
What makes this particular ‘to-do’ so important in my opinion? Well, life happens.
What does this mean? Well, education members get married/divorced, have kids, buy a home, retire and start collecting their pension. All of those little things can add up to big changes in your budget—which can then impact your overall financial goals. That’s why it’s a good idea to review your financial situation, including your investment plan, at least once a year.
Graham’s spring financial maintenance checklist:
- Review budget
- Ensure investment portfolio is balanced/reflects risk tolerance
- Update Estate Planning documents
#3: Debt/credit checkup (Federica Screnci – Agent-Mortgage Specialist)
Spring marks the start of the home-buying season. It should also be the time you review your credit situation. Because whether you’re looking for a mortgage now, or somewhere down the road—being ‘debt-aware’ is the best way to keep your credit score high and your credit risk low (to better your chances at being approved).
Be sure to also add ‘checking into your credit report’ to your list of spring financial ‘to-dos’.
With credit fraud on the rise, staying on top of your report will ensure you’re able to quickly identify any errors or red flags so you can then report them to Canada’s credit bureaus (Equifax and TransUnion).
Federica’s article picks for maintaining peak credit health:
- How to build and maintain your credit history
- How to credit score: 5 things you need to know about credit and debt
- The debt-to-income ratio: what it is and how to reduce it
Are you in the market for your first mortgage? Here’s how to go about choosing the right lender.
#4: Summer cash flow forecast (Caitlin Buchko – Certified Financial Planner professional)
Even though spring has just started, it’s definitely not too early to be thinking ahead to your summer plans. Specifically when it comes to cash flow (and whether you’ll have enough of it to spend July and August the way you want).
That’s why one of your financial to-dos for spring should be what I call a ‘summer cash flow forecast’.
While you can never truly predict what the future will bring—you can at least take certain steps now to ensure you’re in the best financial position possible come the end of June.
Caitlin’s summer cash flow forecast includes:
#5: Getting ‘pension-ready’ for June (Darryl Martella – Certified Financial Planner professional)
If you happen to be retiring this year, you may or may not be aware of the list of pension-planning ‘to-dos’ you need to get done before the end of June.
Here are some of those tasks, as recommended by Darryl (and OTPP):
- Apply for your pension 3 to 4 months before your pension starts (if you apply after your resignation date, you may lose pension payments)
- Be sure to submit your letter of retirement/resignation before your intended retirement date (you must terminate your employment in order to receive your pension)
- The resignation date on your pension application must be the same date on your resignation letter
- Review your service record for accuracy and opportunities to buy back or transfer service
- Decide whether or not you want to purchase supplementary medical coverage (in the event that your health benefits are not extended into retirement)
For a full list of pension ‘to-dos’, be sure to visit the OTPP website.
If you need help with any of your spring financial ‘to-dos’, call on Matthew, Graham, Federica, Caitlin, Darryl, and the rest of us at Educators Financial Group.
Whatever the ‘to-do’ and wherever you are in your career, our financial team of experts can provide you with the advice and solutions designed with the unique needs of education members in mind.