Picking up where we left off from the first part of this article, remember, pay off debts which includes your mortgage. A good strategy for this room of the house is to take on a minimal amount of fixed debt. A person's ability to manage this aspect of their finances will impact their whole financial future. Remember: there is bad debt, and in some cases good debt. Be smart because much of easily accumulated and accessible debt is bad debt!
Investing for the future is also a priority, whether it is an RRSP, RESP, or other. By investing in an RRSP, a person is ensuring their financial future, at the same time as reducing their tax burden today. If you get a refund from your tax return, that money should be used for any of the purposes mentioned already. (In other words do some financial housekeeping or home renovations!)
A small note. Do you know people who have their employer take more tax off that necessary each paycheque? Come tax time they won't have a tax bill. They need to ask themselves this question: Who would I rather pay myself or the government? That same money could be going into their RRSP thus building equity in their future.
The last part of the financial home is the roof, or other goals and dreams. We might find it amusing to think of a house being built roof first. Yet how many people sacrifice future financial independence for today's pleasure? In a future issue we will see how time can be an ally not an enemy and that ensuring financial independence does not mean a person can't have fun today.
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