When times are tough, troubles come out of the woodwork and, true to the rule, 2012 was no exception. In hundreds of letters to Family Finance requesting assistance and commenting on the problems folks face in paying their bills, 10 top issues emerged:
Debt When interest rates rise, as they surely will one day, a 1.0% interest rate increase on a home equity line of credit will turn a $100,000 interest-only loan floating at 3.5% or $3,500 a year to a heftier $4,500 a year. Cash cushions will disappear. People may have to cut savings or even trim spending on food and clothing. Rates have been held down by the Bank of Canada since 2010 and major gains in rates become more likely as time moves on. For Family Finance, paying the bills was the top issue of the year.
Tax shelters Inability to make the most of RRSPs, RESPs, TFSAs and, for those who qualify, Registered Disability Savings Plans (RDSPs) spurred many readers to ask how they could sock away more money and which choices in the alphabet soup of these plans would be most tax efficient. The answer, which depends on balancing tax rates now and in future in the case of RRSPs and TFSAs, on the government bonuses that provide instantaneous gains for qualifying contributions to RESPs, and on complex interpretations of what is a disability, confuse readers and challenge financial planners.
Read more from Financial Post