Episode #8 - Two Minutes to a Better RSP: Making Regular Contributions
Announcer: Welcome to The Money Clip podcast series from The Vault, Scotiabank’s online guide to helping Canadians get ahead financially. Listen in to gain a deeper understanding of your personal finances and find out how a few small changes to the way you manage your money can make a big difference.Michael Seaton: Thank you for joining us on The Money Clip podcast series from Scotiabank. I’m your host, Michael Seaton, and with The Money Clip we provide Canadians with a deeper understanding of personal finance and money-related matters. This is our series titled “Two Minutes to a Better RSP”. We hope to put you on the path to understand how to maximize your retirement savings plan as the deadline approaches. This is our second episode in the RSP series, and our subject today is contributing on a regular basis. One of the best things that you can do to give your RSP a boost is to contribute every month throughout the year. The best way to do this is to do it automatically. You can arrange very easily to have money transferred from your bank account to your RSP each and every month. It’s a convenient and disciplined way to save for your future. And it’s automatic; you don’t need to remember anything. Setting up a regular contribution plan won’t cost you a cent, and you can contribute with as little as $50 per month. Think of it as paying yourself first. Imagine yourself as your own employee that has to be paid. You probably pay some of your bills this way. But instead of paying a bill, look at this as an opportunity to invest in your future on an ongoing basis. When you contribute this way, there’s no scrambling to find cash at the RSP deadline. And we all know how hard that can be with the deadline only two months after the holiday season has ended. A study released last month by Scotiabank reported that, on average, Canadians were planning to spend over $800 during the holiday season. And then there’s the procrastination factor that many of us face. So that’s why many investors have agreed it’s much easier to come up with small amounts than one lump sum. This good habit, once it’s in place, is very hard to break. And don’t forget that a little can add up fast. For example, $25 per week could be a $1,300 head start on your contribution before interest is factored in. Automatic contributions to your plan are easy to set up and you can do it at your branch, over the phone or online. Start with whatever you can manage and take things from there.
This has been another Two Minutes to a Better RSP podcast. Keep listening for more in this series as we take two minutes to review tips and suggestions to reach your retirement goals. Thank you for listening.
Announcer: Do you have any thoughts on today’s show? We’d love for you to get involved and become part of the conversation. Send us your questions, comments or money management tips so that we can address them in future podcasts. Our email address is themoneyclip@scotiabank.com and our call-in number is 1-866-652-5333. The Money Clip is brought to you by The Vault at Scotiabank. Be sure to tune in again next time.