Category Archives: Money Tips

Why I Won’t Bother With Granite Countertops

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A good point made in I Will Teach You To Be Richis that we each have to decide what we really want to spend our money on. Everyone is different. You may prefer to eat Kraft Dinner every night for a year so that you can take a trip to Hawaii once a decade. That’s fine so long as it’s a choice you’re making and not just “life happening to you” because you never thought about what you feel it’s worth spending money on and what it’s not. I, for one, do not think it’s worth spending money to replace my laminate with a granite countertop.

I will admit that the decision for me wasn’t even based on money. Granite requires more work than laminate. For me, that was enough to stick with laminate.

However, today, just for fun, I decided to do some very simple math to see what the financial impact of that choice was.

Replacing my laminate with granite would cost about $3600.

Buying a Granite Countertop versus Education Savings

If I took the $3600 and put it in the RESP for our children, it would immediately earn 20% in matching government grants. That means I’d have $4320 to invest. If I put it in something conservative earning 3.5% after inflation (think Bell, BMO stock) and left it for 10 years, it would be worth about $6090 when needed for post-secondary education. That will pay one year’s off campus rent, based on what a niece is paying now, inflated by 2% a year for the same 10 years.

Buying a Granite Countertop versus Retirement Savings

If I took the $3600 and put it in my RRSP, it would immediately earn me 46% in a tax refund which I could also put in the RRSP, making it $5256 in pre-tax dollars to invest. If I made the same 3.5% after inflation, and left it in for 22 years, it would be worth about $8850 when I drew it out again at a 21% income tax level. That’s more than my CPP will likely be for a year.

Buying a Granite Countertop versus Cash Savings

Since there’s no tax or grant incentive to saving my money in a cash portfolio, the value won’t change that much over the years. But if I took the $3600 and invested it at the same 3.5% after inflation and left it for 22 years, it would be worth about $7670. Which is probably what it would cost to get a granite countertop then. But I still wouldn’t, so I guess I’d be able to buy something to eat off my laminate countertop in retirement.

Choose Your Life, Don’t Be a Victim of It

Do you make conscious choices about what your spending gets you versus what you will not get if you spend that money? If you do, you’ll probably enjoy your life. But if you spend first without thinking about how that choice eliminates another possibility then you may always feel like a victim of your own life.

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What was one of the best spending choices you made? Please share your experience with a comment.

Find out your TFSA Contribution Room Using the CRA Telephone Information Phone System, TIPS

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You can not double-check when you contributed to your TFSA using the Canada Revenue Agency’s Telephone Information System, TIPS. What you can check is how much contribution room was left at the start of the current year.

How Up to Date is the TFSA Contribution Room Information from the CRA?

Unfortunately, financial institutions are only required to report your TFSA contributions to the tax department at the end of December each year. That means the info the government has can get out of date quickly. If you make a contribution on or after January 1, they won’t necessarily know about it so they don’t report it whether they know or not.

The TIPs option to review your Individual Tax Free Savings Account can only tell you the amount of unused TFSA room you had on January 1 of the current year.

So if you’ve made several small contributions this year, the TIPs system will not be of much use to you.

Information You Need to Check your TFSA Contributions Using TIPs

You will probably need the following info to use TIPS

  • your Social Insurance Number (SIN)
  • your full date of birth
  • the amount you reported on line 150 (Total Income) of your last tax return that has been filed and processed by the CRA. The number you need is what you reported, not what the CRA reported on your Notice of Assessment. Sometimes the CRA came up with a different value than you did.

When Is TIPS for TFSAs Available?

For TFSA information, TIPs is available from mid-February to the end of December. (In January and the first half of February, this option is unavailable as the previous year’s contribution information from the banks and other institutions is being input.)

In months when TIPs is available for TFSAs, the service is available 24 hours per day, 7 days a week.

To Check your TFSA Contributions and Contribution Room Using CRA’s Telephone Information Phone System

  1. Call 1-800-267-6999. (for free)
  2. Select the option for Tax Free Savings Accounts.
  3. Select the option for your Individual Tax Free Savings Account.
    Do not select the General Information option. The General Info option just tells you about how TFSAs work, what the penalties are for mis-use etc.
    The Individual Tax Free Savings Account service lets you know the amount of unused TFSA contributions as of January 1st of the current year.
  4. When prompted, enter and confirm your Social Insurance Number, SIN.
  5. When prompted, enter and confirm your month and year of birth.
  6. When prompted, enter and confirm the amount from line 150, Total income, from your previous year’s completed and accepted tax return. Do not just use the amount from your Notice of Assessment, use the value from your actual return.

The telephone system will respond with your TFSA contribution room as of January 1 of the current year.

If you have any concerns, like some Questrade customers did, it might be worth checking your TFSA contribution room for mistakes.

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Did you ever check your TFSA contribution room online? Was it useful or was it hopelessly out of date? Please share your experiences with a comment.