Your Year-End Financial Tips and Reminders
Year-end is quickly approaching and you don’t want to miss out on any important money moves before the year closes out! In this episode, I provide important reminders and tips for your finances to end 2021 on a positive note and put you in a fabulous position to achieve your money goals in the new year.
About the Host:
I am a financial professional, who specializes in helping people to achieve their financial goals. My absolute passion is creating new possibilities in people’s lives by showing them the ropes when it comes to money. I’m here to spark healthy and positive conversations around wealth and investment and create a world where nobody is limited by their financial situation. I believe this begins with education and shifting our relationships with money. I love getting to witness people achieving their most ambitious goals and creating new possibilities for themselves and their families!
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Transcript
Welcome to the wealth and wellness podcast with
Kalee Boisvert:me Kaylie Bob air, I specialize in helping people to achieve
Kalee Boisvert:their financial goals. I have a love for all things numbers, and
Kalee Boisvert:I'm passionate about financial literacy. My goal is to spark
Kalee Boisvert:healthy and positive conversations around wealth and
Kalee Boisvert:investment, and create a world where nobody is limited by their
Kalee Boisvert:financial situation. But wealth is just one piece of the
Kalee Boisvert:equation of living our best lives. So join me as we explore
Kalee Boisvert:both wealth and wellness topics. From your net worth to your self
Kalee Boisvert:worth, get ready to take confident action.
Kalee Boisvert:Hello, this is Kaylee. And thank you so much for tuning into this
Kalee Boisvert:episode of the wealth and wellness Podcast. Today, I
Kalee Boisvert:wanted to do a quick chat now that we're quickly approaching
Kalee Boisvert:the end of the year. And I wanted to share a few money
Kalee Boisvert:reminders and tips for year end. That way, it feels like you're
Kalee Boisvert:ready to close off 2021 On a good note, and have a good start
Kalee Boisvert:for 2022 when it comes to your money. So, of course, it's been
Kalee Boisvert:an interesting few years for all of us navigating the pandemic.
Kalee Boisvert:And I think just to start off, though, I want to say it's
Kalee Boisvert:important to give yourself grace, because I think in this
Kalee Boisvert:time, that's of course, very unprecedented. And, you know,
Kalee Boisvert:everyone was impacted in different ways. And that very
Kalee Boisvert:much could have overlapped with your money and finances, when it
Kalee Boisvert:came to how people's jobs were impacted, and their income as a
Kalee Boisvert:result, and then savings rates and things like that. So it's
Kalee Boisvert:been a very interesting few years to say the least. And I
Kalee Boisvert:think just to start off, I, you know, I think we all need to
Kalee Boisvert:give ourselves a pat on the back for dealing with all this and
Kalee Boisvert:you know, getting through a lot of this unplanned scenarios that
Kalee Boisvert:have maybe thrown some of your financial plans and, and money
Kalee Boisvert:goals for a bit of a loop. But again, hopefully, this is a good
Kalee Boisvert:sort of tips and reminders for you. So you feel like you're,
Kalee Boisvert:you know, ready to go. You're doing what you can as far as
Kalee Boisvert:what you can control with your money. So let's talk about money
Kalee Boisvert:tips for the year. And I'll give you a bit of a disclaimer. Just
Kalee Boisvert:to start off, this is going to be more of a Canada focused
Kalee Boisvert:topic. And some of the tips are going to be very much Canadian
Kalee Boisvert:focused on types of accounts and things like that, just because I
Kalee Boisvert:reside in Canada. And so I work with a lot of people in Canada
Kalee Boisvert:as a result. So I wanted to get really specific for what some of
Kalee Boisvert:these deadlines and things like that are. Okay. So to start off,
Kalee Boisvert:let's first talk about TFSA as tax free savings accounts. So
Kalee Boisvert:those are a you know, very important piece of people's
Kalee Boisvert:wealth building goals and an account that most Canadians that
Kalee Boisvert:are able to have these accounts generally are utilizing their
Kalee Boisvert:tax free savings accounts or so I wanted to talk about those. A
Kalee Boisvert:good reminder for year end for Tax Free Savings accounts is
Kalee Boisvert:just if you are planning on withdrawing from your Tax Free
Kalee Boisvert:Savings Account, consider doing so prior to year end. Because
Kalee Boisvert:you any amounts you withdraw before the year end, you
Kalee Boisvert:actually get that contribution room back as of the next year.
Kalee Boisvert:So if you do it in January, let's say you're been
Kalee Boisvert:considering it, there's something coming up that you
Kalee Boisvert:need to pay for. And you've been considering taking money on the
Kalee Boisvert:TFSA to cover it. Well, good idea might be to take it now
Kalee Boisvert:that we're in December nearing year end, rather than taking it
Kalee Boisvert:in January. Because let's say for instance, you took out
Kalee Boisvert:$10,000 This December from your Tax Free Savings Account. Well
Kalee Boisvert:come January 1 2022, you get the additional 6000 room that
Kalee Boisvert:everyone's been given for 2022. And again, this is if you're 18
Kalee Boisvert:years or above, that's a little reminder as well for TFSA is so
Kalee Boisvert:again, so come January 1 2022, everyone gets that additional
Kalee Boisvert:6000 room. But because you took out 10,000 From yours in 2021 as
Kalee Boisvert:of January 1 2022, you actually get that $10,000 room back so
Kalee Boisvert:your contribution room in that scenario, as of January 1 2022
Kalee Boisvert:would actually be $16,000. So again, it's just gives you a
Kalee Boisvert:little bit more flexibility in being able to replenish your
Kalee Boisvert:TFSA account. If you were to make the withdrawal in January
Kalee Boisvert:for instance. So let's say instead you held off, you pulled
Kalee Boisvert:out that $10,000 In January while you have To wait until the
Kalee Boisvert:following calendar year before you get that room back. So
Kalee Boisvert:again, December is just a nice sort of year and Mark, because
Kalee Boisvert:you get that room back really quick, come January, you already
Kalee Boisvert:have the room given back to you to be able to replenish that if
Kalee Boisvert:that's the plan. So again, just for flexibility purposes, might
Kalee Boisvert:be wanting to consider it now rather than later. Because like
Kalee Boisvert:I said, if you do withdraw in January, for instance, you will
Kalee Boisvert:not get that room back. So let's say you make the withdrawal of
Kalee Boisvert:$10,000, from your TFSA in January, you will not get that
Kalee Boisvert:room back until January of 2023. So you have to wait the full
Kalee Boisvert:year. So a lot less waiting if you're wanting to do it before
Kalee Boisvert:year end. So again, just something to consider for your
Kalee Boisvert:TFSA accounts for year end, reminders and things like that.
Kalee Boisvert:So now let's chat about another important account RRSPs are
Kalee Boisvert:Registered Retirement Savings Plans, and making contributions
Kalee Boisvert:to those. So the great thing about RRSPs is if you are
Kalee Boisvert:planning on making a contribution to your RSP, which
Kalee Boisvert:you would want, which you'd like to claim on your 2021 tax, you
Kalee Boisvert:can actually do so by the end of this year. But you also have the
Kalee Boisvert:first 60 days of the following year. So the first 60 days of
Kalee Boisvert:2022, as well. So you do have flexibility, and it's not as
Kalee Boisvert:urgent to get this done by year end. But you might want to start
Kalee Boisvert:giving some thought about okay, how much do I want to make sure
Kalee Boisvert:I'm making for my Rs contra RSP contribution, have I put aside
Kalee Boisvert:that much savings, you know, where's that money coming from?
Kalee Boisvert:If I do want to do it in the first 60 days. So again, you
Kalee Boisvert:know, those that start of a new year, things move fast. So it's
Kalee Boisvert:a good time to give some consideration at least to if
Kalee Boisvert:you're making that contribution. Again, the deadline at the end
Kalee Boisvert:of the year is not as it's not really the deadline deadline,
Kalee Boisvert:because you do have the first 60 days of 2022. So not a year end
Kalee Boisvert:deadline on that, but one you might want to start giving to
Kalee Boisvert:some consideration to so you're not left scrambling at the very
Kalee Boisvert:last day to make those contributions.
Kalee Boisvert:Okay, so another topic that relates to investment accounts
Kalee Boisvert:are ESPs. So Registered Education Savings Plans, these
Kalee Boisvert:accounts are a fabulous way to save for your children's post
Kalee Boisvert:secondary education, your contributions put into an RRSP
Kalee Boisvert:account, they grow tax sheltered while they're in the account,
Kalee Boisvert:and the government matches your contributions at 20%. up to 500
Kalee Boisvert:per year, or they allow up to a one year of catch up. So that
Kalee Boisvert:would mean technically up to 1000 per year if you're catching
Kalee Boisvert:up on a previous year that you have not received the grant for
Kalee Boisvert:so the year end is an important time to consider for this, if
Kalee Boisvert:you are looking to max out your government grant contributions
Kalee Boisvert:per child. That means that if you make a contribution of 2500,
Kalee Boisvert:in the year 2021. So before the end of the year, the government
Kalee Boisvert:will match you at the $500 they'll put it and so that's
Kalee Boisvert:20%. Again, deadline being important because you can only
Kalee Boisvert:catch up on one year of grant per year. So if you keep pushing
Kalee Boisvert:this off, you start to lose that ability to catch up on yours
Kalee Boisvert:because each year, you're only given the ability to go back and
Kalee Boisvert:catch up on one year. Okay, so that's all I had to say I think
Kalee Boisvert:for account specific. Now let's talk about tax loss selling. So
Kalee Boisvert:this is only going to be applicable on taxable accounts.
Kalee Boisvert:So retirement savings accounts, tax free accounts, this is not
Kalee Boisvert:applicable for at all. So this what I'm going to talk about now
Kalee Boisvert:with tax loss selling or capital gains. Again, it's only
Kalee Boisvert:applicable on non registered account investment accounts. So
Kalee Boisvert:we have a few different names they go by so non registered
Kalee Boisvert:investment account, those are kind of the most common. So
Kalee Boisvert:that's what the this would be applicable for. And first off,
Kalee Boisvert:just to disclaimer, I'm not here to give tax advice. So you do
Kalee Boisvert:want to check with your accountant when it comes to
Kalee Boisvert:consulting on your tax position. And if it makes sense for you to
Kalee Boisvert:crystallize any losses or gains. Just scenario for an instance of
Kalee Boisvert:how this would work is maybe for instance, your income this year
Kalee Boisvert:is lower, maybe it was impacted by the pandemic or something
Kalee Boisvert:like this. And for this year, your income is lower. So you
Kalee Boisvert:might want to see, you know, being that is lower this year
Kalee Boisvert:and you think it's going to be higher in future years. You
Kalee Boisvert:might want to sell some your positions in your account again
Kalee Boisvert:in that non registered account that have increased in value,
Kalee Boisvert:because those will trigger a capital gain. So let's say you
Kalee Boisvert:bought a stock at $5. It went up to $10 over the time you've held
Kalee Boisvert:it. So once you go to sell it there's that $5 gain on each
Kalee Boisvert:share that you will have purchased of that stock. So you
Kalee Boisvert:will be subject to tax, and you're taxed at 50% of your
Kalee Boisvert:capital gains. So again, if you're in a year where your
Kalee Boisvert:incomes a little bit lower, you might say, Hey, I better take
Kalee Boisvert:those gains. Now, because I do foresee my income getting higher
Kalee Boisvert:in later years. Again, something you might want to consult with
Kalee Boisvert:your accountant for. So this is not giving advice, specifically
Kalee Boisvert:because it is very dependent on each person, and your tax
Kalee Boisvert:bracket and things like that. Or another reason to consider is
Kalee Boisvert:tax losses. So let's say you've already made some sales in your
Kalee Boisvert:accounts. Throughout the years, you've sold some stocks, maybe
Kalee Boisvert:you've had some positions that have gone up in value, it's been
Kalee Boisvert:a good couple years, since the dip in the markets from the
Kalee Boisvert:pandemic markets have come up quite a bit since then. So maybe
Kalee Boisvert:you've made some cells in your non registered account, and
Kalee Boisvert:you've triggered some capital gains, or, and so you already
Kalee Boisvert:have these gains for the year and you go Yeah, you know, I
Kalee Boisvert:want to see if I can offset those at all, to kind of bring
Kalee Boisvert:down that tax implication, well, you can look at your account and
Kalee Boisvert:see if there's any positions that are at a loss position. So
Kalee Boisvert:let's say you bought a stock at $20. And now it's trading at
Kalee Boisvert:$15. So you might want to also consider selling it at a loss.
Kalee Boisvert:And that way you can use your loss against any capital gains.
Kalee Boisvert:And the great thing about losses too, is you can actually carry
Kalee Boisvert:those forward to future years as well, if you don't have a use
Kalee Boisvert:for them this year, so might be something to consider to
Kalee Boisvert:triggering some of those losses in your account. If you want to
Kalee Boisvert:just sell those positions, realize the losses. The last day
Kalee Boisvert:for tax loss selling stocks is December 29. Because there's a
Kalee Boisvert:two day settlement from when you sell a stock. So that means they
Kalee Boisvert:will settle prior to the year end. If you sell them after that
Kalee Boisvert:date, they settle in January. So it technically is not in 2021,
Kalee Boisvert:it would be for the 2022 tax year. So make sure you do this
Kalee Boisvert:prior to that December 29 deadline.
Kalee Boisvert:And that ensures that it can be used on your 2021 taxes. And
Kalee Boisvert:keep in mind as well, if you are looking to buy back in either
Kalee Boisvert:position. So let's say maybe you sold something at a loss to
Kalee Boisvert:recognize the gain. But you still like that stock and you
Kalee Boisvert:want to have it in your portfolio. Well, you have to
Kalee Boisvert:wait at least 30 days before repurchasing it otherwise, you
Kalee Boisvert:could it would be considered having done like a superficial
Kalee Boisvert:loss, they call it and essentially, that original loss
Kalee Boisvert:you took no longer applies because you bought the position
Kalee Boisvert:right back and you bought it back within the 30 days. So do
Kalee Boisvert:wait the 30 day time period, before buying that exact
Kalee Boisvert:position back. If it's a completely different stock, this
Kalee Boisvert:is not applicable. Again, it's if you're buying the same
Kalee Boisvert:position pack, you have to wait 30 days to make sure that you
Kalee Boisvert:can still utilize that loss for tax purposes. And yeah, just
Kalee Boisvert:keep in mind that December is the month where people like to
Kalee Boisvert:do these tax losses and things like that for tax purposes, even
Kalee Boisvert:institutional investors for things like mutual funds and
Kalee Boisvert:pension funds and things like that. So it's kind of just
Kalee Boisvert:something to keep in mind with the maybe volatility and what
Kalee Boisvert:goes on in December again, you know, not saying for sure how
Kalee Boisvert:that's going to impact the markets. But that could be one
Kalee Boisvert:of the factors that are impacting markets in December.
Kalee Boisvert:So just keep that in mind. Another diligent strategy for
Kalee Boisvert:year end is to check in with your financial goals. So I like
Kalee Boisvert:using the year end is just that, you know, that reminder that
Kalee Boisvert:point to just reflect review. And if you work, so if you're
Kalee Boisvert:doing this independently, you know, maybe it's taking some
Kalee Boisvert:time sitting down, reviewing your goals, checking to see you
Kalee Boisvert:know, if you're still on track, has anything changed, Is there
Kalee Boisvert:things you want to update as far as what you're looking to
Kalee Boisvert:achieve? Maybe you've added some goals for the coming year, like
Kalee Boisvert:a big trip that you've been wanting to do for a while and
Kalee Boisvert:putting off and that you're optimistic that might be able to
Kalee Boisvert:happen in the next any year or so. So things like that, make
Kalee Boisvert:sure you do take some time, reflect review. If you work with
Kalee Boisvert:a financial professional, it's a great opportunity end of the
Kalee Boisvert:year to just reach out and book review for year end or for early
Kalee Boisvert:January to just discuss again, your goals. If anything's
Kalee Boisvert:changed. It's just Yeah, year end is a nice sort of reminder
Kalee Boisvert:or point to just be be looking in on these things again, in
Kalee Boisvert:reviewing and reflecting on where things are at and where
Kalee Boisvert:you want to go. What else year end is also a great time to
Kalee Boisvert:check in with other important documentation. So documentation
Kalee Boisvert:such as your estate plan so your will your power of attorney or
Kalee Boisvert:personal directive documentation such as insurance policies,
Kalee Boisvert:beneficiaries on your accounts. So If any live changes have
Kalee Boisvert:occurred that require an update, so maybe birth of another child,
Kalee Boisvert:someone passing away a divorce, any major life event, or maybe
Kalee Boisvert:it's just you haven't checked on these in a long time, take that
Kalee Boisvert:time to just check in, make sure that they are reflective of your
Kalee Boisvert:current plan. And if not, make sure you make those updates. So
Kalee Boisvert:if it's an estate plan, you know, maybe it is checking in
Kalee Boisvert:with your lawyer to have that updated your will or power of
Kalee Boisvert:attorney or personal directive, if something has changed. It is
Kalee Boisvert:really important to keep these documents current and with your,
Kalee Boisvert:you know, with whatever directives and intentions you
Kalee Boisvert:have. So make sure that you are checking in on those important
Kalee Boisvert:documents. And again, this might just be the time to remind
Kalee Boisvert:yourself of okay, yes, I need to get that done. Another way to
Kalee Boisvert:get organized year end, if you have any downtime, so maybe over
Kalee Boisvert:the holidays, you have some time of work, and it's your only sort
Kalee Boisvert:of downtime that you're foreseeing the next little bit
Kalee Boisvert:well, also a great time to get ready for tax season. So instead
Kalee Boisvert:of rushing to get this all done at the bitter end, before the
Kalee Boisvert:filing deadline, which can be stressful and chaotic, and leave
Kalee Boisvert:you scrambling for trying to find all these slips and things
Kalee Boisvert:like that, well maybe just start you know, gathering your
Kalee Boisvert:receipts right now for your tax taxes coming up. So for 2021. So
Kalee Boisvert:gathering receipts, making a list of any items that you would
Kalee Boisvert:be expecting for as far as like slips that you're going to be
Kalee Boisvert:expecting to hand into your accounting, if you work with a
Kalee Boisvert:financial or accounting professional, or if you do it
Kalee Boisvert:yourself, maybe making a list of you know, what are the items
Kalee Boisvert:that you're going to need. And sort of then you can check them
Kalee Boisvert:off as they come in early in the new year. So it's a great time
Kalee Boisvert:to kind of be proactive on that. Why not again, if you have the
Kalee Boisvert:time if you have a little bit of downtime, great idea to do that.
Kalee Boisvert:Also, don't let those benefits go to waste. The deadline for
Kalee Boisvert:most workplace health benefits is usually the year end so the
Kalee Boisvert:December 31 year end for most plans. So you know those, the
Kalee Boisvert:savings accounts and things like that, that you can utilize on
Kalee Boisvert:different surfaces like massages and acupuncture, naturopath in,
Kalee Boisvert:you know Dental, things like that. Maybe you know that now's
Kalee Boisvert:the time, hopefully, maybe you have some time over the
Kalee Boisvert:holidays, or if you have some off days where you can schedule
Kalee Boisvert:those appointments. And you know, with all the running
Kalee Boisvert:around we do during the holidays, perhaps a year end
Kalee Boisvert:massage is in order. So make sure you get that done so you
Kalee Boisvert:can fully utilize your benefits. What else also keep in mind
Kalee Boisvert:deadline for charitable donations for 2020 tax year is
Kalee Boisvert:of course December 31 2021 There are so many wonderful causes out
Kalee Boisvert:there. And many that really rely on our support especially over
Kalee Boisvert:the holiday season. So consider giving to support some of your
Kalee Boisvert:favorite causes. And don't forget to get that charitable
Kalee Boisvert:receipt because that's going to really help you out come tax
Kalee Boisvert:time. And then I can't talk about year end tax or planning
Kalee Boisvert:sorry planning in general without addressing the dreaded b
Kalee Boisvert:word. So yes, I am talking budgeting December is probably
Kalee Boisvert:the most important month I would say that we need to be giving
Kalee Boisvert:time and consideration to budgeting and spending. So if
Kalee Boisvert:you're not a huge fan of tracking expenses throughout the
Kalee Boisvert:year, I get it I'm right there with you. I'm not a big fan. But
Kalee Boisvert:you know being diligent about tracking finances over the
Kalee Boisvert:holidays is really going to help spare you from that shock of you
Kalee Boisvert:know credit card bills come January so spend some time
Kalee Boisvert:really deciding you know, what is your budget what is the
Kalee Boisvert:budget that you want to be spending on your kids for
Kalee Boisvert:presence and you know, other people that you're getting gifts
Kalee Boisvert:for for events, things like that again the holidays you know we
Kalee Boisvert:have to remember what it's what it's all about and it's about
Kalee Boisvert:just you know being around loved one loved ones and you know
Kalee Boisvert:being just grateful for things like that for for time with the
Kalee Boisvert:people we love and so you know the the pressure of shopping and
Kalee Boisvert:buying and getting things is is strong like it's everywhere,
Kalee Boisvert:it's all around us it's online shopping and ads we get and
Kalee Boisvert:things like that and and of course if we go to the malls and
Kalee Boisvert:things like that, but yeah, take some time and do your budgeting
Kalee Boisvert:first and and you know put some thought into how much you
Kalee Boisvert:actually want to spend in those different categories and that
Kalee Boisvert:way you're in control right you're it's not like your money
Kalee Boisvert:is just sort of going right out the door and and there's nothing
Kalee Boisvert:left after December. But you're you're being diligent about
Kalee Boisvert:saying hey, this is what's feasible for me in my budget or
Kalee Boisvert:in my you know, with income and things like that right now. No
Kalee Boisvert:and, and so that's what you're sticking to. So it's a great
Kalee Boisvert:time of any months, December's probably the most important to
Kalee Boisvert:really spend some time and get diligent on what your intentions
Kalee Boisvert:are about spending and cash flow. So that's it. Hopefully
Kalee Boisvert:those were helpful reminders for you. And my goal was not to
Kalee Boisvert:overwhelm so hopefully I have not overwhelmed but have you
Kalee Boisvert:feeling ready to end your 2021 on a good note with your
Kalee Boisvert:finances and be ready, so you're off, you know, for a great start
Kalee Boisvert:for 2022 as well. So thank you so much for tuning into this
Kalee Boisvert:episode, and I will catch you on next week's episode. All right,
Kalee Boisvert:bye.
Kalee Boisvert:I hope you found value in this episode. And because I'm such a
Kalee Boisvert:proponent of taking confident action, I want to pose a
Kalee Boisvert:question to you the listener. What is one action that you feel
Kalee Boisvert:inspired to take after listening to today's episode? If you enjoy
Kalee Boisvert:listening, please subscribe and share with your friends and
Kalee Boisvert:family. Thank you so much and I will catch you next time.
