Those Canadians are at it again. They recently assembled, from experts in personal finance, the top 25 money tips. I wrote about the first 5 earlier, so now I’ll continue.
Invest in your kids. The article talks about RESP accounts, which are savings accounts designed for parents to invest for their children, with a bonus matching contribution from the government. No account in the United States offers this kind of guaranteed return through matching contributions, but the Ford Foundation suggests how these might work.
Give now. This suggestion stems from the gift tax versus the estate tax. It might be beneficial to give funds to your descendants while you are alive rather than leave funds for them through a will.
Talk it over. There are many things in the world in which communication is key. Money issues are no exceptions. “The best and simplest way to avoid problems after your death is to talk things over with all of your kids and other heirs well ahead of time.” The advice seems to be for those ready to pass on their wealth, but communication is important in any instance that involves another person, which includes just about every situtation.
Look at all-in costs. It may cost a certain amount to aquire something, but before making a decision, you will need to consider all costs. The classic example is a house. I’ve heard many people tell me that for “just a little bit more” per month, I could be making mortgage payments on a house rather than renting. That doesn’t take into account the down payment, expenses to maintain the house, taxes, and so on. What about the true cost of a car? Edmunds.com offers a true cost to own calculator that determines the real price of owning and maintaining a specific vehicle. You should always be looking at the true cost to own anything you plan on purchasing.
Set goals. This is another hot topic on personal finance blogs. The article suggests setting short-, medium- and long-term goals for yourself in order to track your progress. If you combine this tip with the first tip, “money is a tool,” you might determine that the goals you set shouldn’t be hard net worth numbers, but they should be goals on a more personal level.
Stay tuned for more of MoneySense’s top 25 money tips.
Updated August 9, 2011 and originally published July 7, 2006.