BMO's Financial Tip of the Week: Space Out Payments to Avoid Cash-Flow Problems
TORONTO, ONTARIO--(Marketwire - June 20, 2012) - As part of BMO Financial Group's ongoing commitment to financial literacy and 'Making Money Make Sense' for Canadians, BMO is releasing a financial tip every week in 2012.
BMO's Financial Tip of the Week: Avoid cash-flow issues by creating a payment schedule that incorporates planned financial commitments.
"In order to get your regular payments under control, try spreading them out so that you don't end up having to pay a large lump-sum amount," said Serge Pépin, Vice President, Investment Strategy, BMO Asset Management Inc. "This will provide you with adequate breathing room and help you avoid having cash-flow problems for everyday expenses."
Consider this kind of planning for the following payments:
Property Taxes: The frequency of property tax installments varies by municipality, but most allow you to pay your annual tax assessment through equal quarterly or monthly payments.
Insurance Premiums: Consider making your insurance premium payments on a monthly basis. This way, you will not be scrambling for the funds when your 6-month or annual premium fee is due.
RRSPs: RRSP contributions can be made throughout the year. Consider opting for an automatic payment schedule that takes a small portion off every paycheque and puts it towards your RRSP.
Tax-Free Savings Accounts (TFSA): When contributing to your TFSA, small amounts invested on a regular basis are best. Over time, even small monthly contributions of $50 to $100 will add up.
Registered Education Savings Plan (RESP): Do not be shy to ask relatives and/or friends to incorporate contributions to an RESP as a part of your child's birthday and Christmas gifts. Not only will this allow their RESP to grow, but it will provide you with some relief when juggling other regularly scheduled payments.
About BMO Financial Group
Established in 1817 as Bank of Montreal, BMO Financial Group is a highly-diversified North American financial services organization. With total assets of $525 billion as at April 30, 2012, and more than 46,000 employees, BMO Financial Group provides a broad range of retail banking, wealth management and investment banking products and solutions.
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