RRSP? TFSA? RESP? What These Acronyms For Saving Plans Mean + MORE Dec 14th

WASHINGTON _ If you’re about to buy a home, shop for a car or borrow for college, the pros have some advice:
Go ahead.
The Federal Reserve’s decision Wednesday to slightly raise its key interest rate, advisers say, should have little effect on mortgages or auto and student loans. The Fed doesn’t directly affect those rates, at least not in the short run.
Nor should the economy’s health be much affected by the Fed’s move.
That said, rates on some other loans _ notably credit cards, home equity loans and adjustable-rate mortgages _ will likely rise soon, though only modestly. Those rates are based on benchmarks like banks’ prime rate, which moves in tandem with the Fed’s key rate.
Mortgage rates have been surging, for reasons that have little to do with the Fed. Rather, Donald Trump’s election as president _ with his pledge to slash taxes, loosen regulations and increase infrastructure spending _ has raised the prospect of faster economic growth and inflation…

OTTAWA —The Canadian household debt compared with income climbed to a record high in the third quarter as borrowing grew faster than incomes.
Statistics Canada said Wednesday the ratio of household credit market debt to adjusted disposable income crept up to 166.9 per cent in the third quarter, up from 166.4 per cent in the second quarter.
That means, on average, Canadians owed $1.67 in credit market debt—mortgages, other loans and consumer credit —for every dollar of disposable income.
Benjamin Reitzes, a senior economist at BMO Capital Markets, said the half a percentage point increase in the debt ratio was well below seasonal norms and the smallest third-quarter increase since 2000.

Invest or pay off debt? »

“Even with the more modest increase, the upward trend in household debt…continues unabated,” Reitzes wrote in a report.
“However, we might start to see the ratio flatten out a bit in 2017 as the Vancouver housing market has cooled notably due to the foreign buyers’ tax, and the new mortgage rule should dampen activity modestly in 2017…

When you’ve found yourself paying off debt, saving might seem impossible considering all the bills and creditors nipping at your finances.

Jeffrey Schwartz would urge you to consider otherwise.

The financial expert says it’s possible to achieve both with a little rethinking. For starters, rather than seeing savings as a restraint, look at it as a plan to freedom. Begin the day with paying yourself first — even if it’s the loose change in your pockets — because every little bit helps.

The idea is to start small, so small you won’t even notice the money’s gone. Once you’ve built up enough, it may be tempting to reward yourself with an impulse purchase but you’re only halfway towards financial freedom, according to Schwartz.

For where to go next, check out the latest episode of “2 Minutes To Transform” and let us know about your own successful saving tidbits in the comments below.

“2 Minutes To Transform” is your guide to small but meaningful changes for a better you. Experts share their tips to transform your life at home, in the office or while you’re on the go — all in under two minutes…

WASHINGTON _ The Federal Reserve has raised a key interest rate in response to a solid U.S. economy and expectations of higher inflation, and it foresees three rate hikes in 2017.
The Fed’s action Wednesday will mean modestly higher rates on some loans.
The central bank announced after its latest policy meeting that it’s increasing its benchmark rate by a modest quarter-point to a still-low range of 0.5 per cent to 0.75 per cent. The Fed last raised the rate in December 2015 from a record low near zero set during the 2008 financial crisis.
The Fed’s move, only the second rate hike in the past decade, came on a unanimous 10-0 vote. It also released an updated economic forecast that showed modest changes to its outlook for economic growth, unemployment and inflation, mainly to take account of stronger growth and a drop in the unemployment rate for November to a nine-year low of 4.6 per cent.
Its new projection has the unemployment rate dipping to 4.5 per cent by the end of 2017 and remaining at that level in 2018…

Saving money can be tough considering Canadian consumer debt is worth around $1.702 trillion, but for those willing to learn, Jeffrey Schwartz has a few pointers.

For starters, the financial expert says Canadians should get to know what savings plans are at their disposal and what works best for their needs.

Are you a student looking to save part of your paycheque? A TFSA might do the trick. Perhaps you’ve entered the workforce and want to be better positioned for a comfy retirement. Consider an RRSP. Maybe you’ve got kids you want to send to university or college. We’ve got four letters for you: RESP.

But no matter what plan you consider, it doesn’t hurt to start contributing early. For more on Schwartz’s advice on saving, check out the latest episode of “2 Minutes To Transform” in the video above.

“2 Minutes To Transform” is your guide to small but meaningful changes for a better you. Experts share their tips to transform your life at home, in the office or while you’re on the go — all in under two minutes…