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CIBC Finance expert Jamie Golombek helps a viewer organize and prioritize their financial records.
Money Makeover
The problem: Tiffany, 27, a new wife and mother wants to set up an RESP for her four-month-old daughter. But as a budget-virgin, she’s not sure where to get the money from.
The goal: To put $2,500 a year into an RESP in order to qualify for the Canada Education Savings grant.
The plan: After going through Tiffany’s budget, CIBC Personal Finance Expert Jamie Golombek highlighted three key areas where Tiffany can save hundreds of dollars a month, freeing up the money she needs for her daughter’s RESP.
Credit Card Debt
Like many Canadians, Tiffany had maxed out her credit card and was only paying the minimum payment each month. With an annual interest rate of 25%, Tiffany was paying on average $120 a month just in interest charges. That’s $1,440 a year just in credit card interest charges, and more than half of what Tiffany needs to put toward the RESP each each. Jamie’s solution is to pay down this credit card debt as soon as possible. Once the debt is cleared, Tiffany should pay her card in full each month, avoiding interest charges.
Late fees
Tiffany and her husband have a very relaxed system for paying household bills: they get paid when the couple remembers. This works for the most part, but the occasional bill gets left behind and the couple ends up paying late fees. This can add up over time and it’s money Tiffany shouldn’t have to pay. Ever. Jamie’s advice is to look at the past three months worth of household bills. Figure out the average payment on each bill and set aside enough money each month to cover those bills. Then, set up an automatic payment system to ensure each bill is paid in full, on time, every month.
Cash
Tiffany’s budget had roughly $350 worth of purchases unaccounted for (mostly cash). It’s really difficult to analyze your budget if you don’t have the full picture of how you’re spending your money. Any time you use cash, write it down. Then you’ll know where to cut from your budget.
Jamie Golombek, CIBC Personal Finance Expert
Jamie Golombek appears regularly as a personal financial expert on The Marilyn Denis Show, providing advice on financial topics ranging from how to save for children’s education, to getting your budget in order, to helping homeowners choose the best financing option for their new home.
As a CIBC Personal Finance Expert and Managing Director, Tax & Estate Planning at CIBC Private Wealth Management, Jamie works closely with advisors from across CIBC to help clients meet their financial needs with comprehensive advice and solutions.
With nearly 20 years of experience specializing in tax planning for both individuals and small businesses, Jamie is frequently quoted as an expert in the national media. He writes a weekly column, “Tax Expert”, in the National Post which is syndicated across Canada in various Postmedia newspapers and has appeared as a guest on CBC’s Newsworld and The National.
Jamie received his B.Comm. from McGill University, earned his Chartered Accountant designation in Ontario and qualified as a U.S. Certified Public Accountant in Illinois. He has also obtained his Certified Financial Planning (CFP) and Chartered Life Underwriting (CLU) designations.
He also teaches an MBA course in personal finance at the Schulich School of Business at York University in Toronto.
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