If a client asked me that question, how would I respond? That’s easy – I’d suggest they check their plan!

Our plan has 4 key objectives:

• RSP and RESP Savings
• Extra Mortgage Payments
• Big Trip Savings
• Other Big Item Savings

The majority of RSP and RESP savings is achieved through regular monthly savings incorporated into our budget. Funds towards the other items come from tax refunds, employment bonus, ‘extra’ pay cheques (I am paid 26 times per year but we align our budget to 24 pays per year) and the difference in pay cheques once CPP and EI premiums are maxed. I estimate how much we might receive from these sources and invariably they won’t be enough to meet our targets but depending on the year, they may be close. By having a plan, we don’t have to think very long how to best deploy the money and the less chance there is of it trickling out of our account!

What is the highest priority? I can be a challenge to prioritize your financial plan objectives and the trick is that they’re not necessarily time sensitive or mutually exclusive. For example, we can split our tax refund between 2 or 3 of the goals above and add to them as we go through the year and have a better idea of what other funds may be forthcoming. The other point to consider is that if we invest in RSP’s, we will likely receive a greater tax refund next year and it can be used towards any of the goals above as they are all medium to long term objectives.

We’ve decided to split the refund between RSP’s, RESP’s and our summer trip savings. We made the ‘sensible’ decision with respect to RSP and RESP savings but balanced it with our planned trip (we must pay for the plane tickets this month!).