Wednesday, January 21, 2015



Lower Gas Costs Easier on Family Budgets

Some expert advice on what to do with the extra cash

By Jason Brown, First West CU, Envision/Submitted photo Avi Kay

as prices have hit a four year low across B.C. with an average price of $1 per litre, which is adding up to major savings for consumers.


“Lower gas prices means two things: consumers will have more disposable income to spend, and the prices of many goods and services impacted by the cost of gas, such as the transportation of food stuffs, will go down as well,” says Avi Kay, a branch manager at Envision Financial.


So what should consumers do with their extra cash? While the drop in prices may not last for long, with a little forethought the windfall can be used to improve one’s financial picture.


Kay recommends starting with a review of your daily expenses to determine exactly how much you are saving and what that surplus amount is.


“Don’t just guess, you need to know how much money you have to work with,” he says.


Once you know that, Kay advises tackling any credit card debt you may have first.


If you’re one of the lucky few that doesn’t have any outstanding holiday bills, he suggests increasing your payments on your mortgage, if your mortgage terms permit, or directing the monthly cash surplus to any loans, especially if they are at a higher interest rate than your mortgage.


“For one, you will pay less interest over the term of the loan. Another bonus of making that additional principal payment is that it will cut time off the total length of the loan,” he says.


If you don’t want to put the money towards your mortgage, you can instead grow your investments by adding the money to your TFSA or your RRSP before the contribution year ends on March 2.


Alternatively, if you have children then consider starting or topping up your children’s Registered Education Savings Plan (RESP) with the extra cash you have on hand. If you are eligible, the government will match your contributions by up to 20 per cent.


“Last week’s announcement by the provincial government introducing the BC Training and Education Savings grant (BCTES) makes this a perfect time to get started,” says Kay.


The BCTES grant of $1,200 is available to families whose children were born in or after 2007. To take advantage of the grant, they must already be beneficiaries of an RESP with a participating financial institution. The program will be available at Envision Financial in Aug. 2015.


“Regardless of an unexpected influx of cash, January is an ideal time to review your finances and make a plan for the year ahead,” he says.


About Envision
Envision Financial is a premier provider of banking, investment and insurance services for residents and businesses throughout the Fraser Valley, Lower Mainland and Kitimat regions. As a division of First West Credit Union, B.C.'s third-largest credit union with 54 branches and 42 insurance offices throughout the province, Envision Financial brings innovative products, an extensive branch network and local decision making to the banking experience.


Follow Envision on Twitter: @EnvisionFin



© Copyright (c) 2009-2015 The Valley Voice