Once again, tax season for Canadians is drawing near. As the past 12 months have been financially challenging for most people, choosing the right financial tax options are especially important this year. The deadline for getting a Registered Retirement Savings Plan (RRSP) is coming up; many people now have to decide whether or not an RRSP is the right choice for them.

Canadians can now choose between a RRSP and a Tax Free Savings Account (TFSA). Each option offers its own advantages, as well as disadvantages. Having detailed knowledge about both choices is vital for making the best financial decision for your situation. As financial situations can fluctuate, what was the best choice last year may no longer be the best choice for this year; don’t simply rely on what has worked in the past.

The TSFA has become a popular financial planning tool since it was introduced. The TFSA is being recommended for those who make forty thousand a year and under; at this income rate there won't be very much saved on taxes. As well, there is a possibility of being penalized later on when a large amount is withdrawn from this retirement savings. The TFSA does not penalize any withdrawals at any time, making the money much easier to access if it is needed. The government declares how much can be withdrawn from a RRSP; these withdrawals are then considered income; money withdrawn from a TSFA is not.

When making under forty thousand the TFSA is considered the better savings plan; however when the yearly income grows past this point, this money can be withdrawn and then invested into a RRSP. Conversely, for those making the higher income now with the understanding of making significantly less in the retirement years, the RRSP can be the better savings tool then; it can later be withdrawn and then deposited into a TFSA.

It is important to remember that a healthy financial plan includes the fact that your planning must be flexible in order to accommodate the financial fluctuations that occur. Different financial savings products do become available; research your options every year to find out what is now available that would be beneficial for you. As well, during different stages of life, a different financial plan and budgeting will be needed. Such things as buying a home, starting a family, etc. can all have a major impact on our finances, as well as our financial savings strategy. Consult with a financial advisor or another professional who is educated and well versed in the financial field.

While some people view Valentine's Day as a day that focuses on love and romance, others may view Valentine's as nothing more than a time to make money by companies trying to cash in on 'yet another holiday'. Regardless of what your personal views about Valentine's are, it does seem that a 'successful' Valentine’s does seem to correlate with the amount of money spent. Some people want to have that 'one special night' that can easily run up a huge bill.

Spending a large sum of money on Valentine;s might also not fit in with the couple's yearly budget as. For couples who are planning to buy home, a car, etc. or planning their wedding, financial obligations may mean cutting back on other expenses. Many Canadians also have student loans that have now become payable as well. So while the romantic side of a person may be to spend the extra money and 'go the extra mile', i.e. buying a larger diamond ring that really isn't financial feasible. The more financially responsible thing to do may be to buy a'‘nice, but not extravagant' ring and use any extra savings towards the wedding, honeymoon, purchase of a home, car, etc.

While openly and honestly discussing finances may not be considered very romantic, it can be more beneficial in the long term. It is also important to realize that the larger diamond companies are at their high point in the advertising season; for them this is the number one season for the high sales items. The same also rings true with other expensive items such as cruises, honeymoon getaway packages, etc. This means that for approximately a month before Valentine's Day, the media will be bombarded with advertisements and commercials regarding all the romantic things to do and buy, as well as spending money to impress the other person. But it is also important to understand what each other considers to be a necessity and what is considered a luxury. For some it may be more important to save for a down payment for a home, for some it will be getting out of debt as quickly as possible, and for some others as well, it may be buying a new car or going on an expensive vacation.

Having a successful financial plan may be a little tricky and some hard work, but it doesn’t have to take the romance out of the relationship. By both people taking an equal share in the financial planning, both parties have an equal stake in the couple’s financial health. This can be a great opportunity in making the future plans meet realization, and therefore can actually be a positive bonding experience for both.

When it comes to reading the small print in financial contracts, very few people actually bother to read the document in whole. Whether the paperwork relates to business or personal finance, being able to have comprehensive understanding of the information included is inherent to making the best financial decisions possible. For those who cannot fully understand the language, and/or those who have difficulties with reading may suffer financial consequences if they sign a contract that is not in their best interests. For those who have competent literary skills, many tend to lose interest after a couple of pages and discontinue reading the contract.

According to the Canadian Council of Learning, almost half of Canadian adults have low literacy skills. This non-profit organization estimates that 12 million people in Canada are below the internationally accepted standard of literacy that is required to effectively cope in a modern society. The Organization for Economic Co-operation and Development defines literacy in five different levels; they report that the average Canadian score is 2.5 within this range. The five different levels are:

•    Level One: Very poor literacy skills. Individuals operating at this level of literacy may not be able to correctly determine medicine dosage as given on the packaging, for example.
•    Level Two: The ability to deal with only simple, clearly defined materials that involve uncomplicated tasks. Individuals operating at this level of literacy may have developed everyday coping skills but are challenged with the acquisition of new skills. Individuals at this level may find it difficult to learn new job skills, for example.
•    Level Three: The ability to adequately cope with the skills required for everyday life and work in an advanced society. Individuals at this level of literacy have about the same level needed to finish high school and enter college or university.
•    Levels Four and Five: Very strong skills. Individuals at this level of literacy can successfully process complex and demanding information. Individuals who are in this range generally experience less unemployment, earn more money and rely less on government transfers.

There is no common denominator when it comes to literacy skills. People with low scores can be seniors or young adults, employed or unemployed, etc. Surprisingly, twenty percent of university graduates have literacy skills that score below level three. Many who score low have not completed high school, although some have pursued some form of post-secondary education.

It is important to fully understand and comprehend any and all forms of financial transactions. This includes life (and health) insurance policies. When purchasing life insurance coverage, make sure to read all written materials that are provided, and have a good understanding of what those materials mean. For individuals who may have problems understanding these types of documents, make sure you have someone who is trustworthy to fully explain the material before signing the contract. Individuals may also want to inform their insurance broker that they need further clarification of the contracts and policies as well.

As Canada is now facing an aging population, insurance companies are now focusing on preventative rather than reactive measures when it comes to potential health issues. Insurers are now building comprehensive databases of health information for the clients that they insure. These databases contain the details of health issues that can range from drugs that are prescribed, chiropractic visits, etc. This information will be used for the purposes of being able to more accurately predict those who may be at risk of having and/or developing major health issues, i.e. chronic diseases.

By focusing on preventative measures, insurers hope to be able to effectively intervene before the health problem becomes severe, which usually also means more expensive, in order to help the individual take action to either manage and/or prevent the health condition from becoming worse. Not only is this strategy beneficial to the person, but also to the insurance company by keeping costs lower. Some insurers are also planning to take even more immediate action; Manulife Financial is implementing a new program that will benefit providers by setting up a workplace clinic which will be able to provide employees with the resources to test such health concerns as cholesterol levels, blood pressure rates and body mass levels.

One of the issues that insurers are hoping to accomplish is to quantify the value of good health by attaching a dollar value to activities that promote a healthy lifestyle. By using this strategy, insurers hope to be able to convince employers to establish wellness programs for their employees that would ultimately result in the cost of employee benefits being reduced. This would ultimately save money for not only the insurers, but for the business, and of course the employees benefit from being able to access services that improve their health.

With new medical breakthroughs and treatments, Canadians now have a longer lifespan. However, living longer does not necessarily mean that this population is living a healthy lifestyle. Medical costs tend to rise for people as they age; they also tend to be more expensive for health conditions that are more advanced. Healthy living as well as early detection practices are beneficial not only for the individual, but for those who cover these expenses.

As life and health insurance rates are based in part by health status, premiums are lower for those who are healthy. Consult with your employer about ways to promote health in the workplace, and ways to encourage these practices.

2009 has definitely been a financial roller coaster ride for many Canadians. Many experienced financial stress; all the uncertainty did make many Canadians review their financial planning.

RBC recently did a survey through Ipsos Reid to assess how Canadians felt about their existing life insurance coverage. Out of more than 1000 Canadians polled, only 68% said that they felt confident that they had enough coverage for them and their family's needs. Adults who have children were more concerned about life insurance coverage in regards to the death and/or disability of a parent. 75% of parents polled said this is one of their biggest financial concerns.

As well, those polled showed that more than half of Canadians felt that they suffer from too much stress in their lives; parents felt particularly vulnerable to stress. 7 out of 10 Canadian households that have children admitted they experience too much stress; 51% of households without children reported these unhealthy levels of stress. They also are aware that high stress levels can contribute and/or exacerbate health problems as they get older.

When it came to the challenges of what these people would do to reduce their stress and lead healthier lives, the poll showed at:

•    55% were not willing to give up television watching time;
•    45% were not willing to give up eating red meat;
•    34% were not willing to give up their alcohol consumption
•    More than 75% of those polled felt they maintained healthy eating habits most of the time;
•    Men seemed to experience less willpower when it came to indulging in unhealthy behaviors; half were unwilling to give up red meat to add five health years to their lives, 4 in 10 women were willing to make the change.
•    39% refused to give up alcohol in order to improve their health; 28% were willing to.

As the holiday seasons have traditionally been a time when people eat foods that they know are bad for them, overindulge in alcoholic beverages, etc. this may also be time to reflect how your lifestyle suits your life insurance coverage. Especially owing to the uncertain financial times other safeguards such as savings may no longer be in place or at the right dollar amount. After the holiday season may be the perfect opportunity to review your financial planning strategy and make sure that your coverage is reflective of your needs for the upcoming year.