I’m not much of a financial expert, but here’s what I know. An RRSP has limitations. While the contributions are tax-deductible, taking money out is taxable. This includes the original principle, and any interest. So you pay less tax in the end. However, RRSP’s have a lot more limitations and penalties than a TFSA. Here’s the basics of it:

• Anyone over 18 can open one
• You can put up to $5000 a year into it (this changes will increase to reflect inflation)
• You still have to pay tax on that $5k income
• If you don’t put $5k in a year, the extra “space” can be rolled over to the next year. For example, perhaps I can only put $2000 in this year. Next year I’ll be able to put $8000
• You don’t pay tax on any withdrawals, and there’s no limit to when you can take it out
• Taking some money out takes from that $5000 limit. So if you put in $2000, then later take out $1000 for some reason, you can still put in $4000 later in the year again.
• They can be inherited/passed on like other RRSPs and whatnot, and tax-free, too
• You can contribute to a spouse’s account, for example if you have a higher income
• It doesn’t affect benefits like Old Age Security or Child Tax Benefit

Again, I’m not a financial expert (not even close), but to me this seems a pretty sweet deal for someone to get into. Apparently they also have a good interest rate, as high as 6%, though I haven’t heard about that part expect from word-of-mouth. That’s better than my GICs, and I’m likely going to be transferring those over to a TFSA account when I get the chance. Especially since you can actually use the money if you need to.

You can check out all the details here: http://www.budget.gc.ca/2008/pamphlet-depliant/pamphlet-depliant2-eng.asp

Any commenters, please feel free to elaborate on this or correct me.

Together we’ve got about $12k. Tuition and other school fees are about $2500 each and we need to put away about $3600 for rent up until April. With about $2500 for books, bus pass, and other school supplies, I’ve got a little bit of extra cash to stow away. Hopefully that can stay save for gifts, etc.

My concern is the monthly costs. Utilities are included in rent, and the only real needs are food and gas – with gas being about $35/week for going to work across town and getting large groceries, we’ll use the bus for other travel.

I have absolutely no idea how much groceries will cost. It’s just the two of us. We’re not too heavy eaters but we don’t like eating crappy cheap stuff all the time either, and we’ve gotta have lunch-packable items for school. I’ve thought no more than $75 a week (after the initial cupboard stocking, of course), but Laura seems to think that it’ll be closer to $100, if not more. I’m more inclined to believe her, as I don’t cook or do shopping whatsover.

So, this I’m calling for comments. Any ideas on what our weekly/monthly costs are gonna be (keeping in mind we’re in the Windsor area) are welcome, and just general living costs and issues and discussion.

I’ll have some geek stuff next post, I promise.