What to do with savings

Q – I have no money set aside for retirement, but I do have a lot of credit card debt. My question is should I use the money in my savings account to start an RRSP or should I pay down my credit card debt? – L.P.

A – This one is easy. Pay off the credit card debt. You’re being charged a very high rate of interest on that balance. The money you save by paying off the consumer loan could then be directed into an RRSP.

Strategy: Calculate how much interest you’re paying on the credit card each month. Then pay off the balance with your savings and don’t allow it to run up again. Once that is done, instruct the bank to deduct an amount equal to the credit card interest from your account each month and direct the money into an RRSP. You’ll be surprised how fast it builds up. – G.P.