What’s the point in having a savings account?


Michael Hunter

A client recently asked me, “What is the point of having a savings account if the government is just going to tax it away?”
A fair point, but let’s look at this from a few angles.
Yes, we all know the government taxes your earnings from your job. So, it doesn’t seem fair that they can tax the interest on the money you put away as well. In fact, interest paid on savings does not get special treatment like non-registered accounts do.
And even more annoying is the little amount you can gain, due to low interest rates, being one-third to one half taxed away!
So, what is the point?
Well, I think this pandemic has proven exactly what the point is. Many of us lost our jobs this past year and were left in a lurch. Thank goodness the government pulled through and came up with a system that would help most Canadian’s fight through. But what would happen if life were to happen to you? How long would you be able to survive?
I think to get over this lack mentality, we need to not worry about what is taken away but focus more on what we have built for that rainy day. Just that little shift in thinking could be the answer to, “What is the point?”
If you are interested in hearing about ways in which MJH Financial can help you navigate the turbulent waters of taxes, you can set up an appointment at https://calendly.com/mjhfinancial/30min