BUSINESS

Divorce shouldn't
impoverish Jane Split

JANE SPLIT has just sepa-
rated from her husband.
Suddenly, she has to make
some heavy financial plan-
ning decisions.

“Should I sell the town house
and rent, or take my share of the
proceeds and buy a car, some fur-
hiture, put some money into a
rainy day account and use the rest
for a down payment on another
place farther out of town where I
might be getting a job transfer?”
she asks.

“How cas I save on the extra
tax I now have to pay on my child
support?

*9'll need money for education
for my two girls. And I also want
to retire at 55.”’

Split — not her real name —
completed the 16-question entry
form which appeared recently in
this column. She was chosen as
one of the five winners whose situ-
ations were reviewed at the Cana-
dian Association of Financial
Planners’ Pacific Planning School.

‘““My approach to money
management needs some work,”
she said. ‘“‘Right now, what I
haven’t budgeted for goes on
MasterCard and | worry about it
later. 1 pay myself — that is, save
—last, if any money is left."’

With her job, child support and
family allowance, Split has an in-
come of about $36,000 a year. Ex-
penses include $784 2 month for a
live-in nanny.

Split has $4,500 divided between
mutual funds and guaranteed de-
posits in an RRSP plus another
$4,000 in non-RPSP mutual funds.
She expects a $3,000 tax refund
and plans to spend the money ona
family holiday.

“] put the girls’ family allow-
ance cheques into a mutual fund
and their grandparents have set up
two $5,000 term deposits for their
future education,” said Split.

Debts include the life-insured
mortgage and a $2,000 balance on
her line of credit. Split has $75,000
in group coverage at work but feels
“4ife insurance is generally a waste
of money.”’

She hopes to negotiate an in-
crease in her child support pay-
ments to at least $800 a month
when the divorce is finalized.

Eight groups of eight to 10

planners each reviewed Split’s case
at the CAFP seminar. Peter
Baigent, education committee
chairman, was in charge of having
all the recommendations condens-
ed into a single report for Split.
Here are the highlights:
e HOUSING. Stay put for now.
Find out if your job transfer is
definite and wait until you reach a
settlement with your husband.

If the transfer doesn’t come
through, for example, and you ne-
gotiate a lump sum _ settlement

550,009 people

work hard to

protect Canada’s
endangered species.

Easter
Cougar

felis concoior
couguor

You can help too.

AE By tor mom niamaten contact
Conodian Wildlife Federanon
223 Comng Avo
Ottawa Ontano K2A 32!
(O79) 728 2408

dollars
and sense

Michael Grenby
es

from your husband, perhaps you
could buy out his interest in the
home.

Own rather than rent: profit on
sale of a principal residence is
tax-free while income on invest-
ments is taxable. And your home
provides a hedge against inflation.
® SAVING TAX. Put the max-
imum into your RRSP. If you
don't have enough income, trans-
fer some of the non-RRSP mutual
funds into your plan. Use the tax
refund you get to pay down the
line of credit and mortgage.

Make sure you claim the
‘‘equivalent-to-married’’ amount
for one of the girls and the max-
imum child care expenses.

Your $3,000 tax refund indicates
you are having too much tax
dedncted. Have Revenue Canada
give your employer permission to
withhold less tax, and use the extra
take-home pay to eliminate debt,

WHAT

then build savings.

¢ RETIREMENT. Even with max-
imum RRSP contributions, you
will need additional savings to
retire by 55 — and with present
expenses, aiming for 60 or 65
might be more realistic.

Review all investments annually
to make sure they are performing
as expected and have a balance to
cope with the changing economy.

* EDUCATION. If the grand-
parents are alive, they are suppos-
ed to report the interest earned on
the money they gave the girls until
the girls are 18. Consider an RESP
(registered education savings plan)
to avoid this tax problem, as well
as equity mutual funds for better
long-term growth potential and
better tax treatment.

>OTHER AREAS. Adjust ex-
penses and budget to pay yourself
first. Replace the nanny with a
rent-paying, babysitting tenant.
Get rid of MasterCard; use line of
credit for real emergencies only.

Consider owning life insurance
on husband to guarantee funds for
child support if he dies. Check
beneficiaries on both your personal
and group life insurance to make
sure children rather than husband
are named as beneficiaries.

If husband does increase support
payments rather than offering a
lump sum settlement, see if you
can borrow from your parents to
buy out his interest in the home.

kee

Mike Grenby is a Vancouver-
based columnist and independent
personal financial adviser who
will answer your questions as space
allows in his column, Write to him
c/o North Shore News, 1139
Lonsdale Ave., North Vancouver
V7M 2H4. .

33 - Wednesday,

12%4%

30-89 DAYS

June 6, 1990 - North Shore News

13%
1 YEAR
S years 12%%

ALL RATES SUBJECT TO CHANGE WITHOUT NOTICE

VANCOUVER 815 West Hastings Street

VANCOUVER 5701 Granville St. at 41st Ave.

NORTH VANCOUVER Lonsdale Quay

NEW WESTMINSTER 435 Columbla Street

WHITE ROCK 1959-152nd Street
CALGARY 506-6th Street S.W.

883-7283
263-7283
983-3773
524-2268
531-1123
268-7321

MEMBER CANADA CEPOSIT INSURANCE CORPORATION

Office Technology Program

Train for Success

Secretaries, Word Processors, and Accounting
Clerks are in demand. Enrol in one of our
specialized training programs.

Secretarial — 8 months
© Financial — 10 months
¢ Word Processing — 10 months

Acquire computer, communications and
interpersonal skills to meet the challenge of the
office of the 90s.

Programs start September 4.

We have a place for you, but hurry!
Telephone 984-4959 for information and to
arrange for a personal interview.

2055 Purcell Way * North Vancouver * B.C.

‘S HAPPENED TO YOUR PROFITS?

HOW TO CAPITALIZE ON A CHANGING MARKET
Creative Real Estate Sales ‘Tools For The Nineties

A TWO DAY SYMPOSIUM ON THE TECHNIQUES THAT WILL ENSURE YOUR SUCCESS ASA
REAL ESTATE REPRESENTATIVE DURING THE NEXT DECADE.

Assurance of a commis-
sioned sale, giving incorne
to attendees.

Luxury accommodation.

¢ Input.and perceptions from
industry leaders.

¢ Complete tultion inancing
with zero percent interest.

Seminar Dates and Locations:
Thursday and Friday, June 7 and 8, 1990, 8:30 am to 5 pm
The Constellation Hotel, Toronto, Ont. (416) 675-1500
Thursday and Friday,.June 14 and 15, 1990, 8:30 am to 5 pm
The Sheraton Landmark, Vancouver, BC (604) 687-0511

$1545.00 per person at the door or

FOR MORE INFORMATION PLEASE CONTACT

THE ANSDEL GROUP AT (416) 858-2020
OR TOLL FREE AT 1-800-865-5484.

Registration is limited, so please respond quickly!

accompany this form.)

e Theory and practical educa-
tion giving contracts, forms
and documents to increase
income immediately.

take advantage of pre-registration at the
reduced costs of:

$1395.00 per person.

(A $500.00 Non-refundable Deposit

must be received by June 1, 1990 with
the balance due at the door.)

Registration Form
Ci YES, please register me for the seminar. However, | will be paying in full at the door.

(2 YES, | wish to attend the seminar and take advantage of the special pre-registration price. Please find enclosed my non-refundable deposit
($500.00 per person). (While Visa and Mastercard will be accepted at the door for the balance of the fee, a check or money order must

Total Number of Individuals Attending:
Total Amount of Deposits Enclosed:
For Group Discount, please provide one total payment, with as many individual registration forms as necessary (photo copies are acceptable).

Thank you.
Name:
Company:
Address:
Province:

Upon completion please return to: Ry

Postal Code:

City:
Phone Number:

The Ansdei Group,
2476 Argentia Road, Mississauga, Ont., LGN 6M1

cy

Don't be stranded In a changing
market, open your fiefd of vision, §
invest in the only guarantee in
life—yourselft

100% Financing
with NO interest