DOLLARS AND SENSE HOW RELEVANY are Canada’s inflation figures to your own cost of living? The recent cut in tobacco taxes helped lower the consumer price . index to 0.2% in February, which was great news for smokers. But if you don’t smoke, your cost of living might have actually risen. «The figures for that particular = month show that bumper crops of Californian and Mexican vegetables also helped to reduce prices, But the costs of clothing, trans- / portation, energy, housing, health and personal care products, recre- ation, reading and education ruse. . Statistics Canada’s regular reports on changes in the CPI give a _ » good indication of general infla- ~ tionary (or deflationary) trends. But you should always look at your ‘own spending pattem to get a better - idea of your personal inflation rate. Wednesday, h March 30, 1994 - North § Shore News - 21 stats don’t always reflect your reality CPI basket contains as well as item prices from Statistics Canada; most major libraries also have the infor- mation. The two key publications are (he monthly CPI catalogue 62- 001 and the more detailed quarterly Consumer Prices and Price Indexes catalogue 62-010.) From time to time cajculate your personal inflation rate based on your spending patterns, You should certainly rua through this exercise whenever you have a sharp change in lifestyle like moving to a new area, changing your relationships (living with someone, living without someone, having a child) and especially retir- ing. How much you spend each year is important, But also work out how much your cost of living is likely to change each year, based on the goads and services you buy. For example, if you regularly buy electronic gadgets, chances are you can expect costs to trend lower, thanks to competition and new technology. On the other hand, if you move to anewly developed area and face higher costs as the municipality puts in and pays for basic and per- haps extra services, your cost of housing could well increase far more than the average over the next few years. . If you are borrowing money as interest rates rise, your personal inflation rate will rise more than if you are debt-free. Use the monthly CPI figures as a guideline. But realize your own spending patterns could produce significantly , different results. Then adjust your spending, earning, borrowing, sav- ing and investing plans accordingly. * Dependent children. You can no longer claim an exemption fora dependent child — unless the child qualifies for the equivalent-to- spouse amount (line 305) of the additional personal amount if the child is mentally or physically infirm and over 18, Don’t report the child tax benefit; it isn’t taxable. * Capital gains. The budget pro- posal eliminating the $100,000 exemption takes effect only for the 1994 tax year; it doesn't affect tax relurns now being filed for 1993. ‘Treat capital gains realized last year under the existing rules; use the pro-rating formula if you can claim an exemption on revenue property owned before March 1992, and sold in 1993. * RRSPs, Report a retiring allowance received in 1993 (box 26 onthe T4A slip) on line 130 of your tax return. Then deduct the amount transferred to your RRSP on tine 208, Attach bath the T4A slip and your contribution receipt. If you receive periodic payments from a registered pension or deferred profit-sharing plan, you may put up to $6,000 of that amount into a spousal RRSP for the 1994 tax year until the normal con- tribution deadline of March 1, 1995. This is the final year for such “rollovers.” If you contributed to an RRSP and also withdrew money under the Home Buyers’ Plan last year, chances are you won't be allowed to deduct the contribution for 1993, Check with your local Revenue Canada office: ask for both the 1993 HBP pamphict and the 1994 information update. ppc 650 Mike Grenby is a North Shore- based columnist and independent financial adviser who works with individuals; he will answer your questions in this colunn as space allows — write to him clo The North Shore News, 1139 Lonsdale, North Vancouver V7M 24-4. State of the art Ericsson Digital pocket Cellular Phone* or fease a Motorola flip phone for only $9.95/month with no buy out. Unlimited focal calling for the first month, also receive a free leather case ($39 value) ® MOTOROLA * Some conditions apply. Call for details. 813 - 910 Mainland Si., Vancouver ty ha = “RE a , H DXB "The CPI basket {the 1986 selec- * tion is the latest; an updating to 1991 is expected shortly) includes ; “more than 600 goods and services. +. Bach item has a different ee weighting, to reflect usage by the _-mythical “average” Canadian con- “> sumer. (You get a list of what the REE! Sati ‘Created By THE TORONTO DORINION BANK _ THE TORONTO DOMINION BANK cordially invites you ... : to attend our upcoming. MORTGAGE FINANCING PRESENTATION Everything from pre- qualification to signing the _ mortgage. Learn the “Ins and outs" of mortgage financing. Whether you are a new home buyer or are looking to refinance your home, we can othe questworknat or fran LUM take the guesswork out of financing. . 4 : oa 0 DATE: APRIL 5, 7994 TIME: 7:00 pm to 9:00 pm LOCATION: The Lonsdale Quay Hote), 123 Carrie Cates Court, North Vancouver, 986-6144 There is no cost to attend, however seating is limited. Reserve your seats today by calling your local North Shore Branch of The Toronto Dominion Bank. 15th & Lonsdale, N. Van. Westview Shopping Ctr., N. Van. Edgemont Village, N. Van. 18th & Marine Or., W. Van. 2040 S. Park Royal, W. Van Here are answers to some qucs- tions people are frequently asking .. 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