Business TheReview — Wednesday, February 12,1992 — A18 How your spending habits compare to your counterparts : How do your spending pattems compare with those of “average” Canadians who live the same way as you? Especially when tmes are tough, it helps to know whether _ your living expenses are in our out of line. People rarely talk to each other about their spending habits. I review — in confidence — the personal financial details of hundreds of individuals and fami- lies who have completed a finan- cial questionnaire when they come to see me for advice. One of the most common questions they ask is how they compare with others. There are no firm guidelines on the “right” amount of money to spend on food, clothes, car and so on. What works for one individual or family might be totally inappro- priate for another. But to give you an indication of spending habits, | approached Wil- son Baker, president of Tetrad Computer Applications Limited, for some information. In 1988, Tetrad developed two programs, PCensus and PSearch, to combine census and general Statistics Can- ada data. “We can tell Toyota which postal code areas are most likely to contain potential Lexus buyers, for example,” Baker said. “We have desktop demographic software and data bases which allow organizations to look at their markets, to better understand the people they are serving and to reach people they hope will buy their products and services. “Put another way, where you live determines the kind of junk mail you get.” Tetrad, which has been in busi- ness in Canada for 24 years, is about to launch a similar computer software service in the U.S. I asked Baker to run some spending details on a sampling of the 47 different groups defined in Tetrad’s Mosaique software — like “Old Money and Establish- ment Wealth,” “Young Profes- sional Families in Transition,” “Singles and Couples with Mod- erate Incomes,” “Maturing and Empty Nest Homeowners” and ‘“Pensioners. ” For each group Baker provided details for a cross-section of the dozens of spending categories: (a) personal income tax, (b) food from stores, (c) food from restaurants, (d) operating car/truck, (e) women’s wear, (f) men’s wear, (g) home entertainment equipment and service, (h) alcohol, (1) interest on personal loans. Some interesung trends emerge. For example, in general as people get older, women spend increas- ingly more on clothing than men. You might like not only to find the category that most closely describes you but also to compare your spending habits with those of people in other categories. Remember, these figures are aver- ages. Old Money and Establishment Wealth. These are the wealthiest consumers; 85 per cent own their own homes and only about 30 per cent move in a five-year period age of 44 per cent). Most are English-speaking fam- ilies; many are in the latter stages of child-rearing with teenagers in high school. They buy six times as many luxury cars as the national average. They like expensive tra- vel, entertainment and other lei- sure products and services. Annual spending amounts: (a) $17,321; (b) $4,705; (c) $2,329; (@) $3,436; (e) $2,024; ) $1,185; (g) $690; (h) $1,107; @) $590. Affluence and Achievement. These families have very high incomes but unlike the previous group, they didn’t inherit any of their money. Family heads are in mid to late career with children in plimary and secondary schools. More than half the families have two or more children. They buy. new Cars at twice the average rate. (a) $13,398; (b) $4,610; (©) $2,101; (d) $3,311; ©) $1,677; (f) $1,001; (g) $650; (h) $1,057: @) $561. Upscale with Immigrant Roots. Family size is well above average, and the children tend to NDP waiting for E-word The pre-Christmas debate over whether Prime Minister Brian Mulroney uttered the “F° word was not important, New Democratic Party federal leader Audrey McLaughlin told supporters at a Saanichton fund-raising dinner last month. “TJ don’t care if he said the F-word or the B-word. I want to hear him say the E-word, so we can have an election and get on with it,’ she declared to cheers from her audience. Citing recent New Democratic Party gains in B.C, Saskatchewan and New Brunswick, she said people are now tuming to the NDP. “People want a government that is on their side,” she said. She criticized Reform Party plans for cuts in health and educa- tion budgets and replacement of TAX TIPS: the GST with another form of tax. “These are not grassroots poli- cies, they are scorched earth poli- cies,” she said. She claimed Liberal Party poli- cies shift continuously. “It’s getting so bad that all Liberal policies have an expiry date stamped on them.” Canadians are becoming cynical and many believe the constitu- tional debate is the government’s way of avoiding economic prob- lems, McLaughlin said. In Canada, McLaughlin said there are a million children living in poverty, 1.5 million unemp- loyed, another 1.5 million on social assistance and 270,000 homeless. “Tf we don’t get people back to work, the deficit will only increase,” she said. & RRSP* R.R.S.P.s CAN TAKE YOU TO THE TOP OF YOUR FINANCIAL INDEPENDENCE (written by Ron Gurney of Ron Gurney Financial Services Ltd. in Sidney, B.C.) Achieving financial independence in retirement is a big goal that many seek to reach. By looking ahead 10 or 20 years you can develop an R.R.S.P. savings and investment strategy that will help to make you climb for financial independence and success. The new RRSP tules increase the maximum deductible contribution limits. The 1991 contribution limits are based upon 18% of your 1990 earned income to a maximum of $11,500, whichever is less. Earned income includes: -salary or wages minus any allowable deductions from such income, i.e. union dues. -income from carrying on a business, either alone or as a partner actually engaged in the business. -net rental income, whether active or passive, from real property. -income from royalties in respect of a work or invention of which the taxpayer was the author or inventor. -payments from supplementary unemployment benefit plans. -alimony or maintenance included in income for tax purpose, including that received by a common-law spouse. -net research grants. Less the following: -loss from carrying on business either alone or as a partner actively engaged in the business. -net rental losses from real property. -deductible alimony or maintenance payment. lf you are a member of a pension the 18% of earned income is reduced by your pension adjustment. Your PA appears on your T4 slip. Each autumn Revenue Canada will also advise you of your contribution room for the current year. If you are not a member of a pension plan your 1991 contribution is 18% of 1990 earned income to a maximum of $11,500, whichever is less. For 1992 contributions the limits increase to 18% of 1991 earned income ora maximum of $12,500, whichever is less. Again for those with pension plans this is reduced by your pension adjustment. be in primary school. Relatively large mortgages restrict discretion- ary spending. Two-income fami- lies are common; the principal wage-earner usually hasn't reached his or her peak earning years. Large family size vans, four- wheel drive vehicles and home electronic products popular An Asian heritage is common, fol- lowed by Italian roots. (a) $10,848; (6) $4,432, ©) $1,871; @) $ 3,148; (€) $1,446; () $874: (g) $599; (h) $1,002; @) $521. Ee 977% Rates Subject to Change Without Notice Prov. of B.C. Coupons Fully Government-Guaranteed Flexible ¢ Liquid « Worry-Free Invest $11,500 today. _ Receive $42,550 in February, 2006! AN IDEAL RSP/ RIF INVESTMENT! DENIS DENISCHUK B. Comm. Sidney 655-1303 RBC DOMINION SECURITIES PEMBERTON Member of the Royal Bank Group S& ERIC HURWOOD 388-4234 Call Your Professional Advertising Representative Today! CORRIE MOROZOFF 656-1151 The R RRSP smart Its smart to Invest in an RRSP, but choosing the right one can be confusing. 1! help you find the RRSP that best fits your needs. Investors RRSP smarter. - Investors Group Uj : CHARTERED ACCOUNTANTS Revenue Canada authorized transmitter for Electronic Filing 9768 THIRD STREET, SIDNEY 656-3991 This new rule of using the previous year’s earned income provides you with great opportunity for planning your 1992 R-R.S.P. contribution. You can now take monies which you normally would leave earning taxable interest income and purchase your R.R.S-P. early, thus reducing your interest income for 1992. If you do not have the funds available to purchase your maximum 1991 limit, you can carry the unused portion ahead 7 years. If you : over-contribute you can now carry this over-contribution ahead and use itup when there is room to do so. You must be aware that there is an $8,000 maximum limit to this over-contribution. As you are aware, the products for your R.R.S.P. contribution are endless. Please make sure the product you choose corresponds to your financial needs. Check around for good advice and the product that you can understand. Good luck! R.R.S.P.’s Let Us Shop the Market and Find the Best R.R.S.P Rates for You *FAST *UNBIASED *SECURE For Personalized Service Call 656-9393 RON GURNEY FINANCIAL SERVICES LTD. 10A — 9843 2nd St., SIDNEY, B.C.