Pension Perspectives online at www.peba.gov.sk.ca

This article is the first in a two-part series about getting out of debt (part one) and staying out of debt (part two).

Until a few months ago, I used to think I would be in debt forever. I’m only 29 years old, but with my student loan, car loan, mortgage and credit cards, I’ve acquired a significant amount of debt. As a PEBA staff member, I’ve learned enough about retirement planning to know I don’t want the burden of retiring with unmanageable debt. So, I resolved to start tackling my debts. To achieve my goal, I had to answer the following five questions.

1. How much money am I spending monthly?

In the past, I’ve created a budget but because I didn’t know how much money I needed to cover

my expenses I never stuck to it. This time, I tracked my spending for a month by keeping my receipts. Then I used my receipts to calculate how much I spent on things like

entertainment, gas, groceries, etc.

2. How can I spend less?

Once I knew where I was spending my money, I

found three areas where I could reduce my

spending. This was the most challenging

part for me, but I vowed to stick to my budget. I allowed myself $50 a month for clothes shopping and resolved not to spend more than that. As a home owner, I

chose to put-off any home renovations and focused on home maintenance. Whenever possible, I did the work myself instead of hiring a contractor. Another big change I made was choosing to cook instead of going out to eat. I found it helpful to create a weekly meal plan before

Ways to rein in your debt

To complete the transition of Capital Pension Plan members to PEPP, transaction processing will be suspended and PEPP Access and Retire@Ease will be unavailable from: Thursday, June 25 at 2:00 p.m. to Thursday, July 2 at 10:00 a.m.

No transactions will be processed while the system is unavailable. You can continue to send information in for processing, but it will be held until the transition is complete. Requests will then be processed in the order they were received. Thank you for your understanding.

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Notice: systems unavailable from June 25 to July 2

perspectives pension

June 2015

Pension Perspectives online at www.peba.gov.sk.ca

PEPP is Canada’s largest defined contribution (DC) plan, with over $7 billion in assets and over 54,000 members. So why does it matter whether you’re a member of the

largest DC pension plan in Canada? Because having more assets and

more members in a plan decreases the cost of services and increases the opportunity for more services. In other words, being a PEPP member gives you more choices, more tools and more services at a low cost. For a complete listing of fees, click on the Publications link under the Investments tab on our website.

going grocery shopping to ensure I had the necessary ingredients on hand. I found these savings tips and many more get-out-of-debt tricks on www.debtfreeforever.ca

3. Can I make more money?

I have a full-time job that pays reasonably well, but unfortunately it’s not enough. So I got a part-time job at a coffee shop three nights a week. I’ll be the first to admit it’s not how I prefer to spend my evenings, but it’s what I need to do, if I’m serious about getting out of debt. I also sold some stuff like the elliptical machine that’s been collecting dust in my basement, the expensive patio furniture I can only sit on for four months of the year, and the china I never use.

4. Which debt should I tackle first?

The number crunchers of the world would insist I pay off the debt with the highest interest rate first, but that’s not

what I did. To try building some momentum, I tackled the smallest debt first. It worked! After I paid off the first debt I was motivated to tackle the next debt.

5. What do I do if there’s an emergency?

Before I started paying off my debts, I saved my money until I had enough for a small emergency fund of about $1,000. I have this money tucked away so I can pay cash, instead of using credit, if something unexpected happens.

Even though I’m only four months into my get-out-of-debt resolution, I feel that I’ve made some lasting changes. It’s been challenging, but at the same time, I’m much more aware of how my choices today affect my financial future. Thanks for joining me on my journey. I look forward to touching base with you in the fall when I’ll share my plans for staying out of debt.

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We’re adding more flexibility to our line-up this fall

PEPP’s Fund Line-up

Asset Allocation Funds (you may choose one of these funds)

PEPP Steps

Accelerated Growth

Growth

Balanced

Moderate

Conservative

Speciality Funds (you may choose one or both of these funds)

Money Market

Bond

Members are initiating change - you asked for more flexibility and will soon have it. This fall, you will be able to invest in any one of PEPP’s Asset Allocation funds and add the Money Market and/or the Bond Fund.

Yes, that’s right. You will be able to invest in three funds at the same time. Currently you can invest in a maximum of two funds at a time - one Asset Allocation Fund and/or the Money Market Fund. Take a look at the examples below to see how this change could provide an opportunity for you.

• Susan will be able to invest 70 per cent of her account balance in the Growth Fund, 20 per cent in the Money Market Fund and the remainder in the Bond Fund (three funds); or

• José will be able to invest in the Balanced Fund and in the Bond Fund (two funds).

More assets and more members means lower fees for you