In most cases, yes. A Tax-Free Savings Account (TFSA) is a great vehicle for your savings. Earnings on any investments held within the plan are tax-free, and so are withdrawals. You can deposit up to $5,000 a year, with unused contribution room carried forward. Better still, you can use your TFSA for anything you like. To be eligible, you must be 18 years old or older (which means we qualify even though we may not look like we’re over 18 :) Yeah right!

It may sound like an oxymoron — like jumbo shrimp or skinny fat — but good debt does exist. And when it’s good, it’s very, very good. Good debt can be seen as a cost-effective means to increase your standard of living. A loan that represents an investment in your future, or a loan that is used to buy an asset that may go up in value, are two examples of good debt. Others include loans to start a business, buy a home or investment property or upgrade your education.

When debt is bad, it can be very, very bad. Bad debt keeps on reminding you that you didn’t properly think through a purchase or strategy... and it keeps on nagging at you. Taking cash advances on your credit card is one typical example of bad debt. The loan interest is nondeductible, and you will spend more of your future income paying back the debt and interest. As a result, you will have less money available for your financial goals.

We’re going to have to answer this one with “that depends.” For good reason, mind you. The strategy of borrowing to invest is called “leveraging.” It’s an aggressive investment strategy that magnifies both gains and losses. To earn a net profit, your investment must generate an after-tax return that exceeds the net borrowing costs. If you choose to borrow to invest, you’re responsible for repaying what you owe, plus interest, even if the investment declines in value.

We’re going to assume you’re not talking about the just-in-case $20 cab-fare you keep stashed in your wallet. For your life emergency fund, you’ll want it where you can access it quickly but still earn an acceptable rate of return. Generally, your choices consist of cashable Guaranteed Investment Certificates (GICs), term deposits, Treasury bills, corporate notes and money market mutual funds. To help you decide, consider the following: safety, liquidity, convenience, reinvestment of earnings and interest rate.

Absolutely! Your net worth is the difference between what you owe and what you own. By calculating it every year, you can see the effects of your financial plan. If you’ve made the right decisions, over time your net worth will gradually rise. There may be blips along the way, of course — like the market meltdown of 2008-09 — but the overall trend should be positive.

Probate is the fee paid to a provincial court to determine the validity of a will. The fee is calculated as a percentage of an estate’s total value, and it can represent a significant outlay, depending on where you live. In Quebec, for example, most wills are prepared by notaries and probate is not required. And probate fees in Alberta, Yukon, Nunavut and Northwest Territories are not very significant.

To reduce probate fees, you need to reduce the value of your estate, and that means arranging it so your assets can go to your desired beneficiaries without the use of your will. Joint ownership with right of survivorship, life insurance and direct designations through Registered Retirement Savings Plans and Registered Retirement Income Funds are a few examples of how this can be achieved. Talk to a professional.

Taxes are important to us. They’re so important that it’s not uncommon to complain about how much of our paycheque never makes it into our hands, even though we just got a raise. And around tax time… well… let’s not go there. Knowing your marginal tax rate will take some of the mystery out of your dwindling take-home pay. Your marginal tax rate is the rate levied on the next dollar added to, or deducted from, your taxable income in a tax year. It’s the highest rate of tax you’ll pay, but it won’t apply to all of your income. When you move from one tier up to the next, you pay a proportionately higher amount of income tax.

If you’re over 60, one option you may want to consider is a reverse mortgage. This is essentially a loan against your home, which you don’t have to pay back until you move. It allows you to convert some of your home’s equity into cash without having to sell it or make monthly payments. Interest on the loan is added to the principal that you owe. Note that loan rates and fees are typically higher for reverse mortgages than they are for regular mortgages or loans.