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Q: Is it better to save $$$ via RRSP or TFSA? We don't know which way to go.

Diana says...
Savings of any kind are good—for both short-term and long-term goals. When it comes to RRSPs (registered retirement savings plans) or TFSAs (tax free savings accounts), it's not an either/or option. It depends on your current finances and long-term goals. Couples starting out or raising a family tend to have little or no extra cash. Yet retirement years are a given, so I would start small—even $25 a month each—and have the funds automatically withdrawn from your bank and placed in a RRSP account. You won't miss the cash, and the results can add up to literally thousands of dollars in your lifetime—especially if you start early. For TFSAs, it's easy to withdraw the funds and, most notably, there are no tax consequences when you do so (unlike RRSPs). TFSAs can be used for any savings—a dream vacation, home reno or new car. In a perfect world of stretchable income, you would contribute to both your RRSP and TFSA. For info on the tax and technical sides of these plans, talk to a trusted advisor or accountant.

Diana Cawfield is an award-winning financial writer with more than 10 years of experience. Click here to send her your questions.