How to beat the RRSP blues

With the RRSP contribution deadline looming early next week, Canadians are scrambling to pull money together so they can enjoy a reduction in what they owe ontheir taxes, or even get a refund.

About 64 per cent of Canadians have RRSPs, but many dont save regularly for them. There is about $683 billion in unused RRSP contribution room in Canada.

Personal finance expert Gail Vaz-Oxlade says the first step is getting started as a saver.

• Everything you need to know for tax season is in our special report

"Theres always a reason why you cant save, but if you get into the habit of saving, youve taken a step across the line. Youve gone from not being a saver, to being a saver,"she said.

She advises paying off consumer debt as quickly as possible, but also putting money aside, even as little as $25 a month.

In an interview with CBCs The Lang & OLeary Exchange, Vaz-Oxlade, author of Money Rules,says the biggest mistake made by those who do contribute to an RRSP is putting in the wrong investment.

Vaz-Oxlade has three rules for RRSP investing:

• You cannot buy anything you dont understand.
• You have to know your time horizon.
• You must buy something that fits your risk profile.