Always Save Money

Plan for the unexpected and save money

2013-04-09T15:36:00.003-04:00

When it comes to saving money its really important to be prepared for the unexpected. That’s especially true when it comes to your car. We all have car insurance, it’s the law, but the chances of having a car accident aren’t particularly high. A recent study by car insurance.com found that an average driver is likely to have a car accident every 17.9 years. It’s the rest of the emergencies that we never seem to prepare for. Whether you locked your keys in the door or ran out of gas, an emergency involving your car can be stressful and expensive.


ROADSIDE ASSISTANCE

The best protection from unexpected events is to get roadside assistance. A basic CAA membership costs $69 and that allows you up to 4 calls a year. On a cold and snowy night when your car battery stops working or if you need a tow to your local mechanic, you’ll be glad you have help.

But is the cost worth it? What if you don’t need roadside assistance for years? Here’s a breakdown of some of the emergencies roadside assistance covers and how much they would cost you on an individual basis.

Getting a tow

This is the most important reason to have roadside assistance. Its never fun to be stuck on the side of the road with a car that has stopped working. Calling a tow truck can be very expensive and a little intimidating. Flat rates for most tows start at $275 and that doesn’t include the cost per kilometre. No matter how small, Police experts say up to 85% of accidents require a tow.

Locking your keys in the car

They only thing lucky about locking your keys in the car is if your car wasn’t running, everything else can be a very painful experience. Without planning early one of your options is to call an emergency locksmith. The cost to get your car door open starts at around $110 for the first half hour.

Getting a boost

Its one of the most common problem Canadians face during the cold winter, having the car battery stop working in the extreme cold. Getting a boost to get your car going will cost you a flat rate starting at $100.

Tire needs to be changed

We all learned to change a tire in mechanics class in high school, but does anyone really remember how too? With the all the things that can go wrong during a roadside emergency this task is best left to the experts who have the equipment and expertise to make sure you’re safe. A tire change at the side of road will run you around $170.

Running on empty

Breaking down because you ran out of gas is embarrassing. Even though preventable, it can happen to any of us. Hiking your way to the nearest gas station may not be a possibility if you are on a highway or quieter road. If you call for assistance you are looking at the cost of a service call and another charge for the gas. That could run you close to $200.

Being stranded is never fun, but it can be worse if you have no idea who to call. By purchasing roadside assistance a car emergency can be less painful as you know a reputable, trustworthy expert is on the way to help you. Its saves money as you won’t have to make any rash or quick decisions that cost more than what you can afford.

Source:

http://www.cbc.ca/news/canada/ottawa/story/2013/02/13/f-ottawa-towing-companies-rates-fee-charge-costs-high-consumer.html

http://www.opp.ca/ecms/index.php?id=577

http://www.carinsurance.com/Articles/How-many-accidents.aspx

http://www.aperfectpicklocksmiths.ca/

RRSP Deadline Dos and Don'ts

2013-02-28T22:59:00.001-05:00

The deadline to contribute to your RRSP in order to claim it on your 2012 tax return is at midnight March 1st. This inevitable creates a day of mini chaos at banks across Canada. Many feel the pressure to put money in by the deadline so they can see a better tax refund later in the year. If you are thinking of making a contribution this year to your RRSP by the deadline, here are some dos and don'ts that should help your decision.

Don’t ever borrow to save into your RRSP.
Do rush to make a contribution by the deadline if you haven't paid enough income tax.
Don’t just shove money into your RRSP without thinking about where you will invest it.
Do pay down your monster mortgage, if they have one, rather than save in an RRSP.
Do set up a systematic investment plan (SIP) for your retirement.
Don’t just shove money into your RRSP without thinking about where you will invest it.
Do make sure the investments in your RRSP are set to DRIP.
Don’t buy Mutual funds in your RRSP.
Do make your RRSP a priority to your child’s RESP.
Don’t over contribute.
Don’t rely soley on the advice of you investment advisor.
Do learn to invest online using a discount brokerage.
Do understand all the fees associated with opening an RRSP.
Do make your RRSP contribution online.

Any more tips on RRSP deadline dos and don'ts? Please share....

Easy Financial Resolutions for 2013

2012-12-30T20:49:00.001-05:00

Spending less and saving more is the third most common New Year’s resolution.But once you make it your chance of success is about 8 per cent. But if you make a realistic one and make one often you’re more likely to succeed. Those who make a resolution each year are ten times more likely to keep them. Here are my top 5 money resolutions for 2013 to make and my #1 to avoid.

1. Weekly cash-free day

A day where you stay close to home, spend money, eat out of your fridge and take stock of all you did that week.

2. Save at least 5 per cent more

Whatever you are doing right now when it comes to saving, boost it by 5 percent. If you are saving nothing then this is a good small step towards getting financially ahead. Once you’re comfortable saving this small amount boost it again, until you are saving your maximum amount without hurting your lifestyle.

3. Give to charity

Even if its only 5 dollars a month, find a charity you believe in and start donating. Set it up so it comes out of your bank account every month, NOT your credit card. When charges are on our credit card we tend to be on autopilot when paying them. Make sure you feel how important each of your donations are when you see the money withdrawn from you account. Giving it away makes you appreciate your own money.

4. Find a saving buddy

Try the buddy system. Sharing similar financial goals will keep you accountable, and make saving more fun. Look for someone in a similar financial situation as you and someone you see socially often (this will make it easier to keep track of each other). Make each other your phone a friend when you feel the impulse to shop or spend money. By calling and talking it out you can make sure you are making the best decision about your money.

5. Leave the car at home once a week

Walking, cycling or taking transit will save you money on fuel and possibly parking, and can promote good health at the same time.

#1 Worst money resolution

Get out of debt and save money

It’s to broad and without a plan the chance of success is low. You need to first take smaller steps like the resolutions mentioned above. This will help you work towards being debt free and financially happy. Saying you’re going to loose 25 pounds this year but then never exercising is the same as saying, I’m going to be debt free and never making plan.

The State of Consumer Debt in Canada: By RBC Bank

2012-11-19T13:21:00.002-05:00

I'm always interested in how Canadians are dealing with debt.

A recent RBC poll finds more Canadians are surprising debt free compared to a year ago. This looks at all non-mortgage debt. With results from an RBC Royal Bank 2012 poll, this info-graphic gives a snapshot of the current state of consumer debt in Canada.

How to deal with debt

2012-11-15T06:37:00.002-05:00

On CBC Radio this morning, I'm talking about Canadian household debt levels rising at the fastest pace in two years.

Time and time again, we've heard warnings that Canadian household debt levels are out of control. And as Canadians head into the holiday shopping season, there's yet another reminder that we shouldn't be spending as much as we are. A new report from credit reporting agency Transunion says Canadians' personal debt loads grew at their fastest pace in 2 years over the summer. The agency says the average consumer's total debt load, excluding mortgages, rose to $26,768 in the three months ended on September 30th. Auto loans were the biggest driver for the increase.

If you are dealing with high debt levels here is what you should be doing.

Calculate your mortgage at a rate atleast 2 per cent higher - can you still afford your home?

Mortgage Calculator

Try to be a one car family- you will save $500 a month, that's the average cost to own a car.
Don't charge anything to your credit card unless you can pay the balance off at the end of the month.
Make the holidays all about the kids, keep gifts for adults small and simple and save money.
Stick to your holiday budget.
All year make a hapbit to save 5 per cent of your salary in a slush fund to pay for Christmas gifts, vacations anything extra.
STOP SPENDING!!!!

Retirement Savings at Every Age

2012-08-03T17:47:00.002-04:00

****As seen on Steven and Chris****

We all know it's never too early to start saving for your retirement, but how you invest should change as you get older. Our finance whiz, Rubina Ahmed-Haq, breaks down what you should be doing with your money, when, according to your age.

In Your 20s... You may be carrying large student loans or have just landed your first full-time job. Paying down debt is financial priority No. 1, followed by setting up your retirement savings system.
Retirement savings goal: Invest 10% of your after-tax income in retirement savings: 80 percent moderate, 15 percent conservative and five percent cash.

In Your 30s...
You're likely juggling a lot of big expenses—house, marriage, baby, mortgage—and feeling stretched financially. Don't let that derail your retirement plan. Be sure to borrow money intelligently (a.k.a. only what you can afford) and try to balance your financial obligations.
Retirement savings goal: Continue to invest 10% of after-tax income but rebalance your portfolio by moving more money into fixed-income investments: 75 percent moderate, 20 percent conservative and five percent cash.

In Your 40s...
Maybe you've begun investing for your kids or are dealing with the costs of home renovations and a growing family. Fortunately, your 40s will likely yield your maximum salary. Speak to a fee-only financial planner to make sure you're getting the most out of your income.
Retirement savings goal: As your salary grows, so too should your retirement savings plan. Check your retirement fund annually to make sure it's well balanced: 60 percent moderate, 35 percent conservative and five percent cash.

In Your 50s & 60s...
Retirement is on the horizon, and it's time for you to start thinking about what it will look like: How much money will you require annually? Where will you live? Maybe you should consider downsizing.
Retirement savings goal: At this point, your retirement investments should be virtually risk-free: 50 percent conservative, 40 percent moderate and 10 percent cash. You are too close to take any major chances.

Watch the episode here: Retirement Savings at Any Age

Beware of Bundle Packages

2012-04-22T15:33:00.004-04:00

Bring up the topic of cable, internet or phone companies and you’ll inevitably have hours of conversations that range from, how someone got the best deal to how a customer feels totally ripped off by the high fees.
In my case I went from feeling totally valued by my communication provider, to completely duped in a matter of four months.

Read my whole story on Ratesupermarket.ca: Beware of Bundle Packages

AS SEEN ON STEVEN AND CHRIS: My favourite money quotes!

2012-04-21T16:23:00.000-04:00

I dissect some of her favourite money quotes into tried-and-true financial lessons we all can use.

"A penny saved is a penny earned."
—Benjamin Franklin, founding father of United States

Translation: Saving small amounts throughout your life is the best way to build wealth. When you're buying anything, consider the cost and see if you can get it for a better price somewhere else. Remember: Every penny you save should go directly back into your bank account.

"What's the quickest way to become a millionaire? Borrow fivers off everyone you meet."
—Sir Richard Branson, founder and chairman of Virgin Group

Translation: Too many of us are living off borrowed wealth. We fund rich lifestyles through credit cards, huge mortgages and car leases. Focus on building real wealth in your life. Live below your means. No more than 30% of your after-tax income should be spent on your mortgage and taxes, and no more than 25% on the rest of your living expenses. Also, 10% of your income should always go towards savings and investments. If you aren't meeting these basic percentages, you need to cut back on something.

"Rule No. 1: Never lose money. Rule No. 2: Never forget rule No. 1."
—Warren Buffett, the most famous billionaire of our time

Translation: Don't spend more than you have. Always respect your money and be conscious of how you're spending it. Don't take unnecessary investment risks; avoid losing money.

"If investing is entertaining, if you're having fun, you're probably not making any money. Good investing is boring."
—George Soros, another billionaire and Forbes rich-list regular

Translation: Take a slow and steady approach to investing. Making money is hard work and quick profits are not a reality. If we all had dull investing habits, we would be much wealthier and more financially secure. If it's quick thrills you're after, head to the casino; if you want to build wealth, save early, consistently and intelligently.

"Greed is good."
—Michael Douglas as "Gordon Gekko" in Wall Street (1987)

Translation: We need to be greedy (to an extent) in order to get ahead financially. Gekko was referring more to the hunger and the will behind financial gain—to do and be your best. We always have to serve and guard ourselves first before we can help others.

Read more: http://www.cbc.ca/stevenandchris/2012/04/best-financial-advice.html

My three biggest rip offs: As seen in The Globe and Mail

2012-04-17T19:45:00.001-04:00

Nothing bugs me more than paying extra for something that should be free. After I've taken the time to research what I'm buying, budgeting what I can afford - I don't like to be surprised with extra costs that I did not anticipate and should have been disclosed up front. Here are three of the biggest rip-offs out there in my opinion.

Paying to pre-select your airline seat: Many airlines charge customers to get their choice of seating. For example, two Canadian carriers charge up to $20 or up to $30 for a one-way flight lasting more than two and a half hours. By arriving at the airport 30 minutes before the recommended time, you duck the unnecessary charge. Airlines prey on people’s insecurities that they will be unable to sit together or have to sit near the washroom during a long-haul flight.

Annual furnace maintenance plans: Most heating, ventilation and air conditioning (HVAC) companies offer customers a version of the plan, which costs around $120. It gives customers a once-a-year maintenance and inspection. But 90 per cent of what the “experts” do, you can yourself. Some examples: replacing the air filter every three months, cleaning the blower compartment every year, checking that your outdoor vent is clear of obstructions and is not clogged with garden material or animal nests. A furnace bought today should not require professional maintenance for at least 10 years.

Getting a manicure at the salon: Often, your hairdresser will try to up-sell you a manicure while you’re getting your hair cut. These manicures are usually $30, which is twice the price of getting the same service at a nail bar that usually charges $15. Your hairdresser might tell you the manicure service is more sterile or they practise better hygiene than the nail bar – it’s a scare tactic. At a nail bar they have one job and they do it well.

Read the entire Globe and Mail article here: Feeling gouged? The nine biggest rip-offs out there.

How big of a problem is identity theft?

2012-04-16T17:34:00.000-04:00

While the experts would have you believe that identity theft is a growing problem, the chance of losing money to this type of consumer fraud is actually fairly small. But while the dollar amount of losses and number of people it affects may not be big, if it does happen to you it can be a mess to untangle.

Identity theft is a broad term that includes things ranging from a credit or debit card being compromised to a more severe problem like real estate title fraud, when a thief mortgages your property and disappears with the money. The Canadian Anti-Fraud Centre says about 18,500 Canadians were victims of identity theft in 2010, the latest year complete figures are available for. They lost a collective $9.4 million, or about $510 a person. In many cases banks and other lenders absorbed the losses when their customers were victimized.
Read more Identity Theft: Should You Worry?

Greek Debt Worries Far From Over

2012-03-29T10:12:00.000-04:00

It’s believed that Albert Einstien once said “Insanity is doing the same thing over and over and expecting different results”. It’s not the clinical definition, but I think it relates well to the current actions, by the European Union (EU), International Monetary Fund (IMF) and European Central Bank (ECB), to lift Greece from its debt woes.

Once again the group has approved a bailout package worth collectively 158 billion Euros (130 from the EU and 28 from the IMF), in hopes it will save Greece from ultimate financial collapse. It’s the second bailout in as many years. The first bailout, funded by the EU and the IMF, was agreed in early May 2010. Under the agreement, the 110 billion euro fund would be issued within three years. But despite harsh austerity measures that followed, the money hardly made a dent in Greece’s debt problems and pushed her unemployment rate up even further. The jobless rate is currently 21 per cent in Greece, or twice the Euro zone rate.

Read more on my Ratesupermarket Blog

Can I Afford A Vacation This Year?

2012-03-18T21:41:00.003-04:00

Summer is only a few months away and many of you might be planning on taking a holiday to get some much needed R & R. But before you press "buy" on that expensive European holiday you have to decide if you can afford it. Here are some simple ways to figure out how much you spend this year.

The 4% rule

If you're carrying a mortgage, line of credit or any other low interest loan I recommend spending 4% of your after tax income on vacations. Why? Unless you have no debt anymore, than any more spent on vacations will be eroding into your long-term savings. If you're carrying ANY high interest debt like a credit card or store card loans, you must pay this off before you hit the road (or the beach) on a holiday.

Cash in the bank

Always pay cash for your holiday. NEVER charge your holiday on credit unless you have the money already in the bank. Remember following the 4% rule, if your household income is $50,000 your holiday budget is $2,000 annually. Want to spend more? Save longer. Make one year a staycation to afford a luxury holiday the following year.

Taking a break doesn't need to cost you a fortune

It’s important to take a break and have some time to recharge. But if your bills are piling up, this is the year to use some of your vacation money to get out of debt. You can take a break without spending to much money. Road trip, previously mentioned staycation, visiting family and friends.

Stretch your holiday dollars

Booking a holiday out of country the prices are usually best around six weeks in advance. Check rates on line and call competing agents to see if they can beat it. Traveling midweek is cheaper for flights. Look for all-inclusive roulette holidays, these are ten preselected hotels at a certain star rating offered at a discounted price. Recently I stayed at a 4 star plus for $1054 taxes in. I would have paid twice that if I booked individually. The catch is you find out your hotel name 3 days prior. You pick the general area, i.e. Mayan, Cancun or Punta Cana.

Look at costs from all angles

It’s always wise to do through research before you go. Online review sites like tripadvisor.ca have made it easier to plan and prepare. Pay attention to details like, is the airport transfer included? Is there departure tax? What’s the average cost of eating out? For example I priced out a villa in St. Barts once at a reasonable rate, but later learned, through research, that the cost of groceries, transport to the island, restaurants was much higher than anywhere else in the Caribbean. Staying there was reasonable but everything else was too expensive.

When can you not afford to take a vacation?

By taking a close look at your finances you can decide if you can afford to get away this year. Generally your after tax income should be divided as follows.

Housing 30%
Savings 15% (10% pay yourself- 5% short term)
Other Living Expenses 30%
Debt servicing 10%
Transportation 15%

Break this down and your mortgage and taxes should not cost more than 30% of your after tax income, transportation shouldn't exceed 15% If you're spending more than this amount, you might want to look at tackling your household debt before you spend money on getting away. That said you should still look at ways of taking a break from work, staying at home, visiting family or a short weekend away, all of this will make you feel good and not drain your finances.

Cheap Vacations Ideas

1. Book a night or weekend at a nearby hotel.

2. Check out local festivals.

3. Hit up the museums for a dose of culture.

4. Spend some time with the great outdoors.

5. Hit the beach with a pile of books to read.

6. Have a proper Girls or Boys night out on the town.

7. Live in the city? Get out of town to a local trail for an all day hike.

8. Visit social coupon sites to stack up on great deals to use during your staycation.

9. Take dance lessons.

10. Get a one-week pass at an ultra high-end gym.

BMO lowers rates to historic levels AGAIN

2012-03-08T07:42:00.002-05:00

The BMO Bank of Montreal is lowering its five year fixed to 2.99 per cent - again. Canada's fourth largest bank made the same move in January when it started offering the five year fixed to customers at this low rate for a limited time. This time, the rate will be available to homeowners until March 28th. The bank is also offering the 10-year fixed at 3.99 per cent. A sexy option for those wanting to lock in for the long term.

In order to remain competitive and not lose market share BMO's move will likely prompt the other four big banks to lower their rates for the short term as well.
If you're thinking of breaking your mortgage to take advantage of this lower rate keep this in mind.

Penalty
Understand clearly from your current financial institution the penalty that you will be paying to get out of your current mortgage. The younger your mortgage term the more expensive it will be and the higher rate you are locked in at right now will mean you pay more of an interest rate differential.

Blend and Extend
If the bank is giving you the option to blend and extend, make sure you understand how much interest you will be paying over the life of the mortgage. If you have already made a sizable dent in your loan you may not want to extend your amortization and pay more interest over the long term.

Pay more than 2.99%
If you are lucky enough to get into this mortgage without any major penalties start paying your mortgage bi-weekly at a rate that represents 4.99 per cent. This does two things, one it reduces your amortization schedule significantly and it prepares you for higher interest rates when you renew in 5 years time.

Expert Tax Advice for Canadians

2012-02-29T20:22:00.000-05:00

Get expert advice on filing your personal taxes for 2011. In this recent video shot for RateSupermarket I speak to H&R Block, Senior Tax Pro and National Spokesperson Cleo Hamel about how to best prepare for tax season.

Also read more in my latest blog for Ratesupermarket.ca Are You Ready for Tax Season?

Don't Forget These Important Deadlines:

Generally the deadline for the 2011 tax return is April 30, 2012.
If you carried on a business in 2011 your return has to be filed b y June 15, 2012.
If you have a balance owing for 2011, you have to pay it by April 30, 2012.

Also http://www.ratesupermarket.ca/blog/are-you-ready-for-tax-season/<br>

My First Paycheck! Now what?

2012-02-26T14:14:00.000-05:00

Getting your first full time job, it can be the most exciting time in your life, I know it was for me! Wow, so much money. It can be hard for someone who's been a struggling student all their life to deal with. Here are some tips for anyone in their first job to get their finances in order and get themselves on the road to financial freedom.

Pay off high interest debt

This includes any credit card loans you've racked up, or a line of credit that's maxed out and your student debt. It's really important to get your high interest debt under control. Except for your retirement fund (more on that below) before you start saving aggressively for anything else take control of your loans that are costing you every month.

Start contributing 10 per cent to your RRSP

Start putting 10 per cent of your after tax income away for retirement from they day you start making money. If you made $10.00 save $1 for when you turn 65. Adopting this habit early in life will guarantee you have a substantial nest egg to retire with and help you feel better about your financial health.

Build your rainy day fund

This is fundamental to protecting yourself when life throws you a curb ball. Calculate how much money you need every month to live. Rent/mortgage, utilities, cable/phone/Internet, transportation (make this list exhaustive). Make sure you have 3-6 months in your rainy day fund. This means if you lost your job or were faced with a large expense, no matter what happens you will be able to survive for that amount of time without any impact on your lifestyle

Have a monthly financial plan

Always know what is coming in and what is going out. Saving money starts with tracking where its going. Take a few months to track all your spending to see how your incoming and outgoing money flows. Build a realistic financial plan that includes all your necessities, variable expenses and your luxuries. Don't put only $50 down for going out to dinner if you spending patterns show you spend much more. This will only frustrate you because you keep going over budget. Rather see how you can trim back on those extras if you need to save money.

Seek professional advice

Financial planning and taxes can be confusing and not all of us are good at it, seeking good advice from a professional can save you thousands over the long run. Make sure you are using a fee-only financial planner so you understand the cost of their advice up front. With an accountant find one that is available year round, you don't always have questions about your taxes during tax time. Make sure you get good references in both cases from people you trust. Never take financial advice from anyone unless you have done your own homework and background check first.

Watch more on my interview with CTV Newschannel's Brad Griffen.
http://watch.ctv.ca/news/top-picks/saving-money/#clip626603

CMHC insurance stretched to its limit

2012-02-17T10:48:00.000-05:00

Canadian debt levels are at historic highs and this is largely due to people taking on bigger mortgages.

Mortgages make up 68 per cent of Canadian’s total debt, according to the CMHC’s Canadian Housing Observer 2011. That’s a total of $1.042 trillion we owe on our houses. CMHC insurance is required for anyone buying a home with less than 20 per cent down.

As a result the Canadian Mortgage and Housing Corporation (CMHC) has been insuring more mortgages to satisfy the appetite of Canadians wanting to buy bigger and more expensive homes. With interest rates at historic lows, money is cheap and this makes real estate very attractive.

In addition, banks are moving to take risk of their books and looking for insurance on loans that have higher ratios. It’s not required by law, but what it does is it securitizes these loans, gets them off the banks balance sheet and reduces their capital requirements. Banks are paying the insurance premiums to do this, but its worth it- for them.

For more information on why the CMHC is approaching this limit now, check out my interview with George Hugh, President of Taurus Mortgage Capital.

Read my full blog on ratesupermarket.ca , CMHC Approaching Limit A Warning To Homeowners.

Is Your Inheritance a Fast-Track to Financial Success?

2012-02-15T08:39:00.001-05:00

More than half of Canadians are waiting on a fat inheritance from their parents to help them out financially. And the majority of them expect more than $100,000. How realistic is this?

Not a fortune by any stretch!
According to the latest research from Investors Group, the estimated $1 trillion dollar transfer of wealth forecast to occur in the next 20 years may result in fallen expectations for some.

Many who have received an inheritance (and are willing to disclose the amount) say the average is $57,000. One in five (18 per cent) who have already inherited said they received $100,000 or more while one quarter (26 per cent) received less than $5,000.

Who can blame them.

Meanwhile, nearly half of Canadians aged sixty or more are concerned they are going to need their savings to fund their retirement and won’t have money left to give to their survivors. And most don't want to make personal sacrifices to ensure an inheritance for their family.

“As people live longer and have higher expectations for their retirement, younger generations may have to adjust their own expectations about the anticipated transfer of wealth,” says Christine Van Cauwenberghe, Director, Tax and Estate Planning at Investors Group.

“Knowing the dollars and cents behind your inheritance can have an impact on your financial plans,” says Van Cauwenberghe. “It is smart to know what you can expect so you can plan accordingly and family dialogue is a good place to start.”

Mom and Dad when you're gone....

The poll reveals that many families are not taking the time to discuss or deal with inheritance issues. Four-in-ten Canadians whose parents have a will (39 per cent) say they have not discussed the terms of the will with their parents while sixty-one per cent of Canadians with deceased parents who had a will, admit they never had the talk.

“When it comes to wills in Canada, there’s not enough action and certainly not enough talk,” Christine says. “Broaching the sensitive topics of wills and estate details with loved ones can be daunting but having “the talk” early on can provide security for planning and make the process easier when the time comes.”

Interestingly, those who have discussed will and estate details with family members indicate it was not a difficult conversation. Three-in-ten (31 per cent) said the discussion was very easy while only three per cent said they found it very difficult.

Inheritance should be seen as a bonus to your financial portfolio, it's important to plan for your own retirement and keep your own debt in control. Relying on an inheritance can also create what is called "moral hazard," where you are spending money in anticipation that you will get more and be bailed out. And never forget the tax man takes almost half of your inheritance when it's released to you!

The Economics of Love

2012-02-10T12:43:00.000-05:00

Valentine’s Day is only a few days away and if you haven’t bought anything for your significant other you may want to read this before you do.
Canadians will spend on average $144 million on chocolate and confectionery on the day of love. On top of that more than $20 million will be spent flowers, mostly by men. The pressure to buy a cute pink and red card for your sweetie is everywhere, as soon as the Christmas decorations come down the hearts and cupids go up, reminding consumers there’s still more you need to spend to show your love. Read my blog on ratesupermarket.ca.

Love and Money: They work together

2012-02-07T10:21:00.002-05:00

Just in time for Valentine's Day a new survey shows most Canadians know little about their partner's finances. But 95 per cent say its important to date someone with a similar financial outlook.
So, how do we know we are dating our financial match if we don't ask probing questions like. How much do you save? How much debt do you have? How much money do you make? Was money an important topic growing up? Some of these questions might sound impolite, and admittedly not the best question you ask on the first date! But its important to know how your partner feels about money especially if you plan on making them you life partner.

I'll be attending an event hosted by Financial Guru, Gail Vaz-Oxlade this week, who will be talking about how important it is to make sure we understand our partners financial outlook. Stay tuned for an update.

Meanwhile, here are some interesting findings ING Direct released today.

92% of Canadians say it’s important for them to date someone with a similar outlook on money. 58% of women say it’s very important compared to 43% of men.

89% of Canadians say it’s important for them to know about their partner’s finances, including income, debt, assets and investments.

62% of women indicated this was very important, compared to 43% of men.

One in five Canadians knows only a little, or nothing, about their partner’s finances.

Only 21% of Canadians cited the importance of discussing if and how finances would be merged.

The most popular topics Canadians feel they need to discuss before committing to a serious, long-term relationship include: Debt, mortgages, car loans, lines of credit and credit cards (42%)How expenses will be shared (36%) Lists of monthly expenses (33%)

10% of Canadians say they have avoided breaking up with someone for financial reasons.

8% of Canadians say they have ended a romantic relationship with someone, but continued to “stay together” physically and financially.

My Debt to Income Ratio is Higher than 153%: But That’s Okay!

2012-02-05T11:53:00.000-05:00

Experts will tell you your debt-to-income ratio is one of the best ways to gauge your financial position. The media often quotes the Bank of Canada saying Canadians are at dangerously high levels of debt at 153 per cent. But what does that mean? I’ve spent countless dinner parties arguing how to properly calculate debt to income ratios and how can you tell if your in the danger zone. There are many schools of thought on how to asses your financial health. Here are a few that I highlight in my latest blog on ratesupermarket.ca.

Four-Week Financial Detox: As Seen on Steven and Chris

2012-02-01T22:01:00.001-05:00

I'm teaming up with Steven and Chris to put you on a diet—a financial diet, that is. Your mission, should you choose to accept it, is to embark upon a month-long financial cleanse. Every week, join fellow S&C fans in tackling one of the fiscal challenges outlined below and share your experiences on Facebook. For an extra challenge try my daily detox by creating a money-do jar full of financial to-dos!

I'll be doing all the challenges and tweeting and commenting of Facebook along the way.

Week 1: Declutter & Make Money

Comb your home for an item(s) to sell. We all have extra stuff stashed away in our basements and closets. If you haven't used it in months, it's time to get rid of it. Whether it's furniture, clothing, shoes or electronics, your trash could be someone else's treasure. Immediately deposit any money you make on the sale into your savings account.

Week 2: Lower Your Interest Rate

Call your credit card provider and ask if it's possible to switch to a lower-interest account. If you are currently holding a $0 balance on your card, call your bank and ask to renegotiate your mortgage rate or try and get the interest rate lowered on your personal line of credit. The point here is to make the call and negotiate! Take back control by having a firm grasp on what you're currently paying and asking for something better.

Week 3: Talk Money!

Reach out to three people who you think are in good financial standing. Email or call them and ask if they would be willing to meet you and talk money. It's important to find out how other people are managing their finances so you can increase your knowledge and pick up some successful tips. Talking about money is not as taboo as it used to be—especially if it comes from a sincere place and you admire the person you're meeting. Get the conversation started with these three questions:

What is the best way to pay down debt?

How do you decide to make a big-ticket purchase (e.g. car, house, renovations)? How do you know if you can afford it?

What was your worst money mistake, and what did you learn from it?

Week 4: Get Organized...Big Time.

Dedicate the entire weekend to getting your financial paperwork organized—and yes, it will take the whole weekend. Set up a filing system, if you don't have one already. Organize your bills into "in" and "out" folders. Make sure each type of payment has its own specific folder. If you subscribe to paperless invoicing, go into your accounts and print off three months worth of summaries so that you have a paper trail. Most importantly, take this opportunity to collect all the papers required for tax filing and keep them in one spot

Bonus: Take a close look at your statements and see if there are charges that should be removed. Maybe you're paying too much for cable or you have an extra magazine subscription that could be cancelled; take the time to examine your financial paperwork closely.

Are Furnace Maintenance Plans Worth It?

2012-01-23T06:00:00.001-05:00

Do you have a furnace maintenance plan? How often does a technician come do a diagnostic check on your furnace and have they ever found a problem that saved you money? In my latest article in Moneyville.ca I look at what maintenance plans cover, how often people use them and in the end if they are worth it. Read more in Moneyville.ca in "Are Maintenance Plans Worth It?"

Five Ways to Prepare for Tax Season

2012-01-17T09:29:00.001-05:00

1. Spend one weekend getting organized
My advice spend a weekend to go though your important documents and receipts figure out what you can write off. Visit the Canada Revenue Website (www.cra-arc.gc.ca) to see if you qualify for any tax benefits and what paperwork you need to send to Ottawa. You could save yourself hundreds of dollars by just being organized.

2. Hire a professional

An Accountant is up to date with on all the tax rules in your area. This will avoid costly mistakes like misrepresenting yourself or missing out an eligible tax incentive. Accountants know tax laws. They can help save you money by understanding new government incentives and tax rules

3. Decide if you should contribute more to your RRSP

The more you make the more tax you pay. By contributing to your RRSP you can bring your income down to a lower tax bracket, hence saving tax you would have paid and still having the luxury of having that money grow tax free. If you fall in to the highest tax bracket, ie: you're making $132, 406, you should find out if you can still contribute to you RRSP. Your RRSP deadline for contributing to your RRSP for the 2011 tax year is February 29, 2012.

4. Income Splitting

You can reduce your tax bill significantly by implementing income-splitting strategies if your spouse is in a lower income bracket. When you retire and withdraw money from your RRSP you will be taxed. By setting up a Spousal RRSP, you can transfer a portion of that income into your spouse's RRSP to be taxed at lower rates when it's withdrawn by your spouse and after age 65. The contributor to the Spousal RRSP is able to bring their room down and still enjoy the tax benefit of getting a larger refund.

5. Self Employed or Full Time

In either situation find out what incentives you are eligible for. Clothing, equipment, business expenses. Talk to individuals in your own field, they are your best resource. This is when your accountant will come in handy as well.

NOTE: Generally the deadline for the 2011 tax return is April 30th, 2012.

The Role Of The Mortgage Professional

2012-01-06T09:43:00.000-05:00

Image courtesy of Can Equity

Increasingly Canadians looking to buy a house are seeking more information from the professional helping to secure their mortgage. They look to their mortgage expert for good financial advice, guidance and some level of consultation on what most likely is the biggest investment of their lives. Mortgage experts are now on the front line when giving advice to new homeowners on how much they should borrow and at what rate.
Read more on my latest blog at www.ratesupermarket.ca.

Your 2012 Financial Checklist

2012-01-01T06:00:00.001-05:00

How much debt am I in?

This is your total debt, mortgage, credit cards, unpaid bills, money you owe family. Make an exhaustive list and tackle the high interest debt first.

How can I improve my financial outlook?

If you have been in the same job for a while, with the same salary, look at taking a class or course that might help with a promotion and ultimately make more money. This year start networking again and find out what other opportunities are available. I would start by getting in touch with former colleagues and see if they can meet you for a coffee.

Am I on track for good retirement?

No matter what your salary is you should be putting 10 per cent of your after tax income towards your retirement. This is outside of your long-term savings or any other big ticket item you may be saving up for. Remember there are other options than stocks and bonds. You can save your money and put a down payment on real estate, purchase GIC’s or invest in a business. This is an investment you want to set up to use after you turn 65.

How can I better understand the benefits of a TSFA and RRSP?

Figuring out what works for you can be confusing. Here are my two recommendations. If you’re saving for your retirement and your tendency is to make impulse purchases, an RRSP might be better for you because the money is harder to access. Also, if you're just starting out in your career and anticipate making more money in the next few years, you can save the room in your RRSP for when the tax incentive in better to contribute.

Am I going to try to get out of debt or be a saver this year?

If you have high interest debt you should concentrate on paying that off rather than saving money. Paying off a few hundred dollars on you credit card will represent a larger amount of money over the term if you are paying 19 per cent on a credit card. If you have no high interest debt then making a commitment to save a pre-determined amount every month will add up to significant savings over a 12 month period.

Watch the full interview as it aired on CTV Newschannel. 2012 Financial Checklist