Your Money-Wise Guy

How to Get Your Tax Refund Throughout the Year

2013-02-18T10:00:00.000-05:00

Tax season is almost upon us, although you’d hardly know it given the huge push encouraging us to make an RRSP contribution in advance of the looming March 1 deadline.

Yet this past week, the Canada Revenue Agency opened up its NETFILE program for the season which allows individuals to electronically file their 2012 personal income tax and benefit returns using commercially available tax-preparation software, which, depending on your situation and/or income level, may be free.

What’s different for 2013 is the CRA is no longer mailing an access code to eligible NETFILE taxpayers, effectively eliminating the need for the access code altogether.

So, without the NETFILE Web access code, how do we file online this year? All it will take to file your 2012 return online is your social insurance number (SIN) and your date of birth. Worried about someone else, like a disgruntled ex-spouse, going online with your SIN and birth date and absconding with your tax refund?

Not to worry, says the CRA, since no taxpayer information, such as banking information or your address, can be viewed or changed through NETFILE. Once a tax return is filed, the notice of assessment and refund are sent to the address and/or bank account the CRA already has on file.

This means if you need to change any personal information on your tax return, you have to first update it with the CRA before you NETFILE. This can be done using the secure online service called “My Account” or by contacting the CRA directly.

The early launch of NETFILE, however, does raise the perennial question: Why are Canadians in such a rush to file their 2012 returns early. The most likely answer is that many are expecting a tax refund. For 2011, the CRA reports that the average refund was $1,580, up $70 from the prior year.

But a tax refund is simply a sign you’ve loaned your hard-earned money to the CRA for a year or longer and you’re just getting your own money back, interest-free.

An easy way to avoid or at least try to minimize your tax refund for 2013 is to complete CRA Form T1213, Request to Reduce Tax Deductions at Source in which you list various deductions that you plan to take when you file your 2013 return, such as RRSP contributions (other than those made through payroll deduction), support payments or childcare expenses.

Send it to the CRA and, if approved, you will receive an authorization letter which you can hand over to your employer’s payroll department authorizing them to reduce the amount of tax withheld at source from your paycheque.

This way, you can get your refund through the entire year and make it work for you, perhaps by using it to pay down debt, save for your kids’ college education by contributing to an RESP or even setting up a regular RRSP contribution so you’re not rushing to meet the 2014 RRSP deadline.

Saving Money While Spending a Bit

2013-02-18T09:00:00.000-05:00

Despite what some self-righteous frugalists would have you believe, not all money-saving tips work.

For example, "grow some of your own food" isn't possible for someone who lives in a condo. You can put a few things in pots, but that's not the kind of savings you'd get from a backyard full of vegetables.

It also won't work for people who are physically unable to dig and delve, or for those who live in places inhospitable to gardens. I'm thinking about the town of Bethel, Alaska, with its near-constant wind, planting-season temperatures between 41 and 55 degrees, permanently frozen soil just 3 feet under the region's infertile soil and water that gets delivered by truck.

Another interesting thing about Bethel: It's cheaper to buy pre-bagged salad there, because the cost of the water to wash lettuce and other veggies more than makes up for the premium you pay for pre-cleaned greens.

Sometimes, you really do have to spend to save.

Video: Spend Money to Save Money

How to Make College's Spring Break Cheaper

2013-02-11T10:00:00.000-05:00

Spring break is a time for college students to relax and recharge their batteries mid-semester, but planning an extravagant trip that ends up breaking the bank could lead to more stress when they return to campus.

“While blowing a ton of money on spring break might seem like a lot of fun, students need to keep in mind the very real expenses they are going to be faced with come summer and come graduation, when they will have real concerns like rent, groceries, etc,” says Stephanie Kaplan, CEO and editor in chief of Her Campus Media.

Especially since finals will be right around the corner when they return, it’s important for students to finalize their plans and set a budget to avoid a financial mess and distractions from academics.

“There are a lot of expenses involved with planning a trip, so make sure you have accounted for everything but also have buffered in some cushion/emergency money in your budget,” says Vincent Turner, CEO of Planwise. “Staying on budget - and not being completely broke when you get home - will be easier to do.”

From budget tips and alternatives to the typical beach vacation, here are four ways students can make their time off affordable.

Money Saving Tip No.1: Use Your Student ID.

Depending on their destination, students can often use their enrollment status to save money on hotels, air fare, trains or even tour guides when visiting a new city, says Scott Gamm, founder of HelpSaveMyDollars.com.

“Social couponing sites typically offer special travel deals, for multiple travelers, which can include hotel, air fare and meals, and these can be domestic trips or abroad too,” he says.

Make sure to read the fine print beforehand--some student-friendly deals look great but include a specific timeframe or require an additional purchase, warns Turner.

Money Saving Tip No.2: Limit Dining Expenses.

Eating out is a major expense, especially when doing it for three meals a day. Steven Smith, CEO of Mvelopes, suggests going to the local grocery store to get food to cover some meals to give your wallet a break.

“You can definitely save money by getting some basic snacks, drinks, breakfast options, etc,” he says. “Another way to help the food budget is to eat only two meals a day and supplement your diet with snack items, such as granola bars or fruit.”

Turner recommends researching local happy hours and food specials before arriving and asking local residents for cheap dining options.

“Touristy areas are notorious for being overpriced--the locals are your secret weapon for finding the best food, shopping, etc. on a budget.”

Money Saving Tip No.3: Think More Local.

Some students save all year for a tropical get away but can still get the spring break beach experience without leaving the U.S, says Kaplan.

“Places like Miami and Panama City still give you that spring break feel without the cost of international travel,” she says.

While students with rewards program credit cards can redeem points for special airfare and hotel packages to travel overseas, Gamm cautions against using credit internationally without checking for fees first.

“If traveling abroad, beware of the 3% currency conversion fee that some credit card issuers charge,” he says.”There are some issuers that charge no fees, but check with your credit card issuer before you travel.”

Rather than shell out a bunch for an all inclusive beach resort, students can get creative by going to see a friend at another college, take a camping trip, or consider a “staycation,” suggests Turner.

“Fill your days with local activities you have been meaning to do all year--have a picnic in the park, go on a hike, go to the museum,” he says.

Road trips to historical sites or venues within a few days’ drive can also give students a way to spend time with friends or family and split the cost of gas, Smith says.

Money Saving Tip No.4: Take a Volunteer Trip.

For students looking to give back and do something different this spring break, experts suggest researching different volunteer opportunities.

“Look into service and volunteer trips (many of which also allow a lot of time for going out and having fun) through companies like i to i Volunteering, Habitat for Humanity, the Student Conservation Association, and programs directly through your school,” says Kaplan. “These trips can also serve as resume-builders.”

Many programs offer a program package where students split their time between volunteering and touring, says Turner.

“These programs are usually targeting colleges, so talk to your school about the programs they have to offer. However, keep in mind that programs can actually be costly so make sure to do your research.”

How To Save Money From Your Airfare

2013-02-11T09:00:00.000-05:00

A lot of people are wondering what the potential merger between American and US Airways would mean for their pocketbook. With this in mind, here are some tips on booking airfare you can follow that could save you money.

1. Book in pairs. When booking for a family or group, booking in pairs can help you avoid higher prices that many airlines charge for the convenience of sitting together.

2. Buy your tickets on Tuesday afternoon. It turns out that airlines typically release their sale fares on Tuesdays at 3 p.m., making it a good time to secure those deals before they expire or are gobbled up by other sale-searching travelers.

3. Shop around on websites. When searching for the best prices on airfare, it is a good idea to look at multiple websites. Hipmunk.com has an “agony tab” that combines price, duration and number of stops so you can determine how painful your upcoming trip will be. Sign up at Yapta.com and it will send you alerts if the rate falls before you book.

4. Book directly with the airline. Airlines often pay a $10 to $15 commission on flights that are booked through a discount site. Because of this, airlines often encourage customers to book through their official websites by offering incentives like promo codes and deals posted on their Twitter and Facebook accounts. Most airlines don’t publicize this, but many will give you a refund if the price of your flight goes down after booking. You just have to call them.

5. Be flexible with your dates. Being flexible with your travel dates and searching nearby airports could save you lots of money. Choosing a flight out of an airport near your first choice for a day earlier or later could help keep more money in your wallet.

Money Saving Tricks and Tips for Students

2013-02-06T10:00:00.000-05:00

If you are at university, you’re probably using a current account to manage your money. But how are you doing at managing your spending day to day? If you’re like many students, you’re probably feeling the pinch.

University students normally have to learn to be a little more frugal to make their money go further. After all, if you’ve only got a student loan to live on, it hardly gives you lots of cash to play around with. Your bank account can help you manage your money since it helps you keep track of what you are spending.

So make sure you look into a bank account to see if there is one that better suits your needs.

And to save a little money on the way, here are some great tips:

1. Get your books from the library.

When it comes to buying textbooks for your course, why not look in the local library first. You may be able to borrow them instead of forking out substantial amounts of money for new ones. Even better, try to find second hand titles online – they’re bound to be cheaper and you will be able to keep them too.

2. Shop where you work.

If you love to shop at a certain store, why not look at getting a part-time job there? Many will offer their staff a discount. So, whether you enjoy shopping at a certain supermarket or clothes’ shop, it could be a good way of getting the things you want, at a reduced rate.

3. Get things for free.

Look for local groups where people give away the things they don't want. From TVs to beds, you could get just what you need, for free.

4. Travel cards.

Students can get their hands on various travel cards for trains, buses and the Tube, which can make getting around much cheaper.

5. Buy own brands.

Some of us are very loyal to certain brands, especially when it comes to food and clothes. But when times are tough, it’s important to think twice about buying a well-known brand over an ‘own brand’ label.

6. Buy in bulk.

Often, buying items in bulk – like a 10-bag pack of crisps, instead of separate ones – can work out cheaper. So think ahead before you shop and you could save quite a lot on your grocery bill.

7. Share with friends.

If you live in a shared house, it makes sense to do your food shopping together – and share the cooking too. It’s worth planning out what you’re going to cook for every meal of the week, then you can shop with the list of ingredients you’ll need. It will help you to curb those in-store impulse purchases for things you don’t really need. You could even open a joint bank account with the people in your house to share bills and other expenses – though this isn’t likely to be a student account.

8. Try not to use a car.

Cars are expensive to buy – and run. So instead of driving around, it’s worth considering buying a bike. It’s cheaper, much better for the environment and a good way to keep fit.

9. Be a model at a beauty salon.

Get your hair cut, legs waxed or eyebrows dyed by a student at a beauty college. It will be much cheaper – or even free.

10. Take up jogging.

One of the cheapest ways to exercise is to jog. So forget those expensive gym memberships and get out there among the elements.

However you spend your money, it’s always good to have the right bank account. And many student bank accounts will offer a interest-free overdraft for the length of your course, which is great news if you find that you’re a little short of money from time to time. Although overdrafts are subject to status and repayable on demand

And once you’ve got on top of your money – and your spending – you should feel a lot more relaxed about your time at university.

Tips on How To Reduce Dental Cost

2013-02-06T09:00:00.000-05:00

Oral care is a big part of overall health and you can only brush it off for so long before you end up in a dental chair. What may induce more anxiety than the dreaded drill is the bill.

"A recent study shows that dental care costs are expected to rise 58 percent through 2018 in America," Tami Goodman, vice president of customer care at DentalPlans.com, said.

But Goodman says you can take a bite out of your dental costs. One way is to visit a dental school.

"The procedures are conducted by a dentist in training, usually under the supervision of a dental professional or supervisor," she said. "There can be a long waiting list, as well as longer times to complete the procedures."

A discussion with your dentist about payment options could mean extra savings.

"A lot of dentists offer discounts for people that pay up front with cash or checks," Goodman said. "They may offer discounts for patient referrals or have financing available in their office."

Another money-saving tip: some dentists team up with organizations like Dentistry From the Heart and participate in free dental clinics.

"There's often a wait. Get there early and make sure you check beforehand to see what services are being offered during that free clinic," Goodman said. "A lot of times, they are limited to cleanings and extractions."

You may also want to look into a dental plan to cut costs.

"These discount plans traditionally help the consumer save anywhere from 10 percent to 60 percent off of procedures," Goodman said. "In addition, a lot of the discount plans provide discounts on procedures that aren't traditionally covered by insurance like cosmetic dentistry and braces. These plans do vary by price and by region, so it's important to check all the terms and conditions."

And of course, prevention can also help to prevent those high dental costs.