Zippitydodog Feeds - Financial Literacy

How To Save Without Feeling The Pinch

Fri, 21 Aug 2009 00:00:00 -0700

Need to curb your spending? You�re not alone. But rather than putting your wallet on some crazy crash diet (i.e. �No meals out! No new clothes! No vacation!�), be realistic.
Saving money doesn�t have to be painful. In fact, you�re more likely to stick with your plan if it doesn�t hurt too much. Here are some ways to cut back without feeling the pinch.

Find money you don�t know you have

Late fees on movies, interest charges for late bill payments, parking tickets and overage fees on your cell phone are all discretionary purchases you don�t need to be making. Ditto for paying surcharges at a non-credit union ATM or exceeding a monthly transaction cap on one of your accounts.
Like it or not, convenience costs. And so does laziness. So try cutting what we might call �the stupid factor� from your budget first. You might be surprised at how quickly all those little extra fees add up.
Likewise, think about services you�re currently paying for�and then not using. Magazine/newspaper subscriptions and gym memberships are typical culprits.

Buy smarter

If you�ve always worn department store or designer clothing, it�s probably going to be tough for you to suddenly switch to wearing no-name brands from the local super-duper discount store.
That�s why outlet stores and retailers that specialize in buying up department store brands and selling them at a discount are becoming so popular. If you�re willing to hunt a little, often you can find big labels without the big price tags. Scoop something off the sale/clearance rack at these stores and the deals only get sweeter.
Another option is to consider the types of purchases you actually could make at a discount store without really noticing. Pajamas and workout clothes come to mind. If it�s just you sweating to the oldies in your living room, or making breakfast in the kitchen, does what you�re wearing really matter that much?

Get creative

Being budget conscious doesn�t have to mean becoming a social hermit. Maybe instead of doing a fancy dinner date you could opt for casual coffee and dessert instead. Or take a cue from your grandmother and invite friends over for a potluck. Try an appetizer party or a theme night to make things more interesting. Or if you�re really craving a night away from the kitchen, put limits on it. Maybe it�s okay to have nice dinner out just once a month, or even two lunches. And don�t forget that alcohol is a notoriously bad investment at a restaurant. If you can be happy with water or another more modestly priced beverage, you�ll have more left in your pocket at the end of the night.
Similarly, think strategically about your annual vacation. Try making it a day shorter�or saving on accommodations. Maybe instead of five nights at a nice hotel you could do three, and then 2 nights with friends/family or even camping.

Be Free

Did you know your local library stocks movies? Most do�especially if it was a book first. And if you�ve got a computer with Internet access, check out the full catalogue online.
And while you�re at it, try talking to far-flung family and friends using your computer too�rather than using a long-distance plan. You can even do computer-to-computer video calls.

Keep it fun

Need some extra incentive to save beyond just meeting your bills and other obligations? Try tracking how much you�re saving or engage in a friendly competition with another member of your household. After all, the only thing better than more money in your account is bragging rights.
For more money saving ideas, try a Google search on phrases like �cost cutting tips.� You�ll be amazed what you can learn. Or visit us at a community branch of Nelson & District Credit Union or email us at enrichingyourlife@nelsoncu.com.

Credit Card Survival Tactics

Thu, 09 Jul 2009 00:00:00 -0700

Love 'em or hate 'em, most of us can't live without credit cards. Those shiny plastic rectangles represent financial freedom and convenience in an age of consumerism and instant gratification.

But do you really know what you're getting into when you slap the plastic down? Recent statistics show that personal debt has increased dramatically in the past five years. Canadians, and in particular British Columbians, have gone from being the best savers in North America to carrying the highest consumer debt load in the country.
By using these guidelines, you can avoid the perils of too much credit card debt:

The average person spends 112 percent more on a credit card than they would if paying cash. If you can't pay cash, never go to a mall or store without taking a specific list of exactly what you need

Have only one credit card. If you can't bring yourself to get rid of the others, put them in a small bowl filled with water and freeze it. You'll think twice about using them while waiting for the ice to melt

Save as much as several hundred dollars each year in credit card interest charges by paying off your entire bill each month. Try to avoid late payment and over-your-limit credit fees

If you can't pay off your balance, pay as much as you can or switch to a card with a lower annual percentage rate

If you have high-interest cards, pay more than the minimum payment to save money and retire the loan more quickly

Before you whip out your credit card, ask yourself, "do I really need this?" Saving may not be as much fun as spending, but you'll thank yourself later

If you have more than one credit card debt, pay off the card with the smallest balance first. Then tackle your next smallest credit card balance. You will feel a sense of accomplishment by paying one credit card in full at a time.
If you have any further questions on credit please talk to one of our Member Service Experts at any one of our 3 community branches.

Getting Started with Online Banking

Thu, 09 Jul 2009 00:00:00 -0700

Nothing beats the convenience of doing all of your banking at midnight, in your pajamas, and for a generation that has grown up Facebooking, Skyping, and living a Second Life, it�s second nature. But for those who remember when a bank visit was part of a weekly routine, where you knew the tellers� names, the prospect of managing money through your home computer can be daunting.

It shouldn�t be. With each generation of software, online banking gets easier, and with Web 2.0 innovations, security continues to get better. There has never been a better time for computer novices, or experts for that matter, to start managing their day-to-day finances through their credit union�s virtual branch.

You can check your accounts, get an up-to-the-minute bank statement, transfer cash between accounts and pay bills or maybe have the system do it for you�automatically.

Getting Started

The rules for defensive computing apply when establishing online access to your accounts. For Microsoft users, that means adding a personal firewall program in addition to the security measures your credit union offers.

Your credit union can help you set up online access to your account in person at one of our three community branches.

Choose a password that is easy to remember, and also unique, because it�s best to avoid the convenient feature that allows your computer to remember log-in details. The rules for securing other electronic data apply. Don�t choose obvious passwords, such as family birthdays, home addresses or simple keying, like 1111.

If you are the sole user of your computer, it may be tempting to use the memory feature, but remember that laptops are especially prone to theft. Better to take the time to type in your password and account number than give a thief easy access. And always remember to log-out.

If you access your account from a shared computer or in public sites, such as libraries or Internet cafes, it�s wise to clear the browser history and close the web-surfing program after every use.

To prevent �phishing��the techniques used by online con artists to trick computer users into revealing passwords, credit card numbers and bank accounts�treat electronic requests for information as you would any real-world ones. Don�t reveal personal information until you are certain of who is asking. If in doubt, a simple call to your credit union or the business that is supposedly asking for personal data will confirm whether the request is legitimate. But the rule of thumb is if an information request arrives by email or instant message, that�s a fraudster phishing for your cash.

There are lots of tips and information about online use and fraud circulating. For the best advice, stop by a community branch of Nelson & District Credit Union, ask questions and get started.

Quick Math Tricks = Financial Wizardry

Thu, 25 Jun 2009 00:00:00 -0700

Russell $20 Rule: Estimating Your Retirement Backpack

Every $20 you have at retirement will generate one dollar of income for 30 years (i.e. retire at 60, age expectancy of 90, three per cent inflation with 65 per cent in fixed income and 35 per cent in equities).

For example, if you require $20,000 per year in income (in addition to government benefits or company pension), you will need $400,000 on your retirement date.

FYI: Maximum CPP and OAS support is approximately $17,000 per year at age 65.

Rule of 72: Compounding Coolness in Action

Calculate how fast money doubles by dividing per cent rates into 72
i.e. Your money will double in just over seven years at 10 per cent, at eight per cent money doubles every nine years, six per cent takes 12 years, four per cent takes 18 years (hope you�re young).

By procrastinating, you are eliminating the �Big Jumps.�

FYI: Wealth = money + return + time (use time to your advantage while you can)

Inflation Impact: Cutting Money in Half Without Damaging the Paper

If inflation stays at three per cent, your purchasing power is cut in half every 23 years.
For a 35-year-old, $50,000 will only buy $25,000 worth at 58 years of age and can only buy $1,000 per month�s worth at 81 years. Can you support yourself on $1,000 a month?
A real-adjusted return is what you have after the effects of inflation. You need three per cent just to stay in the same spot�more than that when taxes are taken into account

FYI: Our government boasts that �core inflation� is at 2.3 per cent (June 2009). However, this doesn�t take into account energy or food. Food costs rose 6.4 per cent last month from a year ago, led by a 16.4 per cent increase in fresh vegetables and a 13.9 per cent increase in fresh fruit. Core inflation is a fine measurement as long as you don�t plan on eating food, driving your car or heating your home.

Asset Allocation: Bulls, Bears, Oh My!

Asset allocation refers to how an investor distributes their investments among various classes of investment vehicles. A ballpark guide of weighing equities and fixed income is to assign fixed-income investments to your age. As you get older, your portfolio gets more boring. (Note: boring can be cool).
i.e. At 40 years old, investments are 40 per cent fixed income and 60 per cent equities.

Credit Union 101

Tue, 16 Jun 2009 00:00:00 -0700

Why belong to a credit union?
Ever had one of those dreams where you�re trying to get somewhere but stay stuck in one place? Banking at a traditional financial institution can feel just like that. Big plans and best intentions tend to count for little if you don�t have deep pockets, even if you have a responsible track record. That�s because banks are in the business of making a profit for their shareholders, while credit unions are all about the financial security of their members.

One and a half million British Columbians, including individuals, families and businesses, currently benefit from credit union membership, with more joining every day. They enjoy the favourably competitive advantages of belonging to a homegrown institution that focuses on serving the local community, not enriching some distant stranger with stock options.

The following are benefits to membership:

Your voice counts
As a credit union member, you�re also an owner and can participate in voting for board members. Or run for a position yourself!

Sharing the wealth
When you join a credit union you automatically purchase a share. At the end of the fiscal year, dividends are divvied up among members and also shared in the community. Credit unions are committed to developing and assisting local businesses and non-profits, and giving back to the community. With 40 per cent of national credit union assets, BC�s system is the strongest in English-speaking Canada. Each new member makes it that much stronger.

An open-door policy
You always get a warm welcome when you come in to discuss financial matters, open a new account, or apply for a loan or credit card; you'll never feel as though you�re being patronized or grilled.

Superior customer service
Friendly, personable customer service is a distinguishing characteristic of credit unions, which routinely rate higher than banks in customer service and satisfaction surveys.

An account for everyone
These include special accounts for children, students and seniors; accounts based on the number of transactions you intend to make; multi-purpose business accounts; daily interest savings accounts; pay-as-you-go accounts; $US accounts and more.

Comprehensive products and services
From RRSPs, mutual funds and other investment options, to a wide range of insurance products and expert financial planning, credit unions offer it all. Even better, loan and mortgage rates tend to be very competitive. Terms and conditions are usually more flexible.

24-7 Convenience
With your credit union MemberCard�, you can bank at ATMs around the world. When you use a BC credit union ATM, you won't be dinged with a surcharge. Bank online or by telephone too!

Nelson & District Credit Union: Operating from a position of strength
The current turmoil in financial markets may cause our members concern about our risk position and overall financial stability. Founded in 1950, Nelson & District Credit Union has grown to one of the Kootenays� strongest credit unions. We now support 12,000 members and administer $150 million in assets. In our 58-year history, NDCU depositors have never lost money.

Our Business
Amidst the recent turmoil in global financial markets, NDCU continues to stay on course and will have another successful year. Your Credit Union is strong, capably managed and well-positioned for future growth.

If you have any further questions, please do not hesitate to contact us at Nelson & District Credit Union.

100 Mile Mortgage

Mon, 15 Jun 2009 00:00:00 -0700

The phrase �What goes around comes around� is never as true as it is now with local economies and our personal finances.

One step of our Financial Hike equates a family�s cash-flow to that of water in a water bottle. Money added to a family�s income acts like water flowing in from a faucet; while, taxes, debt management and expenses allow the water to drain out. Savings are the difference between the faucets and the drains � the creation of wealth.

A community has a similar, but much larger, bottle. The infusion of money into a community from various faucets is provided by tourism, employment, social assistance, pensions, etc. The drains are reflected in the money leaving the community through taxes, utilities, as well as the goods and services purchased elsewhere. A full bottle represents a healthy local economy where there are sufficient resources for everyone.

In the early twentieth century, John Maynard Keynes coined the term �Multiplier Effect� to explain what happens to money inside the bottles. Essentially, it examines how often money is exchanged before leaving that community. By spending locally, money is retained for a longer period of time and benefits more people. There is no difference between money that is new to the local economy and money that is re-circulated: $100 has the same value in the hands of the recipient either way. As more money is re-circulated at the local level, the higher its multiplier effect and the stronger the community is economically.

Historically, communities have searched for external sources of new money for economic recovery. Pouring money into the bottle appears easier than finding ways to plug the drains. Unfortunately, this tactic is effective only when there are endless sources to access.
Most communities, including ours, may not have difficulty attracting new money, but, it is how we as, citizens, businesses and governments use that money that needs attention. Too often, money is lost from the local economy when goods or services are bought from outside our communities. Regrettably, there is little long-term benefit from pouring money into our communities if it immediately gushes out. Where and how you spend your money is vital, however, it is equally important at the next level where those people and businesses spend the money that they receive from your transactions.

Re-circulating wealth does not demand that we insulate our community from the outside world. Rather, the emphasis is on increasing local connectivity and maximizing inward investments. Our rural economies can be strengthened by reducing our dependence on external goods and services, diversifying our local businesses and encouraging local spending. Every dollar that enters our community should be given the opportunity to realize its full potential before leaving.

How connected is our local economy? Where is most of our community�s money spent? Individually, we can examine our monthly budgets to see where we spend most of our money and how it interacts in our community.

Commonly, one of the largest expenses in a family�s budget is the mortgage. Our Credit Union can assist in keeping this investment local. Over the first 5 years of a mortgage amortized over 25 years, a family borrowing $200,000 could be paying over $40,000 in interest. Certainly most residents would want that kind of money to remain in our community!
The local economy is the interconnection of many parts and how we spend our money as a community can have a positive effect on our economic vitality and long-term growth. Each one of us can make a difference!

Our new 100 Mile Mortgage program seeks to help our community retain its money by circulating it locally. Logically, our preference is to invest our members� deposits in our community. We therefore welcome the opportunity to handle your mortgage as well as your other borrowing requests.

Whether seeking a new mortgage or renewing an existing one, please visit 100milemortgage.com and remember that our 100 Mile Mortgage specialists are here to assist you.

For more information contact your local branch or email 100milemortgage@nelsoncu.com.
www.100milemortgage.

Is a Credit Union like a Bank?

Fri, 12 Jun 2009 00:00:00 -0700

Yes, credit unions do offer the same financial products and services as a bank. Credit unions are very proud to offer exceptional personalized services and competitive financial products, including a wide range of savings and chequing accounts designed to complement a variety of member needs: ATM cards, personal and commercial loans, lines of credit, mortgages, RRSPs, RESPs, online banking services, insurance products and wealth management services.

No, credit unions are not like banks because they are community-specific financial co-operatives owned and operated by their members. A bank is owned by a few privileged stockholders who make all the decisions for the institution and its customers.

A key principle in the operation of a community credit union is that each member, regardless of the amount of money they have in their accounts, is entitled to the same vote in electing individuals to represent them as directors on the credit union�s board of directors. This co-operative principle ensures credit unions remain accountable to their members.

Want more info on credit unions? Then check out the links.

What is a Co-op?

Fri, 12 Jun 2009 00:00:00 -0700

We can all agree that living in the Kootenays is pretty awesome; there are so many unique aspects within our communities that make us lucky to be here. One prominent feature of West Kootenay communities is the presence of co-ops.

Co-ops in our area take the form of businesses that offer products and/or services to their members: public services that offer child or health care, social groups providing services such as housing or employment assistance, and financial co-ops such as credit unions.

The definition of a co-operative is a community-based democratic institution that is owned and controlled by its membership to provide a unified voice and structure to a group of individuals who have pooled their resources to achieve common goals.

Co-ops provide an environment where members and the community benefit from working together. By purchasing a share in a specific co-operative, one becomes a member responsible for assisting in the co-ops decision-making process. In this decision-making process, each member, regardless of number of shares, position in community or amount of investment, is entitled to one vote.

Organizations operating as co-ops around the world follow this set of common principles:
1. Voluntary and Open Membership
2. Democratic Member Control
3. Member Economic Participation
4. Autonomy and Independence
5. Education, Training and Information
6. Co-operation among Co-ops
7. Concern for the Community

If you would like more information on co-operatives, please check out these very informative sites.

What to Come Prepared With When Opening a Bank Account

Fri, 12 Jun 2009 00:00:00 -0700

Now that you�ve had the chance to recognize the importance of opening an account of your own you can take some time to decide what type of account best suits your needs as a young, active and financially independent person.

Before you open your own account, you will have to come prepared with a) some idea of the type of services you�ll need for your day-to-day banking, b) questions for a Member Service Rep and c) personal identification.

You must provide at least two forms of valid identification and, please bring original copies. This may include any of the following:

Valid Picture ID - provincially or federally issued, sorry to say school ID is not accepted
Social Insurance Number - SIN
Birth Certificate
Provincial Health Card - British Columbia Care Card
If your ID situation is limited, you may have to open a joint account with a parent or guardian until you have enough ID and account history to go it alone.
Remember that we are a credit union. What's that you say? It's a financial co-operative, and you are responsible for purchasing a membership share. A share for a new member under the age of 19 years is five dollars and over the age of 19 is 25 dollars.

Read more about credit unions and co-ops in the Ask Zippitydodog section. Also, bring a couple of bucks to throw into your new account so that you can start earning interest on your hard-earned cash.

By coming prepared with your identification and money, we can get your account opened quickly without taking up too much of your time, the final decision that needs to be made is what type of account will best suit your needs.

The "B" Word

Fri, 12 Jun 2009 00:00:00 -0700

Do you find saving money a challenge? Do you often wonder how you will be able to "scratch" together enough money to pay off your student loan, your first car or your dream trip overseas? If so - this is the article for you!

You hear the term "budget" in the media so often you tend to filter it out. But it is time to start listening and using this tool to take control of your own personal finances.
One of the biggest challenges for young people these days is saving money. A great starting point for any type of savings plan is determining how your money is being spent. We are all guilty of impulse buying. The key to breaking this habitual drive to be a mass consumer is to ask yourself at that time of impulse is "Do I really need this?"

By taking control of your spending habits you can see what, or how, you can eliminate unnecessary purchases - even though at the time they probably feel like very necessary purchases.

This snapshot of your finances is called a Budget. This is a prediction of your income (money you make) and expenses (money you spend). Budgeting can help you gain control of over spending, help you plan for the future or help you overcome financial difficulties. By taking control of your finances now, you will feel more confident with your finances in the future.

Budgeting does not have to be a restriction on yourself. By becoming conscious of your spending habits, you are making an effort to help you save for any short or long-term goals; whether it's the goal to have a little spending money for an upcoming vacation or a large chunk of change for a new "to you" car.

You can try doing a basic budget at home by subtracting your expenses from your income or use the internet where you can find a variety of calculators that can do the work for you. Check out www.zippitydodog.com, "Sites of the Month" for direct links.

When you start throwing down your numbers you must be realistic, honest and accurate and not base your saving and spending habits on desire. This allows for more accurate results that will be easier for you to manage and goals that will be more attainable.

Set yourself up with a short-term goal that you feel you can reach. By saving a little and watching what you spend you will be able to realize that goal and your saving successes will continue from there. You will then have the confidence to set the bar a higher and saving will become a very rewarding habit.

Some tips to get you started:

-Start canning and rolling all that loose change lying around.
-Pay yourself first. Before you spend it, save it.
-Restrict access to your savings with your debit card.

Why Have a Bank Account

Fri, 12 Jun 2009 00:00:00 -0700

You work hard, you save your money and now you are starting to think about where you should stash it. There are a few options we can eliminate right off the top; under your mattress, buried in the backyard or in your best friends account. By opening your own personal account you feel comfortable knowing where your money is. Below are a few points as to why it is important to have a bank account?

Security - your money is safe and insured.
Saving - save your money for short and long term goals.
Services - you can use a variety of products and services.
Records - you can keep on top of all your financial activities.
Convenience - helps you manage money and gives you access 24/7 if you choose certain products.
INTEREST - the big one, the bank helps you earn a return.

Once you have opened your own personal account you will be introduced to several ways on how to use it and how to start banking and save for your future.

Student Budgeting

Fri, 12 Jun 2009 00:00:00 -0700

Going to school should give you more than just a specific job skill, it should teach you how to gather, understand, and apply knowledge, which includes financial knowledge.

The first lesson involves funding your education. Financial aid offices at universities and colleges list scholarships, grants, and bursaries for students in their institutions, or check general websites like studentawards.com or scholarshipscanada.com. Good grades can be a source of income. Universities compete for the brightest students and offer entrances scholarships for stellar transcripts. Labour unions, professional associations, or your credit union may offer affiliation scholarships to members or their children.

However you raise the money for school, you need a spending plan to stretch it. The bulk of the education bill is in the cost of living the one-to-seven years necessary to graduate, so you have to control your living costs if you want to prevent having an entire life spent on a student�s budget.

One of the best financial strategies is to remember the rule of kindergarten: sharing. Having roommates can help keep housing costs down, but also consider car sharing through one of the growing number of car co-operatives. Then take advantage of the subsidized transit passes offered by many schools.

It�s common for textbooks to cost more than $100 and secondhand copies sellout fast. One trick for reducing costs is to get in touch with students a year ahead of you and arrange to buy their texts at the end of term. However, be sure the text book you purchase second hand is the issue being used by your prof and has not been updated. There is nothing worse than trying to find that quote and formula in a text book that does not have the same page numbering sequence.

Secondhand bookstores off-campus will also be happy to buy your recreational reading including mysteries, how-to books, and good literature.

A computer is essential, and most school bookstores offer discounts on equipment and software. Apple also offers deals to anyone in the education industry. But you can also save a few bucks by sharing peripherals such as printers and scanners with your roommates.

That computer can also help reduce costs by becoming all-purpose entertainment centre. Instead of running up phone bills, opt for a computer-based phone system such as Skype (skype.com), which allows you call anywhere, free. Skip the TV and cable costs by watching TV shows and films online. Add a good set of speakers, and your computer becomes a first class stereo with access to international radio stations too � and a great space-saver in a shared dorm room.

Learning to cook not only saves you money; it prevents the health problems that go with the steady diet of high-fat, high-starch meals that are standard cafeteria fare. Homemade curries, stir fries, chili, and soups, cooked in bulk once a month and frozen, will give you the power to resist that beckoning pizza flyer. Even if you�re on the school�s meal plan, give your health and your wallet a break by skipping overpriced convenience foods. Carry a thermos of home-brewed coffee and a supply of nuts and dried fruit for snacking.

For more ideas, many financial aid offices recommend The Debt-Free Graduate by Murray Baker, which offers a wealth of tips and strategies for Canadian students on how to cover the cost of school without going bankrupt.

Also, before you head off to school be sure to get in touch with a Nelson & District Credit Union Member Service Rep who can assist you in ensuring that all of your financial questions are answered, your contact info is current and you are set up in the appropriate account. Our Aspire-Scholar account is ideal for members in post-secondary studies.

Financial Planning 101

Fri, 12 Jun 2009 00:00:00 -0700

Diploma in hand, you�re ready to take on the world. So what�s your plan? Or, more to the point, your financial plan?

Graduation is the launching point for an array of life-changing decisions and firsts. Whether it�s a new career, car, marriage, house or just a whole lot of fun, there�s planning to be done on the financial front.

�Almost every decision you're making has a dollar value attached to it,� says Ann Bowman, vice-president of communications and corporate relations of the Financial Planners Standards Council. �I would absolutely encourage a graduating student to learn as much as they can about basic financial planning concepts.�

Financial Planners Open Doors

With a lifetime of opportunity before them, now is the perfect time for graduates to team up with a financial planner and start plotting their future.

But aren�t financial experts just for people with money? Who�d want to take on a young person with little income or a pile of student loan debt?

�That is one of the misconceptions that our body is battling,� admits Bowman, adding there�s a financial planner out there for everyone. �There are many certified financial planner professionals who are looking for that next generation of individuals who are about to enter the next stage of their life.�

�It�s never too early,� stresses Jeanette Brox, a certified financial planner, or CFP, professional with Investors Group in North York, Ontario. She understands how overwhelming it can be for graduates, especially when they�re drowning in debt, and she says a financial planner can put things into perspective by encouraging them to define short- and long-term goals and helping them map a path to reach those goals. It�s not just about saving for retirement. In other words, it�s not all about forgoing fun in favour of planning for retirement, which can seem a long way off when you�re just starting a career.

�It encompasses so much more and is of broader value to those who understand the scope of financial planning,� says Bowman. �Most of financial planning is about investor performance,� says Bradley Roulston, a CFP professional in Nelson, British Columbia, adding that too much emphasis is placed on investment or product performance. �Getting into the right habits when you're younger is so much easier than changing habits when you�re older,� notes Roulston.

And the major asset that young people have is time. A financial planner will help you look at the big picture and show you how you can save a bit of money and pay off debts at the same time.

The �B� Word: Budget

�If you use time effectively, you can achieve all your goals,� says Roulston, who regularly speaks with students at high schools and universities about financial issues.

He�s a big advocate of sticking to a monthly budget that allows you to have some fun while saving. It�s okay to start small, and thanks to compound interest, even saving $25 a month has a lot of potential to grow when you begin squirreling it away from the age of 22.

An important step is to take a hard look at where your money goes and decide where to curtail your expenses. Doing this from the outset will serve you well your entire life.

�You�re empowered, you�re in control of your budget,� says Roulston, who advocates an old-fashioned approach to getting what you want: saving. Two generations ago, people actually put aside between 10 and 20 per cent of their income for a rainy day. Today�s nest eggs usually come in the form of a line of credit. �Canadians spend three per cent more than what they make and [spending] is rising.�

If you can put aside 10 per cent of your income, and once that income rises, live as though you�re earning $10,000 less, your nest egg will flourish.

Student Loan Debt

Admittedly, saving for the future can be the furthest thing from one�s mind when finishing university with a daunting $40,000 in debt. If it makes you feel any better, experts say not to despair about student loans.

�People need to understand that this is not such a bad form of debt,� says Brox, pointing out that a student loan is essentially an investment in your future. Roulston agrees, further advising against consolidating student loans with banks, even when they offer a lower rate of interest. �There are all sorts of benefits if you keep it with the government,� he says, pointing to tax credits on interest paid, interest relief options and loan forgiveness.

Watch Out for the Loan Ranger

Instead of obsessing about student loans, graduates should pay off other forms of debt with higher interest, such as credit cards. While credit cards offer convenience, there�s no reason for graduates to have more than one credit card. Credit cards have notoriously high rates of interest and balances should be paid in full each month.

One of Roulston�s primary messages is to avoid sinking into debt. �Debt equals slavery,� he says, acknowledging that living debt-free can be a challenge in a society consumed by consuming. He especially hates to see people going into debt to buy an automobile and advises living without one by instead using transit or joining a car co-op. If a car is a must-have, he recommends buying �one that�s a couple of years old�let someone else take the depreciation hit, and run it into the ground.�

Another temptation is to rush into buying a first home and biting off more than you can chew. Roulston isn�t a fan of the 40-year mortgage simply because of the amount of interest you end up paying over its lifetime. He suggests getting into the market early by purchasing a duplex or triplex with other like-minded friends or family members. Instead of overextending yourself for a $400,000 home, you take on $200,000 of a $600,000 property and get your foot in the door.

How to Find a Planner

If you�re in need of a planner, a first step is to ask for referrals from family and friends. While the knee-jerk reaction might be to sign on with the first person willing to take you on as a client, don't. What you�re hoping for is a long-term relationship and that takes research. It�s okay to interview a number of people in your quest for the right fit.

Of course, financial advisers have to be paid and there are generally two routes to consider: an annual fee or via commission (based on the products, such as mutual funds, that they sell you). The commission route tends to appeal to those with more limited resources.

Experts agree that for recent grads, mapping your financial future is an intricate part of an overall life plan. Laying the foundation for a bright future is about starting early; in other words, don't be afraid to ask for help, even if your liabilities far outweigh your assets. With the right plan, it won't always be that way.

Michelle Warren is a freelance writer in Toronto.

Leaving a Lighter Footprint on Your Financial Hike

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Align your investments with your values and put your money where your heart is!

Social Responsible Investing is nothing more than integrating your values and social concerns into your investment decisions. Social Responsible Investments (SRIs) are normally considered as mutual funds that only buy stocks in companies that are socially responsible. Over the past 15 years, the amount of assets invested in SRIs has grown exponentially!

However, Nelson & District Credit Union term deposits are even more socially responsible, since your money will be reinvested back into our own local economy and abide by our highest lending standards.

You might have concerns over the nature of a business, environmental practices, labour issues, human rights, animal rights or community relations. Why not speak through your investment decisions?

One should not have to sacrifice returns for ethics. Companies that exhibit diligence, prudence and responsibility for long-term social and environmental advancement are far more likely to succeed. For example, a company with a good environmental track record�saving money through good waste management, less litigation and speedy government approval�will be more profitable. There are rewards for good behaviour! Nothing speaks as loudly to government and corporations than where you spend and invest your money.

As investment fund advisors, we are able to access all major mutual funds, including SRIs and naturally our term deposits.

With good planning, we ensure that your portfolio is in line with achieving your viewpoints.

Contact us at thehike@nelsoncu.com

Back to School Tips

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1) Have you budgeted for all projected expenses? Beyond tuition, consider the costs for books, clothes, computers, etc� Also, what about any out-of-town expenses if your child goes to school away from home.
2) Have you started a plan for your children�s post-secondary education? There are pros and cons to RESPs and other investment options.
3) Have your sorted out the logistics of how to assist your child�s out-of-town living expenses � I.e. line-of-credit, credit cards or monthly deposits into their account?
4) Have you talked to your children about financial responsibility? Who will be managing their finances?
5) How does financing their education impact your overall Viewpoints � I.e. tax obligation, vacation budgets, your own retirement funding� Consider education funding only one aspect of your overall Financial Hike!

For Students

1) First time away from home? There is a cost to your newfound freedom. Learn how to budget and manage money responsibly and stretch your dollars further. Working from a monthly budget might be the best strategy!
2) What are your total costs? It isn�t just tuition & books, there is also entertainment, food, travel, rent, laundry � the list goes on� Talk to another student who has gone to the same school about their unexpected costs and monthly budget.
3) Getting a loan? Learn the long-term financial implications of student-debt.

For your Tax-Return

1) Tuition Credits. The federal tax-credit is 15.5% of your tuition paid � a $5,000 tuition fee will save you $775 in federal taxes. This credit is only for tuition fees and mandatory ancillary fees only. A student needs to reduce their tax bill to zero first, then they can opt to transfer (up to $5,000/year) to a parent, grandparent, a spouse (or common-law) or spouse�s parent or grandparent.
2) Education Tax-Credits: $400/month for full-time students, $120/month for part-time.
3) Textbook Credit: $65/month for each month your are in school full-time, $20 for part-timers� How much you actually pay for your books is irrelevant.
4) Student loan interest credit: For qualifying federal and provincial loans only.
5) Transit Tax-Credit: Weekly, monthly or annual public transit passes! Keep receipts for the passes.
6) Employment Tax-Credit: Up to $250 for summer jobs or those who work during the school year.
7) GST Credit: For low-income students. This is a refundable credit, which means that people could get money back from the government even if they don�t have any income and don�t owe tax!
8) Canada Child Tax Benefit and Universal Child Care Benefit. Child-care expense can also be deducted against income.
9) Moving Expenses: Deductions can be made if the student moved at least 40km to take a summer or full-time job. Expenses incurred to move back to school can also be deducted from income earned while going to school.

For more information or for a meeting, contact thehike@nelsoncu.com or drop into your local branch of Nelson & District Credit Union!

Your Hike is long, pack wisely

What Account To Choose From When It's Time

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HeadStart Youth Account

-This is a great account to get your feet wet in the great big world of finance.
-This account is available for members 0-18 years of age and offers a very attractive interest rate so you can watch your money grow month-by-month.
Interest is calculated daily on every dollar in the account and is paid at the end of each month right into your account.
-Any transactions you carry out within the branch with a teller are free; this means that you will pay no service fees. How nice is that?
-An ATM card is available with this account; however, if you think you might like to start using an ATM card you will have to consider a few things.
-Since you are under the age of 19 you must have a parent give us the OK before you can have an ATM card.
-There are service fees that will be charged to your account each month when you use the card, each time you use it costs 20 cents.
-Having an ATM card is a privilege, use it responsibly.
-Free home banking; on-line or by phone. Keep track of your account from home.
-You get a statement mailed to you monthly, another way to keep track of your $$.

Common Cents Youth Account

-This is a great account for those youth members that are interested in having an account that takes care of all of their ATM needs.
-This account is available for members 0-18 years of age.
-The account offers a very attractive step-up interest rate so you can watch your money grow month-by-month.
-Interest is calculated daily on every dollar in the account and is paid at the end of each month right into your account, any portion of the balance that is above 500 bucks will be calculated at a rate based on our Communi-T-Billder Savings Account.
-There is a monthly account fee of 50 cents � BUT � the fee is waived if you can keep a monthly balance of 250 + bucks for the entire month, a great reason to save BIG.
"50 cents, what's in it for me?" You get 20 free electronic transactions, but you need to consider these points again.
-Since you are under the age of 19 you must have a parent give us the OK before you can have an ATM card.
-There are service fees that will be charged to your account each month when you use the card over the limit of 20 free, each time you use it costs 20 cents, at least.
-Having an ATM card is a privilege, use it responsibly.
-Free home banking; on-line or by phone. Keep track of your account from home.
-You get a statement mailed to you monthly, another way to keep track of your $$.

Aspire Trio Student Accounts

"To get the most out of your life, plant in your mind seeds of constructive power that will yield fruitful results.� Grenville Kleiser � Writer

The Aspire Trio is designed for members 18 to 28 years of age. What does your future hold?

Scholar - For Members Continuing their Education

-Low monthly fee of $2.50 per month
-40 debit transactions per month
-Free internet banking
-$100 LOC on approval to help build a solid credit history*
-Global Payment MasterCard with one year of Choice Rewards free*
-Signing bonus, $50 voucher for insurance product with Kootenay Insurance Services Ltd.**
-Interest calculated daily and paid monthly
-Scholarship and bursary info from your Youth Services Rep

Explorer / For Members Working to Play
-Low monthly fee of $2.50 per month
-30 debit transactions per month
-Free internet banking
-Free personal financial analysis by a wealth management expert
-Commission free travellers cheques
-$100 LOC on approval to help build a solid credit history*
-Global Payment MasterCard with one year of Choice Rewards free*
-Signing bonus, $50 voucher for insurance product with Kootenay Insurance Services Ltd.**
-Interest calculated daily and paid monthly

Entrepreneur / For Members in Small Business
-Low monthly fee of $5.00 per month
-10 free written cheques per month
-10 debit transactions per month
-Free internet banking
-Free in-branch deposits, withdrawals and coin orders
-Small business support from Nelson & District Credit Union Business Services Team
-Signing bonus, $50 voucher for insurance product with Kootenay Insurance Services Ltd.**
-Global Payment MasterCard with one year of Choice Rewards free*
-Interest calculated daily and paid monthly
-Monthly statement with cheque imaging

The Fine Print: *All applications are subject to credit approval and applicable terms and conditions set out by Nelson & District Credit Union. **Insurance vouchers for Kootenay Insurance Services Ltd are not valid for credit towards life insurance or ICBC products. Insurance vouchers have no cash value and are non-transferable.

Are You At Risk For Identity Theft

Fri, 12 Jun 2009 00:00:00 -0700

Your risk of being a victim is not linked to your age, income, ethnicity or geographic location. Scammers don�t care about any of that�they just want your money.

Identity theft is the unauthorized collection and use of your personal information.
Your personal information includes things like:

Your name
Birth date
Address
Social Insurance Number
Drivers license number
HealthCard number
Credit or debit cards
Passport
Account passwords
Personal cheques
Personal receipts

Surprisingly enough, with these pieces of info, individuals can build a profile on you and damage your reputation by opening credit card and bank accounts, redirect mail, establish cellular phone or internet service, rent vehicles, equipment, or accommodation, secure employment, blah, blah, blah. You get the point. If this happens, you could be left with the big bills, large charges, bad cheques, and maxed taxes. All in your good name.

Minimize your risk and don�t be a victim by considering these points.

Protect your personal information. Even though you were told in kindergarten to share, don�t share this stuff. Never give out any of the information from the list above to people you do not know.

Notify your financial institution. If you lose a credit card, debit card or cheques or feel that your account info has been breached, make the call immediately.

Use your mind. Put any account and PIN numbers to memory, do not record them in your wallet or use obvious passwords that someone could figure out.

Trash Talk. Shred or tear up papers with personal info.

Pay attention to snail mail. Check your bills and bank statements for accuracy and if bills fail to arrive this is not necessarily a good thing. Ensure you mail is not getting re-directed; if it is, contact those companies sending you mail.

Be aware of your surroundings. Don�t carry out a transaction with a credit or debit card if you don�t feel comfortable.

Ask Questions. Understand what your personal info is being used for.

Thanks for checking out www.zippitydodog.com, the Kootenay's most relevant source of financial information for youth.

The Good, the Bad and the Ugly of Credit

Fri, 12 Jun 2009 00:00:00 -0700

Are you thinking of getting your first credit card�lets fast-forward to next summer!

You have just returned from a fantastic road trip with friends. The fridge is empty so you stop by the grocery store to pick up dinner, you pull out the plastic and it is DECLINED. You have finally maxed-out your card at $3000, an accomplishment that you are not proud of. The challenge is going to be trying to figure out what it is you actually spent that credit on, and� how you are going to eat tonight.

After a sleepless night you decide to cut up that card and any others finding refuge in your wallet. The job you are working now only affords you $100 a month to help pay the card off. You begin a strict monthly payment plan that pains you.

The unfortunate truth is this! With an Annual Interest Rate of 18% it will take 2 years and payments totaling $3600 to reach that elusive ZERO balance.

Credit sounds fun and it makes you feel all grown up having that card in your wallet. But, it can be very costly if abused. If you plan on accessing some form of credit there are several points to consider since misuse can seem like eternity to correct.

The Good
-Understand the costs of using credit, learn how to manage it and stick to one credit card.
-Convenient, it�s accepted almost everywhere.
-Secure, you don�t have to carry pocket full-o-cash.
-Perks, reward programs and insurance coverage on purchases.
-Paying balances off monthly contributes to a strong credit rating.
The Bad
-Just because your approved doesn�t mean you can afford it.
-Control impulse buying, the average person spends twice as much with a credit card than if buying the same item with cash.
-Don�t be lured by teaser rates from credit companies as they can quickly climb to over 20%, a crime in itself.
-Only charge what you can afford, if you find you can�t afford the payments now the downward spiral is about to begin and your credit rating will suffer.

The Ugly
-Don�t over extend yourself with too many cards.
-The dangers of carrying a wallet full of maxed-out cards can be a reality.
-Don�t rely on the plastic. If you can�t pay off 1, how can you pay off 2, 3, �.
-It can take 10 years to clean a dirty credit rating. Sorry, you are declined�no mortgage to purchase a home, no car loan, no personal loan to pay for that dream vacation, or the possibility of a lost job opportunity if you are seen as a possible security risk.

Some Saving & Spending Tips

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Be aware of service charges.
-Limit access to your savings on your debit card; stick to you savings goal.
-Get to know your personal finances; confirm transactions, be conscious of identity theft.
-Keep track of your account balances. Overdraft scenarios can sneak up and be costly.
-Don�t spend on impulse.
-Develop a budget. Spend a month tracking your spending habits and see how you do, and check out the web for various budgeting calculators and be realistic.
-Pay yourself first. Try saving 10 per cent of your earnings before it is spent.
-Mattress Money or Rainy Day Fund. Give your savings a name and goal; by taking ownership of it, you will find that it becomes a routine.
-Retirement may be a long time coming but think about it early and have an understanding of interest rates.
-Minimize any personal debt.
-If you come into some money, think about saving it or paying off some debt before you blow it and then regret your decision.
-Research large purchases.
-If continuing your education, investigate bursaries and scholarships.
-If you have any questions, ASK.

Some Media Bits to Ponder

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Tips for job seekers
-Present to employers what they are looking for today.
-Understand the job and industry you are targeting.
-Show enthusiasm for the job.
-Network broadly.
-Be open to jobs outside your field of interest.
-Be persistent but realistic.

�Tips to help the job hunt� May 5, 2004
Barbara Moses, The Globe and Mail

The weight of student debt
-A recent Stats Canada survey found that undergraduate students who graduated in 2000 owed an average of $20,000, 30% more than the class of 1995 and almost 80% more than students in 1990.
-Don�t panic, sit down and create a budget.

�There are ways to dig yourself from under student debt� June 12, 2004
Erin Pooley, The Globe and Mail

-Students typically have up to 10 years to repay their government loans, and five years to pay a bank line of credit. Special concessions are available in some special cases. Some professional schools may offer bursaries, interest relief, promissory notes or other assistance for those in difficult financial positions. All of these options should be explored where necessary.
-The trick for grads is to live like a student as long as they can after graduation in order to put themselves on a sound financial footing. �You live like a student for so long, the first inclination when you get out is to start living,� says Murray Baker, the author of The Debt Free Graduate, How To Survive College Or University Without Going Broke. �But if you graduate with a lot of student debt, you may have to delay that a little bit longer.�
Some tips on paying debt;
-Always make the minimum loan payments or you could endanger your future access to credit. This could prevent you from making major purchases, acquiring a cellular phone or setting up a business.
-Approach your financial institution about the best ways to keep your borrowing costs down.
-Use any extra cash to pay off the loan or credit with the highest interest rate.
-Do not consolidate the government loan with other debt, you will lose the non-refundable tax credit on interest.

�A financial primer for new graduates with loans� April 20, 2004
James Daw, Toronto Star

Payday Loans Spell DANGER

-Payday loans are loans issued against a pay cheque. They are short-term loans that can typically range from $100 to $200 dollars. To get one, the person borrowing writes a postdated cheque for the amount desired�plus a fee, a large fee. The cheque casher or payday lender holds the cheque until you are paid. The typical loan period is no longer than two weeks
-On payday, you take the cash to the lender and exchange it for the postdated cheque, or you allow the lender to cash the cheque. Or, if you don�t show up with the cash the lender cashes the cheque.
-When you borrow from payday lenders the fees are enormous, $100 will cost you $20 in charges/interest. That is an annual percentage rate of 521%, most banks and credit unions are charging 9% when lending money to clients.
-If you cannot pay back the loan at the end of the repayment period that�s when the expensive problems begin and any good credit history you have developed becomes history.
-Payday loans are predatory by design because repeat fees from borrowers are the lifeblood of this business.

�Five loans that spell danger� April 18, 2004
Leah Gliniewic, Bankrate.com

Be Aware of Fraud and Identity Theft

-A new credit card scam has prompted a warning from Vancouver Police who are warning
people not to part with personal information over the phone after a recent scam came to light. The fraud involved an individual phoning a credit card holder and claiming to be from the security and fraud department at Visa.
-The caller pretended to have spotted an illegal $500 charge being billed against the victim�s credit card and offered to re-imburse the amount.
-The fraudster said a fraud investigation file had to be opened and gave the victim a fake control number before asking the victim for numbers from the credit card.
-The victim�s card was charged almost $500 by the fraudster.

�New credit card scam prompts warning�
Vancouver Sun, condensed by CUCBC newslist

-Seventy-five percent of Canadians say they are concerned about identity theft, but only 20 percent consider themselves �very well informed� about how to protect themselves against one of the fastest growing crimes in North America. --This includes new tactics being used by criminals, such as �phishing�, where fraudsters create websites that mirror those of well-known companies to lure customers into providing personal information.

�Canadians Overwhelmingly Concerned about Id Theft, ��, June 30, 2004
CCNMatthews

-"Skimming," an insidious credit card scam that surfaced in the eastern US at the start of the new millennium, is now increasingly reported in British Columbia. The technology in this case is a "skimmer," a Palm Pilot-size hand-held device that can read and store all the encrypted data embedded within a card's magnetic stripe, as well as the name, number, expiry date and other face information. The data can then be copied onto counterfeit cards that are so good they zip past the security screens of the world's biggest credit card companies.
-The victim of skimming is unaware - because the cards have not been stolen. Rather, they've been used in a restaurant or a gas station where the crooks work so fast they can be charging on the card even as the victim returns it to his or her wallet.
-What can a cardholder do to prevent his or her card from skimming - or to mitigate the fallout if one is a victim? The experts recommend "vigilance".

�How to avoid credit card skimming��
i-switch.com

-RCMP issued a warning Thursday to people who use automated bank teller machines after the arrest of three men who are believed to be members of an organized crime group that is using sophisticated new technology.
-The trio of fraudsters allegedly used a debit card skimming operation that involved installing a real-looking card reader to capture magnetic strip data from the backs of cards.
-The card reader was overlaid on the exterior door of a bank. Also installed was a miniature pinhole camera directly above the number pad where customers punch in their confidential personal identification numbers. The remote camera transmitted images of the customer PIN pad entries to a video recorder hidden in a nearby garbage can, which had been brought into the bank by the suspects.
-Police believe the suspects parked outside the bank and wrote down times, then later used the PIN numbers to make counterfeit debit cards using data skimmed from the cards. The equipment was brazenly installed in broad daylight while customers were leaving and entering the bank to use the ATM, police said.

�High-tech scam rips off ATM users� Jul 9, 2004
Neil Hall, Vancouver Sun

Using Your Debit Card - Protect Your Pin, Protect Your Money

Fri, 12 Jun 2009 00:00:00 -0700

1. Use your hand or body to shield your PIN when you are conducting transactions at an ABM/ATM or at the point-of-sale.

2. Never let your banking card out of your sight when conducting a transaction at the point-of-sale. Always remember to take your banking card and transaction record with you once your transaction is completed.

3. Regularly check your statements and balances to verify all transactions have been properly documented. If entries do not accurately reflect transaction activities, for example, if there are missing or additional transactions, you should contact your financial institution immediately.

4. If your banking card is lost, stolen or retained by an ABM/ATM, notify your financial institution immediately upon becoming aware of the problem.

5. Your banking card and PIN are the keys to your account(s). Never disclose your PIN to anyone or you could be liable for losses. You are the only person who should know it.

6. Memorize your PIN - it's your electronic signature. If you suspect that someone knows your PIN, change it immediately or contact your financial institution to cancel the card.

7. When selecting your PIN, never use obvious information. You could be liable for losses if you create your PIN by using your telephone number, date of birth, address or social insurance number.

8. Only conduct transactions when and where you feel secure. If anyone tries to distract you, complete what you are doing and retrieve your card before doing anything else. If you cannot retrieve your card, call your credit union or bank immediately.

Debit card fraud is becoming increasingly common. Be aware of these points so that you are not a victim.

Credit Union 101 � The Trilogy

Fri, 12 Jun 2009 00:00:00 -0700

Episode I - What is Credit?

'In a galaxy far, far away evolved a dangerous but manageable ruler called DARTH CREDIT.

CREDIT was, and still is, a privilege and not a right. It was the knowledge gained through the tireless efforts of a young Jedi named ZIPPITY that he learned�. the key to maintaining good CREDIT was knowing the cost of using it and learning how to manage it."

First of all we need to define the concept of CREDIT; 'credit is an arrangement to receive or access cash today and pay tomorrow'. This sounds appealing but it can lead to very scary things.

Personal CREDIT comes in a variety of shapes and sizes and it's very important to understand that you have to pay for this privilege.

First lets explain the difference between fixed credit and revolving credit: Fixed credit comes in the form of loans such as mortgages, car loans or small personal loans. Fixed credit requires that you provide a guarantee that you will re-pay the amount of credit you are using. You will pay your institution for the use of this money for your purchase, this is called interest. Revolving credit comes in the form of credit cards or a line-of-credit. You will also pay for the use of revolving credit but you will find that it is very pricey to use this form of credit since there is little or no security given by the person borrowing. Since there is no guarantee of repayment, the interest charged to obtain this form of credit is very high.

So, as you can see CREDIT will come in a variety of shapes and forms and it is vital to understand the cost of using it before you are granted access to it

Credit Union 101 � The Trilogy

Fri, 12 Jun 2009 00:00:00 -0700

Any Jedi, especially Zippity, would know that it is key to remember that CREDIT, the opportunity to borrow today and pay tomorrow, is a privilege and not a right. Many, namely those on the Dark Side, find this a difficult concept to grasp. Some think that CREDIT is out there for them to use when they want to use it!
It is important to remember that anyone wishing to access CREDIT will need to satisfy some key points. You need to ensure that those allowing you access to their money are comfortable with your ability to repay. A credit union, bank, credit company, department store, or any other institution or business offering CREDIT will review your current financial situation before allowing you access to CREDIT, their $$$.

What they are looking for:

-How long you have worked and how much you earn at your current job.
-Where you are currently working.
-How you have operated your personal bank account.
-How you have used CREDIT in the past, this is known as your CREDIT HISTORY. If you have had any credit�
-Any other CREDIT DEBT you currently are carrying, this may be a student loan, car loan, other credit�
-What you have to offer as collateral, car, house, investments� This is what you will lose if you don't pay-off any of your CREDIT DEBT�ouch�
-What is your CREDIT SCORE, this score is a number calculated on an equation based on your use of any CREDIT in the past.

If you can satisfy all the requirements of accessing CREDIT you are then introduced to the Cost of Using Credit. There is a cost in using someone else's cash over a period of time, this cost is called INTEREST. There are several factors that will influence the INTEREST RATE when you borrow from others and they can be related to your personal situation and broader factors affecting world markets.

It is the misuse of CREDIT that can lead to the Dark Side of Interest. Darth Credit can be dangerous and costly and puts many people in very difficult situations that will affect their ability to obtain credit in the future. In a worst-case scenario one may lose a portion of their income involuntarily�ouch� For this reason it is important to manage your CREDIT vigilantly in order to avoid the high costs of borrowing that can add up quickly and get you in debt fast.

Stay tuned for Episode III where we will discuss the Lighter Side of Credit and Smart Credit Goals, a feel good story of how to keep you out of trouble with your CREDIT.

Affording a Home: What to consider when considering a Mortgage.

Fri, 12 Jun 2009 00:00:00 -0700

The housing market is booming in the Kootenay�s with first time homebuyers taking the leap from renting to owning. Unless you are a professional athlete or on Bill Gates� payroll you will be financing your purchase with a significant loan, aka. MORTGAGE.
Here are some important points to review:

-Are you going to be happy in the house and the community you are considering? Research the economic conditions and livability of the area you plan on moving into.
-Are you financially prepared? Seek professional financial advice before buying a home.
-Research your ability to pay. Use the tools available on the internet like a net worth and mortgage calculator to help determine if you will qualify for the mortgage.
-How is your credit rating? Before approving you for a mortgage, lenders will want to see how well you have paid your bills or debts in the past.
-What can you afford? You will have to accumulate at least 5% of the down payment and consider that, in addition to your monthly loan payments, you need to also pay for homeowners insurance, utility bills, taxes, general maintenance and home repair costs, strata fees if you purchase a apartment or condominium�No more landlords to cut your lawn and fix any problems. This is your home!
-Research the cost to borrow. A lower interest rate may be achieved with a larger down payment, a good relationship with your bank or credit union, a good credit history�
-Research payment options and payment flexibility. By paying bi-weekly and making lump sum contributions on mortgage anniversary dates you can speed up the payment process. This means you reduce the amount of interest you will have to pay to the bank.
-Maintain a good relationship with your bank or credit union representative. They can help.

Thanks for checking out www.zippitydodog.com, the Kootenay�s most relevant source of financial information for youth.

What is an RESP?

Fri, 12 Jun 2009 00:00:00 -0700

THE BASICS
What is an RESP?
-an investment plan that helps families accumulate money for post-secondary education through regular contributions and the receipt of the Canadian Education Savings Grant (CESG). Similar to RRSP'S, an RESP offers tax-sheltered growth of your investment until the money is withdrawn for the beneficiary continuing with post-secondary studies. The max annual contribution to an RESP is $4000 per beneficiary with a lifetime contribution limit of $42,000 per beneficiary. There are penalties for over contributions greater that $2000.

What is the CESG?
-it is a federal government incentive to promote saving for a child's (beneficiary's) education. The CESG is deposited directly into the RESP annually and is equal to 20% of the annual contributions to an RESP, to a maximum of $400 per year/per beneficiary with a lifetime CESG max of $7200.
-20% of $2000 is $400, the max CESG contributed to an RESP.
-children are eligible for CESG up to the age of 17, children ages 16 and 17 are only eligible if: (1) a min of $100 in contributions made to an RESP in any 4 years prior to turning 16. (2) $2000 in the year prior to turning 16

Tax-sheltered until when?
-an RESP is tax-sheltered until the beneficiary qualifies for, and withdrawals Education Assistance Payments (EAP) for a Qualifying Educational Program (QEP). Unlike an RRSP, there is no accompanying tax deduction when the student begins to use the RESP for education, the income becomes taxable. However, because the student typically has little other income, and the benefit of tuition credit, the student effectively pays little or no tax on RESP income.
Who are Subscribers and Beneficiaries?
-the subscriber is the individual who contributes to the plan for the beneficiary and can do so up to 21 years after the year the plan is opened.
-the beneficiary is the individual named by the subscriber who receives the benefit. Beneficiaries can be changed without restriction.

THE ACCRONYMS
CRA- Canadian Revenue Agency
RESP - Registered Education Savings Plan
CESG - Canadian Education Savings Grant
QEP - Qualifying Educational Program - a program not less than 3 consecutive weeks in duration with program requiring each student completing at least 10 hrs of study per week.
EAP - Education Assistance Payments - the payment of accumulated earnings and grants paid to beneficiary when enrolled in a f-t QEP.
AIP - Accumulated Income Payments - earnings from principle and from the grant if abeneficiary does not attend a QEP. Subscriber must repay CESG.
SIN - required to set up an RESP, you must have a Social Insurance Number for the beneficiary to set up an RESP.