Unimor Capital Corporation

Tag: saving

  • 5 Money Personality Types: Which One Are You?

    5 Money Personality Types: Which One Are You?

    Like almost everything else in life, your response to money is largely dictated by your personality. But have you given much thought to how you behave in regard to your finances and how that behavior affects your bottom line?

    Understanding your money personality is the first step and will help you shape your approach to spending, saving, and investing.

    KEY TAKEAWAYS

    • It may be useful to understand the various money personalities when finding the right approach to investing, spending, saving, and the overall management of your finances.
    • Five common money personalities are investors, savers, big spenders, debtors, and shoppers.
    • Debtors and shoppers may tend to spend more money than is advisable.
    • Investors and savers may overlap in personality traits when it comes to managing household money.
    • Big spenders and shoppers often have similar habits, but big spenders tend not to worry about debt, and shoppers may spend more time hunting for bargains.

    The Five Money Personality Types
    Character traits regarding money can be classified into specific groups. This subject has been analyzed in a variety of ways, and many people can identify with parts of several of these money personality profiles. The key is to find the type that most closely matches your behavior. The major profiles are big spenders, savers, shoppers, debtors, and investors.

    1. Big Spenders
      Big spenders love nice cars, new gadgets, and brand-name clothing. People with a ‘spending’ personality type aren’t typically bargain shoppers; they are fashionable and always looking to make a statement. This often means a desire to have the latest and greatest mobile phone, the biggest 4K television, and a beautiful home. When it comes to keeping up with the Joneses, big spenders are the Joneses. They are comfortable spending money, don’t fear debt, and often take big risks when investing.
    2. Savers
      Savers are the exact opposite of big spenders. They turn off the lights when leaving the room, close the refrigerator door quickly to keep in the cold, shop only when necessary, and rarely make purchases with credit cards. They generally have no debts and may be viewed as cheapskates. Savers are not concerned about following the latest trends, and they derive more satisfaction from reading the interest on a bank statement than from acquiring something new. Savers are conservative by nature and don’t take big risks with their investments.
    3. Shoppers
      Shoppers often develop great emotional satisfaction from spending money. They can’t resist spending, even if it’s to buy items they don’t need. They are usually aware of their addiction and are even concerned about the debt that it creates. They look for bargains and are happy when they find them. Shoppers are varied in terms of investing. Some invest regularly through RRSP plans and may even invest a portion of any sudden windfalls, while others see investing as something they will get to eventually. Money personality traits are always not one-size-fits-all, and it may be possible for people to have overlapping characteristics when it comes to managing their finances.
    4. Debtors
      Debtors aren’t trying to make a statement with their expenditures, and they don’t shop to entertain or cheer themselves up. They simply don’t spend much time thinking about their money and therefore don’t keep tabs on what they spend and where they spend it. Debtors generally spend more than they earn and are deeply in debt while not putting much thought into investing. Similarly, they often miss taking advantage of the company match in their RRSP plans.
    5. Investors
      Investors are consciously aware of money. They understand their financial situations and try to put their money to work. Regardless of their current financial standing, investors tend to seek a day when passive investments will provide sufficient income to cover all of their bills. Their actions are driven by careful decision-making, and their investments reflect the need to take a certain amount of risk in pursuit of their goals.

    Make These Changes to Your Money Personality
    Once you determine which of these personality types describes you the most and have put some thought into how you approach money, it’s time to see what you can do to make the most of what you have. Making small changes can often yield big results.

    Spenders: Shop a Little Less, Save a Little More
    If you love to spend, it’s likely that you are going to keep doing it, but you should seek long-term value and not just short-term satisfaction. Before you splurge on something expensive or trendy, ask yourself how much that purchase is going to mean to you in a year. If the answer is “not much,” skip it. In this way, you can try to limit your spending to things you’ll actually use. When you channel your energy into saving, you have another opportunity to think long term. Look for slow and steady gains as opposed to high-risk, quick-win scenarios. If you really want to challenge yourself, consider the merits of scaling back.

    Savers: Use Moderation
    Ben Franklin once recommended “moderation in all things.” For a saver, this is particularly good advice. Don’t let all of the fun parts of life pass you by just to save a few pennies. Tune-up your savings efforts, too. Pinching pennies is not enough. While minimizing risk is any investor’s prime goal, minimizing risk while maximizing return is the key to investing success.

    Shoppers: Don’t Spend Money That You Don’t Have
    A critical step for shoppers is to take control of their credit cards. Unchecked credit card interest can wreak havoc on your finances, so think before you spend – particularly if you need a credit card to make the purchase. Try to focus your efforts on saving the money you have. Learn the philosophy behind successful savings plans and try to incorporate some of those philosophies into your own. If spending is something you do to compensate for other areas of your life that you feel are lacking, think about what these might be and work on changing them.

    Debtors: Plan Your Finances and Start Investing
    If you are a debtor, you need to get your finances in order and set up a plan to start investing. You may not be able to do it alone, so getting some help is probably a good idea. Deciding on who will guide your investments is an important choice, so choose any investment professional carefully.

    Investors: Keep Up the Good Work
    Congratulations! Financially speaking, you are doing great! Keep doing what you are doing and continue to educate yourself.

    The Bottom Line
    While you may not be able to change your money personality, you can acknowledge it and address the financial challenges that it presents. Managing your money involves self-awareness; knowing where you stand will allow you to modify your behavior to better achieve your financial and life goals.

     

  • Ways to Finance a Home Renovation

    Ways to Finance a Home Renovation

    Ways to Finance a Home Renovation

    With the pandemic keeping more of us at home, for more hours of the day, about a fifth of homeowners have their eye on a renovation in the near future. The big question for many is: What’s the best way to pay for it?

    Since the COVID-19 pandemic entered our lives, Canadians have been spending a lot more time at home—and in many cases, it’s inspired both indoor and outdoor renovation projects. New consumer research suggests 23% of Canadians have completed a renovation in the past year and an additional 21% are considering a renovation in the near future. The shift to backyard visits may have made a new deck or freshly landscaped patio more appealing, and in some cases, remote work or virtual school has highlighted the need for a space that functions as a home office. Others are noticing overdue cosmetic updates or are using this time to complete repairs around the house.

    While these home renovations are often necessary, and some are even exciting, most Canadians don’t have the means to pay for these projects outright. 25% of Canadians have saved money during the pandemic as a result of reduced spending on dining out, entertainment, clothing and commuting costs. Families in this fortunate position are using newfound space in their budget to create emergency savings, invest or pay down debt or to help fund a large purchase. Even with these savings in hand, however, Canadians will need to borrow at least part of the cost of their planned reno projects. The big questions for many are: What are the options available? And which is the best for them?

    Can you afford to finance your reno?
    Generally speaking, it’s okay to borrow money for a renovation as long as you can adequately service the debt it creates. This means understanding how the interest rate and repayment structure of your loan will impact your finances. What will the monthly payment be on a $30,000 loan or a $50,000 line of credit, for example, and can you afford to add that to your budget?

    With so many borrowing options available from your bank and other lenders, if you have a steady income, you’ll likely have access to some form of credit. However, that doesn’t necessarily mean you should go for it. If you don’t qualify for a secured loan or line of credit, you probably shouldn’t do the renovation. Getting turned down by a lender reflects your credit history, debt, income, and other factors—including the size and affordability of your project. You may want to consider scaling back the renovation or holding off until you’ve saved up a larger proportion of the cost.

    Home Equity Line of Credit (HELOC)
    A home equity line of credit, commonly referred to as a HELOC, is a revolving line of credit that is secured by the equity in your home. Nearly all banks and credit unions offer this type of lending, and because a HELOC is secured to your home, interest rates are significantly lower when compared to unsecured loans and lines of credit.

    Homeowners can typically borrow up to 80% of the appraised value of their home minus the amount owing on their mortgage. For example, if your house is worth $750,000 and you owe $300,00 on your mortgage, you would be able to borrow up to $300,000 on a HELOC. Interest payments are structured, but otherwise, the homeowner is able to move money in and out of the line as they please. Most major financial institutions offer interest rates based on the lender’s prime rate (for example, prime +1%).

    Once you’re approved, the funds can be used for anything you choose: a renovation, a new car, unexpected expenses. Many homeowners opt to set up a HELOC with their lender just to have credit available immediately if needed. However, this type of credit can be dangerous if you’re prone to overspending or bad at setting boundaries. As you make payments back to the line, that credit becomes available again, allowing you to re-borrow funds. If you are only making the minimum payment each month—usually just the interest owing on the amount you’re currently using—while you continue to draw additional funds from the line of credit, your debt can skyrocket. It’s best to use a HELOC for planned expenses only and avoid using it for discretionary spending or filling gaps in your monthly budget.

    If you’re worried you may overspend on a HELOC, ask your lender to set a limit you’re comfortable with. Just because you get approved for the maximum amount doesn’t mean you have to take it. So, if you only need half of what they’re offering, ask them to meet you there.

    Refinancing your Mortgage
    When you refinance a mortgage, you’re adding to the amount of money you borrowed from a bank or other lender to purchase your home. This new amount is then rolled into balance on your mortgage. This means you won’t have a separate loan or line of credit payment to deal with—it’s all covered by your mortgage payment. Mortgage refinancing is more structured than a HELOC, this is an attractive option for many homeowners and often has the lowest possible interest rate, because it’s a first mortgage that is secured by the equity in your home.

    Refinancing a mortgage is a great option for those with a tendency to spend, as there’s less need for discipline, you get a lump sum loan, to cover the cost of your renovation and the repayment is fixed. You can’t really abuse that money and you can’t get extra.

    If you add to your mortgage principal, you will owe more and, subsequently, you could have a higher monthly payment. However, if you add to the loan while locking into a lower rate, you may actually end up with a lower monthly payment (yes, even if you’ve borrowed more money). For example, if you originally owed $450,000 on your mortgage at 4% interest with an amortization of 25 years, your monthly payment would have been $2,375. If you added a $100,000 loan at the time of your mortgage renewal and locked into a lower rate of 1.8%, you’d owe $100,000 more but have a monthly payment of $2,278—slightly lower than your original monthly mortgage payment.

    Unsecured Personal Loan or Line of Credit
    A personal loan is a lump sum that you’ll repay with interest on a set schedule. A personal line of credit operates like a HELOC, with a limit you will continually regain as you repay the funds borrowed, but at a higher interest rate because it’s not secured to your home. The interest rates on personal loans and personal lines of credit are typically similar.

    While this type of credit may come in handy in an emergency, it isn’t ideal for planned renovation expenses. Not only do these options come with much higher interest rates than secured forms of credit, but you will also likely have access to less money, which limits what you can do.

    However, if you find yourself in a bind, an unsecured personal loan or line of credit with a reputable financial institution can be helpful. If you can pay it off quickly, it’s better than using a credit card. But it’s not inexpensive or ideal for the average person. While the interest rate on a HELOC may be the lender’s prime rate + 1%, interest on a personal loan might be anywhere from 6% to 12% or more, depending on the lender and terms, as well as your personal credit rating and existing debt load. The interest rate on a standard credit card will likely be 19% or higher.

    The bottom line? In an emergency, a personal loan can be a lifesaver, but it isn’t ideal for most homeowners and should not be used for discretionary spending.

    What else should you be thinking about when borrowing funds for a home renovation?
    A renovation can cost a lot of money, but it typically adds value to your home—something to consider if you have plans to move in the near future. If you’re borrowing money on a HELOC or other form of credit to renovate, your home’s value should go up, if you’re selling, this could be a great investment. But if you’re not selling, you still have to pay it back. Real estate value aside, a home renovation can bring a lot of personal satisfaction and improve your quality of life.

  • What Money-Savvy Kids? 5 Lessons to Set Them Up for Financial Success

    What Money-Savvy Kids? 5 Lessons to Set Them Up for Financial Success

    As parents, it can be overwhelming to think about everything we need to teach our kids — whether it’s showing them how to cross the street safely, introducing them to the alphabet or teaching them to ride a bike. Unfortunately, money still seems to be a taboo educational topic — even among families. Teaching your kids about money lessons is essential for raising adults who are comfortable talking about and handling their finances. By following these tips, you can create a solid financial foundation for your kids.

    1. Talk About Family Finances
    We’re not suggesting that you study your financial spreadsheets with your kids for a family fun night, but your children can’t get comfortable talking about money until they know you’re comfortable talking about it. By setting up a consistent family budget meeting — you don’t have to call it that if the b-word scares/bores everyone — your gang can get in the habit of discussing topics like how much money it takes to keep your household functioning and why it’s important to plan for big purchases.

    If kids get the opportunity to give their input — and no, they don’t get the deciding vote, even if they outnumber you — it will empower them to take responsibility for how the household spends its money. It can start with something simple like: We have $50 extra spending money this month. Would you rather go to a drive-in theater or save the money so that next month we could go on a camping trip?

    2. Show Them Why Saving Pays
    Your child’s method of saving will evolve as they get older but teaching the basic value of setting aside money will help them avoid the temptation to make an impulse buy each time they have money in their hands.

    Use Real Dollars & Coins
    Using physical cash and coins is great for helping younger children understand the concept, as it allows them to see how their nickels and dimes (and dollars) can really add up. You can start out by teaching kids to budget their money — consider using one piggy bank for savings, another for spending and a third for giving.

    Open a Bank Account
    When they’re ready, you can take the next step by opening a bank account for your child. Many banks have accounts specifically for minors if their parents also bank there, which can help your children save on fees that banks may charge for regular accounts.

    By bringing them along to a physical location to open their bank account, you’ll help your kids become more comfortable dealing with financial tools and institutions. That way, banks won’t seem as intimidating when your kids open their own accounts as adults.

    Teach Them About Compound Interest
    Additionally, use their savings accounts as an opportunity to teach kids about compound interest — a basic financial concept that explains how your money can grow by earning interest on the interest.

    3. Let Them Learn the Value of Their Money
    Getting your children to value their money can give them a head start on money management skills. It starts with understanding where the money comes from (the ATM doesn’t count). Whether you pay them an allowance, they receive money as gifts from relatives or they’re making their own money (yes, even a lemonade stand business counts), your children will better understand how much a dollar is worth if they learn how to budget their money early on. Accounting for each dollar allows a child to learn decision-making skills that will prepare them for later in life when they’re parcelling out their paycheck.

    Ask them questions like: Is it worth doing an extra chore to have their pick in the candy aisle at the grocery store? By giving them the power to make that decision, your children will be able to apply the same money concepts when deciding as an adult whether it’s worth working an extra shift to buy those new shoes or taking on a side gig to pay to build an emergency fund.

    4. Don’t Let Investing Be Only for the Rich
    Your kids don’t need to become the next Warren Buffett to learn the value of investing. And they don’t need to be rich to start (and neither do you). No matter what their age, kids can learn about growing wealth by investing a small portion of their money. We recommend starting with a very small amount since there is, of course, a risk that their investment could lose value. It’s a tough lesson, but one that’s easier to accept if your child lost a week’s allowance rather than a lifetime savings.

    And investing doesn’t require a large cash outlay to start, especially if you work with a brokerage that allows you to open a custodial account and invest in fractional shares. For just a few dollars, your kids can pick a couple of companies that make their favorite toys or movies, then check the stock price each week to see how their investment is faring. If your family is the competitive type, let every member invest in a different stock and see whose stock grew the most at the end of a year.

    5. Don’t Make Debt a Four-Letter Word
    You want to protect your kids from all the bad things, so if you don’t talk about debt, they won’t end up in it, right? Maybe. But probably not. Giving them the tools to understand debt is a better way to avoid bad debt and responsibly handle the good debt that they’ll face in their lifetime.

    Differentiate Good Debt vs. Bad Debt
    So how can you teach kids the difference between bad and good debt? Remember these two factors:

    • What’s the interest rate?
    • What’s the value of the item they’re going into debt for?

    As a general rule, if you’re borrowing money at a higher rate than you can earn by investing, that’s bad. For example, if a credit card charges 18% interest, you can’t reasonably expect to get those kinds of returns on investments, so that’s a bad debt. However, if you get a mortgage with a 3% interest rate, there’s a good chance you could invest that money and make more in interest.

    It’s also important to teach kids that bad debt vs. good debt involves the types of things and events that they’d want to use the credit for. Borrowing money to buy a candy bar? Bad debt. Borrowing money to invest in a mower so you can start making money cutting the neighbor’s lawns? Good debt (since they’ll in theory be using that borrowed money to make more money).

    Get Real About Student Loans
    One of the biggest decisions kids will have to make early on in regard to debt is whether to take out student loans. Start talking to your teens early about how student loan debt could affect their lives after college. Although it can be a very personal decision, encourage them to consider the costs and benefits of student loan debt. For instance, is the private, out-of-state school with the gorgeous campus worth the debt burden if they’re getting an education degree? Teaching your kids early about how to use debt and credit lines responsibly — perhaps by adding them as an authorized user — will let them see the benefits of building a solid financial foundation.

    Start Small
    And if all this is a little much for your youngest kids to understand, you can introduce this money lesson with one of these debt free charts. Start by deciding on a bigger purchase your child wants but doesn’t have enough cash for yet — but small enough that they can “pay it off” in a few weeks or months. Each time they make a “payment” to you, they can color in another section of the chart. By the end, they’ll have a better understanding of what it means to pay off debt, and you’ll have another piece of art to hang on the refrigerator. Win-win.

  • Meal Planning: The Money-Saving Ingredient

    Meal Planning: The Money-Saving Ingredient

    Meal Planning: The Money-Saving Ingredient

    Let’s call it a Wednesday, mid-afternoon. Lunch is a distant memory and you’re starting to feel a bit peckish. Just then, your phone buzzes. It’s your partner, roommate, or child, asking, “What’s for dinner?”

    If you’re like most people, that question is a source of low-volume stress every single day. In fact, the average person faces these five stumbling blocks:

    • No idea what to cook
    • No groceries to make whatever idea we do come up with
    • Short on skills or equipment
    • No time
    • Out of sync (not everyone in the house eats the same things or at the same time)

    There’s a fix to all of these problems, but it isn’t particularly glamorous or thrilling, and you might groan at the next two words: meal planning. Hear me out! Meal planning creates a framework to fall back on. It’s the first line of defence against all the dark arts conspiring to make you order take-out or convincing you to eat cereal standing over the kitchen sink. It puts you in the driver’s seat and makes you proactive instead of reactive. After decades of teaching home cooks, I can vouch that meal planning and shopping are the two most underrated, under-discussed (and yet most critical) elements of getting dinner on the table.

    Having a meal plan is also the best way to save money on your weekly food bill. With a plan, we make fewer impulse buys when grocery shopping and decide against picking up those aspirational ingredients we buy then never use (I’m looking at you, jar of sauerkraut at the back of my fridge), as well as those extra ingredients that end up in the compost bin. Plus, with a plan in place—and the groceries on hand—we’re much less likely to order take-out or delivery. Don’t worry if you’ve tried meal planning before and found it didn’t stick. I bristle against rules, so the classic two-week meal plan has never worked for me. Luckily, there are four other methods that still deliver all the benefits.

    The Camper method assigns a theme or protein to each day of the week, just like at summer camp (e.g. Taco Tuesdays, Chicken Wednesdays, Breakfast for Dinner Thursdays). The themes repeat every week or two, but the recipes themselves can change.

    Maybe you have time on the weekend to stock the fridge and freezer with big-batch recipes, then dish them out over the week. The Batcher system is perfect for people who have next to no cooking time during the week.

    If your day-to-day schedule changes on a dime, you might prefer to pencil in just three or four dinners and lean on quick pantry meals on other nights. This Semi system works well for me, and it’s also a perfect starter system for anyone who is reluctant to try meal planning.

    The fourth system, the Wingnut, is for those people who truly prefer to fly by the seat of their dinner chairs and simply rely on a well-stocked fridge and pantry. It’s a great system for retired chefs or young couples who don’t mind popping out to the grocery store at the last-minute, but not terribly helpful for most of the rest of us.

    Whatever framework makes sense for your life, there are two critical pieces I recommend for everyone. First, have a back-up plan—what I call a back-pocket dinner. This is a meal you can make without a recipe, using pantry staples, and in very little time. Back-pocket dinners are typically really simple dishes. My own is garlic spaghetti—a dish of pasta, oil, garlic, and Parmesan. If I had a dollar for every time, I’ve been so close to ordering delivery only to realize that garlic spaghetti is faster, cheaper, and smarter, well, I’d be rich. So bring on the grilled cheese sandwiches, the fridge-clearing omelettes, and the pita pizzas. When you can feed the family from what’s in the pantry, you’ve got a superpower.

    The second piece is to designate one night a week to eat what’s in the house. Whether that’s leftovers or something from the freezer, eating what you’ve got before buying anything new just makes sense. In our house, we call it Scraps Night and it’s usually on a Monday when we have a variety of leftovers from the weekend. This simple weekly ritual dramatically reduces food and money waste. If there’s nothing obvious to use up or eat up, just lean on that back-pocket dinner.

    While meal planning might feel tiresome or limiting at first, it will likely grow on you. I love how meal planning saves time, money, and energy, but most of all, I love having an answer to that daily “What’s for dinner?” question. It eliminates the dull stress of decision fatigue, and that’s a high-five everyone needs!

  • Money Management Tips for 2021

    Money Management Tips for 2021

    Have you made your New Year’s resolutions? You might have already dusted off some of those perennial favourites: lose weight, drink less, travel more, etc. But what about resolutions for your wealth? Just as “lose 10lbs by visiting the gym twice per week” is a better goal than “get fit,” setting specific, measurable goals for your finances is an important step in achieving them. If you’re unsure of what to focus on beyond “spend less, save more”, let these 6 money-saving tips guide your resolutions to make 2021 a financial game changer.

    1. Invest in Yourself
    One of the best investments you can make is in yourself. The best areas to focus on are your earning potential, financial literacy, and mental health. 2020 was a difficult year for most, and caused significant upset to people’s careers, savings, and lifestyles. While no one could have prepared for a global pandemic, we can fix any vulnerabilities it identified. Now, more than ever, people are understanding how big their Emergency Fund should really be and why investing in the stock market is essential to financial security.

    This is a great time pursue extra education and credentials that can increase your earning potential. You might even want to switch to a new career entirely. Likewise, the stress of the past 12 months has emphasized how important it is to take care of your health. Go ahead and adjust your budget to fit essentials like a gym membership or therapy to ensure you can really go into 2021 ready for whatever the year has in store.

    2. Get Rid of Your High-Interest Debt
    Carrying multiple balances, especially at varying interest rates, can feel like death by a thousand paper cuts when your bills come in the mail. If one of your goals is to get your debt under control in 2021, consolidating that debt on a low-interest loan or line of credit might be the answer.

    Debt consolidation means moving all or most of your debt to one place, so that you can experience the joys of having only one interest rate, one minimum payment, and one repayment term. You can do this by taking out a line of credit, debt consolidation loan, or credit card and using it to pay off all your existing balances. Not only will credit consolidation alleviate the headache of managing a number of different payments, it can also reduce the carrying cost of your debt and even get you out of debt faster. It’s also likely to give your credit score a boost right off the bat!

    3. Start Saving for a Big Goal
    If you really want to start the New Year off right, take your first steps to accomplishing something big with your money. This can be anything from saving up a down-payment for your first home or finally starting a retirement savings account. Whatever your goal, make sure you know exactly what you’re saving for and the specific dollar amount you need.

    Once you know your money wish and the price tag, it’s time to plan. If you want to hit your target by the end of 2021, all you need to do is divide the amount you need to save by 12, and that will tell you how much you need to set aside each month. For example, this might be the year you finally make good on your promise to yourself to have an emergency fund. If you want to have $2,000 saved by the end of the year, you’ll need to set aside $167 per month to accomplish this goal.

    Once you know what you’re saving for and how much you’ll need, open a dedicated high-interest savings account, and start saving right away. Bonus points if you open the account with a financial institution other than your primary bank, so you don’t see the cash and are tempted to spend it every time you log in to your online banking. To give your goal an extra boost, don’t wait until your first paycheque in January to start saving. Even if you only have $10 to spare right now, deposit it in your new savings account to give your goal some momentum.

    4. Introduce Good Financial Habits
    The best way to ensure your meet your financial goals in 2021 is to set up good routines and habits that ensure your success happens automatically.

    Commit to “No-Spend” Days
    One of the best things you can do is commit to 1 or 2 two “no-spend” days per week. These are days where you don’t spend any money. You make coffee at home, you don’t order-in dinner, and you definitely don’t make any online purchases or visit any stores. No spend days help get you identify what spending is really necessary and how much you do just out of habit.

    Check Your Finances
    Another great thing you can do is set aside 1 or 2 hours each week to review your finances. This is a great thing to do Sunday night before the start of your week. Block off some time to review your spending, pay any outstanding bills, and check up on the performance your investment portfolio. Even if you have a budgeting app that tracks all your spending, you still need to go over everything and make sure there are no mistakes that are costing you.

    5. Reduce Your Financial Stress
    Managing your debt, saving for the future, and trying to earn more money all at one time can be exhausting, and make it difficult to do any one of those tasks well. To free up the emotional and mental energy you need to tackle big financial goals, focus on optimizing the little things first.

    Here are some quick ways to reduce the mental load of regular financial housekeeping, so you can focus on bigger tasks at hand:

    • Sign up to receive your credit report emailed to you monthly so you always know exactly where you stand
    • Automate all your regular bills to a single cash-back or rewards credit card
    • Set up a weekly transfer from your chequing account to your retirement investments to ensure you’re always saving for the future
    • Look for discounts by bundling services from one provider
    • Review your insurance coverage, and make sure you have the often-neglected but always-needed coverage, like disability insurance
    • Rid yourself of subscriptions

    6. Plan for the Future
    As soon as you have assets, whether they be in the form of property, stocks, investments, or a vehicle, you should start thinking about putting together a legal will. If anything were to happen to you, this is the only way to ensure your wishes are respected and your assets are disbursed how you want them to.

    Every day is a chance to start fresh with your finances, but there’s something about the New Year that can inspire that extra boost to get your bank account in order. There’s never been a better time to remedy old mistakes and reach new money milestones, so when you sit down to make your 2021 resolutions, make sure to include a few that will put more money in your pockets–now, and for many years to come!

  • The 10 Best Ways to Save Money on Holiday Shopping

    The 10 Best Ways to Save Money on Holiday Shopping

    Christmas is right around the corner, and you had better be prepared.  Making sure that you have what you need for everyone on your list can be a challenge — and it can also be expensive.  If you want to avoid breaking the bank this holiday season, here are 10 tips to help you save money on Christmas shopping:

    1. Stick to a Budget
      First off, set a budget and stick to it.  Figure out how much you have to spend on your Christmas shopping.  Then, make a list of those you need to buy for.  If you have a list of what you want to get each person, it will save you time and keep your spending on track.
    1. Buy Inexpensive Stocking Stuffers
      Don’t go overboard on stocking stuffers.  It’s tempting to buy every little gadget available, but you need to watch out.  You might not be keeping track of the little things you buy, and they can add up.  This is a great chance to be frugal by shopping for little gifts at the dollar store and including some candies, nuts and mandarin oranges.
    1. Set Up a Gift Exchange
      You can cut down on shopping for extended family by setting up a gift exchange.  As your siblings grow up, get married and have children, your Christmas shopping list gets longer.  It can get out of hand unless you change the way you do things.  Draw names and each person will only buy for the one person whose name they drew.  Everyone gets a gift and you all save possibly hundreds of dollars.  It’s a winning situation and can be a lot of fun.
    1. Shop the Early Sales
      One of the best things you can do when it comes to the way you save money on Christmas shopping is to look for sales.  Shop early if a decent sale comes along.  Not only will this save you money, but it can save you the hassle of crowds as Christmas gets closer.
    1. Shop Online
      Once December gets advanced enough, the traffic and the crowds become unbearable.  Another way to avoid crowds and save money is to shop online.  You can often find products cheaper than you do in the store, and you don’t have to battle with others.  However, you do need to keep an eye on shipping costs to ensure you really are getting a deal.  Check for promo codes and sites that offer free shipping on holiday purchases.
    1. Save on Shipping by Ordering Early
      To save money on shipping, shop soon to give you time to use many sites’ free shipping options.  The closer to Christmas, the more you’ll need to pay for priority or express shipping.  This is also the case when you are sending presents to friends and family.  If you must pay for express or overnight shipping to get your gifts on time, you’ll pay so much more money.
    1. Stay Away from Extended Warranties
      During the holiday shopping frenzy, it’s hard to make decisions, and easy to say yes to whatever someone suggests. However, you need to be on your toes at check-out if you want to save money. Avoid extended warranties on your purchases.  If an item is defective, it’s likely to have issues within the standard warranty’s time frame.  Don’t spend extra money for coverage you probably won’t need.
    1. Buy Discounted Gift Cards
      There are plenty of places to buy discounted gift cards.  If you aren’t sure what to get, look for an experience. Discounted gift cards can provide you with a face value that exceeds what you actually pay.  This can be a way to look like a hero and save money.
    1. Consider a Bonus Gift Card from a Restaurant
      Want to save money on your own dining experience?  Some restaurants have been enticing people to buy gift cards by including a bonus gift card.  You might not save money on your immediate Christmas purchase, but you can save money on a future meal.  That can be worthwhile.  Additionally, you might be able to use the bonus card as a white elephant gift or a stocking stuffer.  While this can be a great deal, check out the bonus card as it may have an expiry date.
    1. Keep the Gift Receipts
      Finally, make sure that you keep all your receipts in a safe place since items may be broken or clothes might not fit. While some stores will accept returns without a receipt, it will be at whatever their lowest price has been on that item, so you might not get full value for it.  You will also need your receipt if you want to make a claim using your credit card.  Many credit cards offer extended warranties and protection against theft or returns.  If the store won’t take it back, you might be able to get money through your credit card perks — but you’ll need the receipt.

    With the right planning and a little savvy, you can save money on Christmas shopping every year and get the right gift for each person on your list.

  • 7 Most Common Financial Mistakes

    7 Most Common Financial Mistakes

    It is indeed a material world. When it comes to spending, North America is a culture of consumption. The result: rising levels of consumer debt and declining household savings rates. Don’t make these 7 most common financial mistakes. In 2008, this culture was hit hard by economic reality. According to the Federal Reserve, U.S. household debt grew steadily from the time they started tracking it in 1952. It declined for the first time in the third quarter of 2008. As a result of the credit crisis and ensuing economic recession, savings rates also rebounded.

    For those who had been living beyond their means for years, it suddenly got a lot harder to make ends meet. And, although the government tends to encourage spending during economic downturn and statistics may lead us to think that overspending is normal, it is often a risky choice. Here we’ll take a look at seven of the most common financial mistakes that often lead people to major economic hardship. Even if you’re already facing financial difficulties, steering clear of these mistakes could be the key to survival.

    Mistake No. 1: Excessive/Frivolous Spending
    Great fortunes are often lost one dollar at time. It may not seem like a big deal when you pick up that double-double, stop for a pack of cigarettes, have dinner out or order that PPV movie, but every little item adds up. Just $25 per week spent on dining out costs you $1,300 per year, which could go toward an extra mortgage payment or a number of extra car payments. If you’re enduring financial hardship, avoiding this mistake really matters – after all, if you’re only a few dollars away from foreclosure or bankruptcy, every dollar will count more than ever.

    Mistake No. 2: Never-Ending Payments
    Ask yourself if you really need items that keep you paying for every month, year after year. Things like cable television, subscription radio, video games, and cell phones can force you to pay unceasingly, but leave you owning nothing. When money is tight, or you just want to save more, creating a leaner lifestyle can go a long way to fattening your savings and cushioning you from financial hardship.

    Mistake No. 3: Living on Borrowed Money
    Using credit cards to buy essentials has become somewhat normal. But even if an ever-increasing number of consumers are willing to pay double-digit interest rates on gasoline, groceries and a host of other items that are gone long before the bill is paid in full, don’t be one of them. Credit card interest rates make the price of the charged items a great deal more expensive. Depending on credit also makes it more likely that you’ll spend more than you earn.

    Mistake No. 4: Buying a New Car
    Millions of new cars are sold each year, although few buyers can afford to pay for them in cash. However, the inability to pay cash for a new car means an inability to afford the car. After all, being able to afford the payment is not the same as being able to afford the car. Furthermore, by borrowing money to buy a car, the consumer pays interest on a depreciating asset, which amplifies the difference between the value of the car and the price paid for it. Sometimes a person has no choice but to take out a loan to buy a car, but how badly does any consumer really need a large SUV? Such vehicles are expensive to buy, insure and fuel. If you need to buy a car and/or borrow money to do so, consider buying one that uses less gas and costs less to insure and maintain.

    Mistake No. 5: Buying Too Much House
    When it comes to buying a house, bigger is also not necessarily better. Unless you have a large family, choosing a 6,000 square-foot home will only mean more expensive taxes, maintenance and utilities. Do you really want to put such a significant, long-term dent in your monthly budget?

    Mistake No. 6: Treating Your Home Equity Like a Piggy Bank
    Your home is your castle. Refinancing and taking cash out on it means giving away ownership to someone else. It also costs you thousands of dollars in interest and fees. Smart homeowners want to build equity, not make payments in perpetuity. In addition, you’ll end up paying way more for your home than it’s worth, which virtually ensures that you won’t come out on top when you decide to sell.

    Mistake No. 7: Living Paycheck to Paycheck
    The cumulative result of overspending puts people into a precarious position – one in which they need every dime they earn and one missed paycheck would be disastrous. This is not the position you want to find yourself in when an economic recession hits. If this happens, you’ll have very few options. Everyone has a choice in how they live, so it’s just a matter of making savings a priority.

    Making a Payment vs. Affording a Purchase
    To steer yourself away from the dangers of overspending, start by monitoring the little expenses that add up quickly, then move on to monitoring the big expenses. Think carefully before adding new debts to your list of payments, and keep in mind that being able to make a payment isn’t the same as being able to afford the purchase. Finally, make saving some of what you earn a monthly priority.

  • How to Talk to Your Kids About Money

    How to Talk to Your Kids About Money

    In some families, how to talk to your kids about money can be more uncomfortable than talking about sex. Many parents don’t know how to approach the topic of money, and some avoid it altogether. By starting the discussion early, you can make it easier to talk about this tough topic later, when your child is making larger purchases, thinking about getting a job, or beginning financial planning for college.

    Practice Smart Spending
    Talk with your children about how you make spending choices based on more than just affordability. Use language like “We’re not going to spend our money that way because…” or “It’s not a good value because…,” rather than just saying, “It’s too expensive,” which may give the impression that you would buy it if you could afford it.

    Create Learning Opportunities
    If you’re refinancing your mortgage, you have an opportunity to discuss the concept of interest and the importance of paying off loan balances quickly. When you’re taking out a car loan, talk about how loans allow you to pay for things that you don’t have the money for, but you end up paying more in the long run. Bring your kids with you to the bank. If you’re making a deposit in a savings account, talk about the importance of ‘saving for a rainy day’.

    Honesty as the Best Policy
    If you are facing financial difficulty, be honest with your children. You don’t need to worry them with all the details, but it is helpful for them to learn that money isn’t magical—it doesn’t just appear when you need it.

    Stress Wants vs. Needs
    Many kids—especially young ones—have difficulty differentiating between wants and needs. When your child says she ‘needs’ something, ask if she really needs it, or if she just wants it. Make sure your child understands the difference, and start paying attention to what you’re saying and the example you’re setting—for example, do you really need an expensive cup of coffee to get you through the morning?

    Keep an Open Dialogue
    When you’re out shopping, talk with your kids about why you make the purchases you do. Are you influenced by advertising? Pricing? The quality of the product? How do you choose one product over another? Help your child start thinking carefully about making purchases.

    Be an Example
    Discuss with your children the choices you make with your money. For example, how does your caring for others impact how you save, spend, and give money away? Why do you sometimes wait to make certain purchases? What does it mean to you to be responsible with your money?

    Highlight the Positive
    Many financially savvy practices, such as buying secondhand, donating old clothes to a thrift store, and reusing and recycling goods, are also good for the environment. Point out that not only are you saving money by doing these things, but you’re also taking action to help preserve the environment.