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Tag: spending

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.
February 1, 2023
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.
June 1, 2021
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.
November 15, 2019
Before You Make a Budget
You’re ready to start a budget — awesome! You’re probably feeling excited and ready to get your money in order. But here’s the thing: It’s super easy to give up on budgets. They can get complicated and require some maintenance. So before creating your budget, take these simple steps to set yourself up for success:

1. Track Your Spending

Sometimes it feels like each paycheck disappears into thin air. The money lands in your account, you revel in your balance for one day, then you pay your monthly bills and it’s gone!

That’s why it’s so important to track your spending. Before you even start a budget, you’ll want to get a clear idea of where all your money is going each month. There are plenty of ways to do this: good old-fashioned check book balancing, pen and paper or checking your accounts each day. Get yourself used to keeping tabs on your spending by using an app like Mint.com. This will help you better understand what your fixed expenses are each month and where you might be overspending.

2. Set Yourself a Few Fun Goals

Because budgeting can quickly become a dreaded chore, you’ll want to set yourself a few goals to keep you encouraged. No, these don’t all have to be boring financial goals, like paying off student loans or starting an emergency savings. Although those are great, work at a fun goal, like a road trip or cruise. Then, hold yourself accountable by setting up a separate savings accounts and have money automatically come out of your chequing account. You probably won’t even miss that small amount each week, but over time, it will contribute to your goal.

3. Bundle Your Debt Into One Bill

One of the trickiest parts about budgeting is keeping tabs on all your monthly payments, especially if you have debt. Rather than making four different credit card payments each month and logging them in your budget, make life easier for yourself by combining them under one umbrella. It will be much easier to budget with one, easy-to-manage monthly payment.

4. Find Easy Ways to Cut Back Big Bills

Building a budget will force you to take a good hard look at your monthly expenses. Ask yourself: Am I paying too much for any of these non-negotiables? The answer: Probably. Start with a bill that’s super easy to cut — car insurance. Yeah, there’s no getting around it, unfortunately. But to get the best deal, you’ll want to compare rates twice a year. Sometimes you get complacent paying your bills, but there’s usually ways to save or haggle for a lower price. Cable/internet is another good example, if you call, chances are there’s some kind of promo they can offer.

5. Pick Your Go-To Budgeting Method

Yes, there are budgeting methods — plural — but before you panic, we recommend using the 50/20/30 budgeting method for its simplicity.

Here’s how it works:
- 50% of your income goes toward essentials
- 20% goes toward financial goals
- 30% goes toward personal spending
Of course, you’ll want to play around with this, but keeping these base-line percentages in mind will help you figure out how to allot your money for the month.
September 3, 2019
How to Talk to Your Kids About Money
When is the best time to talk to your kids about money? Right now! Your kids will learn about money from someone. Don’t let it be from an out-of-control celebrity on social media. You have the opportunity to be the positive example in their lives and the guiding voice they can trust. No, money isn’t a taboo subject, and no, your kids don’t need to be sheltered from financial matters. So buckle up and just have the talk already—or go deeper if you’ve only skimmed the surface. If you want to change your family tree, you’ve got to change your mind-set. Here are five tips on how to talk to your kids about money.
1. Start slow.
According to a 2017 T. Rowe Price survey, 69% of parents have some reluctance when it comes to talking about money with their children. And only 23% of kids say they talk with their parents frequently about money. There’s no need to schedule a five-hour lecture presentation to review bank account balances and retirement plan contributions. Start by simply answering your kids’ money questions at an age-appropriate level. You may be surprised at what they already know or what they need to know more about. Once they realize you’re open to these discussions, they may be more comfortable coming to you with money questions.
1. Be honest.
If you regret going into debt or not saving more for college, tell your kids. Parents so rarely have open, honest moments with their children. Kids can handle it—really. Instead of hiding your financial failures or covering it up when money is tight, tell your kids the truth. If you ran up debts in your past and had difficulty paying them back, share that. They’ll appreciate your openness and learn a valuable lesson about overspending.
1. Talk values, not figures.
If you’re hesitant about disclosing your salary and major expenses to your kids, don’t sweat it. The good news is your kids don’t really want (or need) to know that stuff. They need concepts like saving, budgeting, paying down debt, and giving. To help your kids get an idea of what real-world budgeting looks like, encourage them (when age-appropriate) to download a budgeting/money tracking app. They can use the tool to track spending habits and see just how far their money is going. Soon, establishing a budget will feel like second nature. And if they stick with it, they’ll be well ahead of the curve by the time they hit the college campus.
1. Set family goals.
Let your children sit in on and contribute to family budget committee meetings. Just remember you and your spouse are the adults. Only mom and dad make the final decisions. If you are paying off debt or saving for the future, let the kids join in as you celebrate reaching milestones along the way. As you set goals as a family, remind your kids that goals require sacrifice. That might mean skipping a vacation in order to cash-flow a car. But they’ll catch on, especially if they understand these sacrifices will affect their future as well.
1. Learn about money together.
Eventually you’ll touch on topics you may not completely ‘get’ yourself; like tax free savings accounts or RRSP’s. If you don’t feel fully knowledgeable on these topics, that’s okay! Admit you don’t have all the answers and do the research together to find ways of securing your future. It’s a great excuse to spend some time together. So go ahead and open up about the family finances, but keep it simple. Start the conversation, be honest, and teach and lead by example. Someday, your money-smart kids will be proud to follow in your big financial footsteps.

Want more great tips on how to talk to your kids about money? Dave Ramsey and his daughter Rachel Cruze cover this and more in their best seller Smart Money Smart Kids!
March 1, 2018
Budget Your Way to Your Financial Goals
Budgeting really isn’t that bad. Here are six easy steps to achieving your financial dreams. With a new year just over the horizon, it’s time to make a few resolutions. If you haven’t yet crafted a budget, now is the time to do so for 2018.

Regardless of whether you want to take a trip to Hawaii, buy a fancy new set of wheels or simply save more and spend less, a budget can get you there. Following are six steps to budgeting to your financial goals.

Step 1: Set Your Goal

What do you want to save your money for?
- Go on a vacation
- Buy a house
- Have a security blanket in the bank
- Merely pay the bills each month, with a little left over
Budgeting can help with every one of these goals. In addition, having a concrete goal increases your chances of sticking to the budget. Some people even look for motivation by creating dream or vision boards with photos representing their goal.

Step 2: Track Your Expenses

Getting a handle on where you spend money is important for two reasons:
- It can help identify leaks in your budget. These might include the $100 a month gobbled up by daily fast-food breakfasts.
- It can help you make a realistic budget. If you are currently spending $800 a month on groceries, budgeting for $500 is probably setting yourself up for failure.
The old-fashioned way to track expenses is to collect receipts and keep a log of every penny you spend for the next month. However, you can make the process simpler by signing up for a free account with Mint.com. This service tracks expenses automatically and neatly categorizes them for you. Best of all, it doesn’t cost a dime.

Step 3: Write it Down

Now that you’ve tracked expenses, use those amounts as a guide to create a written budget. Whether you use an online tool, an Excel spreadsheet or a notebook and pen is up to you. But you want to have the budget recorded in a location where it can be easily accessed and changed as needed.

It’s a good idea to always estimate your income low and expenses high. It’s better to reach the end of the month and find you have extra money in the bank than to come up short. In addition, make sure to put a name to every dollar. Maybe you finish with the monthly bills and have $200 left over. Don’t leave that as a catch-all slush fund; decide what you’re going to do with it. Maybe $100 will go into an online savings account, $50 will be an extra debt payment and $50 will be mad money.

Step 4: Monitor Your Progress

Once you have it written down, don’t ignore your budget. Make a point of comparing your actual expenses with your budget on a regular basis, such as each payday.

If you’re using Mint.com, it’ll be easy to quickly see how much you’ve spent so far in each category for the month. Then, you can make adjustments as necessary. For example, if you’re budgeting $50 for clothing and have spent $75, you’ll need not only to stop buying clothes, but also to make an adjustment elsewhere in your budget to make up for the extra $25.

On the flip side, maybe it’s the last week of the month, and you haven’t spent a dime of your entertainment budget. In that case, it’s time to make a date and have some fun!

Step 5: Get a Coach

Maybe you’re feeling overwhelmed. A budgeting coach can help. Make sure to do your homework and find a reputable company to work with and ask about any fees. You should be able to get budgeting help for free.

As an alternative, you can ask a money-savvy friend for help. In either case, having someone walk with you step-by-step through the budgeting process can help you make more sense of how to create a realistic spending plan for your money.

Step 6: Stay Flexible

Finally, your budget is a living document. Unlike your slow cooker, you shouldn’t set it and forget it. Instead, regularly evaluate it and make changes as necessary. Always blowing through the food budget? You may need to increase it and consider where else you can cut back. In addition, as your income, expenses or goals change, your budget should be adjusted to reflect your new circumstances.

Ultimately, your budget is not about restricting money, it’s about empowering it. A good budget finally puts you in control of your dollars and allows you to dictate where money is going instead of letting silly, incidental purchases drain your bank account.
January 2, 2018
What to Do With Your Tax Refund
Another tax season is behind you – it’s time to relax, sit back, and wait for that return. The average Canadian is entitled to a refund, according to Canada Revenue Agency, with the average refund for last year’s income tax totaling $1,580. Before you splurge, however, let’s take at a look at the benefits of saving your tax refund and putting it to better use. Here are our top tips for what to do with your tax refund:
1. Stop treating your return like found money
Although most Canadians are happy to receive a tax refund, there’s very little reason for celebration – you’re actually giving Canada Revenue Agency an interest-free loan. Many Canadians think of a tax refund as a bonus, even though it’s your own money to begin with. Instead of treating your tax refund like found money, it’s important to spend it prudently.
1. Pay off any outstanding bills
If you have outstanding bills, using your tax refund to pay them off is probably the best option for you. There’s nothing worse than the stress of being behind. Take this opportunity to get ahead of the game for once.
1. Pay down your credit card debt
Credit card debt can build quickly, but it’s hard to whittle down once it mounts. If you have outstanding debt on your credit cards, the responsible thing to do would be to put your tax return towards that debt. Of all the debt you have, credit card debt is most likely to have the highest interest rate running from 10% – 29%. By paying that debt down first, you’ll actually be saving money in interest later.
1. Put some of it towards your mortgage
You can’t beat the guaranteed rate of return of paying down your mortgage. If you have a mortgage that allows you to make additional payments without penalty (and most mortgages will allow you to make an annual lump sum payment of 5% – 25% of the mortgage value), this might be the perfect opportunity to use that to your advantage. The more you pay now, the less you pay in interest later.
1. Invest in your future
If you haven’t started an RRSP, maybe it’s time. Your return might not amount to much now, but over the years your investment will grow. This is a particularly good idea if you are feeling no other financial pressures at the moment. A tax return can also be the perfect way to launch an RESP for your child. Consider spending your tax refund to invest for your child’s education – a deposit to an RESP (Registered Education Savings Plan) could be eligible for 20% grant for children up to age of 18 for contributions up to $2500.
1. Start an emergency fund
Doesn’t it sometimes seem like bad things happen either when you’re least prepared or when you’re least able to cope? You just paid a huge vet bill and your washing machine suddenly dies. You finally paid off your credit card debt and your car breaks down. These situations happen all the time, and sometimes it feels like you’ll never get ahead. Without an emergency fund, situations like these can be stressful. Why not take this extra cash and set it aside for those little emergencies? When the time comes – and it will – you’ll be glad you did.
1. Upgrade your job skills
Have you recently found yourself wanting to return to school? Have you dreamt of taking courses to upgrade your skills? Will doing so help increase your salary? If you answered ‘yes’ to any of these questions, you might want to consider using your return to invest in yourself. This is an especially good idea if it will help to boost your income in the long run.
1. Treat yourself to something nice
Sometimes being responsible is all we do. If you’re one of those people who seem to always be doing the right thing – saving money, paying down bills, saying no when you really want to say yes – then maybe you need to do something nice for you. Buy yourself a new outfit. Go get your hair done. Take yourself out for a nice lunch. Go golfing. Spoiling yourself is sometimes the best course of action – especially if it’s something you don’t often do.
March 31, 2017
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.

October 3, 2016
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.

August 1, 2016