Canadian Personal Finance Blog

Archive for October, 2009

There is a lot of information out there about Swine Flu and H1N1, so as a public service, here is a useful video from the CDC about what Swine Flu is, and better still, what symptoms might suggest you have it (and what to do about it).

I am not going to comment about whether you should get vaccinated or not, because so far I have personally heard of:

• Parents at my son’s Nursery school getting into an  altercation shouting at each other about whether their children should be vaccinated.
• Seen incredibly long lines of folks who are NOT in the high risk groups all wanting to get vaccinated (ahead of the high risk groups).
• People writing letters to the editor implying that if you don’t get vaccinated and you get H1N1, you should be denied hospital care (see the Friday Ottawa Citizen).

Let’s all be calm (like we were during the Great Financial Meltdown of ‘09), and take a pill (or not, if you so choose).

Can one take advantage of this Pandemic financially? Seems a rather ghoulish subject, and I haven’t thought of any way, aside from investing in whichever pharmaceutical companies that are crunching out “vaccines” at a great rate. The one good thing about a Pandemic is the amount of time the media spends spinning the story and thus less time lamenting the Financial Crisis of ‘09. I seem to have an affliction which I suspect is the common, garden variety Cold, ho hum (but I bet more people have died from Colds than Swine Flu so far).

More likely to make money off Halowe’en? Dental supply offices and Candy manufacturers might get a spike in business, but then again, the Candy displays have been out since July in our Loblaws.

Around the Financial Boogosphere (oooh scarey kids)

Given we are about to celebrate All Hallows Eve (and then All Saints Day), let’s wander around the Booooogosphere to see what is new:

• Michael James points out there is Pension Reform Promised Soon which is a very scarey topic right now. Many baby boomers approaching their “Golden Years’ are now afraid they may be their “Tin Years” (as in eating out of a Cat Food Tin).
• The Canadian Capitalist has a tip to stop Horrible Identity Theft by using Using a Pre-paid Credit Card for On Line purchases. That identity theft will turn you into a Credit Zombie if you are not careful!
• Larry MacDonald writes about something that scares me to the core the Unbearable heaviness of the tax system pointing out how the Tax system and it’s implementation seems to force people into making ill-advised moves with their money, in the name of short term tax savings.
• Gail Vaz-Oxlade writes about a horrifying topic of Wants & Needs revisited I want to be rich, but I need to get out of debt first, that is scarey (that some folks don’t figure that one out).
• Ellen Roseman asks the gut wrenching question Does your furnace need to be replaced? Trust me folks, that question really does make me quake all the way down to my boots.
• Preet at WhereDoesAllMyMoneyGo is still asking Do You Want to Be on the W Network with him?

Enjoy your weekend and remember to use eye sanitizer after reading this, you may pick up whatever I have, if you are not careful. I bet all the germ-o-phobes I know are in 7th heaven with all this over sanitization.

Given I am starting to pack pounds back on (slowly, but I am now about 30 lbs. above my ideal weight and it is rising), I read over one of my favorite posts from the past Debt is Like Fat. I am doing better with my debt, but now not as well with my fat.

Debt is Like Fat

I was telling my daughter that comment and she looked at me like I had five heads. I tried to explain that building up debt rarely happens overnight, just like building up your body mass is not done overnight, and I think it is very true.

When I had my weight gain it happened over about a 14 year period, and it was slow, but by the time I finally did something about it, it was significant. It was a compounding of eating the wrong things, in the wrong quantities at the wrong time, and a complete lack of physical exertion, luckily I have taken the weight off and am keeping it off (mostly).

Debt build up is the same way, usually (unless you make some gruesome investments, an incredible blunder or you are a victim of a fraud), slowly without you noticing you are doing it. Buying your lunch every day isn’t going to put you into debt, neither is leasing your car, vacationing in Las Vegas, or buying lottery tickets either, however, start adding these together with spending more than you make and suddenly you are building up debt, instead of equity. Keep doing this over a long period of time, and suddenly you have a debt load that you cannot afford and you are just not sure how the heck you did it. It was done one small step at a time.

Unfortunately, or fortunately, debt reduction is accomplished in the same way. Unless it rains money, getting out of debt is done slowly and one month at a time, using a plan and self-control and a wililngness to change your lifestyle (because losing weight and debt reduction are BOTH lifestyle changes, not just a quick fix that allows you to go back to your old habits).

Losing the financial bad habits is the key to debt reduction, keep that in mind.

Carnivals

My posting about Jesus is Watching You! was mentioned at the Personal Power and Self-Help Carnival.

Given the numbers we looked at from Stats Canada yesterday you need to ask yourself, just how much is this all going to cost and how can I deal with this expense.

Let’s run down some of the expenses you are going to need to remember are part of the entire “going to University” equation:

• Cost of Tuition (which varies depending on the school gone to, and the faculty in that school as well).
• Service Fees, some of these you cannot hide from and you need to remember they are there.
• Books and Lab Fees, not expenses you can hide from (you can try to lower them by getting used books or buying them where they are cheaper).
• Living expenses (if the child lives away from home), which could be either a residence and food plan, room and board if they rent a room off campus, or Rent and living costs if they live in an apartment-like model.
• Moving costs, if they leave home (especially if they are going a LONG way away).
• Computing costs, if they don’t already have a computer
• Back to school supplies, paper, printers, etc., etc., etc.,
• Coming home money
• Everyday living money

First, you need to ask, “Am I going to pay this, or am I going to leave it up to my kids?”. In my discussions previously many of my readers have pointed out they didn’t have their education paid for, nor do they plan to pay for their kids’ education. This is an option for a lot of people (and the only option for some folks too). If you don’t plan on footing the bill, then I guess you don’t need to worry about this.

If you are planning on paying for this, how are you going to save? Will you use the RESP savings vehicle? Maybe use your TFSA for extra saving? Get your kid to get a job while at school to help out (so they appreciate the cost of their education)? Hope to win the lottery? Sell a kidney on e-bay? All interesting ways to save for the financial onslaught that University costs can be.

Are you going to have multiple kids at University at the same time? That makes saving doubly important (and you better put twice as much away, at least).

Co-op education for your kid? That way they earn their way through school and it is less of a burden on you?

Nobody moves out, the kids go to school locally and live at home. That saves a WHOLE LOT of money, but then again, you have another Adult in your house, which may cause other issues, but that can cut your University bill in half, if the kids live at your place (but then, how do you get them to move OUT once they have a degree?).

Planning for this orgy of spending can cause your hair to turn prematurely grey, however, it will help you out in the long run.

So Stats Canada came out last week with some very interesting numbers about the cost of University across Canada and the relative increase in costs. I find this interesting because as of this coming year I will have two kids in University and I am learning a lot about the “Ins and Outs” of University fees (which seem even more complicated than bank fees, if that is possible).

The main message from the article was that Tuition Fees are up 3.6% from 08/09 to 09/10 Academic year, which means their inflationary increase is almost as good as Foods meteoric price increases.

On average, undergraduate students in Ontario also paid the highest fees in Canada at $5,951. Students in Nova Scotia had the second-highest average tuition fees at $5,696.

I feel so honoured to be the most gouged in all of Canada, and I’d like to point out that is the Average, which means some schools are more than that (and different faculties in those schools are even higher).

Tuition Only

This is the other more important point in this study, is that Tuition is really only the tip of the iceberg when it comes to University costs, yet it is the only part of those costs that are tax deductible (living expenses are somewhat deductible, but only in the hands of the student).

Nationally, the additional compulsory fees increased 6.8% compared with last year. On average, Canadian undergraduate students paid $749 in additional compulsory fees in 2009/2010, up from $701 a year earlier.

How bad can the fees be you ask, let me run through the list of fees I paid for 4 months for my daughter at WLU (this is excluding Tuition):

• Administrative Council Fee $29.92
• Copyright Agreement Fee $1.70
• Comprehensive Student Fees $150
• Student Union Building Fee $26

Now I don’t mean to pick on my daughter’s Alma Mater however, these are only SOME of the fees I pay (along with a Bus pass fee and Insurance plans too). Hefty eh? Oh, did I mention she also pays $450 rent for a room and has to pay for her own groceries? Yes, this is not cheap, and it is not getting any cheaper either.

With a 4% increase a year on the horizon, think of this interesting statement, if you have a newborn by the time he or she wants to go to University, Tuition costs will have doubled if this trend continues, and my guess is they will have MORE than doubled by that time AND the fees being charged will increase as well (and book costs, let us not forget those too).

Tomorrow, more discussions of the costs of University.