Canadian Personal Finance Blog

Archive for the ‘Canadian’ Category

It’s a Mad House, A MAD HOUSE!!!

NB: You have to read that title like Charlton Heston is screaming it in a movie, to get full effect.

A weekend of Basketball Nirvana here in Ottawa begins, with NCAA March Madness games, and then slides into the CIS Men’s Basketball championships going on at Scotiabank Place. If you want to see basketball, Ottawa is the place in Canada to see it this weekend.

If you live in Ottawa and own a house you also better have paid your property taxes as well. Income tax season continues to roar ahead as well for we Canadians, but is that all we have to worry about? The Canadian dollar is almost at parity with it’s American Cousin, and our Gasoline prices are back to $1 per litre again, while our temperatures are more akin to May in Ottawa, not March. All in all a very interesting week here in the Nation’s Capital.

What do the Financial Bloggers have to say this week?

• Michael James shares his views on Hot Water Heater: Rent vs. Buy, which I witnessed first hand (OK I saw the end where the new water heater was in place). If this had happened to me, I am confident my basement would have looked like a scene out of Waterworld.
• Million Dollar journey got the geek in me all a quiver with their post Free iPhone Apps that Save You Money (Canadians), because even though I don’t have an iPhone, I do have an iPod Touch, and they work mostly on there as well. Quicken has a client for the iPhone as well, if you are part of the Quicken Cult.
• Preet at WhereDoesAllMyMoneyGo answers a Reader Question on Multiple RRSP Accounts, which points out that (A+B) * C is the same as (A * C) + (B * C), for those who like Math (but if C is Zero, then who cares?)
• The Canadian Capitalist points out that even in Index Funds you can have some “issues” say with Tracking error in TD e-series Funds, Part 1. This is of interest to me as I do own these funds, well worth a read.
• Larry MacDonald suggests that Economic lift-off may be delayed, due to the tight money policies in the states. True, but now that Canadian’s can buy American so cheaply, maybe Canada will kick start the American economy?
• The Canadian Couch Potato asks How Much Risk Do You Need to Take? which discusses the always interesting discussion about the balance you should have between fixed income and equities. You mean I shouldn’t have all my money in International Buggy Whip?
• Gail V-O points out that if you can’t live within your means, maybe you should Quit Your Unsustainable Life, but you already knew that didn’t you?
• Canadian Financial DIY asks, is Inflation at 4% to be the New Normal?, that would be nice, except then you can kiss big pay raises good bye too

Have a hoopy weekend.

CPI Numbers on Monday

Stats Canada will publish their Consumer Price Index today, but I will have my regular post about that on Monday.

Given we start a new year, all we folks who receive pay cheques (I believe the Japanese term is Salary-man), we get to start paying CPP and EI premiums again. For a lot of folks, they are just deductions that appear on every pay stub, but for folks who make over a certain amount, this deduction appears some time in the year, and after that, they get a “virtual raise” given they do not have to pay these deductions for the rest of the year.

Michael James is a lover of numbers (but not a numerologist luckily) and pointed out one day how easy it is to approximate how much someone makes, by when they stop paying EI premiums (and you’d be surprised how many people talk openly about the fact that they have stopped paying the premium (in fact I had just told Michael James that very fact)).

It’s actually a pretty simple game to play and well worth a couple of minutes time to create a little model to figure this thing out.

Meet Jack

Jack gets paid bi-weekly, and works as an employee of XYYZZ. He gets paid a regular salary (assume no bonuses and such), so if we list the month in which Jack tells us “I stopped paying EI premiums this month” we can then approximate how much Jack actually makes in salary. We know from the EI web site that your premium is 1.73% of your insurable earnings (and the maximum insurable earnings is $42,300 in 2010).

Just remember what you tell folks can sometimes have more meaning than you might think.

That is a Credit Card Debt!

Here in Canada we are flagelating our government because they are going to be running a budget deficit (they are going to spend more than they make this year) of over $50B, and rightfully so, given we have been runnnig surpluses for several years (i.e. making more than we spend), however we are humble overspenders compared to our brothers to the south (the USA). The estimate now is that this year the US Federal Government will run a deficit (remember that is overspending this year’s budget) of over $1 Trillion, wow.

That is effectively the same as giving every single human being on the earth (assuming the Trillion they are talking about is 10 to the power of 12) $140.00, this year.  Canada’s deficit would only give every human a paultry $7 , as you can see we Canadians are small time in this overspending world.

How will this be remedied in either country. Some are arguing in both cases there are 1 time bail outs that do not reflect actual spending habits (Bank Bail outs, Car Company Bail outs, etc.,), and that may well be the case, but what is going to be the fall out trying to pay back this deficit? Canada had been paying back the National Debt (i.e. the money we owe, from accumulated deficits over the years) however this latest set back is not a good thing.

As with personal finance every time a deficit is run for a year, it will eventually need to be paid back, Live Now but you will Pay A Lot More Later.

Local Ponzi News

If you think Bernie Madoff is a uniquely American issue, think again, evidently a new collapsed Ponzi scheme has been uncovered in Montreal. Earl Jones, the advisor in question is missing, as is all of his “clients” money as well.

This begs the question, do you trust your financial advisor? Are you sure you know where all your money is, and why it’s there?

Canada Day it is Again!

Canada Day returns this year with Canada turning a majestic 142 years young today. There is no Expo 67 like celebration this year, however Canada is preparing for it’s third Olympics this winter in Vancouver.

Enjoy the holiday Canadians!

Happy Moving Day in Montreal!

For those of you in Montreal, July the 1st is also the day that most leases begin, so enjoy your moving day, hope you found a moving van, and don’t carry too much up those winding stair cases!

And Now A Large Flag

Happy Birthday Canada

And Finally an NFB Vignette

Yup, it’s half way through 2009 and how goes your financial plan for this year?

For me my plan of having a job by now, has not come to fruition, but I am still working hard at making this happen.

This week’s posts will discuss what areas and ideas you maybe should be thinking about for your personal finance plan and what you might need to tweak, change, add or forget about in your Yearly Personal Finance plan.

Do You Have a Plan?

You are now saying, “Wait a minute, I don’t even have a financial plan for this year?”, that’s a problem, but not insurmountable that is for sure.

So many people a yearly financial plan has to be complicated, over-thought or grandiose, but that is really not the case (if you don’t want it to be).  A personal finance plan can be as simple as you want it to be, and is simply based on the goals you want to hit this year (financially), no more, no less.

Simple Plan

A simple plan for a year might be:

• Cut your credit card debt by 30% (if you have credit card debt, if you don’t then you have achieved this goal, give yourself a pat on the back). If 30% is way too much for you, then either:
  • You have one hell of a credit card debt and you need to see someone about this.
  • You need to adjust your lifestyle, because this is do-able if your credit card debt is less than $10,000
• Pay off 15% of your University loans (adjust as you see fit).
• Open an RRSP account and put in at least $1000 for the half year. Make sure it is with an investment firm and not with an Insurance Company or a Mutual Fund firm.
• Create an emergency account that you will deposit $100 a month into (open a TFSA if possible for this as well).
• See how much you pay in bank fees monthly and lowering them or cut them to Zero, if possible (see PC Financial or talk to your bank about lowering the fees). My regular readers know how I hate bank service fees.
• Buy 1 less coffee or latte a day and put that money in your top desk drawer (and then put it monthly in your emergency or RRSP account ).

Simple as that, no fuss, no muss, and less worry, if you hit those goals.

Tomorrow

What to look for in your Personal Finance Plan and how to deal with success and with failures.