Canadian Personal Finance Blog

Archive for the ‘Lent’ Category

As Lent begins today, we now have a different world for Mortgages and lending.

The rules seem to be that you must meet the standards for a 5 year fixed term mortgage, even though you might be getting a variable rate mortgage. Rule 2 is the maximum you can refinance your home is now 90% down from 95%, and finally you’ll need a minimum of 20% down payment for your non-primary home, to make it harder to speculate on homes.

This set of rules may be a good thing, but I am kind of torn.

The bleeding heart liberal side of me thinks this is a great idea, stopping folks from getting in over their heads and then having to give up there homes when (note I say when not if)interest rates go up 3-4% this summer. The banks tend to try to get you to buy more house than you can afford normally, but with micro interest rates, this is a very dangerous thing, so I applaud Count Floyd (Jim Flaherty) the Finance Minister for bringing in these new rules (including an actual formula for figuring out whether someone can afford a mortgage, wow, not just a heuristic that no one will follow, an actual rule).

My Civil Libertarian side is worried about yet another Government intervention into our lives. In the immortal words of Pierre Elliot Trudeau:

“…there’s no place for the state in the bedrooms of the nation…”

Yes Mr. Trudeau was talking about Homosexuality laws at the time, but whenever a government agency comes up with yet another rule to help us live happy lives, I get worried. The business side of the argument is, that with more folks able to buy houses by having easier rules for getting mortgages, the market thrives and there is real value set for properties.

I think in the end this will be a good thing, but I am curious, dear reader, what your opinion of these rules are?

Remember Lent begins today too!

Earl Jones only 11 Years?

Earl Jones received an 11 year sentence for his shady financial dealings, defrauding over $50 Million. The down side of the sentence is that he could be out of prison Autumn of next year? Wow, that does not really seem to be a fair term, if that is the case. Spend a year in prison for a $50 Million fraud, and ruin countless retirements?

For those who don’t realize it, today is Shrove Tuesday (aka Pancake Tuesday). This day means Lent starts tomorrow, and in New Orleans we have Mardi Gras festival as well (although I am not sure they have stopped partying since they won the Super Bowl).

The word Shrove, is the past tense of the English verb shrive which means to obtain absolution for one’s sins by way of Confession and doing penance. Doesn’t sound like it is much to do with pancakes, now does it? Evidently we are also supposed to make merry and enjoy ourselves before we go to Lenten confessions (I like the first part, the second is not as likely).

Financial Shrove Tuesday

NO! I am not saying you should go out and blow your finances up before you start your Lenten Financial Journey, far from it. You can have some fun, but all in moderation. If you plan on giving up your daily Latte, then have 1 last one on Tuesday, and savour it. If you plan on brown bagging your lunch for Lent, then maybe a lunch out is OK, however, don’t splurge! If you plan on using cash, maybe it’s time to find a really good hiding spot for your credit cards (or maybe you should visit your bank and put them all away in your safety deposit box). If you are planning on reading some books on Personal Finance, today might be the day to get them out of the Library.

Make sure you have some pancakes too.

Random Acts of Kindness Week?

Forgot to mention that it is Random Acts of Kindness week (I would not kid about this topic), so if you were thinking about doing a Random Act of Kindness, this would be the week to try them out.

A few ideas:

• When in line at a Drive Thru (preferably a coffee shop), offer to pay for the next car’s coffee as well
• Clear your neighbour’s driveway if it is covered in snow (especially if you have a snowblower).
• Give the toll booth attendant a $20 bill and tell her to pay for as many cars that follow as possible.
• Phone up a local kids sports team and ask if they have a fund to help pay for less fortunate kids to play, and give them some money.

These are only a few trite examples, you know how you can help out, so do so. Anybody care to comment on what they may have done so far this week?

For my Buddhist readers, a belated Happy Parinirvana Day. May we all reach that level of enlightenment in our lives (some day).

Video: Madoff Saga

It seems PBS is being quite liberal with their video library so here is a very interesting clip about the Madoff Affair, an interesting view from one of Bernie’s “partners”, sounding very disingenuous (IMHO). Any time someone claims, “As God is my witness…”, I start getting figity:

A very busy weekend for all of us and for me in particular:

1. The Winter Olympics started on Friday night, interesting to see the “Winter” Olympics in a city with no snow and it is 10 Celsius, oh well.
2. Valentine’s Day, but we have talked about it’s significance to Personal Finance
3. The Chinese Year of the Tiger began, and my question is, is it a tradition with the Chinese New Year to make resolutions? Happy New Year!
4. My parents celebrated their 58th wedding anniversary, which is the most significant part of the weekend.

In the coming week there will be lots more interesting things happening:

• It is “Family Day” in Ontario and lots of folks have today off, I don’t being a Federal Employee.
• Lent begins on Wednesday, an excellent time to start a new Personal Finance adventure.
• Stats Canada announces their Inflation numbers for January on Thursday.
• Shrove Tuesday means you should also get out and have some pancakes too!
• RRSP and Tax Season continues on

Tax Season

I await the delivery of most of the documentation I need to complete my taxes. I know that this year I will actually be getting tax back (at least that is my guess, I might be wrong), so I am eager to get my taxes submitted (electronically). For those who have RRSP room, or extra cash, they should be weighing the decision about whether to put their money in a TFSA or into an RRSP (or a spousal RRSP), which makes this season stressful as well.

There are some excellent articles out there comparing and contrasting whether you should be using an RRSP for your long term savings goals or a TFSA, and I encourage you to read other financial blogs and articles to figure out what decision is best for you (my guess is this is a personal decision, and there is no real “cut and dry” decision point that everyone can use).

Your T-4’s should arrive some time soon, but make sure you know what forms you will need for your taxes as well.

The Go Go 90’s

Frontline on PBS has an excellent video about someone who tried to cry Wolf, before the great melt-down. The lady who said Greenspan was wrong.

Yes folks, here I got again, extolling the virtues of Lent and how you can use it to your advantage for your Personal Finances.

Easter is the time for new beginnings or restarting something you need to start doing again, and most people view Lent as a time to “find something to give up”, but that is dull and shows little flare, so another way is to look for something to Enrich your life for the 40 days of Lent (leading up to Good Friday and Easter).

Think about your spiritual journey, yes please do, however, also take advantage of this journey to work on your home finances as well!

Your Financial Lenten Journey

What areas of your personal finances could use either Enrichment or Better still a sacrifice that might help your financial well being? There are some very simple ones that I think about every year (and have done a few of them):

• The Latte withdrawal penance. Cut out buying coffee for the 40 days of Lent and put that money aside, to either save, give to charity or pay down your debt. Keep track of this and see how much money you might be saving here, it’s worthwhile finding out where this discretionary money is going.
• Read 4 Personal Finance books over the 40 days to enrich your understanding of your personal finances or your investing adventures. Building up your expertise over Lent is a good thing.
• Brown bag it for 40 days, give up buying lunch at work, and bring your lunch instead. Another way to find out where your discretionary spending is going.
• Take the bus to work for Lent, leave the car at home, buy a bus pass and take the Bus to work. Yes gas is cheaper right now, but not driving might have other benefits for you (less stress, more exercise, etc.,).
• Read financial blogs every day: another way to build up your understanding of finance is reading and learning.
• Open a TFSA and put found money there: OK, not really a Lent thing per say, but still somewhere to put your new found moneys.
• Live on cash for 40 days and get rid of your credit cards. Freeze them in your freezer, lock them in your safety deposit box, or cut them up, but live on CASH only (no debit either) and see if you can do it, does it change your spending habits? This one is one heck of a heavy one, and anyone who does try it keep me posted and I will encourage you as best I can!

Think about these or suggest others, I am open to suggestions myself. Shrove Tuesday is coming and then Ash Wednesday means Lent begins and your journey begins that day.

I’m giving you a weeks head start to start thinking about this stuff folks!

The bleak  employment data from Stats Canada continues to get worse, with unemployment  rising by 0.3% to a 7 year high of 8.0%.

Over 61,000 jobs disappeared which created the 0.3% jump this past month.

For those of us in Ontario the news is bleak:

Employment in Ontario edged down by 11,000 in March. Since October, declines have totalled 171,000 (-2.5%), mostly in full-time work. Although the unemployment rate remained unchanged at 8.7% in March, it has risen 2.0 percentage points since October, an increase similar to that of British Columbia and Alberta.

That number is huge, 171,000 jobs disappeared, which is very worrysome for folks like me that are looking for jobs.

Very sobering Graph

Hope in Easter

For most this is a long weekend (or even an EXTRA long weekend if you take Monday off as well), but for Christians it is the beginning. Easter is the cornerstone of the Christian belief system, and I will be celebrating that as well this weekend. Sunday is also the end of Lent, so your Lenten Financial challenge will end then as well. Remember it is good to review how your challenge went and whether you wish to continue on with the challenge (if you were particularly successful).

Remember, Easter is a new beginning and you can use this time with your Personal Finance as well. About 8 years ago my wife and I started a new eating regimen and managed to lose over 160 lbs. between us (and have managed to keep most of it off), so using Easter as a starting point is a very good thing as well.

Due to my enjoyment of this weekend, there may be a post on Friday and on the weekend, but I make no promises.

Tax Time Cometh Soon

Remember your filing date looms on April 30th, have you done your taxes? Now might be the time! I did mine with  Quicktax this past weekend and now we wait to pay the man. The sooner you get it done, the better.

What’s funny is I did taxes for everyone in my family, yet I still have 4 returns I can do with Quicktax (they only count a return as someone who made over $25K), too bad I can’t transfer that to next year.