Canadian Personal Finance Blog

According to the Fraser Institute Tax Freedom Day for 2008 was Saturday June 14th. This alleged end of you earning money for taxes means you have the rest of the year to pay for all your other expenses. Speaking as a highly taxed individual (no matter how much I bitch about over spending in my household Taxes by far out strip all other spending we do).

The institute even has a fun little tool to figure out when your specific Tax Freedom Day which was kind of cool to play around with as well.

This artificial celebration really means very little, except that most Canadians pay over 50% of their income in various taxes (if you simply count the number of days until this happy day). How can things change? Less Government spending might help, smarter spending might be nice too (get more from all the money I give you). Given I haven’t had a raise in 5 years, it would be nice if the government was forced to do the same rethinking on spending that my household has had to do (I mean government in the Generic across the board sense, not just the Federal or Provincial folks).

Enjoy earning money for yourself now (figuratively, if not factually).

Mortgage Rates on the Rise?

Thanks to last week’s non-cut by the Bank of Canada most of the major banks are raising their Mortgage rates in reaction.  Any debt vehicle that has a variable rate hasn’t changed that I can tell, but the banks seem to think rates will be going back up very soon, and they are reacting accordingly.  TD Canada Trust’s rates can be found here, Scotiabank’s can be found here, but remember all these rates can be negotiated, and if you don’t want to do that, go to a Mortgage Broker and get a better rate there.

Funny no one has lowered the Credit Card rates lately (sorry had to have a jab at one of my favorite topics).

In Ottawa we have a very flamboyant Mayor who came in to power with the statement that he was not going to raise taxes. This statement (I won’t call it a promise) seems to have disappeared and the latest levy he is talking about is a $50.00 surcharge per tax payer and business due to the high amount of snow in Ottawa this year (the snow clearing budget is over budget at least $23 M so far).

Last year we didn’t have a lot of snow, and this same fund ran a surplus, but I never saw a nickel back in my taxes. In fact this fund has run surpluses for the past N years, yet whenever that happened, no money came back to me directly, but now that Mother Nature has stepped in, I must now find more money to pay for bad planning? If I make the bad plan, I am the one that has to live with it, and I must live with the consequences (yes I still complain), but now I must fork out more money, due to there being no emergency fund for excessive snow? Larry, drop by my house and see if you can convince me I should pay this tax, because I don’t think you’ll get me on side with this one.

Easter Charity

I was very impressed to see John Chow campaigning for donations to a soup kitchen in the Vancouver area. John actually matched all donations, and managed to raise over $7,000 for that charity, and I applaud him for that.

For local Ottawa readers, the Shepherds of Good Hope is a mission that I support when I can, given I used to work up the road from them, and I have seen first hand the good works that they do. Remember Easter is a time of renewal and a time of giving.

Scary Statement for the Day

After the U.S. Fed lowered yet another of their key rates by 3/4% one analyst was actually heard to say, “I wouldn’t be surprised to see a rate of 0%…”, I almost fell out of my chair when I heard that one. I think this constant dropping of interest rate may help in the short run, but it is not resolving the main issues which is massive DEBT problems in North America. People are living outside of their financial capabilities, and it is eventually going to cause something very bad to happen.

Carnivals This Week

This week my posting The Seduction of Spending was mentioned in The Carnival of Everything Financial #15 hosted by Everything Financial .

My interim tax assessment arrived yesterday in the mail and it is about what it was last year with the exception of a 1 line addition that has me wondering:

SWC - 50% Solid Waste Curbside Service $41.00

So this is a surcharge on top of what I normally pay for my Garbage Collection, I guess. Why am I paying this new “fee”? I need to do some investigating because it shows up as a Special Charge, not as part of my regular charges. My concern also is there may be more of these kind of “Special Fees” that will appear on my taxes as Ottawa City Council wants more money too.

TFSA the Follow On

So most of the Canadian financial blogging community seized on this part of the budget and there were some excellent reviews of what it might be used for. My question about whether you should use the TFSA or the RRSP was kind of addressed by Michael James in his posting: Tax Free Accounts vs. RRSPs so have a read of that posting too.

My bottom line is if I could find $5000 extra (say by cutting my discretionary spending, like I keep telling myself I should) my retirement pay ins are fairly good, so I might take advantage of this capability, but I’d need to make a solid plan for it as well.

RRSP Times Up!

Remember Friday is the cut off for your 2007 RRSP contributions, keep that in mind. I believe some banks are staying open late for you to do your last minute RRSP shopping and such. For those of us who buy a little at a time, we’ll drive by the banks and chuckle quietly knowing you are having fun.

Yet another example of what happens when I procrastinate has reinforced my belief that as a tactic in life procrastination is highly underrated. Many things in life will either go away, or rectify themselves if you give them time.

Can procrastination be a viable financial planning concept?

Procrastination Works

In these situation procrastination may actually help you out:

• Large purchases such as cars or houses. By not doing anything you may actually end up keeping large amounts of money in your investment vehicles and gaining value, and you aren’t paying down large debts that you have accrued.
• Selling stocks when they are down. If you procrastinated through this last bit of bad times, you most likely held onto some stock that will regain it’s value and appreciate more.
• Get rich schemes from friends and family, if you wait long enough you will have “missed the boat” but will still have your money too.

Procrastination is Very Bad

When is procrastination a bad strategy?

• Ignoring paying of bills, this is a very bad thing. If you don’t pay your credit card or your utility bills or any other monthly bills, you will end up with a large debt and most likely living in a dark and cold home.
• Not putting money in your RRSP until February 33rd is a bad use of procrastination, put your RRSP money in as early and often as you can.
• Not paying your taxes on time (municipal, federal, etc.,) is really kind of bad too (luckily in Canada we don’t have the IRS and their sweeping powers, however the CCRA can do stuff to you too).
• Not having an emergency plan financially.

Really?

I guess you can see that procrastination may not be the best concept for your financial plan, but remember it can be your friend sometimes, just don’t use it as your only weapon or tactic in your Financial Plan. Pay what needs to be paid now, but think about those big purchases and maybe see if time can help you with that part of your plan.