Canadian Personal Finance Blog

I found a few years back that the time I spend commuting and running errands as time lost. I wasn’t doing anything, so I decided to start to listen to books on cassette. Over the years I have listened to many novels (many abridged), and enjoyed this time that much more.

When I started writing here, I noticed that many financial advice books were starting to get published on cassette and on CD and so now I tend to listen to them in my car as well. Is this the best way to absorb research and ideas? I have no real idea, but I find that it does pass the time nicely, and if an idea is a good idea, it does tend to stick in my head.

Naturally I cannot afford to buy all of this material, I borrow it from the Ottawa Public Library which has an amazing on line system for putting items on reserve and an easy method to pick them up. They also have an ability to download materials onto your PC and listen to them there (for a fixed period of time). Typically if a book is quite useful I may go out an purchase it (that rarely happens), but the library allows me access to a wealth of information that I would not normally have access to.

I have a friend who also does this, but he tends to store the books on his iPOD for later listening pleasure, which is a great idea as well.

National Debt Update

Stats Can put out yesterday a statement about the Canadian Federal National Debt:

At March 31, 2007, the federal government’s net financial debt (defined as the excess of liabilities over financial assets) decreased to $508.1 billion, a 1.2% or $6.0 billion decline from March 31, 2006. An increase of $5.1 billion in financial assets and a decrease of $0.9 billion in liabilities explain this drop. The federal government net financial debt has decreased for the 10th consecutive year, a decline of $80.3 billion from 1997 to 2007.

So the debt has dropped $80 Billion over 10 years, that is not bad, about a 14% drop, and if they can keep this pay back velocity it will only be another 65 years until the debt is finally paid off. I guess it’s better than going farther into debt?

U.S. Interest Rates Down Again?

Another 0.5% drop by the U.S. Federal Reserve yesterday to help prop up a faltering U.S. economy, which caused the Canadian dollar so sore above it’s American cousin for the first time in a while. My guess is the Bank of Canada may follow suit some time in the future, but don’t hold your breath either. Evidently Canadian banks are actually raising their long term Mortgage rates (announced in the past week or so). This suggests that this drop in interest rates may be a very short term thing. TD Canada Trust updated their interest rates (available through an RSS feed) on Tuesday.

This past weekend saw me get a year older, and it struck me how much closer I am to the end of my working days. How much closer, I am not sure, but I am much closer to the end of my working days, than I am to the start of my working days.

Let me elaborate with a few points:

• I have been working for 35 years, given I have had jobs since I was about 12 years old. That always staggers me that I have been working for that long.
• I am allegedly 18 years from retirement age (I think that is a synthetic value, I hope to stop HAVING to work before that, but don’t think it is likely).
• I have been working full time for 22 years.

All of this suggests that I should be well on my way to paying off debts or be out of debt and be planning my retirement, however take these points into consideration:

• I have four children 1 about to start University and within 5 years I may have 3 children in University so this point in my life may be the high point for spending money (I hope), so my goal should be to not be creating new debt(if not paying off old debt).
• I am being taxed at the maximum rate that I will ever be taxed at due to my exorbitant salary (just ask the CCRA) and the amount of sales taxes I pay on things that I buy (given I am spending so darn much).

What does this mean?

1. I should be saving for my retirement in my RRSP, which I am doing, but maybe not at the level Financial experts say I should.
2. I shouldn’t be accumulating junk debt (i.e. credit card debt), which I think my family is doing better than it has done in the past.
3. I should have saved for my children’s education with an RESP, which I have done, but maybe not enough for an entire University degree.

All in all, I think I am doing fine, but as usual, I could be doing much better, so I can strive for more. No point in getting complacent.

Site Under Construction

I am attempting to cut the umbilical chord from the Canadian Financial Rants site over at Blogspot to this site (i.e. have that site point directly here), however I am still running into some issues, so please be patient in my attempts. I have over 700 articles to ensure I have correct, and evidently this is not as easy as I hoped it would.

Yes the new Year has begun, and naturally I procrastinated and am now a day behind, oh well.
I didn’t actually procrastinate in terms of this site, I am working on my new project and forgot to post here, so my apologies.

Start Your Year Out Right

How can you do that on the Personal Finance side of things? Make sure your previous year is closed off and paid off. If you haven’t then it’s time to figure out how to deal with residual debts from 2007 (I don’t mean your mortgage, but I do mean Credit debt). Now is the time to make a financial plan. Remember without a plan how can you tell how you are doing?

Simple Financial Plan for 2008

Here is a simple skeleton plan for you to work from:

• We will put our maximum amount in our RRSP for this year.
• We will put $3000 in each child’s RESP (or as much as we can).
• We will pay off all credit card debt and will put together a plan to pay off all residual debt (lines of credit etc.,) in three years.
• We will save $N for a vacation fund (yes, I believe in vacations, I just never go on them).
• We will pay down $M (where M is greater than the minimum amount for the year) on our Mortgage, or will save that amount for the down payment on buying our house.
• We will pay off our Car Loan quicker than our creditors want.
• Figure out how much we spent at Christmas and start saving a Christmas fund for this year.

Simple little plan, take it, expand it, remove parts but build from it too. Keep track of how you are doing and you should be many miles ahead on December 31 2008.

I figured I’d try out a survey from Blogspot to just see if anyone would actually “vote” and I was impressed to see the following results:

If you found $213,498.42 on the ground what would you do with it?

• Pick it up, spend it, and then lament my loss 28%
• Yell, “Hey anybody drop their wad?” 13%
• Pick it up, and give it to the Salvation Army lady on the corner 10%
• Take $3.14, and feel guilty for doing that 1%
• None of the Above 48%

What does this mean? Not sure, it was my first survey, but interesting that some folks enjoyed my humorous answer #2. Another survey may be coming soon.

Changes Coming

Watch this blog for changes that are coming very soon, I hope. For those who are on the RSS feed, you won’t notice anything (sorry).