Canadian Personal Finance Blog

Looking at your mid-year personal finance review, you can ask the all important question, “Now what?”, and as usual my mealy mouthed answer is, “That depends!”.

If you have met all of your financial goals for the year and it is mid-year, you set your goals too low (or you sand bagged to make yourself feel good), or you got really lucky. No matter what reason, you can celebrate a little bit for achieving your goals, but now is the time to make some “stretch” goals for the end of the year, and prove that your success at the start of the year was not just a fluke and that you can work hard the whole year. Simply sitting on your financial laurels is just not the thing to do, build from your success and show that you can finish strong for the year.

If none of your goals are met, and you think you will be unable to hit any of your goals this year, maybe it is time to re-vamp, or re-think your plan (or scrap it completely). Not to worry, look at where you had problems with your plan and figure out whether you were:

1. Too aggressive in your planning, and set unattainable goals
2. Very unlucky and the world conspired against your plan
3. You never really planned to follow this plan

If the answer is (3) don’t kid yourself, you need to plan, this is going to hurt you some time soon. If the answer is you were too aggressive then maybe go back to your original goals or plan, and maybe scale them back so that they might be attainable by the end of the year (but still make them challenging).

If things are going OK, and you think you can succeed with your plan, good for you, you have made a good plan, and you are following it. You can celebrate a little in your success, but get back to your plan, enjoy your success and keep up the good work.

That is the oppositions’ screams today about Finance Minister Jim Flaherty’s miscalculations on the budget deficit for this year. 

I think this is a little extreme, given how screwed up the economy currently is, and how many interesting things are happening in the economy (can we say Perfect Storm?), but it does make for good political fodder, that is for sure. As I stated yesterday, I believe this is a sandbagging technique and in October they will state how they have saved the day and the budget is in fact only $45B instead, we shall see (either that or it will balloon over $60B and hyper-inflation will be the next major topic of conversation).

Stewardship or Charity with Kids

My wife is doing a talk to a group of adults on how to get kids to actually give to charity (by choice). Surprisingly if you simply tell your kids, “You must give $10 to the Church”, they might cough up the money once, but will resent it and more likely never give much again (even as Adults).

Explaining to kids that they don’t just have to donate money, they can donate their time and talents, instead,  is a first step. Getting kids to understand the importance of charity (and how they have so darn much anyhow) and helping those who need help is not easy and if anyone has any good stories about when they tweeked into the importance of Charity (and what age they were at the time), please feel free to include them in the comments section.

Mixed Tax Budget?

The McGuinty Liberals bring down yet another budget Thursday for the Province of Ontario with promises of large deficits to help with the Financial Apocalypse and such. 

There is also talk of harmonizing both the PST and GST (for Ontario), which makes sense for small businesses (easier to collect and such), but concerns have been brought forward about things that are exempt from the Provincial Sales Tax increasing in price with the new merged tax (hopefully that is simply an accounting issue, and not an issue with unscrupulous vendors attempting to gouge consumers).

Other areas have worries (subsidized child care and such) about losing funding, but again this is a wait and see type of budget.

Cuts, Cuts, Cuts

The CBC is cutting 800 jobs across Canada (will Ottawa lose yet another dinner time news cast?), the City of Ottawa laid off 44 managers Wednesday and various companies are announcing further cuts as well (IBM saying a very large number, but given they are looking to buy SUN Microsystems it might not be exactly what everyone thinks).

With EI benefit claims being much higher in January up 4.4% from December, according to Stats Canada. The graph showing this is quite dramatic.

EI Claimants by Month

It’s been a busy week so I decided to go into the archives and bring up an old chestnut about Kids’ Allowances that I wrote my first year of blogging, I still use this methodology, so it must be good.

Real World Example: Kids’ Allowances

OK, so back to what this blog is about, real world financial ranting.

For the longest time my wife and I tried to get the kids on an allowance, so that they could learn what money is, how it works and some responsibility, but inevitably, we’d forget for a couple of weeks, try to catch up and eventually just gave up (much to the kids chagrin). Interesting, we were trying to teach the kids responsibility and all it did was show how irresponsible their parents were (now THAT is ironic).

About 6 years ago I was in the TD on one of my yearly visits, getting my bank fees waived for a year, and get them to fix something they had screwed up (I think it was my mortgage that year), when I asked about kids’ bank accounts. My brother sends the girls money every year, and we had got to the point where we didn’t want to just buy them toys with it. The poor woman who’s life I was ruining for the day, said the accounts could be opened then (since the kids had SIN numbers), and the accounts would show up “under” my account on my on line banking.

A day or two later, a light went on in my head. I called the bank on the phone lady (who I now call once a year, because I do most of my banking on line, but couldn’t figure out how to do what I wanted). I asked her to set up weekly transfers from my account to my kids accounts, thus assuring that the money was paid every week (whether I remembered or not).

Well, it has worked, the kids get their weekly allowances AND they actually do things like:

• • Buy clothes that they really want
  • Have somewhere to put their uncle’s money and can then buy what they want
  • Buy presents for their friends birthdays (that one shocked me the first time it happened).

So it seems this experiment has worked, chalk one up for me