Canadian Personal Finance Blog

This has been one of the most interesting years in my life and in the financial world, and I will not lament it’s end, but it is certainly not the worst year of my life (but it isn’t one of the top 10 either). 

This year has seen:

• My retirement savings drop by 20% in value thanks to the stock market implosion, caused by the shenanigans and tom foolery over low rate mortgages in the states, and the financial apocalypse.
• My career at Nortel finish at 20 years (I am still looking for gainful employment), but maybe that is a good thing at the end of it all. With this I have taken complete control of my retirement savings, as well.
• My oldest go off to University and now I am learning how the business of higher education works (and it’s ins and outs). 
• An election that seems to have resolved nothing and we are more likely than not off to the polls again in 2009, which always makes for fun writing.
• The birth of the TFSA, but I am not sure how I am going to use it yet.
• Gas prices going up and down have caused havoc with any kind of budgeting attempts by my family, but the cheaper prices now, has managed to balance mid-year large outlays for fuel.
• Interest rates remain at historic lows and inflation has calmed down with the drop of fuel prices as well, where will this lead? I have no idea, but I hope interest rates stay down for a while longer, then they can sky rocket (remember interest rates low good for borrowers, bad for bond holders).
• I await a “bail out” by the government for me, but I guess for the common man, the “bail out” is called buying lottery tickets. Maybe I should change my name to Ford?
• I have written well over 250 posts this year, which is the most active writing year I have ever had.

I thank you kind reader for your patronage this year and hope you keep coming back to see my view of the Personal Finance world in the coming year.

Bye Bye 2008

Man that was a tiring year

$30 Billion is Quite a Debt

Stephen Harper told the CBC that the coming fiscal year the Canadian Government could run up to a $30 Billion debt thanks to the Financial Apocalypse? Wow, that is quite the turn around from running surpluses for years, and if it is a one time thing that does stimulate the economy and gets people (like me) back to work, I guess it isn’t too bad, however my concern is that this isn’t going to be a one time thing. When deficit financing started in the 70’s it was not planned to be the “Standard Business Practice”, but it did end up being that way and we are still paying for it now.

The statement by Harper is also a contradiction of his own finance ministers statements of a week or two ago where it was claimed Canada would only run a $5 Billion deficit, makes me wonder what is the real number (and we won’t know that until December 31 2009 or later) and how much “stimulation” the Tories plan on putting into the economy (and what happens to this whole mess if the Three Headed Coalition Monster rears it’s head as well). Should be a very interesting fiscal year coming ahead, that is for sure.

The specter of Deflation or Hyper-Inflation is what has me concerned as well, because we are now in uncharted waters that is a certainty.

Advent Financial Calendar Box Day 20

Advent is slowly coming to a close and the Christmas Festival begins on Sunday and our Financial Calendar has very few boxes left for us to open.  In today’s box we find House Plan, complete with blue prints, cost estimates, the works. This plan has a few ways you can look at it as part of your financial journey:

1. If you succeed in your financial journey, you may one day be able to afford building your Dream House where you and your family can live and prosper.
2. For me this signifies the importance of a complete Plan for your Financial Journey. If you do not have a Financial Plan which is honest, and complete you cannot succeed and worse still, you cannot tell if you have succeeded as well (which is more important). 

Every week I write at least one article on the importance of Financial Planning, but many times I don’t mention why it is so very important.

There is a line from a Tom Clancy novel that rings in my ears, “… if you don’t write it down, how do you know it happened…”, but better still if you don’t write down what your goals and plans are, how do you know if you are succeeding? That is the positive view you should take of any financial plan, it gives you the positive feedback that you are succeeding, or the Shepherdly tap on the shoulder to get back on track, if you are not.

Make that Financial Plan for next year today, before Advent is over.

Snowmagaedon?

After visiting Toronto (to pick up my daughter from school), I had to chuckle at Environment Canada’s interpretation of the coming snowstorms for Southern Ontario.  The weather forecasts on Wednesday night quoted Environment Canada saying the storms would be Snowmagaedon (my spelling), which is a little over the top, given I don’t think the Rapture will be occurring during this event (if it is, my apologies), but it is even funnier to think that Environment Canada feels it is important to get people’s attention so they use these kind of sensationalized colloquialisms.

The storm does look quite serious, and I would suggest not traveling during it, but I am hoping that the Rapture does not come during it (because then we’d miss Christmas). Hunker down my fellow Ontarians, here comes another snowstorm!

Bank of Canada decided a 3/4 point drop was needed to help stimulate the economy. That means the overnight rate is now 1.5% which is it’s lowest since the early 1960’s, holy cow.

While Canada’s economy evolved largely as expected during the summer and early autumn, it is now entering a recession as a result of the weakness in global economic activity. The recent declines in terms of trade, real income growth, and confidence are prompting more cautious behaviour by households and businesses.

That spells it out clearly why we are getting these low rates, but as usual I warn my readers, this is not an excuse to get further in debt, it is an opportunity to get OUT of debt, if you have a variable rate credit facility. Continue your regular payments, and you now are paying more of your debt off!

The more interesting question will be how much of this cut the banks will pass on to consumers? Currently “prime” for TD is 4.00% , what will it be today? Should be interesting to check that one out.

I note also that their rate on their green visa card is 19.75%, hope no one is paying that rate.

Congratulations Jean Charest

Belated congratulations to Monsieur Charest for his Victory on Monday as well. Hope this means 4 years of relative peace and quiet on the Quebec political scene, but having grown up in Quebec, I know that will not be the case, it is NEVER dull in Quebec. I expect to see Mario Dumont appointed ambassador to France or something of the like (if the Tories hold onto power). As for Mme. Marois, good luck, remember all political parties in Quebec grow weary of their leaders (quickly), if they do not win.

Advent Financial Calendar Box Day 11

You open this box and it is a list with the following entries:

Television  $300
Jewelery    $3000
….

It is a home inventory of your valuables in case you are robbed, or your house burns down. There really is no excuse not to have a home inventory, and even better if you have serial numbers, model numbers and possibly a picture of each valuable item, because Insurance companies are going to ask for it, if there is a claim. 

And you can put your home inventory list in either your home safe, or in your safety deposit box.

I think that loud bang I heard when I turned the water back on for my toilet repair yesterday was more than “just nothing”, given the huge water stain in the ceiling this morning. Yes, after bragging on this very blog of my great home repair skills, Karma or God or however you want to spin it, came and bit me for being so proud of myself.

We have a hole in the ceiling, but now the “leak” has decided to disappear? Might have been residual from the pre-gasket replacement, but I doubt that, should be interesting anyhow.

Coalition?

OK, I will wade into this murky swamp that is the Canadian Parliament, my guess is this is not going to work no matter what happens and we will be going back to the polls in February or March with a backlash against the Tories and the Liberals, and maybe the NDP making big inroads because the arguments are simple:

• Bloody Tories caused this election, arrogant bastards!
• Liberals kick their leader to the curb, go back and get him to run a government propped up by separatists?
• That Jack Layton, he’s a nice guy and was just trying to govern.

Advent Financial Calendar Box Day 3

Today’s box, is like those Russian stacking dolls, it is a box in a box. The box in the box is a Safety Deposit box, do you have one? If you don’t wear do you keep your important documents? Remember this is a carrying charge for investing, so you can actually write off your box for your taxes.

Safety deposit box, go get one if you don’t have one, or at least have somewhere safe to put your important documents.

Carnivals

Mentioned in a few carnivals this week:

• The Bankruptcy and Debt Blog #13is being hosted by Bankruptcy Acccess where they feature my post about Buying Lottery Tickets and Going to the Casino?
• The Carnival of Twenty Something Finances  - Thanksgiving Hangover edition is being hosted by Broke Grad Student and the same post is mentioned there.