Canadian Personal Finance Blog

… must come down (and that’s not just lyrics from an Alan Parson’s song either).

The NFB comes through with another interesting short about greed and money. If only CEO’s had to work that hard to get their profits up, and only if their heads did those funky things like in this short, I guess only in my dreams.

In this animated short, two moneymen intent on climbing the profit ladder at any cost inevitably come crashing down. Incisive and succinct, Tom Tassel’s Krach illustrates a basic principle: what goes up must come down.

But is it as simple as a stroke of the pen? Maybe, who knows? Look at my investments and tell me this isn’t random!

How many seeds have the Millenium Seed Bank saved? Just watch!

We had another get together of the National Capital Financial Bloggers Association this past week and the regulars were there, but we also had a special guest appearance by Canadian Financial DIY, and he has been added to the prestigious N.C.F.B.A. blogroll in the right hand column. A very interesting chap and with many of the same attributes as yours truly (worked in the same places, from Montreal, etc.,). He also is brave enough to show a picture of himself on his blog (I may one day, but I need to find a top hat and monocle first). 

Financial Blogging This Week

Many interesting posts for this week, and let’s start off with our spotlight blogger this week:

• Canadian Financial DIY wrote an interesting tome about a Modest Proposal for Preventing Older Retired People in Canada… I think I am worried now, hope no politicians take this up.
• Michael James writes about Tax Avoidance on New Homes (in Ontario), which may make for an interesting cat and mouse game between the government and it’s HST and builders. 
• Preet at Where Does All My Money Go continues his educational series about Indexes (and active vs. passive investing) with The Market versus The Index (in a steel cage match). 
• The Canadian Capitalist writes another scathing commentary on Our World-Beating Mutual Fees, seriously folks read this stuff and get the heck away from those high MERs. 
• The Canadian Tax Resource is writing some helpful posts in the series Estate Planning 101 and one I enjoyed is Estate Planning 101 – Death, Taxes, and your RRSPs and RRIFs.
• After getting ripped off No Debt Plan published a helpful 7 Ways to Identify and Avoid On Line Scams. 
• Riscario Insider has an interesting post Preston Manning on Financial Planning, which I enjoyed, but the title is a little misleading. 
• I always enjoy when folks talk about their personal lives and their hobbies and One Caveman does in his article Good Personal Finance Takes Practice.

Victoria Day Weekend

Given it is an early long weekend here in Canada, don’t look for anything on Monday, I will be enjoying a day off, but look for a new video for the weekend enjoyment.

I’ve written about this before, but I figured I’d rehash this topic, since it is nearer to my heart these days living on no income currently.

This past basketball season my estimate is that the total cost of one of my daughters playing for a competitive team with travel, registration and team fees cost about $1500 or so (that may be a little high), of which the Government is kind enough to give me a $500 tax credit (which I appreciate a great deal). This amount is actually quite cheap for a single child in a competitive sport.

Friends that have children that play competitive hockey are outlaying upwards of $5-10,000 a year in total costs, and higher in some situations. Figure Skating is a surprisingly very expensive sport for kids (costume costs, competition costs and coaching costs are enormous), as well. Other sports like Soccer, Football, Baseball and Volleyball I am sure cannot be that cheap either (I don’t have exact figures for those sports so I won’t comment, if anyone has any, please feel free to add them to the comments here).

We who keep our kids active are actually helping society to a certain extent by:

• Instilling a sense of team and community pride.
• Keeping our kids occupied (and thus not out spray painting our neighbours fences (hopefully))
• Showing the value of physical fitness

Yes, it does sound like I am blowing my own horn, so I’ll stop there, but I think organized sports or activities is a good thing for kids.

What do people do who can’t afford this stuff? I know Canadian Tire runs a program to help out and locally in Ottawa there are a few community groups that are trying to help as well, but I am sure that is just not enough.

If you want to help out in your community and you have the extra money, maybe find a family that needs this kind of help, and offer to sponsor a kid for a year, your investment might pay back huge dividends in the long run.

Why does it cost so much?

Most sports fees are so expensive for many reaons, but some I know of are:

• Very high insurance premiums since NO organized sport dare not have liability coverage.
• Maintenance of fields, parks, gyms and rental of these facilities.
• Fees to officials (not a very large cost, but still a cost).
• Profit (yes some hockey leagues are run as FOR profit institutions).

When did Recreation become a big business?

This year I will not be receiving a tax rebate, thanks to a plethora of reasons, but if I did there is always the question what do you do with found money like this?

Found Money: Windfall or Savings?

Simple Savings Routine

Some people have a very good equation at tax time:

• Put moneys into RRSP up to Limit
• Take Tax Rebate from this saving and apply to mortgage as overpayment
• Repeat methodology each year

An excellent Savings routine, and if you can do this a good way to build up your RRSP and pay down your mortgage.

Let’s Go On Vacation

Other folks I know view Tax rebate moneys as “found money” and feel  that since it hasn’t been planned for, it can be spent however they wish and they typically use it towards a family vacation. Surprisingly, I don’t think this is a bad thing, if the family vacation is just that and not an excuse to spend more money on vacation and go farther into debt. Vacation and rest is important, as long as it is well planned (financially).

I Hate Tax Rebates

Another group of folks I know, despise getting a tax rebate, because that means the government has had your money for the year, when you could have had it instead, and they make sure their employer takes off as little tax as possible, while ensuring they don’t owe money to the government come April 30th either.

I like this concept as well, and usually try to make sure I pay as little tax as I can. 

At the end of it NOT owing money to the CRA is a good thing.

Found Money?

So what if I “find” money (say it falls off the back of a truck, or a relative gives me some)?

If you go with the RRSP routine, it becomes a savings windfall:

1. Money goes to RRSP and creates a tax rebate
2. Tax Rebate moneys goes onto Mortgage or into a savings vehicle if Mortgage is paid off.

I like that idea a great deal.

What do you do with found money?