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Debt and Financial Chains

Do you realize that you drag your financial past decisions around like Jacob Marley did in a Christmas Carol ? All of those odd decisions that you made in the past build a chain that you are now hobbled with, and will continue to be hobbled with. Dickens had Marley’s chain signify the horrible decisions he made about mankind. That is a lovely sentiment, however, the financial chain that you create for yourself here and now is just as crippling (if you continue to make bad decisions).

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Jacob Marley
Jacob Marley and his Chains (Sir Alec Guiness)

Getting the point across to younger folks, that pretty much all the odd decisions that they make early on in life will follow them one way or another, in pretty much all aspects of life, but especially in financial terms, is not an easy task. When you are young you have all the time in the world, and if you make a few mistakes it won’t caused you any issues later in life, or will it?

  • If you decide to forego putting money in your RRSP, and decide to get a nicer car when you were 25, you then have more links in your financial chain to carry. You will have to save more later in life to retire the way you wish.
  • If you don’t quit smoking until you are 40, you have 20 years of spending money on your habit, and shortening your life (and paying more for your life insurance as well). More links in your financial chain. You might want to look up how much term insurance costs for a smoker over the age of 50, if you think I am being alarmist.
  • Every debt that you think you will pay off at a later date, or worse each month you carry credit card debt, you forge many more strong links in your financial chain.
  • Every lottery ticket that you have bought over the years adds more links to your chain.

The financial chains you forge in your youth, are a heavy weight to carry into your golden years.


TFSA Transfer? Now is the Time ?

I borrow this concept from Million Dollar Journey who had this as one of your end of year things you should be thinking about doing. Most of the hints are good ones, but this one had me scratching my head a little.

TFSA Piggy Bank

Now let’s be clear that you can transfer from a TFSA that you own to another TFSA (that you own), if you do a DIRECT transfer, as outlined by the CRA here. I am not sure if you get the transferred TO institution fill in the forms, or the transferred FROM institution fill in the forms, but this is really what you should be doing, if you are thinking of doing a transfer from one TFSA to another. There might be fees involved, depending on whom you are dealing with.


The other idea is to cash out money from TFSA account, and then wait until in the new year to move it into another TFSA account. I suppose an example of this might be if you had a Mutual Fund TFSA account, and you wanted to transfer money to a Trading TFSA (e.g. TD Mutual Funds account to a TD Waterhouse TFSA account), but I think you are better off doing this as an official transfer, and the following up with the CRA after it all happens to make sure that it has not done anything wonky to your TFSA limits.

The CRA has a very helpful article Example – Qualifying transfers between TFSAs of the same individual, have a read and see if your transfer can be done. There have been lots of stories of folks making mistakes with their TFSAs and having to pay hefty fines from the CRA for their misunderstanding of the rules.

Am I missing the point on this one?


Advent, TFSA Drops, Negative Interest and #MoneyStories

Advent continues, and hopefully, you are getting all your festive duties completed with not too much stress and strain. Remember Advent is the time of preparation for your holiday calendar. Just remember you can still get gift cards at any gas station (that is open) on Christmas Day (helpful present gift of the week).

Gift Cards, Cash
Where Great Gift Ideas Go to DIE!

The Liberals continue to do as they promised, and have announced that the TFSA limit for 2016 will be $5500. Will this cause all those rich folks to charge out and deposit $10000 in their TFSA? Not really sure but it might happen. The alleged middle class tax cut will be implemented as well, which will save you about $600 or so, unless you make more than $200000 in which case, the new tax measures are gonna hurt. I have asked the CRA whether the Family Income Splitting Tax Break is now off the table (i.e. cancelled), but haven’t heard back yet. Will the new trumped-up (pardon the pun) Nanny-gate take the shine off the Dauphin? We shall see.

There is a chance that Canada might actually have a negative interest rate from the Central Bank? The Governor of the Bank of Canada said it is not very likely, however it is not completely off the table either. What would a negative interest rate be used for? To stimulate spending, since keeping your money in a bank would cause it to decrease, but isn’t that kind of what is happening with bank accounts with 0.01% interest and $20.00 month bank fees? Sorry, I couldn’t resist. We do seem fixated on stimulating our economy.

My Writings for Week Ending December 11th

Our tree is not up yet, but I did do some writing this week:

Less jobs and more people looking for work in November

Isn’t redundancy a bad thing ?

Some fun Christmas stuff from the past

Facebook Post of the Week

Friend of this site, Kerry from Squawkfox was on the television last week talking about managing kids’ expectations at Christmas. Does this mean she is giving me a lump of coal this year?

Tweet of the Week

It was very nice of the CRA to answer my tweet and now we have confirmation that the CRA does have an RN on call to help out with the T2201 forms (learned that from a commentator ):

👇 For more great financial articles from this week click here 👇


Financial Redundancy

In the high-tech world the term redundant is actually a good thing. Most folks think of redundant in terms of jobs, and being declared redundant (i.e. being laid off, or the like). In the high-tech world redundant is actually a vital part of reliability. If there are redundant systems in place, or redundant connections then there are backups in place to take over if one of the systems fails, and that is what I mean by Financial Redundancy.

Last week there was a very good tweet that inspired me to think about this concept.

The point being made is that you need to have a separate bank account in a different bank or savings concept (trust company or the like) just in case your main bank account or bank gets compromised in some way. What do I mean by compromised?

  • Your account has been hacked and thus locked out so you have no access to it, until the issues with the security intrusion is remedied.
  • Your bank “goes down”. This can be a myriad of possible issues including: Interac failure, Computer system crash, bank is hacked (as mentioned in the tweet), etc.,
  • Your bank fails? Yes, this is ridiculously drastic, but it has happened, and I am sad to say, it will happen again (ask the folks who had money in Savings and Loans in the states)

Redundancy ?

Really the question is what do you do if you don’t have a redundant money supply to fall back on? You could use your credit cards, and you already have a redundant system there don’t you (pretty much everyone has more than 1 credit card, a Visa, a Mastercard, an Amex, maybe even a Diners Club), so why don’t you have some redundant savings in place too?

This Seems Redundant

An idea is maybe putting your Emergency Fund (which we all should have in some fashion) at a different bank? That way it really can help in an emergency.

If you are looking to back up your data, here is a link to Backblaze a very useful computer backup and restore site.


Unemployment Up in November

Even though Canada is no longer in a recession (by definition), we found out that the job picture became much gloomier in November.  Stats Canada published their Labour Force Survey for November 2015 on Friday, and their summary is quite evident in terms of how things are going with jobs:

Employment decreased by 36,000 (-0.2%) in November, the result of losses in part-time work. The overall employment decline in November followed a similar-sized increase in October. The unemployment rate increased by 0.1 percentage points to 7.1% in November.

Losses in part-time jobs can happen but in November? Aren’t there more jobs in retail and such? If you think there are no puzzling bits of data in the report, there are.

Compared with 12 months earlier, employment increased by 124,000 or 0.7%, with all the growth in full-time work. Over the same period, the number of hours worked grew by 1.1%.

So there are more full-time jobs being done since last year, and more hours are being worked? Confusing, but still a bit of good news at least.

More people are working, but a dip this past month.

Employment Numbers
Employment for Past 5 years

The unemployment graph shows a step up as well.

Unemployment for past 5 years
Unemployment for past 5 years

The telling story for me is the following statement:

In November, employment fell by 24,000 among youths aged 15 to 24.

So fewer young folks with jobs? I guess that stands to reason as they mostly work those lost part-time jobs (or am I just rationalizing here).

You should check out the tables from the article, as they are all quite interesting.

Labour News for 2015

Here are some of the posts about jobs from this past year:


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