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Tangible Financial New Years Resolutions

If you are planning on making financial New Years resolutions do yourself a favour and make them measurable. When they are measurable they are attainable.

My Personal Opinion On Resolutions

Here is a good example of some noble resolutions

  • I will save more this year
  • Pay down my mortgage
  • Lose weight

I applaud you if these are your goals, however, how are you going to know whether you have succeeded or not? Without a tangible financial goal you are doomed to failure.

More tangible versions of the same goals might be:

  • The balance in my TFSA on Dec 31 2019 will be 10% larger than on January 1 2019. This is very specific, you can even put actual values in there, which makes things easier for you to monitor your goal.
    • Remember if you are saving for your kids’ educations an RESP goal of $2500 added to the account would be good.
    • RDSP contributions for your child need to be there as well.
  • My mortgage principal will be $10,000 lower at the end of this year. The important thing is to set a tangible financial goal. How you do it is left open, but what the goal is, is concrete.
    • You can automate this goal, and make it easier. Setting up automatic over payments on your on-line banking of $400 per pay (if you are paid bi-weekly) makes this resolution real.
  • I will lose 60 pounds this year by going to the gym at least 150 times. Ideally I will try to lose 5 pounds a month. Again, this is very concrete, and easily monitored.
    • In my case I am lucky as my office has a gym I can use for free.

Resolutions are wonderful things (although you can set goals any day of the year), but they must be specific. Saying, “I will be a better person” is admirable sentiment, but what does it mean and how are you going to do this?

  • Give more to charities?
  • Being more positive in your life outlook? (again really hard to monitor this, unless you tell someone who can say, “You really are being a sour puss these days”).

Make your goals and resolutions tangible and measurable and you are more likely to succeed. Also, remember to put your resolutions somewhere where you can be reminded about them.

  1. Set the background of your computer or tablet with them?
  2. Put them on your refrigerator?
  3. Tell your spouse, they will remind you.

All Those Happy New Years

Yes, for about 15 years I have wished you a Happy New Year

  • A happy new year for 2021 ? Well it started pretty grotty, but it might get better.
  • I must have had an inkling about 2020, as I didn’t wish you a Happy New Year to start things. Hopefully with this post I have helped make the year better?
  • In 2019 I was too practical with Tangible Financial New Years Resolutions but still worthwhile thinking about it, eh?
  • For Happy New Year 2018 I had a great photo of being stuck on the 401 during a snowstorm, and links to previous New Year Messages.
  • 2017 I pointed out that you start paying CPP and EI again, so your net pay is going to be lower.
  • 2016 Happy New Year, just didn’t happen, not sure why, must have been having a grinchy holiday?
  • 2015 Happy New Year and I included a really bad joke about it being the year of the RAM in the Chinese Calendar.
  • 2014 Happy New Year again I pointed out that CPP and EI rates were increasing as well, I really am a kill joy.
  • 2013 was a Happy New Year, a celebratory Sunday was the photo to start the year.
  • 2012 I used to post best of Twitter posts, and it seems to have fallen on a Sunday as well.
  • Merry New Year! It All Starts again…  was how 2011 started, and I included a bunch of resolutions in that article.
  • 2010 New Year began with me in a new job, which was very nice, given I had been unemployed for a while.
  • 2009 started a little bleak, in that I was unemployed, and was looking for a job, during a major economic crisis.
  • Belated Happy and Prosperous New Year was how 2008 started, the economy was booming, employment was high, but there were hints of the systemic failure that was coming soon.
  • A New Year Brings Tax Breaks? The tax breaks appeared in 2007 but later disappeared, unfortunately.
  • 2006 I was still figuring out what this whole thing was going to be, but I did show some signs of a ranting good time.

Yes, I really did start in 2005.

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Stock Picks 2018 End of Year

At the start of the year, I actually did publish a Stock Picks for 2018 article, which is a rarity for me. I am not in the stock picking business I am into Index Funds, and my stock picks reflected that fact.

Stock Picks
I even made a fancy slide

This year has ended quite nastily for the markets. After 10 years of growth, you had to know something was going to change, and so far the great shart of 2018 continues. We shall see when the bottom hits.

What happened with all of my picks? Let me refresh your memory.

  • Canadian Index Fund based on a TSE index like TDB900 – TD Canadian Index (e-Series)
  • US Index Fund based on the Dow Jones Industrial Average like TDB902 – TD US Index (e-Series)
  • A Canadian Bond Fund like TDB909 – TD Canadian Bond Index (e-Series)
  • International Index Fund like TDB911 – TD International Index (e-Series)
  • A Dividend ETF (if you are so inclined) like FTSE Canadian High Dividend Yield Index ETF (VDY)

A fairly typical Couch Potato portfolio. How much of each you buy is up to you, but let us assume an equal amount bought in each of these funds.

        Jan 2 2018    Dec 26 2018
TDB900 $      1,000.00 $            961.20
TDB902 $      1,000.00 $         1,103.88
TDB909 $      1,000.00 $            995.90
TDB911 $      1,000.00 $            958.60
VDY $      1,000.00 $            959.30
Value $      5,000.00 $         4,978.88    -0.422%

At the end of the year you would have lost about $21 or 0.42% of your investment. Given how the markets are running right now, not too bad really.

If you are an investor in individual stocks, I wish you good luck. For Indexers let us remember the sage words of Preet B., “I am an Indexer, I don’t care what the Index did today!

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The 12 Days of Christmas Debt

To get everyone in a festive Christmas spirit, allow me to offer this cautionary tale of Christmas Debt.

The 12 Days of Christmas DEBT

12 Months of Agonizing Payments

Have you paid off last Christmas yet? How about the one before that?

11 Maxed Out Credit Cards

How much room do you have on those cards? Really?

10 Overdrafts a leaping

Really, how much are you paying in overdraft fees? Just because your bank balance can show a negative value doesn’t mean it should always be that way!

9 Minimum Payments

Do you realize you will pay that off in 20 years with those minimum payments, or possibly 50 years? Minimum payments forestall the inevitable.

8 Balance Transfers

Shuttling debt from one credit card to another is not solving the problem. Juggling chainsaws will lead to a messy end, and that is what this is.

7 Cashed in Emergency Funds

Is Christmas debt an emergency? I don’t think that is the emergency you were planning.

6 Pay Day Loans

Pay Day Loans could be starting a death spiral in your finances that will lead you to Day (3)

5 Gold Reclamations!

Did your Grandmother leave you that ring to help you cash it in for pennies on the dollar to pay off debt?

4 Calling Collection Agencies

These are not the bogus ones you get emails. These are the real ones

3 Calls to insolvency trustees

They can help, but you can’t keep doing this every year either.

2 Calls to your family for an emergency loan

You do have to pay those back, you realize?

1 Mortgage Refinance

Using the equity in your house to pay for consumer debt is a terrible thing.

Yes, not very festive, but ultimately a bit too true. I go to Church, and I am confident the Christmas season is not to bankrupt you. It is at a time to get together with family and friends. 

Wonder why you dislike this time of the season? How many of the Days of Debt on the list are you facing in January?

Previous Boxing Days?

I have written on the topic of Boxing Day a few times.

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Christmas Treats, RESPs, The Markets and Polkas and #MoneyTalk

With Advent upon us, it is not much time until Christmas will be here (and then gone). Did you realize there is actually a Financial Advent Calendar on this very site? You can consult it here.

With interest rates slowly rising, is it time to rethink short term savings? A good example is your RESPs for your kids. Should you be thinking about using GICs to ensure the money grows slowly but safely? Can you even use GICs in your child’s RESP? All good questions. Now you can get GICs with interest rates above 2%, maybe you should at least be putting your kids’ Grant money and put that in  there? Remember it is near year end, if  there is room still left you should  put a top up to get to your $2500 yearly maximum payment to the RESP.

My view of the Stock Market is it is currently having a shart. If you are unclear on what a shart means, please clock on the link. This shart might become something worse soon, given the trade stupidity going on, but for nice it is a mess caused by someone thinking they were only letting off gas.

Are planning on playing the Christmas Money Polka this season? It’s a simple game where you have bought many things on credit, and when the bill arrives in January, because you didn’t budget well you take the cash you got from family and pay off some of those bills. The money just goes round and round, and at the end of it you feel sick (just like a Polka), and broke.

Did you start your Emergency Fund with the idea that you were going to pay off Christmas with it? That’s not an emergency fund, that is a Christmas Fund. Maybe you should have both? Remember starting to plan for Next Christmas can start before this Christmas. You will have a better Christmas perspective now, than in July next summer.

Recent Articles

I really need to read letters more carefully, as I ended up blundering my way into a very large tax bill because of my inability to read letters well. I outline the predicament of my own creation in CRA and me: Assessment Excitement, the CRA was very helpful is the moral of this story.

Podcast of the Week

Finally you get to see what I actually look like, and you may realize why I have commented that I have a face for Radio. I do like the preview photo makes you wonder what I was thinking.

A Face Only a Mother Could Love
🎱 For more personal finance stories click here 🎱

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CRA and me: Assessment Excitement

The summer of 2018, the CRA sent me a letter of assessment for my son’s school fees. These kind of assessments happen often. While I am slightly freaked out by them, it is still not a big deal. The letter asked for all associated documentation supporting my medical claim for my son’s school fees.

I dutifully collected all the receipts for the School and for my son’s Occupational Therapist. I wrote a cover letter outlining what I was sending and I sent it via registered mail to the CRA.

In that previous paragraph I made two mistakes (one small and one critical error):

  1. I could have easily scanned all the receipts and submitted them to the CRA on line. Much faster, and less expensive. Hopefully I will remember that for the next time.
  2. The letter asked for all associated documentation, and I misinterpreted that to mean receipts, and that caused a big problem.

 For those unaware, if your child is disabled you can claim their schooling or training as a medical expense. You must have a DTC first, and then ask permission of the CRA to be able to make that claim on your taxes. This is where my blunder took place.

My son had changed schools a while back, and I had never done a new letter outlining how his new school would help him with his disability (Autism Spectrum). Without this letter, and supporting documentation from his Doctor and other medical professionals, the CRA had every right to deny this claim on my taxes. As I did not include any supporting documentation with my assessment, the CRA denied my claim, and sent me a bill for what I owed.

The CRA was in the right to do this, and I was in the wrong for not sending it. I want to be clear on this point, I am not casting any shade on the CRA, they have actually been very helpful in this case.

It took a while, but I finally received my Assessment response via email, and I was shocked and upset to see the results(an over $4000 tax bill). After reading the email a few times, my wife read it and pointed out my mistake. She realized that I had not sent a new package outlining how the new school helped my son. I believe I sputtered and swore, but then came to the epiphany that my wife was right.

The past few weeks I have spent collecting the needed data and letters to support my claim for my son’s school expenses, and submitted them (electronically) to the CRA.

As the date of when I was supposed to pay my new tax bill came closer, I realized my reassessment was not going to be completed in time. Again, this was due to my procrastination, not the CRA inaction. I decided to call the CRA, and they directed me to their collections group.

When I spoke to the collections person, he brought up my file, I explained that I had submitted the needed documentation, and they decided to give me a 90-day extension on my due payment. This means I won’t have to fork out $4000 at Christmas time.

There is no guarantee that the CRA will accept my claim and documentation. Given the amount of supporting documentation I am hopeful that this is sufficient, but at least I won’t have to pay out a large sum of money now (that might be refunded later).

Conclusion

As I have said previously, if you don’t ask the answer is always no. I asked the CRA for clarification on what they needed, they provided that to me. The CRA also granted me an extension on payment, because I asked, and had a good set of reasons.

Sometimes the CRA screws up, but in this case, they are actually the heroes in this story (so far).

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