Canadian Personal Finance Blog

It seems to be normal practice for most banks these days to attempt to maximize their business with you. Many try to upsell services to you, but others go with a simpler strong-arm tactic, if you want the service you must bank with us. This is within the rights of the bank to demand this, but you don’t have to capitulate either.

An example of this is the practice of forcing anyone opening a debt vehicle with the bank, to also have to open a chequing account. This situation arises if you use a Mortgage Broker or have bargained with many banks for your Mortgage.

You don’t have to open an account, but the bank won’t let you play either.

Creating the chequing account typically forces the user to have to pay a monthly fee to have the account (not in all cases, but in some cases). I have seen this with Student Lines of Credit, Mortgages and HELOCs as well.

This “policy” seems a throwback to the days when banking was done during bankers’ hours, but also another cash grab to make consumers pay more for services they aren’t using. This implies that transferring money from a different bank is hard for banks. The real reason would be they can then see the funds are available to pay the loan in question.

A reason I have heard quoted by bank representatives is that if the customer wants to have access to  on-line banking (e.g. to check their loan balances) they will have to open a chequing account. Seems a bit thin, as a reason, but I am not a bank.

Are All Banks Like This ?

These examples I have heard are from the “Big Banks” I am not sure about the on-line banks or trust companies.

As a stock holder in the banks it seems like a good business practice, but as a consumer I am tired of dying a death of a thousand paper cuts. Having to pay service fees to many banks a month does add up.

Holy cow, interest rates went up another ¼ point this week, and the media is wetting itself. Surely it is time to panic? Not yet, but a single jump could have been an isolated event, two could signify a trend. Was this not expected, is the only question to ask. The Canadian economy seems to have gone off the rails in terms of growth, and the Bank of Canada feels it needs to put the brakes on things, so this looks like a trend.

How High are rates going? Hopefully not THIS high!

The Canadian Dollar has jumped in reaction to this rate rise. Your Canadian dollar can buy more, but your Canadian products are now more expensive on the open market too.

My vacation didn’t go that well, but I did have a nice conversation with Doug Hoyes. Doug will attempt to make it sound coherent and there will be a podcast about a few things soon. Doug is an interesting chap to  chat with, given he is a Bankruptcy trustee. I learned that before you claim bankruptcy you need to actually show your spending habits and all your assets to the trustee. Maybe folks should do that now, so they can figure out where the problems are before you call Doug?

Gasoline is back to over $1.20 a litre in Ottawa, and it is not likely to drop any time soon is the predictions from Gas Buddy and such. I guess I am glad I drive a Corolla, might be time to look at electric cars, or better still going back to a single vehicle for the family.

The NFL season has begun, and I wonder how long will this sport continue? I have loved football my entire life, especially the NFL, but given the concussion findings that are coming out, I just wonder how much longer the sport can continue? Some have suggested better equipment might change things, but I am not  that optimistic. My guess is that football has about 10-15 years until it will fade away. Economically the question what will the economic impact of this multi-billion dollar industry disappearing have?

Recent Writings

No, I am not getting into the travel blogging world, far too competitive. The Big Cajun family went on vacation so we figured we’d publish some Big Cajun Vacation Tips. The vacation didn’t go as expected with my son getting a nasty strep throat, but it was still enjoyable. I also did a bit of work, chatting with Doug Hoyes, there is a Podcast planned out of those sessions.

What is the Importance of Financial Reports? Do you put together IKEA furniture without reading the instructions? Why don’t you read your financial reports ? You need to at least be able to understand your Credit Card Bills, and Bank statements, or you will be in trouble.

I tip my hat to David Letterman with Stupid Bank Tricks, showing some of the things I have done to make my bank actually help my financial plan.

Micro Blogging

I like when a tweet is self-contained and this comment by John Bogle is just that.

🤖 For more great stories on money click here 🤖

We have returned from our annual Cajun Family Vacation, and this year we learned a few valuable things about planning ahead. Here we give you (with some help from my wife) some useful vacation tips.

A Vacation Tip is to visit the Halton Radial Railway

• We bought our La Ronde Season passes in April, and it ended up costing less than a Single Day’s pass. This was a Gold pass too, so free parking made it a great deal. Same is true for Canada’s wonderland.
• The Toronto CityPass is another great bargain if you want to go to the Aquarium, The Science Centre, Up the CN Tower, the zoo and some other stuff that my son didn’t want to attend.
• Always have a Plan B on vacation as well. Thanks to my son getting a bad strep throat infection we ended up not doing a lot of what we had planned to do.
• Never a bad idea to investigate medical facilities around where you are staying. We found a walk-in medical clinic and got my son some antibiotics. Always bring your health cards and medical/drug plan information with you as well (free antibiotics). It could end up saving you a lot of money and headaches (if you are inside Canada). Travel insurance would be a good idea if you are out of the country.
• If your hotel room has an issue, like a raucous party that goes on until say, 4:30 AM outside your door, remember to call the desk to ask for help instead of hoping for the best. When you check out mention it again, and most hotels will rebate you some of your nightly rate. I tend to be quite polite and compliment the hotel in this situation (and ask “… why do people do that?”). Worked for us, twice this summer.
• We like to stay at hotels that provides a fridge and microwave in the room to help save money (it also helps ease our son’s anxiety to have familiar food from home). We have even been known to travel with our own toaster.

These are a few simple tips, there are plenty more out there. See which ones work for you.

Previous Stupid Bank Tricks

I enjoy strategies to use the banking system to your advantage. With this in mind, I have written a few articles on Stupid Bank Tricks.

• Real World Example: Kids Allowances. An early article pointing out how you can automate your kids’ allowances, using the bank.
• A Quick Brilliant Savings Tip was done by a co-worker. It is not really a banking trick, but still fun.
• Pay Yourself First outlines how to spread your money around using your payroll system.
• I have set up an account to not have to pay ATM fees, it worked for a while.

More Stupid Bank Tricks

A co-worker told me about a stupid bank trick (with my apologies to David Letterman) that has helped him a few times. This one struck me as particularly good strategy.

Create a bank account where deposits will go. Deposits such as,

• Pay cheques
• Tax Refunds
• etc.,

This account is solely in place as a deposit point. The account information is given to your jobs payroll department and the CRA.

The strategic part is to have a working account which scrapes this account, to build up funds for do day-to-day banking. This account is banking main street, where bills get paid, cheques written, groceries paid, and other normal banking tasks.

Why separate these two accounts? In the case of my co-worker, he found out he was going to be “Phoenix’ed”, as something had gone wrong with his pay, and they wanted to take back money from the account. His “scraper” functions had already taken the money from the account, so his wages could not be taken back, as there were insufficient funds in the account.

Why This Strategy ?

Compartmentalized bank accounts is an interesting idea. I have done this for saving, but had not thought of the ramifications of a “scrape back” on my account.

I assume there is a way to tell your bank not to allow withdrawals from your account by specific folks? This is not a topic I had ever thought about.