Legal Tips for Saskatchewan Renters

21 Jul

By Sheryl Smolkin

In Part 1 of this series for renters we looked at things to consider when you are looking for a rental property. Part 2 will focus on the legal rights of landlords and tenants in Saskatchewan. These legal obligations are prescribed in The Residential Tenancies Act 2006 and The Residential Tenancies Regulations 2007.

First of all, it’s important to understand the types of accommodation that are not covered by these rules. For example, if you are living in a school dormitory, hotel, motel, cottage or resort home rented for less than six months, these properties are excluded from the protections and responsibilities outlined in the legislation. Other exclusions are health care facilities, personal care homes and farm homes rented by people cultivating the land.

Here are some FAQs and answers about the rights and responsibilities of Saskatchewan landlords and tenants.

  1. Do I need a lease?
    You and your landlord can mutually agree to a fixed, periodic, month-to-month or week-to-week type tenancy and a signed lease is not required for periodic leases. A fixed term lease of more than three months has to be in writing, must detail the date on which the tenancy expires and, must contain the provisions required by the Residential Tenancies Act. If the lease is written out, your landlord is required to give you a signed copy within a period of 20 days of when it is signed.
  2. My future landlord wants a two month security deposit? Do I have to give it to him?
    No. Deposits that are collected by the landlord cannot exceed one month’s rent and they can be used to cover the cost of damages to the rental property. Your landlord can demand a security deposit, but only at the beginning of the tenancy. It is also unlawful to charge tenants key money.
  3. My one year lease is expiring. Do I have to give notice that I am leaving?
    Term leases always expire at the end of the set term. Your landlord has absolutely no obligation to give notice to vacate at the end of the period, nor do you. However, your landlord is required to provide you with two months of advance notice when telling you whether or not he is willing to renew your lease, and if the landlord is willing, he must provide you with the terms of the new lease.
  4. What if I want to break my lease early?
    You can end your tenancy by simply giving the follow notice:

    • A minimum of one month’s rent before the day of the month on which the rent is payable for a month-to-month tenancy
    • A minimum of one week before the day of the week on which the rent is payable for a week-to-week tenancy
    • One day’s notice if the landlord is in breach of a “material” term included in the rental agreement (for example, if the unit is in a state of disrepair and considered uninhabitable). In these circumstances, notice that is given must provide the reason the lease is being terminated, and if the breach can be remedied, you are required to give the landlord a reasonable amount of time to fix the breach before ending the tenancy.
  5. My landlord told me I have to leave in 15 days. Is that legal?
    It may be if your rent or utilities have been overdue for at least 15 days. Otherwise, a landlord may end a tenancy for any of the causes set forth in s.58 of the Residential Tenancies Act (i.e., repeatedly late paying rent; unreasonable number of occupants in the unit; putting landlord’s property at significant risk etc.) by giving the following notice:

    • At least one month before the day of the month on which rent is payable for a month-to-month tenancy.
    • At least one week before the day of the week on which rent is payable for a week- to- week tenancy.
    • Earlier upon application to the Office of Residential Tenancies.

    The landlord must give you a reasonable period of time to fix the cause for which the tenancy is being terminated if the reason can be remedied. You may dispute the notice by giving notice to the landlord within 15 days after receiving his notice.

  6. Can I sublet my unit?
    If your tenancy is for a fixed term, you can sublet the property with the landlord’s written consent, and the landlord can only withhold consent when it is considered reasonable to do so. The landlord can charge you a fee of no more than $20 for considering or consenting to the sublease.
  7. I just moved in five months ago and my landlord wants to raise the rent effective immediately. Do I have to pay the increase?
    You do not. Landlords are required to give one year written notice of a rent increase in the event of a periodic tenancy, unless they are a member in good standing of the Saskatchewan Rental Housing Industry Association (SRHIA), in which case the landlord can give six months’ written notice of a rent increase. If a landlord ceases to be a member in good standing of the SRHIA during the six-month notice period, the notice given by the landlord will take effect after 12 months rather than six, and the landlord is required to inform the tenant of this in writing. Rent may be increased only once each year, unless the landlord is a member in good standing of the SRHIA, in which case rent can be increased twice each year. No notice of a rent increase can be served within six months of the start of the tenancy or the date of the last increase, whichever is later. Public housing authorities as well as non-profit corporations are exempt, as rent may vary with income.
  8. Can my landlord enter my apartment when I’m not home?
    Your landlord can enter your rented unit in the event of an emergency, or if you agree. Otherwise, the landlord is required to provide you with 24 hours advance notice in writing for entry that takes place between 8 a.m. and 8 p.m. specifying a four hour period when they will be entering the premises.If you have provided a notice to terminate the lease, your landlord is allowed to show the property with your consent, or as may be agreed in writing with you or after the landlord has made a reasonable effort to give you two hours advance notice.
  9. Can I withhold rent for repairs?
    It is not legal for you to withhold rent for repairs and may warrant an eviction for nonpayment of rent. If you have requested that the landlord make certain repairs and the landlord has not done so, you have two options other than withholding rent.The first option is to bring an application to the Office of Residential Tenancies for an order directing the landlord to do the repairs, and you may ask for a reduction of the rent until the repairs are completed.The second option you have is to contact municipal authorities to determine if any local bylaws that set minimum standards for rental properties have been broken. If so, you can ask for the property to be inspected by an official. If officials find any repairs that need to be done, an order will be issued to the landlord to fix the problems immediately.
  10. Can a landlord  refuse to rent to me because I have a cat or I smoke?
    Yes. Pets are permitted in the rental unit only if they are explicitly allowed in the lease or if the agreement does not address this issue. The landlord can also include a no-smoking cause in the lease.

For general information about renting in Saskatchewan contact:

Office of Residential Tenancies
120 – 2151 Scarth Street
Regina, SK
S4P 2H8
Toll-free: 1-888-215-2222 (within Saskatchewan)
Toll-free fax: 1-888-867-7776 (within Saskatchewan)
Tel.: 306-787-2699
Fax: 306-787-5574
http://www.justice.gov.sk.ca/ORT
See Web site for contact information for all offices.

 

Jul 18: Best from the Blogosphere

18 Jul

By Sheryl Smolkin

We recently posted the blog Rent vs Buy: A Reprise, but the subject of when, or even if millennials will ever buy homes seems to be a continuing theme in both the blogosphere and the mainstream media.

Its not surprising that issue is still a live one, particularly in cities like Vancouver and Toronto where housing prices have gone through the roof and only young people with great jobs and a hefty gift from the Bank of Mom and Dad can get their foot in the door.

Several months ago BMO published the report Rent-Weary Millennials Not in a Hurry to Become Home Owners; Need to Save Accordingly. In the prairie provinces, people age 19-35 gave the following reasons why they are delaying home ownership:

  • 27%: Don’t feel comfortable making such a large purchase at this point in my career
  • 46%: Other priorities take precedence (such as traveling, continuing education or starting a business)
  • 33%: Don’t want to be left with no disposable income
  • 40%: Not sure where I want to settle down
  • 27%: Have to pay off debt first

In a Huffington post blog, Jackie Marchildon asks Are Millennials Choosing To Rent, Or Just Choosing Not To Buy?  She argues that renting is its own lifestyle and although currently dominated by millennial city dwellers in Toronto and Vancouver, it is not unique to this generation, nor to their respective cities.

On the Financial Independence Hub Helen Chevreau (daughter of well-known personal finance guru Jonathan Chevreau) says she is  Young, saving, and hopefully one day will buy a house. She critiques an article about “Tony” in Toronto Life who would rather spend his generous pharmacist’s salary on exotic trips and lavish spending than be shackled by a mortgage. She advocates for a happy middle ground: “somewhere between throwing down $1,500 on a meal and stealing toilet paper from the bathroom of the bar to save a few bucks.”

Another perspective comes from a young married couple who is saving up for a cottage because “they don’t want to invest their money in a shoebox.” They are also paying off student debt ($700/month) and spending $300/month on dog walking for their new Labrador mutt puppy.

Rent to Own | Option to Purchase is an interesting article by Saskatoon lawyer Richard Carlson. “There is no such thing in law as a ‘rent to own agreement.’ The idea was made up by people who wanted to sell to someone who did not qualify for a mortgage,” he says. “There is a good chance it will lead to a problem and a dispute.” He also distinguishes “rent to own” from an “option to purchase” which comes with its own set of challenges. Bottom line is, get independent legal advice before you enter into one of these questionable arrangements!

Do you follow blogs with terrific ideas for saving money that haven’t been mentioned in our weekly “Best from the blogosphere?” Share the information on http://wp.me/P1YR2T-JR and your name will be entered in a quarterly draw for a gift card.

What you need to know before you rent an apartment

14 Jul

By Sheryl Smolkin

We’ve written several articles about the ins and outs of home ownership, but in fact Statistics Canada reports that 31% of Canadians rent. And although 82.4% of couple-family households own their dwelling, only 55.6% of lone-parent households have purchased a residence and less than half (48.5%) of non-family households own their own homes.

While at first blush, finding and renting an apartment may not seem particularly complicated, if you’ve ever had a terrible rental experience you probably asked a lot more questions the next time around.  So in order to give renters some food for thought, this week we present the first of a two-part series on “what you always wanted to know about renting an apartment but you were afraid to ask.”

  1. Location, Location, Location:
    A perfect apartment is not perfect if it is miles from work and family and not on a regular transportation route. Also, check to see if there are easily accessible grocery stores, a drugstore, schools and places of worship.
  2. Paying the rent:
    Make sure you can afford the rent. The landlord may have you fill out an application, do a credit check and ask you for references. One rule of thumb is that you should budget 25%-30% of your income for rent. Typically you will have to give a first and last month’s rent when you move in. If you are a student, a parent may have to co-sign the lease.
  3. What the rent covers:
    Ask about any additional charges for utilities or cable TV. Find out if you are entitled to a locker and or/parking or if there is an additional charge. Do you get a guaranteed parking spot? Is it indoors or out? Do the window coverings and the microwave stay with the apartment or go with the current tenant? How much does it cost to use the laundry machines?
  4. Fuzzy and Fido:
    Do you have devoted pets who are members of your family? Don’t take for granted that dogs or cats are allowed. Even if you have a very small, quiet, dog you will have to take him out several times a day and there is always a nosey neighbor who will notify management that you are breaching the lease.
  5. Property inspection:
    Make sure you get to inspect your unit before you sign on the bottom line. Check for leakage, insects and that all the appliances work. Test the faucets, hot water, the shower and the toilets. If you see any damage, take pictures and inform the landlord before you sign the lease. If possible, get it in writing when necessary repairs will be completed.
  6. Building maintenance:
    Is the building clean and in good repair? What condition is your unit in? Is there a superintendent in the building you can easily contact if you suddenly have no hot water or your refrigerator stops working? Ask other tenants about their experience.
  7. Decorating your apartment:
    Can you paint or wallpaper your apartment? Will you have to repaint it “boring beige” before you leave? What if there are holes in the wall from picture hangers? Will your last month’s rent act as a security deposit? In what circumstances can the landlord refuse to return all or part of your security deposit? Can you change the locks or put additional security locks on the door of your unit?
  8. Renter’s insurance:
    These days everybody has computers, tablets, TVs and other very portable electronics. Regardless of how good you think the apartment security is there is always the risk that your apartment will be broken into or your possessions destroyed by fire. Invest in a comprehensive tenant’s insurance package.
  9. Roomies:
    You may need to rent out a room in your apartment to help pay the rent. Does your landlord have to approve the roommate? Does the roommate have to co-sign on the lease? Are you responsible for the full amount of the rent if your roommate packs up and leaves in the middle of the night? Can you list the apartment on Airbnb?
  10. Other misc. questions:
    Can you barbecue on your balcony? Can you store your bike on the balcony? Can you control the heat? How do you let somebody into the building? Are there overhead lights or enough convenient outlets to plug in lamps and other appliances? Is there Wifi in the building? How is the cell phone reception? Where do you dispose of garbage? Is the building noisy? Is there a history of vandalism in the building or the area?

Next week we will talk about the legal rights of landlords and tenants in Saskatchewan.

 

Jul 11: Best from the Blogosphere

11 Jul

By Sheryl Smolkin

The world was shocked to learn that the UK voted to exit the European Community. Nobody really knows what will mean for investors yet but Robin Levinson King at the Toronto Star suggests four ways Brexit could affect Canadans. They are fewer exports, lower returns, a stronger U.S. dollar and a continuing white hot real estate market if interest rates stay low in this country.

Do you have a special skill set or do you own something that someone else wants? Trade it for something you need writes Marie Engen on Boomer and Echo. Bartering for goods and services instead of paying cash is a concept that is alive and well today. It can also save you a bundle.

For many people, paying off debt is one of life’s biggest challenges. Jessica Moorhouse blogs about four women who will inspire you to crush your debt. For example, Amanda D. from Ottawa paid off $64,000 in seven years. She consolidated all her debt with one bank, negotiated a lower interest rate and accelerated her pay down by doubling monthly payments and making periodic bulk payments.

How to purchase life insurance and what kind you need is a potential minefield for many people. On Money after Graduation, Bridget Eastgaard says buy term life insurance and avoid cash-value life insurance at any cost. That’s because cash value life insurance is much more expensive. Also, even one missed payment can void the policy which means you will lose both your insurance coverage and your premiums paid to date.

And since some of you still may not have planned a vacation for the summer or the balance of this year, take a look at Barry Choi’s blog The cost of travel: How to pick a vacation destination. He says daydream a little bit and pick your destination but be realistic if you can’t afford it or it really doesn’t make sense to go to Thailand in typhoon season. The easiest and most cost effective destinations may be locations where you have friends or family.

Do you follow blogs with terrific ideas for saving money that haven’t been mentioned in our weekly “Best from the blogosphere?” Share the information on http://wp.me/P1YR2T-JR and your name will be entered in a quarterly draw for a gift card.

How to choose a career

7 Jul

By Sheryl Smolkin

While selecting a future career at the end of high school or university may seem like a momentous, life-long commitment, the fact is that few people spend their whole life anymore in the same job or even doing the same type of work.

In a 2014 article on Workopolis Peter Harris noted that from 1990 through 2000 the number of people staying at their jobs for less than two years doubled from 16% to 33% of employees. That trend has only accelerated into the 2000s, almost doubling again from 33% to 51%.  In other words, job hopping is the new normal. In a subsequent Workopolis commentary Harris concludes that if the current trend continues, Canadians can expect to hold roughly 15 jobs in their lifetime.

So if you are starting out in 2016, or making a career change, how do you decide what field you want to go into and how to achieve your career objectives?

It doesn’t hurt to take advantage of vocational testing that may be available from guidance counselors or private consultants. In some cases the cost of these services will be pegged to your means. This will help you zero in on the kind of careers that you have an aptitude for and you are interested in.

You may also be able to leverage your hobbies. Playing in a band or singing in a choir can give you a great sense of satisfaction but these pursuits may not always be the foundation for a remunerative career. However, teaching music, audio engineering or music therapy may be more practical applications of your talents.

Similarly, if you like playing video games, consider becoming a video game designer or a programmer. Sports enthusiasts can become coaches, announcers, agents, trainers or sports event planners. Visual artists may opt for a career in graphic design.

Also, think about the subjects in which you excelled in school. A math whizz may enjoy a career as an actuary or accountant. An English major can aspire to be a journalist, an editor or a lawyer. And if you are good at fixing things or working with your hands, don’t rule out working in the trades such as carpentry, auto repair, construction or electrical work.

The Government of Canada’s Job Bank allows you to explore careers by low, medium and high wages in different parts of the country. When I searched for “Registered Nurse” in Saskatchewan, I found that in Saskatoon the hourly wages ranged from a low of $25.50/hour to a high of $46/hour, but in the Prince Albert Region the average hourly pay range is from $19.45 to $47.

When you have zeroed in on some possible careers you may be interested in, find somebody working in the field who can answer your questions about what it is really like to be an engineer or a plumber. Most people are willing to find time for a ½ hour “interest interview,” and some may even allow you to “job shadow” for a day.

Of course regardless of where your passion lies, it is wise to do a “reality check” to determine whether the career you are contemplating is in a growth area where there are lots of opportunities.  In Canada’s hot jobs, and ones to avoid Nathan Laurie, president of Jobpostings.ca notes that anyone with a computer science, math or engineering degree will find lots of opportunity on the job market. “Those degrees can apply to industries across the board — finance, e-commerce, IT — there are lots of roles for those types of positions. In addition, areas including web development, design, robotics and big data are seeing a lot of growth,” he says.

You may also be surprised to find out that Canada’s Best Jobs 2016: The Top 25 Best Jobs In Canada ranks the following as the top five jobs in the country, based on median salary, wage growth, and five-year employee growth:

  1. Mining or Forestry Manager
  2. Urban planner
  3. Pharmacist
  4. Pilot or flying instructor
  5. Public Administration Director

But regardless of which career you train for and where you or your kids get their first or next job, chances are it won’t be the last one. Today’s workforce must be the CEO of their own careers. That means keeping an up-to-date resume, networking and continuously improving both generic and job specific skills. In this way you will always be ready to embrace the next, great career opportunity when it comes along.

The Retirement Boom: Reboot and Reinvent Rather than Retire*

30 Jun

By Sheryl Smolkin

Click here to listen

Click here to listen

Hi. Today I’m interviewing Catherine Allen, co-author of The Retirement Boom for Save with SPP.com. She is Chairman and CEO of the Santa Fe Group, a financial services and technology executive, corporate board director, and expert in cyber security and risk management. Catherine lives in Santa Fe, New Mexico.

Q. Catherine, The Retirement Boom is a book by baby boomers for baby boomers about the transition into a new phase of life. Why did you and your co-authors decide to write the book?
A. Well, all of us are boomers ourselves at various ages within the category. We all have experienced or continue to experience reinvention. We all have a desire to stay involved and to be relevant. In fact, we do retreats and many of our attendees age 55-60 told us, “I really don’t want to retire. I’m not ready to retire. I want to do much more.” That’s what led us to do the research and the book.

Q. Who should read your book and what can they expect to learn from it?
A. First are the boomers, especially those 55 plus, who are concerned about and have a fear that they’ll never be able to retire or that they will run out of money before they pass away. For them it’s both financial and lifestyle planning. Twenty-seven percent of Gen Xers are also very concerned that they too many not be able to retire. Lastly there are many 70 year olds that have retired and told us, “I’m bored. I want to do something different. I want to reinvent myself. I may have 30 more years to live.” By reading the book, financial advisors and corporate HR people can also learn a great deal about the needs of their clients and workforce.

Q. How do you think retirement today for baby boomers is different than it was for their parents 30 or 40 years ago?
A.I see differences in four areas: financial, health, emotional, and government policies.

Thirty or forty years ago many more people had pensions which today are pretty much gone. Most people thought they might live to 70 or maybe 72 or 75. Today because of health care and being fit it’s very likely the boomers will live until 100. That means there are expenditures like travel or entertainment or other things that they want to do that they need to allow for.

Also, when people retired 30 or 40 years ago they did the 3 G’s as I call them. Gardening, grandchildren, and golf. Today people want to stay active, they want to get involved, they want to give back, they want to be a part of the ongoing environment.

Finally, government policies are not keeping up. Government policies have to positively support the aging population instead of being against things like social security or medicare or pensions or even not understanding the impact of aging. Those are all big differences I see from just 30 or 40 years ago.

Q. People spend their whole life with an identity that’s tied to their work. How can they overcome the fear associated with this loss of this identity to better embrace and enjoy their retirement?
A. That’s my favorite subject and it’s about reinvention. You don’t have to keep that same identity. This is a time when you can follow your passions as a way to reinvent your identity. We encourage people to keep their bio and resume and certifications up to speed because you never know when you might want to go back into the work force, especially if it’s a field that you love.

We encourage everybody to have a business card that has their website or their email and telephone number on it so that they feel like they have an identity and that’s who they are. Then lastly, we talk about people having a portfolio career and that means perhaps a third of what they’re doing is earning income by consulting or writing books and so forth. A third of their time is giving back through non-profits. A third of their time is just having fun enjoying and learning about life.

Q. Many people do continue working beyond the normal retirement date. Do you think that most people that are doing this are doing it for love or for money?
A. Well, that’s … It’s hard to tell. I would say 50/50. First of all, they are continuing to work as a form of insurance to keep funding their lifestyle and their retirement because many people believe they will live to 100. Secondly, many people want to remain again, relevant. They want to make a difference, they’re engaged.

The boomers — many of whom are part of the 60s generation — feel like now they finally have time to give back. It might be teaching, it might be mentoring, it might be being active in non-profits either by giving or volunteering or being on boards. Recent research published in the Journal of Epidemiology and Community Health say that the longer people work beyond 65 the less likely they’re to die at that age compared to others who do not work.

And what’s interesting is the numbers go up. At age 72 you’re 56% less likely to die than a 72 year old who is not working. I think that kind of research is going to encourage people to work longer after the age of 65.

Q. What do you mean by retirement robbers and how can retirees avoid them?
A. First of all, the biggest retirement robber might be yourself. They are people that keep you from doing what you want to do. You may have set up goals for retirement so you have time to follow your passions. Now guilt keeps you from enjoying what you said you wanted to do in retirement.

Also there are relatives. You’re retired, so guess what? You’re the one that can do the errands, you might be the caretaker or the “go to” person. We encourage people to try to think of retirement just like thinking about a career. What it is that you want to do, and how do you want to allocate your time? Try to stick to your plan so you are not sabotaging yourself.

Q: You and your co-authors interviewed over 300 people as part of your research for this book. Can you share 1 or 2 of your favorite anecdotes with us?
Well, I’ll start with my dad. He was a small town community banker. He always said he wanted to die with his boots on. That was his way of saying he wanted to be working when he passed away and he did. He was always a role model for me.

We’ve also heard from several women who were stay-at- home wives raising their kids who have gone back to work. Now their husbands have retired and they say things like, “I married you for life but not for lunch.” In other words, just because you’re retired doesn’t mean that it’s up to me to fill all of your time.

Another example is I was on a corporate board with a gentleman who was 92 years old and probably the smartest one of all of us. He wouldn’t say anything until he was ready to say the exactly right thing. There are lots of examples of people well into their 70s, 80s, and even 90s who are still actively involved and engaged in the world.

Q. What are some of the ways retirees can simplify their lives so that they can pursue their passions?
A. Well, start with your own home. Downsize or clean up. There’s a relationship between having less clutter in your mind and less clutter in your home. Try yoga or meditation or journalling. One of my favorites is detaching from technology for a while, whether it’s for a weekend or for a day or even for an entire vacation.

Lastly is relationships. I think as you get older you really want to think about who are the people that are most important to you and surround yourself with those you trust. Plan most of your time to be around these people. I call it sorting friends just like you sort your closet.

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The Retirement Boom: An All Inclusive Guide to Money, Life, and Health in Your Next Chapter can be purchased in paperback or for Kindle on Amazon.com.

*This is an edited transcript of a podcast interview recorded in May 2016.

Jun 27: Best from the Blogosphere

27 Jun

By Sheryl Smolkin

I was noodling around the internet today when I came upon Rock Finance, which scans 200+ articles about money and daily and links to the best ones they think will motivate and inspire readers. Cait Flanders who formerly blogged as “Blonde on a Budget” has partnered with j.money (Budgets are $exy) to populate this site.

Here are a few of the “best money blogs” they have featured recently:
In Revisiting the Latte Factor: The Power of Daily Routine Trent Hamm says giving up your latte and bagel once and saving $8 isn’t a big deal. However, if you cut out 250 purchases, it adds up to $2,000. That’s why he says examining your regular routine and finding ways to save on recurring purchases is important.

Is it ethical to return stuff to the store like the dress you only wore once to the prom or unopened packages of food? When J. Money was a student he gave a used boombox back to Walmart several months after he bought it because he was flat broke and the store had a 90 day return policy. Nevertheless he was very embarrassed and made a vow not to return goods he purchases in future unless he immediately realizes he made a mistake or the goods are damaged.

Mrs. Frugalwoods has WAY more willpower than I do. She says she hasn’t purchased any clothes in 2.5 years and counting. Her initial reasons for enacting a ban on clothes-buying were financial, But then she realized she frequently used to buy clothes more for fun than anything else. And the unexpected benefit of her continuing decision not to buy clothes is that she is increasingly less concerned with her appearance. “I’d much rather save money than buy into the notion that I need to fix my appearance,” she writes .

Mr. Money Mustache offers wealth advice that should be obvious. Some of his colourful suggestions are:

  • Don’t try to gamble your way to wealth.
  • When you get a windfall, it should go straight to your highest interest debt.
  • Don’t buy stuff you can’t afford and don’t need.
  • Don’t pay to have stuff stored.
  • Don’t look at restaurants as an ongoing source of food.
  • Stock up on reasonable amounts of things you use when they go on sale.

And the Financial Samurai writes about slicing through money’s mysteries. He questions why Vacation Money Is Crazy Money. After discussing why his frugal habits fell apart on a recent trip to Paris, he offers some interesting suggestions for controlling vacation spending.

  • Create a budget in Excel.
  • Spend cash for food and entertainment
  • Don’t forget exchange rates
  • Where possible combine business travel and personal travel.

Do you follow blogs with terrific ideas for saving money that haven’t been mentioned in our weekly “Best from the blogosphere?” Share the information on http://wp.me/P1YR2T-JR and your name will be entered in a quarterly draw for a gift card and

 

How to pay off your mortgage sooner

23 Jun

By Sheryl Smolkin

A continuing debate among personal finance pundits is whether you should pay off your mortgage first or save for retirement, particularly in a low risk environment. The fact is you should probably do a little of both as frequently as possible. One strategy some experts advocate is to make an RRSP/SPP contribution and then use your tax return to decrease your mortgage balance, thereby reducing your amortization period and minimizing the total cost of your loan.

But whatever you decide to do, your goal should be to eliminate your mortgage entirely before you retire. By doing so, you will reduce your monthly expenses and minimize the impact the drop in income at retirement will have on your lifestyle.

How much you can pay down your mortgage and when will depend on the terms of the loan secured on your property. That’s why it’s important when you are negotiating or re-negotiating your mortgage to clearly understand the terms and what if any penalties you might incur if you deviate from the prescribed payment schedule.

Here are four ways to pay off your mortgage faster with examples as suggested by the Financial Consumer Agency of Canada:

1. Increase the amount of your payments

One of the ways to pay off your mortgage faster is to increase the amount of your regular payments. Normally, once you increase your payments, you will not be allowed to lower your payments until the end of the term. Check your mortgage agreement or contact your mortgage lender for your payment options.

For example, if John is getting a mortgage of $150,000 amortized over 25 years with a fixed interest rate of 5.45% for five years, minimum monthly payments amortized over 25 years are $911.  If John pays just $50 a month more, it will only take 22.5 years to retire the mortgage and he will save $14,000.

2. Renew at a lower rate, keep payments the same
At the end of your mortgage term, when you renew or renegotiate your mortgage, you may be able to obtain a lower interest rate. Although you will have the option to reduce the amount of your regular payments, you can take advantage of this situation to pay off your mortgage faster. Simply keeping the amount of your payments the same will make you mortgage-free sooner.

Stephanie adopted this strategy when she renewed her $100,000 mortgage after five years and the interest rate dropped from 6.45% to 5.45%. While the lower interest rate would have reduced Stefanie’s monthly payments to $924, she decided to keep the monthly payments at $1,000 in order to reduce the total amount of interest payable over the term of the mortgage.By keeping the monthly payments at $1,000 per month with the lower interest rate for the rest of her mortgage, Stefanie will save over $12,000 and will pay off the mortgage two and a half years sooner.

3. Choose an “accelerated” option for your mortgage payment
You can spend approximately the same amount of money on your mortgage each month and still save money by choosing an accelerated option for making your payments. Most financial institutions offer a number of payment frequency options:

  • Monthly
  • Semi-monthly
  • Biweekly
  • Accelerated biweekly
  • Weekly, and
  • Accelerated weekly

Accelerated weekly and accelerated biweekly payments can save you thousands,  or even tens of thousands in interest charges, because you’ll pay off your mortgage much faster using these options. The reason is that you make the equivalent of one extra monthly payment per year.

Let us assume that Richard has a mortgage of $150,000, amortized over 25 years, with a constant interest rate of 6.45%. If he chooses an accelerated payment frequency equivalent to one extra monthly payment a year, Richard will pay off his mortgage over four years sooner and save more than $29,000 in interest over the amortization period.

4. Making lump-sum payments: Prepayments
A prepayment is a lump-sum payment that you make, in addition to your regular mortgage payments, before the end of your mortgage term. The prepayment reduces your outstanding balance and allows you to pay off your mortgage faster.The sooner you can make the prepayment, the less interest you will pay over the long term, and the sooner you will be mortgage-free.

5. Key things to remember:

  • Your mortgage agreement will specify whether you can make prepayments, when you can do so and other related terms or conditions. Read it carefully, and ask your mortgage lender to explain anything you don’t understand.
  • If your mortgage lender is a federally-regulated financial institution such as a bank, as of January 2010, it must show your prepayment options in an information box at the beginning of your mortgage agreement.
  • Your mortgage agreement may specify minimum and maximum amounts that you can prepay each year without paying a fee or penalty.
  • The prepayment option is generally not cumulative. In other words, if you did not make a prepayment on your mortgage this year, you will not be able to double your prepayment next year.
  • A closed mortgage agreement may require you to pay a penalty or fee for any prepayment.

Jun 20: Best from the Blogosphere

20 Jun

By Sheryl Smolkin

After several weeks of “theme” issues it’s time to check in with some of our favourite bloggers to find out what’s on their mind.

On Boomer and Echo, Marie Engen asks the perennial question RRIF Or Annuity? Which One Is Right For You?  She suggests combining both so an annuity covers your basic retirement expenses together with with your CPP, OAS, and any other pension income you may be receiving to give you a guaranteed income stream for life. This allows your RRIF to provide you with investment growth opportunities and easier access to your money for your more enjoyable lifestyle expenses.

Tax Freedom Day 2016 happened June 7th this year. Retire Happy’s Jim Yih says it’s another reason to celebrate summer. He explains where all of your taxes go because once you realize the severity of tax on your lifestyle, it is your job to investigate legitimate ways to reduce your tax bill. “I’ve often said that good tax planning is the foundation to any financial, investment or estate decision,” Yih concludes.

Bridget Eastgaard lives in Calgary where due to the drop in oil prices the rental market is very soft. On her blog Money After Graduation she shares One Simple Shortcut To Put More Money In Your Budget. Her research revealed a similar unit renting for $250 less in her building plus a half-dozen comparable apartments renting nearby for less. She succeeded in lowering her rent by 20%, saving hundreds of dollar a month that will be redirected to accumulating a down payment on a house.

Sean Cooper thinks Millennials Should Save Their Down Payment and Not Rely on the Bank of Mom and Dad. He says by showing your millennial child tough love, you’re teaching your kids a valuable lesson: not everything in life will be handed to them on a silver platter. Just like you did, he says they should to work for it.You won’t be there to help them forever.

And the Big Cajun Man Alan Whitten reminds readers to keep an eye on their bank account to make sure automatic withdrawals are being processed properly on an ongoing basis. When he checked on his son’s RESP recently, he found that TD Bank mysteriously stopped depositing in November of 2015. There has been a problem ticket opened on this issue, and someone will be getting back to him.

Do you follow blogs with terrific ideas for saving money that haven’t been mentioned in our weekly “Best from the blogosphere?” Share the information on http://wp.me/P1YR2T-JR and your name will be entered in a quarterly draw for a gift card.

 

8 reasons for taking your vacation in Canada

16 Jun

By Sheryl Smolkin

An article I read in the Globe & Mail this week noted that the Canadian tourism industry is grappling with a demographic problem that could threaten its future. Apparently millennials are spending far more of their travel dollars outside the country than at home. One reason cited is that it is so expensive to fly within Canada, it makes sense to go further afield.

I can understand that most of us would love to be able to jet off somewhere warm to get away from our frigid winters. But in spite of seasonal mosquitoes and black flies in some parts of the country, Canadian spring and summers at their best are not to be missed.  So in the hope of persuading more of you to spend at least a couple of vacation weeks a year exploring closer to home, here are eight reasons in no particular order why I think you should consider some domestic travel along with the international adventures on your bucket list.

  1. Mobility rights
    You don’t need a passport or a visa to travel from one end of our vast country to the other. With the exception of arcane laws forbidding the import of alcohol between provinces, you can buy anything you want and take it home without worrying about declaring your goods or paying duty. Medicare insurance coverage varies from one province to another, but your health card will generally be accepted across the country. Nevertheless, travel insurance is still a good idea to fill in any coverage gaps like air ambulance in the case of illness or an accident.
  2. See Canada first
    Tourists come from all over the world to see our country, but many of us are looking for “exotic experiences” elsewhere. The fact is that every region in Canada has its own unique attractions. Unless you have seen the snow-capped Rockies, skated on the canal in Ottawa or visited Peggy’s Cove you cannot fully appreciate the beauty of this diverse country and how well it compares with foreign destinations.
  3. They speak your language(s)
    Travelling in Canada can be so much less complicated than going to Europe or Asia because you don’t have to worry about making yourself understood. Even if you decide to visit Quebec, most of us studied some French in school and can get by. And if Air Canada loses your luggage or you need to see a doctor for an unexpected ailment, you will be able to explain the problem without the benefit of an interpreter.
  4. Spend Canadian dollars
    In January of this year, the Canadian dollar sunk to new lows. It has bounced up and down since then, but the fact is if you have to exchange it for U.S. dollars or euros to pay for a trip, it’s going to cost you a lot more than a few years ago. It’s a great time to see your country and support our economy.
  5. Meet great people
    Whether they live north, south, east or west, your Canadian neighbours are great people. They will go out of their way to show you around, invite you into their homes and make sure you have a terrific visit. With few exceptions, you can feel confident that whether you travel alone, with a companion or as part of a family you are vacationing in a safe, welcoming place.
  6. Festivals and special events
    Theatre, music, comedy, film and literary festivals abound. Whatever you are interested in, you can time your visit to catch concerts and live performances. Here is a listing of the top ten summer music festivals in Saskatchewan, but from the Symphony Splash in Victoria B.C. to the Stratford Shakespearean Festival in Ontario to the Shelbourne County Lobster Festival in Nova Scotia there are hundreds of local events across the country you can plan your vacation around.
  7. The great outdoors
    Frequently whether we travel at home or overseas, we just fly from one city to the next. But there are about 2.6 million lakes and 5 mountainous ecozones in Canada. To really see the country, get into your car and drive in any direction. Whether in a tent, yurt, airstream, pod, igloo, hut, villa, cabin, cube, teepee or treehouse, camping or glamping (upscale camping) are excellent ways to experience the great outdoors.
  8. Multi-cultural cites
    Canada recently welcomed over 25,000 Syrian refugees. That is in addition to the thousands and thousands of immigrants and refugees from all over the world who have found a home here over the last 149 years. As a result, you can sample the cuisine and experience the culture of their homeland right around the block or down the street. Within walking distance of my house in Toronto I can eat Chinese, Indian, Iranian, Japanese, Hungarian, Korean, and Greek cuisine and then head over to a Jewish delicatessen.

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Do you have a Canadian vacation planned this summer? Send us your favourite pictures with a short paragraph telling us where you went and describing the high points. With your permission, we’d love to share your images and your story.

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