By Sheryl Smolkin

Last week we included links to blogs and articles discussing the implications of the new mortgage rules announced by Finance Minister Bill Morneau in early October. But the ultimate impact of these changes on individuals and the housing market are still emerging. Here is some additional insight you may be interested in.

RateSpy.com’s mortgage expert Robert McLister writes that the Feds Nuked the Mortgage Market. He calls it “a stealth rate hike” by federal policy-makers that is an end run around Bank of Canada Governor Stephen Poloz  who has opted not to drive up Canadian interest rates.

Even Liberal MPs are concerned new rules will shut out first-time homebuyers  and they are wondering why Morneau didn’t consult the national Liberal caucus or the House Finance Committee prior to making the announcement intended to cool down the overheated housing market in major urban centres.

But Boomer & Echo’s Robb Engen says Cool It. The Feds Aren’t Killing The Housing Market. He acknowledges that home builders are upset with the feds for introducing new rules, but says maybe this time the feds got it right. Commenting on this blog, Michael James from Michael James on Money says, “Maybe new rules will save some from the biggest financial mistake of their lives.”

If you or someone you know has been saving for a down payment, Canada’s New Mortgage Rules: This Is How Much You Can Afford in the Huffington Post includes a great chart that will help prospective buyers to determine how much house they can afford with 20% down based on a benchmark qualifying interest rate of 4.64%.

And finally, Sean Cooper says in spite of the new mortgage rules, First-Time Homebuyers Shouldn’t Throw in the Towel. He says, “While I’m not a fan of parents gifting their adult children their entire down payment, there’s even more reason now for parents to top up their child’sdown payment to reach 20% and avoid the stricter qualifying rate.” He also believes first-time homeowners should avoid buying “too much house.”

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By Sheryl Smolkin

For many working Canadians and for those in Saskatchewan, the road to a comfortable retirement is becoming longer and more difficult.  A large portion of the working population is living pay cheque to pay cheque, unable to save, and worried about their local economy, according to the Canadian Payroll Association’s recently released eighth annual Research Survey of Employed Canadians

The survey reveals that only 36% of working Canadians and 37% of those in Saskatchewan expect the economy in their city or town to improve in the coming year.

Many working Canadians are cash-strapped and barely making ends meet. Nationally, and in Saskatchewan, almost half (48%) report it would be difficult to meet their financial obligations if their pay cheque was delayed by even a single week.

“A significant percentage of working Canadians carry debt, have a gloomy view of their local economy and are fearful of rising interest rates, inflation, and costs of living,” says Patrick Culhane, the Canadian Payroll Association’s President and CEO. “In this time of uncertainty, people need to take control of their finances by saving more. ‘Paying yourself first’ (by automatically directing at least 10% of net pay into a separate savings account or retirement plan) enables employees to exercise some control over their financial future.”

Incomes flat, saving capacity drained by spending and debt

“Survey data suggests that household income growth has stalled, as respondents reporting household income above $100K has hardly increased in five years,” says Alec Milne, Principal at research provider Framework Partners. “In fact, real incomes have actually declined when inflation is taken into account.”

While pay has remained largely unchanged, employees’ spending and debt levels have affected their ability to save. Nationally, and in Saskatchewan, 40% of employees say they spend all of or more than their net pay

Despite employees’ challenging financial situations, only 28% of respondents across the country cite higher wages as a top priority.  Instead, an overwhelming 48% nationally, are most interested in better work-life balance and a healthy work environment. In Saskatchewan only 25% prioritize higher wages, while 45% are most interested in better work-life balance and a healthy work environment.

“Clearly, many Canadians are concerned about their financial situation,” says Lucy Zambon, the Canadian Payroll Association’s Board Chair.  “But better work-life balance does not have to mean reduced financial security if you spend within your means.”

Over one-third (39%) of working Canadians feel overwhelmed by their level of debt, an increase from the three-year average of 36%. Debt levels have risen over the past year for 31% of respondents. In Saskatchewan, 35% feel overwhelmed by debt and 35% say their debt level has increased this year. Unfortunately, 11% nationally and 9% in Saskatchewan (among the lowest nationwide) do not think they will ever be debt free.

Similar to prior years, 93% of respondents nationally carry debt (96% in Saskatchewan). Over half of respondents nationally (58%) said that debt and the economy are the biggest impediments to saving for retirement.

Retirement savings fall short, retirement pushed back

Half of Canadians and 59% of Saskatchewan respondents think they will need a retirement nest-egg of at least $1 million.

Unable to save adequately, the vast majority of working Canadians have fallen far behind their retirement goals, with 76% nationally and 74% in Saskatchewan saying they have saved only one-quarter or less of what they feel they will need.

Nearly one-half of employees nationally (45%) now expect they’ll have to work longer than they had originally planned five years ago, primarily because they have not saved enough. Nationally, respondents’ average target retirement has risen to 62, whereas these same respondents’ target retirement age five years ago was 60, before reality set in.

Saskatchewan Pension Plan makes retirement savings easy

The Saskatchewan Pension Plan makes saving for retirement easy by offering all Canadians between the ages of 18 and 71 a flexible series of contribution options that can be modified at any time. Plan members can contribute up to $2,500/year:

• Directly from their bank account or credit card using the PAC system on the 1st or 15th of the month using a semi-monthly, monthly, semiannual, or annual schedule.
• Using VISA® or MasterCard® online at SaskPension.com or by calling toll free, 1-800-667-7153.
• At financial institutions, in branch or online
• By mailing directly to the SPP office in Kindersley

Members can also transfer up to $10,000/year from another RRSP into their SPP account.

By Sheryl Smolkin

Major changes to the mortgage rules announced by Finance Minister Bill Morneau in early October have both existing homeowners and people planning to buy a home for the first time scratching their heads. They are wondering precisely what the changes are and how they will be personally impacted.

Here are some blogs and media articles that may answer some of their questions (and yours).

In his blog Dave the Mortgage Planner, Dave Larock presents a three- part look at the new mortgage reality:

Part 1 looks at changes effective October 17^th.  Beginning on that date all insured mortgage applications will be underwritten using the Bank of Canada’s Mortgage Qualifying Rate (MQR). As of the date the blog was written  the MQR was set at 4.64%, which is about double what you would actually pay for a market five-year variable-rate mortgage, and that gap helps ensure that the borrowers most vulnerable to rate rises can afford higher payments when the time comes.

Part 2 covers additional rule changes that will take place November 30^th. Until now, the rules for insuring low-ratio mortgages have been more lenient than those used for high-ratio mortgages, in recognition of the fact that low-ratio loans have more paid-in equity, which makes them inherently less risky. But after November 30, the qualifying rules used to underwrite portfolio-insured low-ratio loans will be the same as those that are used to underwrite insured high-ratio loans.

Part 3 explains why Dave believes these changes are necessary, and who the winners and losers are in the new world of mortgages. For example, he says Canadian home owners in hot markets, where property values are better protected when lending standards are raised and household debt accumulation slows are winners. However losers include high-ratio borrowers, who just saw the rate that lenders use to qualify them for a five-year fixed-rate (which most of them are choosing) more than double.

In a CTV News story, Meredith McLeod reports that until now, buyers with more than a 20% down payment opting for mortgage insurance have escaped stress testing. They were able to obtain low-ratio insurance sold through two private insurers, but backed by the federal government, subject to a 10% deductible. Starting Nov.30, new criteria for low-ratio insurance will take effect. To qualify, the mortgage’s amortization period must be 25 years or less, the purchase price be less than $1 million, the property has to be owner-occupied, and the buyer must have a credit score of 600 or more.

While the new mortgage rules respond to legitimate concerns about escalating home prices in the red-hot Toronto and Vancouver real estate markets, it is still unclear how they will impact smaller cities and towns in other provinces where prices are more stable, or in some cases even dropping. Todd Kristoff, a Regina mortgage broker told CBC there has already been a correction of roughly five percent over the last several years in Saskatchewan and therefore the changes are not necessarily needed in this province.

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By Sheryl Smolkin

Buying a first home used to be a rite of passage for young people in their 20s and 30s. However, even for many millennials with well-paying jobs, buying property in large cities like Toronto or Vancouver has become an elusive dream.

But in smaller centres across the country purchasing a residence is a more practical and affordable option. Nevertheless, even though the sticker price is lower, owning a house is still a big commitment with many potential pitfalls.

That’s why we decided to chat with Saskatchewan Pension Plan’s Network Technician Stephen Neiszner (age 29) about his first foray into the real estate market in his home town of Kindersley, Saskatchewan

Q: Stephen, Saskatchewan Pension Plan in Kindersley was your first full-time employment after you graduated from college and you’ve worked there ever since. Where did you live before you bought your apartment?
A: I lived in a rented condo across the street from the Saskatchewan Pension Plan office.

Q:  Why did you decide it was time to take the plunge?
A: I was looking on and off for about a year before I found my place. The thing that sparked it off was that the light in my bedroom was leaking and the landlord had no intention of fixing it.

Q:  Tell me about the property you bought and how much it cost.
A: I bought a 1,000 square foot, 2-bedroom condo in a four-plex, with a small yard for $155,000.

Q: How much did you put down on the $150,000 purchase price?
A: My down payment was 13% of the purchase price, which is about $20,000.

Q: How long did it take you to save up that $20,000?
A: I started saving as soon as I moved into Kindersley in 2008.

Q: How much are your monthly mortgage payments? Are there also monthly condo fees?
A: I make payments every two weeks so my monthly mortgage payments are about $620. There are no condo fees, but I put away $100 from each paycheck just in case of any unexpected expenses. I pay for my own utilities.

Q: Are there any common expenses for services like clearing driveways and care of the yard?
A: Each unit takes care of their own section of the yard. We all pitch in to clean the sidewalks as required.

Q: What percentage of your monthly take-home pay do you actually spend on the mortgage?
A: It’s 27%.

Q: Does that leave you with enough money to also save for retirement and for other things?
A: Yes. I put $50 into my RRSPs every paycheck, $200 into my TFSA, and the amount of $100 for taxes and building upkeep goes into a high interest savings account.

Q: Okay. I imagine you’re also invested in Saskatchewan Pension Plans.
A: I am.

Q: Did you opt for a fixed rate of interest or a floating rate on your mortgage?
A: I went with a variable interest rate.

Q: What are the term and amortization period for your mortgage?
A: My mortgage term is 25 years and amortization period is five years.

Q: Are there any prepayment provisions in the mortgage? Do you plan to make lump sum payments to reduce the principal over time?
A: Yes. I am able to pay back as much as 20% of my original mortgage payment each year. In the future, I think it will be possible to make extra payments, but right now I’m still trying to balance my budget.

Q: How long ago did you actually buy your condo?
A: I bought it in December 2015.

Q: Ah, so it’s your first year. Were there any surprises before or after closing? Any expenses you didn’t budget for?
A: I had a large amount in my TFSA that I was able to pull for my closing expenses. The one thing that really got me was the setup fees for the utilities that I wasn’t expecting, which were almost $500.

Q: Wow. What about telephone? Are you all cell?
A: I am all cell.

Q: Have you ever regretted your decision to purchase an apartment?
A: No, not really. I knew there would be challenges and growing pains. To offset some of the costs, I recently acquired a roommate.

Q: That’s interesting. What advice would you have for potential first-time homeowners in their 20s or 30s? What things should they consider before they make the jump?
A: Save. When you think you have enough money, save some more. Don’t rush into anything. I looked at 20 places before I found this one. Ask a lot of questions, not only to your real estate agent, but to your bank, the home inspector, people you know around town, your parents and friends. Just ask questions.

Don’t be afraid to use the RRSP first-time home buyer’s program. I withdrew $10,000 or half my down payment from my RRSP under this plan.  I have 15 years to pay back the interest free loan.

And also remember, budgeting isn’t just about your mortgage. You have to factor in utilities, vehicles, transportation, food, traveling and insurance. You’ll still want to take holidays, I’m sure. And I have to budget for a new water heater within the first year.

Q: That’s great. Thank you, Stephen. It was a pleasure to talk to you today. Enjoy your new home.
A: Thank you, Sheryl.

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This is the edited version of the transcript of a podcast recorded in September 2016.

Seeing what the Saskatchewan Pension Plan has done for its members is giving Debbie Dand confidence about her own retirement.

“I usually talk to people who are inquiring about retiring,” said Dand, who works as a retirement officer for the plan.

“I educate them the best I can as to what their options are with the plan so they can make the best decision about what to do with their retirement savings.”

She discusses those options on the phone with members, knowing in detail what the plan has done over the last 30 years, first as a member and then, as an employee.

“Since 1986, when the plan started, it has accumulated an average return of 8.1 per cent less administration fees, so it has been a very good plan.”

It’s not just the return history that has benefited members.

“Saskatchewan Pension Plan has very low management fees at around one per cent, which is very low if you look around at some of our competitors,” said Dand.

“(The competitors) fees could be quite a bit higher. Over the years, it makes a quite a difference in what you are going to make in the long run.”

Now, after working for the Saskatchewan Pension Plan for the last 26 years, Dand is looking ahead to her own retirement.

“I myself have been a member of the plan right from 1986. The accounts have grown very nicely,” said Dand.

Her co-worker, Melody Lamont, sees the plan having a solid future capable of taking caring of members in retirement.

“For anybody that’s a member, they have the opportunity to receive an annuity if they remain with the Saskatchewan Pension Plan, guaranteed for the balance of their life,” said Lamont.

“So we’re offering the members something that’s very simple to work with. It’s a fit for anybody who’s interested in obtaining a wonderful pension plan.”

That’s why she encouraged her husband and daughter to join the plan while Dand says her husband and four children are also members.

Canadians between the ages of 18 and 71 with room to make RRSP contributions are eligible to become members. Your Notice of Assessment from Canada Revenue Agency will tell you what amount you are eligible to contribute each year. There is no minimum contribution amount and members have options about how they will make their contributions, including through online banking or directly from a bank account.

“I believe it’s something that’s there for the long term and that’s what’s very important for anyone who wants to look toward retirement and a good pension plan,” said Lamont.

By Sheryl Smolkin

Building on the old adage that a picture is worth a thousand word, in this edition of Best from the Blogosphere we direct you to video channels and specific personal finance videos you may want to follow regularly.

First of all, keep an eye on the series of videos from Saskatchewan Pension Plan, and in particular this one, which clarifies issues raised in a recent quiz posted on savewithspp.com. Other video blogs discuss how to become a member of SPP, how to start a company plan with SPP and why fees matter to your investments.

Money School with Preet Bannerjee tackles a whole range of topics including Employer Matching Retirement Contributions. Are you leaving money on the table?

Only buying a house is a bigger financial commitment than buying a car. The message in this humorous Get Smarter About Money video blog is that you have to look at the cost of ownership from operating costs, insurance, maintenance and financing to understand the big picture.

The Globe and Mail’s Rob Carrick is featured in the “Carrick Talks Money” series of video blogs. If you can’t figure out whether or not your investment advisor is making money for you, take a look at Where can I find out how much I’ve made or lost since I opened my investment account?

And last but not least, Bridget Eastgaard from Money After Graduation discusses two ways to pay off debt in The Debt Avalanche vs The Debt Snowball. Find out which is the best approach for you!
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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.

By Sheryl Smolkin

According to the Retail Council of Canada, Canadians annually spend upwards of $1 billion on Halloween-related products and services each year, with the average Canadian spending more per capita than the average American on various Halloween- related goods. In fact Canadians have become so enamored with Halloween that holiday-related spending is second only to Christmas.

So how can you spend less on Halloween without disappointing all the big and little ghosts and goblins that live with you or show up at your door? Here are some ideas:

1. Buy later: Don’t buy Halloween candy when it hits the shelf in September. Chances are you will eat up the first batch and just have to buy more. And your waistline doesn’t need the extra calories.
2. Buy what you need: There are very few young children who trick or treat in my neighbourhood. Yet “just in case” every year I buy several boxes of mini-chocolate bars to give out. As a result I typically end up spending more and eating the leftovers.
3. Buy in bulk: It’s easy to toss a box of individually wrapped candy bars or small bags of chips into your grocery cart and call it a day. But do the math. Chances are that if you buy treats from the bulk store and package them in small plastic bags tied with a ribbon, the cost per item will be much less.
4. Make your own costumes: I must confess I just spent $40 on an “Elsa” costume for my granddaughter because she is crazy about the character in the Disney movie Frozen. But her other grandmother sews and has made her great costumes for a fraction of the cost in previous years, including a very clever dinosaur that she loved every bit as much.
5. Re-use, re-cycle: Check out Value Village or another local thrift or second hand store. For a few dollars you can find great stuff to outfit yourself or your little one as everything from a hobo to a travelling salesman to a ballerina.
6. Costume swap: If you bought or made your child the most popular costume last year, for sure it no longer fits. Furthermore, even if it does fit, she won’t want to wear the same thing two years in a row. Set up a page on Facebook and invite your friends to participate in a costume swap.
7. Avoid over-decorating: A pumpkin carved with a funny face and lit with a candle shows the neighbourhood you are open for business. But you don’t need cobwebs, sound effects and a fake grave with dancing skeletons to attract people or enjoy the evening.
8. Have a party: Halloween is often cold and wet in Canada. A house-party with lots of games and orange food can be a lot more fun than traipsing around in the rain or wind with heavy coats covering up lovingly crafted costumes. This website has hundreds of economical Halloween party ideas.
9. Check out community events: If you don’t have the time, money or space to host a Halloween party, check out community events. You will likely discover that your local library, community centre, school or museum is hosting free or low cost events.
10. Buy on sale for next year: If you have space to store then, buy costumes in sizes your children will grow into, decorations and non-perishable snacks when they go on sale November 1^st. However, be prepared for the fact that the kids might have very different ideas about what they want to wear for Halloween when they are one year older and if you put your purchases away in a really safe place by next October, you may not be able to find them!

By Sheryl Smolkin

As the days get shorter and the temperature goes down, staying fit is often a challenge. Joining a fitness club can be expensive, particularly if you don’t use it regularly. On a windy, chilly morning it seems a lot easier to just take the car rather than walking even a short distance to work.

But if you modify your schedule now to incorporate some fun, inexpensive activity into your day, you will be healthier and less inclined to hibernate before the first snowfall. Here are some online resources that will both inspire you and give you some ideas.

I really like Nia Shanks on Lift Like a Girl, where she encourages women of all sizes and from all backgrounds to start strength training. Shanks writes empowering articles about how women can be more, not less, the best bodyweight exercises to do, and why exercise should never be considered punishment for eating.

If you are a runner, or always wanted to run but haven’t gotten around to it, take a look at Couch to 10K and Beyond: My Journey to Becoming a Runner by Alison Micelli. Her advice is, “Grab a friend, a crew or a mentor and give it a go, use it as a way to explore your city, get outside or switch up your routine. You’ll be amazed at what you can do and the things that you can accomplish when you stick with it!”

Dave Smith from Make Your Body Work, was chosen as “Canada’s Top Fitness Professional” in 2013. There are lots of great ideas in his blog How To Exercise At Home: The 50 Best Free Online Workout Resources. The YouTube videos he links to include workouts of all different kinds from kick boxing routines to yoga to Pilates.  CafeMom Studios is a very popular YouTube channel that helps moms build their body back after pregnancy and childbirth using postnatal workout videos for cardio, pain-reduction, circuit training, and yoga exercises for strength and flexibility.

On his blog Frugalwoods, Mr. Frugalwoods has posted The Ultimate Bike Commuter’s Guide to Winter Cycling. He shares both safety tips and how to stay warm. Why bike to work through notorious Boston (substitute Saskatchewan) winters? He says:

1. It could be the fastest way to get to work.
2. You need to exercise anyway so you might as well combine exercise with commuting.
3. It’s a focused way to start and end the day.
4. Bike commuting saves a bunch of money.

And if you are planning to participate in winter sports like skiing or skating, now is the time to check out 10 Exercises for Winter Sports: Increase Strength & Reduce Injury. While winter sports are great fun, you definitely don’t want to underestimate the workout they provide.  In fact, if you’re not fully prepared physically for the season you could be at a high risk for injury.

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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.

By Sheryl Smolkin

If you are having trouble making ends meet you can spend less, get a job that pays more money or work more hours. Spending less will only take you so far in your quest for a balanced budget and better paying jobs are not always easy to find, particularly in the short-term.

However, there are lots of options available if you want to put in more time. Where overtime is readily available in your primary job, taking on a few extra shifts could be the answer. Otherwise, you may consider taking on a part-time job, or to use a newer expression in the workplace lexicon — find yourself “a side hustle.”

Before you commit to a regular part-time gig it’s probably a good idea to think about any potential conflicts with your primary position. First of all, if you have the kind of job that doesn’t end promptly at 5 PM, you can’t plan to start work somewhere else across town an hour later. Also, if your day job is at Apple, it’s a safe bet that part-time work at Microsoft will be viewed as an untenable conflict of interest.

Potentially lucrative side hustles are more available than you think, and many can be done from the comfort of your own home. For example:

1. Seasonal work: Retail establishments frequently hire extra staff for the Christmas holiday season. A party store in my neighborhood is looking for staff for their busiest time of the year, which is Halloween. You can bet that after the first big snowfall lots of people would be thrilled if you offer to shovel their driveways.
2. Blogging: I’ll be the first to admit that making money via personal blogging about a subject of interest is not a slam dunk. The major advantage for me has been the exposure which has led to regular well-paid writing jobs. But there are lots of bloggers out there who have thousands of readers and generate revenue from goggle ads and industry players.
3. Complete surveys online: Big brands need consumer opinions on their products, advertisements and identity. Your feedback will help them to improve and grow. To show their appreciation they will reward you for your time on reputable market research panels. Companies typically pay through PayPal or in the form of gift cards. You won’t make a fortune but every little bit helps.
4. Sell your photos online: Do you take amazing photos? You can actually sell your photos online at places like iStockPhoto, Shutterstock, Fotolia, and Bigstockphoto. Photos can be sold over and over again, allowing you to earn a residual income.
5. Transcriptionist: If you have excellent keyboard skills you can get piecework transcribing everything from audio interviews to meetings to legal proceedings. This can be done on your own time, but make sure you understand the minimum weekly quotas and how much you can reasonably expect to earn.
6. Customer Service Agent: One position I saw advertised online is for fundraising agents who make outbound calls to existing and past supporters of some of the largest charities across Canada. Each day, representatives speak with donors to help raise funds, respond to emergencies, renew support, sponsor children, and provide other worthwhile opportunities for charitable giving.
7. Airbnb: Are you an empty nester with one or more empty bedrooms in your home or a currently unused basement apartment? Consider sprucing them up and renting them on Airbnb. However, before you start, check the zoning in your area to ensure short-term rentals are permitted.
8. Driving: The future of Uber in many parts of Canada including Saskatchewan is up in the air. But if you are available evenings and weekends you may be able to make money using your own car to transport other people around as Lyft or Uber drivers. If this option appeals to you, make sure to check with your insurer to see if you have the proper coverage.
9. Baking: Does everyone love your banana bread? Is your cheesecake to die for? How many free wedding or shower cakes have you baked for friends? If you love baking, why not start a home-based business? You can set up a Facebook page with lots of pictures of your work and before you know it you will have more business than you can handle.
10. Caregiving: Most daycares close by six PM, but not all jobs are 9-5. People who work shifts are always looking for experienced caregivers to cover evenings and weekends. Similarly, many elderly people have regular caregivers but their families need occasional respite care.

These are only a few of the dozens of possible side hustles that can earn you extra money to pay the bills. Any hobby has the potential to be turned into a business. However, it is important to realistically assess how much time and energy you have and the possible impact working more will have on your family and your performance in your day job, before you take on extra work.

Here are some additional articles with lots of other ideas you may be interested in:

99 Side Hustle Business Ideas You Can Start Today
50+ Ways To Make Money Fast By Side Hustling
The Top 68 Side Hustles: Add Some More Money to Your Life
29 Smart Ways to Make Money on the Side in 2016

By Sheryl Smolkin

The leaves are turning and the weather is changing. As fall visits us briefly before the long cold winter sets in, it’s time to re-visit recent posts from some of our favourite personal finance writers.

On Boomer and Echo, Marie Engen offers 5 Ways To Stretch Your Retirement Dollars. My favourite is to sign up for senior discounts. In Calgary an annual transit pass for seniors is just $95. BC Ferries gives a 50% discount on passenger fares (Monday to Thursday, except holidays). Retailers such as Shoppers Drug Mart have senior discount days. A number of universities and colleges offer free tuition, at least for non-credit courses.

Sara Milton writes on Retire Happy about Financial warning signs: Are you prepared for the worst?. She says before financial disaster hits, there have  usually  been warning signs for some time. Just like on the dashboard of a car, an individual’s financial “check engine” light was lit up like a Christmas tree and, either he/she didn’t notice or  deliberately ignored it in the hope that it would somehow fix itself and switch off.

While investors may be reluctant to sell stocks because the sale will trigger tax inclusions, Pat McKeough reminds us on the Financial Independence Hub thatCapital gains tax is one of the lowest taxes you’ll ever pay. For example, if an investor purchases stock for $1,000 and then sells that stock for $2,000, they have a $1,000 capital gain. Investors pay Canadian capital gains tax on 50% of the capital gain amount. This means that if you earn $1,000 in capital gains, and you are in the highest tax bracket you will pay about $247.65 in Canadian capital gains tax on the $1,000 in gains.

For most young people in college or university student loans are a necessary evil. But they can become a tremendous burden after graduation. How I worked my way through university by Robin Taub on Forward Thinking profiles Corey Barss (age 25) who grew up in Brantford and attended Ryerson University. By saving money while he was in high school and working nearly full-time as a cook and server at the Ryerson campus pub while he was in university, he was able to graduate with only $30,000 in student loans. Even when he got a full-time job he continued work 12 hours/week at the pub in order to become debt free in three years.

And finally, the Globe and Mail’s Rob Carrick writes that one of the most important financial literacy lessons young people can learn is how to deal with banks. In Millennials, banks are not your friends his message to students is that banks aren’t your friend, and neither are they your enemy. They’re companies you do business with and that means you have to have to go in prepared to defend your own interests. He says students should look for ways to bank for nothing, and he gives  important factors to consider when evaluating student bank accounts.
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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.