By Sheryl Smolkin

 

 

Hi, as part of the SavewithSPP.com continuing series of podcast interviews with personal finance bloggers, today, I’m talking to Tom Drake, author of the personal finance blogs Canadian Finance and Balance Junkie. He also partners on three other sites and writes guest posts on several others.

Tom lives with his wife and two boys in Edmonton. He’s a financial analyst for all of the Sobeys stores west of Ontario. He’s always looking for ways to reduce any expenses, while continuing to save money, in part because his wife is a full-time homemaker.

Welcome Tom.

Hi Sheryl, thanks for having me here.

Q. When did you start blogging Tom?
A. I started in early 2009. I hadn’t really thought about my personal finances too much prior to that. I was never totally terrible with money, but in about a six month span, we got married, and soon after that, we were expecting our first child, and we were also looking to buy a house when the market dipped in early 2009. So those three things kind of put personal finance right at the forefront in my mind.

Q. What were your goals for the blog when you started blogging, and have they changed over time?
A. Well, they have a little. When I first started, it was certainly more about the three major events that I’ve already mentioned. Nowadays, I try to cover as many personal finance topics as possible because through Google searches and even people emailing me directly I discover a lot of topics that I can kind of help them with their own personal finances, even if it’s not something that I’ve had to deal with myself.

Q. How frequently do you blog?
A. Lately it’s been about two or three times a week on the “Canadian Finance” blog. I have multiple blogs, so I’m probably doing something every day. I also post one to two times a month on “Balance Junkie,” and soon I’ll be writing on “Retire Happy” as well.

Q. What other blogs do you have?
A. Well, within Canada, it’s the Canadian Finance blog and Balance Junkie and I’m also a partner with Jim Yih on Retire Happy.

Q. To what extent is there an overlap between the topics that you would feature or write about on your own blog and that, for example, you or Jim or his other bloggers would post on his blog?
A. Well, Jim Yih is very dedicated to the retirement niche, which I honestly haven’t thought about it much. I save money in my RRSP and have savings in my TFSA as well, but I don’t have a huge retirement planning goal right now. So I don’t cover those topics as much. So I’d say my blog is about more general personal finance issues and his is very targeted on retirement issues.

Q. So what will you be writing about on Retire Happy?
A. On Canadian Finance, I cover a lot of tips on how to save money, reduce your utility bills and such. Most of the people who read Retire Happy are beyond that, and they’re looking for ways to use their money better. So I’ll probably be covering things like making sure that your credit card has a decent rewards plan and products like TurboTax. Just about anything that can help people use products that are out there and add something a little more than just retirement to that blog.

Q. Now, you say that retirement hasn’t been your focus as yet. May I ask how old you are?
A. Just about to turn 37 this week.

Q. I see, well, you know what, you’re getting closer to that break point. I think 40 is when the light goes on.
A. Yeah, exactly. I do save a decent amount. I just don’t have a full retirement plan. I don’t know if I’m going to retire at 50 or 70 at this point.

Q. Unlike Tim Stobbs who says he’s retiring at 45.
A. Oh, that would be nice, but I’ll say 50 at the earliest.

Q. There’s probably over a dozen well-known personal finance bloggers or more in Canada. What’s different about your blog? Why do you think it’s a must read?
A. Well, I think with any personal finance blog, readers are going to gravitate to someone that kind of fits their situation. So as a family man in my mid-30s, I get a lot of readers that sort of fit that same mold. Also, archived articles from other staff writers I have had from time to time add a different dimension.

Q. How many hits do you typically get for each blog?
A. I don’t really look at it per post. So much of it is search traffic. I get a few thousand in a day. But as a total network of all the sites that I own, or am in partner with, we get over 500,000 page views in a month.

Q. Wow. You said all the sites that you own or partner with. You’ve told me about two and about working with Jim. Are there others?
A. Yes, Jim Yih gets all the credit for this model, which is basically taking a 50/50 partnership where we focus on our strengths. I like writing personal finance posts, but I’m not as efficient at it as a lot of these other writers. So the people I partner with are really good writers.

Jim’s been writing for over a decade in newspapers and on his own site, even before we turned it into Retire Happy. I’ve also partnered up with Miranda Marquit down in the States. She can be found pretty much in any personal finance blog that you look at. She’s a big freelancer.

These people don’t want to deal with creating a site, working on things like search engine optimization, how to monetize the site, so they actually make some money from it. Those are more of my strengths actually than the actual writing. So it’s been a good partnership with both of them.

And the third person I’m partnering with is Kevin at Out of Your Rut which is another American blog. Again, he’s more of a freelancer. But he has a site and we work to make sure that site makes money as well and gets the traffic.

Q. One of the more popular blogs you’ve posted related to the Smith Maneuver, which allows you to deduct mortgage interest as an investment expense. Can you tell me how that works?
A. Basically what you need is a re-advanceable mortgage. And what that means is as you pay down your principle, you have a home equity line of credit that will increase. So if you pay $500 down on your principle, your L.O.C. increases by that amount. You can use that line of credit to invest in dividend bank stocks.

The goal is that the stocks you pick have a higher dividend percentage than the interest rate you’re paying on your mortgage. Then you can use those dividends to accelerate your mortgage pay down. So ultimately your debt level stays the same.

A lot of people don’t like that, because you’re not really reducing your debt, and you’re leveraging it for investing. But I’m comfortable with it. The dividends I have are certainly making a higher percentage than what I’m paying on a mortgage currently. Obviously, the risks are the way that the mortgage rates go in the future. But dividends have some preferential tax treatment as well, which also helps.

Q. So when did you implement a Smith Maneuver personally?
A. Probably about 2010. Buying my house in 2009, I got the Scotia STEP mortgage which includes a line of credit. But since I had exactly a 20% down payment, I couldn’t actually borrow anything yet because I hadn’t paid down any additional principle. So after about a year of that mortgage, I started out with the Smith Maneuver, and using that extra equity on the house to invest in stock.

Q. So you’ve got a day job. You’ve got two kids. You’ve got your work with your own blog and others. What advice would you give to busy people to fit it all in?
A. I don’t get a lot of sleep. So if you can do a 19-hour day, you can fit a lot. But otherwise, certainly prioritize family first. Obviously, I’ve got my day job. But as soon as I come home, I spend time with my family. Once the boys are in bed, then I go into business mode and write a blog post or deal with various technical issues and such, up until 1:00am or later.

Q. That’s amazing. I’m one of those people who needs my sleep. So you’ve mentioned a number of people you’ve worked with, but who are your favourite personal finance bloggers?
A. Well, some of the ones that originally got me into personal finances haven’t been blogging as much, like Mike at Money Smarts or Preet at Where does all my money go?

Million Dollar Journey is certainly the reason I started blogging. It’s what got me into the Smith Maneuver too actually, and so I still read that one quite a bit. And I read Jim Yih’s stuff a lot. But Robb at “Boomer & Echo” is certainly a great writer.

Q. So if you had to look at all the time you’re spending on this, are you doing it for love or are you doing it for money?
A. I do make a full-time income with my online business, but my wife is staying at home with our kids. So it’s her full time income basically. It’s worth it to juggle sort of both jobs right now, to allow her that time with the kids.

Q. If you had only one piece of advice to people who want to save money and optimize their savings, what would it be?
A. I think the biggest advice for me is basically to have a positive cash flow. I’m not a big fan of budgeting myself. It’s something I don’t think people always stick to. But the cash flow is just simple calculation to make sure that you’re bringing in more than you’re spending. So you want to make sure you’re saving and covering all your bills. And you certainly want to make sure that you’re not going into a negative cash flow. It’s the simplest way to improve your finances.

Thanks very much Tom. It was a pleasure to talk to you.

Thank you. It was great conversation.

—

This is an edited transcript of the podcast you can listen to by clicking on the graphic under the picture above. If you don’t already follow Tom’s blogs “Canadian Finance and Balance Junkie” you can find them here and here. Subscribe to receive blog posts by email as soon as they’re available.

 

By Sheryl Smolkin

I must confess that at least once or twice when looking for something to distract me on the treadmill at the gym, I’ve watched Extreme Couponing and felt a little guilty. I can’t imagine spending hours every day looking for coupons, plotting my shopping strategy and stockpiling items I may never use. But it seems sinful somehow to pass up obvious bargains.

While the best source of coupons used to be newspapers and grocery store fliers, a big chunk of the business has gone online. In many cases coupons can also be downloaded to your mobile device. So I did some internet research to find the best Canadian coupon websites for those of you who are interested in taking advantage of these deals.

On yummymummyclub.ca, Sarah Deveau rates the following as the top five coupon sites in Canada and provides explanations for what you can expect to find.

Save.ca

The site offers coupons for baby formula, pet food, juice and plenty more. The selection changes frequently and they do impose limits on how many coupons you can request per household. Check out their sister site flyerland.ca for flyer deals, coupons, contests and more.

brandsaver.ca

This Procter & Gamble website offers coupons for their best-selling products, from laundry detergent to toothpaste and nearly everything in between. They also offer free samples. Check back often as supplies are limited and featured products change frequently.

Groceryalerts.ca

This is primarily a grocery coupon and grocery deals site, but shoppers can also read articles on how to shrink their grocery bill using coupons and sales, find recipes and check out product reviews. All coupons and policies are verified prior to being posted by Canadian founders Steven and Lina Zussino. Follow them on Facebook for breaking deals and limited quality sample giveaways.

smartcanucks.ca

On one of the top coupon sites for Canadians, users can not only print coupons directly from this website, but they can also trade coupons with others across the country. You can register for the forums and find out where the best sales and deals are at every major retailer in the country.

entertainment.com

The Entertainment Book has a 50 year history providing coupons for thousands of businesses in 145 cities across North America. So you can’t go wrong by picking up your Saskatchewan copy, as well as a copy for any cities you plan on visiting during the year. If you miss the school kids selling the book, you can usually buy the current Entertainment book at up to 50% off the regular price a few months into the season (no coupon required!).

However, before you embark on a full-scale campaign to save mega-bucks by couponing, read Part 1 and Part 2 of the Great Coupon experiment, also by Sarah Deveau. She managed to save $20 on diapers that were already on sale at Toys R Us but concluded that it definitely wasn’t worth the time she had put into the project. Furthermore, she says even stacking two or three coupons on one product wasn’t enough to price it lower than its lesser priced, no-name brand cousin.

I’m not a big fan of coupons, but I am reasonably diligent about using my loyalty cards from places where I shop regularly. At Shoppers Drug Mart and Longo’s in Toronto points accumulate with every purchase that can be redeemed for dollars on a future purchase. Sobey’s points are converted to Air Canada points.

Do you use coupon sites or loyalty cards that have saved you a bundle? Share your money saving tips with us at http://wp.me/P1YR2T-JR and your name will be entered in a quarterly draw for a gift card. And remember to put a dollar in the retirement savings jar every time you use one of our money-saving ideas.

Beginning in January we will be mixing things up a bit, and in addition to blogs that discuss ways to save money so you can save more for retirement, we will be interviewing our favourite financial bloggers, reviewing books that will help you better manage your finances and rolling out a monthly Retirement Savings 101 series.

The team at Saskatchewan Pension Plan wishes you a happy, healthy holiday season.