Debt & Frugality

As Didi says in the novel (Findependence Day), “There’s no point climbing the Tower of Wealth when you’re still mired in the basement of debt.” If you owe credit-card debt still charging an usurous 20% per annum, forget about building wealth: focus on eliminating that debt. And once done, focus on paying off your mortgage. As Theo says in the novel, “The foundation of financial independence is a paid-for house.”

5 surprisingly smart Financial Habits of Millennials

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5-millenialsBy Maricor Bunal

Special to the Financial Independence Hub

Millennials often get a bad rap for a lot of things. They are usually perceived as narcissistic, entitled, lazy, spoiled, and (perhaps the greatest stereotype of all) irresponsible with money. But having grown up in a sluggish economy, millennials may not be as bad with money as most people think. In fact, when it comes to personal finance, millennials are actually making some smart money moves that their older counterparts would do well to emulate.

Here are five surprisingly smart financial habits commonly used by Gen Y-ers that older generations should consider picking up.

1.) Use technology to manage finances

Millennials are a generation that grew up with technology, so it’s only natural that they would tap its power to help them with their personal finance. These days, Gen Y-ers rely on various mobile apps and tools to easily track and manage their money. Some of the most popular budgeting and finance apps today include Mint, GoodBudget, and PocketGuard. These apps are used to record and track purchases, monitor spending patterns, and even make automated, hassle-free payments.

2.) Choose experiences over material possessions

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‘Tis the season of merry debts

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depositphotos_36811637_s-2015“It’s that renowned time when much debt is racked up during the spree of merry.”

The season of joyful giving hovers in our merry midst once again.

Some finances get stressed and stretched to the max — like credit cards creeping past their safe outer limits. The reasons don’t matter, it’s the outcomes that really count.

Easy credit is everywhere. It seems so painless at first. Just sign those tempting card offerings that sail through email and mail slots. Voila, it’s done. I receive at least a couple new flavours every month.

People love to be generous during these merry times. Yet good intentions can lead to frightful finances. A frosty thought that may cost dearly. Possibly, even a brush with financial ruin.

For example, making the minimum monthly payment on credit cards is akin to a slow financial death. With interest rates in the 20% ballpark, it takes a lifetime to pay off balances.

Good Samaritans wanted

Let’s reflect a little on the season that incurs those merry debts. Individuals who spend more than they can afford usually don’t do it intentionally. As we know, stuff happens: all in the spirit of giving.

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Buying a home with an Income suite? What you need to know

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first-time-landlordBy Penelope Graham, Zoocasa

Special to the Financial Independence Hub

 As Canadian real estate becomes steadily more expensive, homebuyers are increasingly exploring new affordability options. Renting out a portion of your home to help offset mortgage costs has become a popular method – and with the price of an average detached house well past the $1 million mark in the Toronto real estate market, it may be the only way some buyers can move beyond condos and townhomes.

For these buyers, assuming the role of landlord in exchange for a bigger house or better neighbourhood seems a smart trade-off. However, renting out part of your property – especially when you also dwell there – can be a complicated undertaking, and requires extensive research and resources. Here’s what those considering the purchase of a home with secondary suite should take note of.

What is a secondary suite?

Also referred to as an income suite, secondary suites are separate units within a principal residence. It must have its own private entrance, kitchen, sleeping and living areas. In order to comply, and be protected by, your province’s Residential Tenancies Act (RTA), you cannot share any of these living facilities with your tenant, as they’re otherwise considered a boarder. Continue Reading…

Robo advisers will expand beyond investing to insurance & lending

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Invisor CEO Pramod Udiaver

By Pramod Udiaver

Special to the Financial Independence Hub

While the online advice industry is still relatively new to Canadian investors, the breadth of online financial services has been evolving quickly. This is good news for investors who are looking for more goal-based investing options and services that consolidate their various financial needs.

Goal-based investing considers a client’s goals and the steps needed to achieve them. This practice helps investors see their financial goals as easy-to-navigate paths, with clear beginnings and ends. It ensures investors fund their accounts based on desired results, rather than how much they think they might need. And it takes the uncertainty out of investing by showing exactly how and when each goal will be achieved.

While investing and insurance goals are not generally planned under the same service, insurance is an important part of any financial plan and the goal-setting process. Progress towards our goals can be thwarted by events like disability, serious illness, or the death of a loved one.

Role of insurance

We see that in many cases, even if one of these events were to occur, clients say they would still want to stay on a path to achieve their goals. Proper insurance can help them stay on track by replacing a portion of their income while they are disabled, allowing them to maintain a desired standard of living and keep saving. Life insurance can ensure that goals set for one’s family, like sending kids to good schools, allowing the surviving spouse to retire comfortably, or the desire to leave a legacy in the form of a charitable donation, can still be achieved.

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Which type of credit card is best for you?

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Travel and tourism concept. Air tickets, passports and credit cards, tourism and planning, vector illustration
Travel a lot? A travel rewards credit card may be just the ticket.

By Alyssa Furtado, RateHub.ca

Special to the Financial Independence Hub

 When it comes to choosing a credit card, it’s easy to feel overwhelmed by the number of different options available. Although it might seem simplest to choose one with your current bank or go with whatever your friends use, you could be leaving rewards such as cash back on the table by taking a one-size-fits-all approach.

Here are four common profiles and the best type of credit card for each.

Frequent flyer

Making the most of vacation days can be expensive, especially if you like to travel. However, you can often help offset these costs using a travel rewards credit card. There are some great travel rewards programs in Canada where you can start collecting points. But because each program is different, make sure you know how they work.

The BMO Rewards Program is a good example, because for every dollar you spend you can earn up to two points. You can then redeem 100 points for $1 back on a wide range of categories including flights, hotels, car rentals and even merchandise or gift cards. Your everyday spending can really start to add up – for example, if you spend $1,500 a month using the BMO World Elite MasterCard, after a year you would have enough points to redeem $360 in value.

Travel cards often also offer good value because most come with a range of insurance benefits such as lost or delayed baggage, trip delay or cancellation and medical coverage. You can then relax on your travels, knowing that if something does go wrong, you’ll be covered.

Big spender

If you like to use your credit card for most of your everyday purchases and bills, you should look to maximize your rewards with a premium rewards credit card. Many of these cards have an annual fee, but if you’re a big spender, the net reward from premium cards are often much higher because the earning potential is usually much higher than with no fee credit cards.

The best rewards cards typically fall into two categories – travel and cash back. If you’ve decided that you don’t fit into the frequent flyer category above, consider instead a cash back credit card. With this type of card, the amount you can redeem typically starts at around 1%, but can get as high as 4% or even more with special promotions.

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