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.”

Retirement income planning for you and your spouse

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patmckeoughBy Pat McKeough, TSINetwork.ca

Special to the Financial Independence Hub

There are a few retirement income planning steps you and your spouse can take to lower your taxes.
These steps work especially well if your spouse makes a lower income than you do.

There are lots of ways to shift investment capital and income to the lower-income spouse. This lets you lower your overall tax bill right now. It also ensures that each spouse gets roughly the same amount of income in retirement. That will cut taxes later, as well.

We’ve discussed other retirement income planning techniques like paying your spouse’s bills, setting up a spousal RRSP and swapping assets for cash or shares. Here are more ideas:

Reinvesting attributed income

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The four Ds to buying your first home

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An old wooden house in Dalarna, SwedenBy Sheila O’Hearn, Zoocasa

Special to the Financial Independence Hub

 “If a monkey can be taught to salt away money by sticking it in a sock, so can we.”

That’s what my partner and I told each other the day we decided to start saving for a home. Real estate can be tough, so we started our plan early. In some ways, it was madness. We still had to pay monthly rent and a first baby was on the way. It meant cutting back on activities we enjoyed, little extras and big extras.

But what we had going for us were the four D’s: the dream, the drive, the discipline, and a deadline.

Eventually we hit our target and moved to a small town where houses still cost less than they do in a city. Ours was a modest, century-old farmhouse that would require work, just right for my partner’s creative outlet. It was a cozy fit for our two additional children, but it was home and has been for 28 years.

How a person or couple saves for their first home is not a question of doing it one way, but of having knowledge of the options to make informed choices and a solid plan.

The dream

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Millennial Blog Wrap: Budgeting now to be debt-free later

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Business desk concept - BUDGETBy Helen Chevreau, Hub Staff

As a millennial, it’s important that we begin to create good financial habits to govern our lives, starting with budgeting.

From a healthy morning routine, to being grown-up about money, as we get into this new stage in our lives, we need to make sure to put ourselves on the right track, or risk ending up in serious financial trouble.

From the blog Making Sense of Cents comes a new post that touches on some common bad money habits that are extremely easy to fall into. Whether you’re of the “out-of-sight-out-of-mind” or the “it’ll-never-happen-to-me” mindset, or any of the other bad money habits mentioned, this post is here to help you change your ways before it’s too late.

Now, Not Later

Along the same lines, it seems that the bad habit of paying down debts more slowly to reap the rewards of ‘more cash in hand how’ is springing up, and Bridget Eastgaard of ‘Money After Graduation’ is here to tell us why that’s such a terrible idea. Continue Reading…

Choosing frugality amid social pressures to spend

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Man keeping a woman from entering a store and begging her to stop shoppingBy Helen Chevreau, Hub Staff

As millennials, we often feel pressured by both the media and our peers to look and act a certain way. It’s a general rule of thumb that if you’re in your twenties or thirties, you’ll feel the strain of wanting the newest and best something at least once. Many of us will crack under pressure and eventually purchase that new iPhone (even though our current one works fine), or that new pair of jeans (even though we already have a pair in that colour).

The thing about succumbing to these societal pressures, though, is that for the most part, at the end of the day, we don’t feel better about ourselves after making these big purchases. In fact, a lot of the time, it’s quite the opposite. We see the shiny new product and our first reaction is “I need this now.” We can convince ourselves the price is irrelevant, and that it will pay for itself, or that it’s a necessity. But how frequently is that true? Do we ever really need to bow to those pressures?

Stop, Drop, Don’t Shop

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Mrs. Frugalwoods

It seems there is a trend emerging in the financial millennial blogosphere wherein bloggers enact a “shopping ban.” The terms of the bans vary by site, but the general premise remains the same:  a new consumption philosophy rooted largely in the theory of not purchasing anything.

“Mrs. Frugalwoods” of the blog Frugalwoods, for instance, is well on her way to going three years clothes-purchasing-free. Continue Reading…

How to manage your first Credit Card

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a young business woman holding new credit cardBy Alyssa Furtado, RateHub.ca

Special to the Financial Independence Hub

When you become an adult is a matter of opinion. It could be when you turn 18, move out of your parents’ home, or land your first job. But for some, they joke that you’re not really an adult until you get your first credit card. I don’t know where the joke originated from but from a financial standpoint, getting your first credit card is practically a life event.

Depending on what province or territory you live in, you can legally get a credit card at the age of 18 or 19. Unfortunately, at that age, many of us aren’t making sound financial decisions, which is why you might be tempted to sign up for a new card on your college/university campus or even inside a grocery store or mall.

What credit card you select and the benefits it offers could affect you in the long run. So it’s a good idea to understand how to manage your first credit card before signing up for the first offer available to you.

Picking the right card

Receiving a free t-shirt or a travel mug may be tempting but if that’s the reason you’re signing up for a credit card, you can do a lot better. Continue Reading…