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 apps to help get your personal finances on track

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By Julia Faletski (Sponsor Content)

For many people, managing your money means simply checking your bank account every month and paying your bills. That’s a great starting point. But if you want to get on a strong financial footing and maybe even retire a millionaire, you’ll need to set goals and have a plan for how to get there. That means budgeting, saving, building a strong credit score, and more.

Fortunately, today’s technology means you don’t need to be a math wiz to make these smart money moves. In fact, you don’t even have to look at a spreadsheet. There’s an app for that.

To help you get started, we’ve curated a list of apps that will help you automate —  and dominate — your personal finances:

Budgeting

To start out your financial journey, you’ll want to know how you’re doing today. Budgeting is probably the most fundamental aspect to personal finance. There are lots of budgeting apps out there, but Mint is one of the more well known ones for a good reason. Mint allows you to manage your finances from beginning to end: you’re able to link banks accounts, credit cards, investment accounts (like WealthBar!) and bills. You can track your spending, create a budget, and see a complete picture of where your money is going, all in one place. It’s great for both keeping track of your day-to-day transactions and long-term goals.

If you want more of a step-by-step guide to creating and following a budget, take a look at You Need A Budget (YNAB). Not only are you able to link accounts and track expenses, but you can also get advice on how to pay down debt, manage monthly expenses, and accumulate savings. It’s always a bonus when a company infuses their features with financial education. Knowledge is power!

Taxes

We get it, tax season probably isn’t your favourite time of the year. Luckily, apps like TurboTax aim to make filing your taxes painless. The app will take you through a number of easy-to-answer questions — prompting you to provide the pertinent information — and then it will do the calculations for you. No need to go through all the tedious steps yourself! The goal is making sure no money is left on the table in unclaimed deductions.

Credit score

Having healthy credit goes a long way when you need to borrow money for a big purchase like a house or even get a credit card. Credit Karma allows you to take the guesswork out of understanding your credit score. They make it easy to access your credit rating for free, understand what is positively or negatively affecting the rating, and see how you can improve it. Continue Reading…

Loaning, Leasing and Owning: Know the Differences

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By Sia Hasan

Special to the Financial Independence Hub

The terms “lease” and “loan” are often used in conversations about personal finance, and you may not be sure of the difference between them. You may have even less confidence about when you should take out a loan, lease an item or just buy whatever you need out of pocket. By finding out the differences between these options, you can figure out which choice is best for your situation.

Loan

A loan is an amount of money that you borrow from a bank or another financial group. They give you the money and you agree to pay it back over time, almost always with interest. A loan is right for you if you need to make a payment on something that you cannot afford all at once or that involves education or another kind of service.

Within this broad term are many specific kinds of loans. Loans can be classified as secured or unsecured based on whether the recipient has to provide a piece of property for collateral. Loans can also be closed or open. If a loan is closed, the person borrows a certain amount of money and then pays it back without taking out more money from the same lender in the process. Student and mortgage loans are often closed. If a loan is open, the person can continue to borrow more money from the same lender. Credit cards are a common type of open loan.

Another type of loan is a solar loan. If you want solar panels but cannot afford to buy them flat-out, you can borrow money that is specifically for your solar panels. When you take out this kind of loan, you can have solar panels installed without having to have all the money necessary to purchase them flat-out. Using this kind of loan does not prevent you from participating in any incentive program the government creates to promote reusable energy. All you have to do is remember to make your monthly payments so that eventually you can own your solar panels without having to repay the money you initially borrowed.

Lease

While loans involve one party lending money to another, leases involve a lending of possessions between two people. One person gives another a certain sum of money and in return, he or she receives the right to use a piece of property. Farmers may lease equipment from larger corporations that own their land. If you have rented an apartment or another dwelling place owned by a landlord, you have participated in a lease before. Leases are less open-ended than loans because they cannot be used to pay for any expense but instead involve a specific piece of property. Continue Reading…

Trick or Treat: How much does the average consumer spend on Halloween?

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By Mike Brown

Special to the Financial Independence Hub

LendEDU’s third annual study also included price comparison research that found consumers can save a good chunk of money by shopping for Halloween on Amazon rather than Walmart.

 

While our level of involvement may differ, most of us will be taking part in Halloween festivities in some capacity.

For the youth, enthusiasm for Halloween begins in September when costume ideas start taking shape. Once it starts, the fun doesn’t end until the candy-induced stomach ache kicks in roughly three hours after that last Twix.

While young adults may bypass the trick-or-treating, Halloween still offers a great excuse to dress up, look silly, and have a night out on the town.

Adults, who are often less excited than children, play an integral role when it comes to Halloween. Without them, who would chaperon the trick-or-treaters, hand out candy, cover houses in spooky decorations, or design the outfits that win the school costume competitions?

Like most holidays, Halloween will always have naysayers, but for the most part, it is seen as an enjoyable night that kicks off the holiday season. And according to LendEDU’s third annual Cost of Halloween survey, it is actually a day that will be forcing many to cough-up a decent-sized chunk of change.

Average American will spend US$162.29 on Halloween in 2019

With Halloween just hours away, LendEDU wanted to figure out how much families are spending on this holiday characterized by candy, costumes, and scary decorations.

​To do this, we asked 1,000 Americans that were planning on celebrating Halloween in 2019 the following question: “How much do you expect to spend celebrating Halloween this year?”

After averaging together all 1,000 responses, we found that in 2019 the average American is expecting to spend US$162.29 on Halloween. (All dollar amounts below, including graphics, are in US$).

It turns out that all of the fun brought on by Halloween comes at a price that may scare a few people away before the haunted houses even have a chance. $162.29 for a few hours of spirited and spooky celebrations is nothing to sneeze at.

>> Read More: How to Save on Halloween

​So, what is making the cost of Halloween so unexpectedly high? Continue Reading…

How to avoid the hidden costs of school

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By Tara Thompson

Special to the Financial Independence Hub

If you have school-age children, you know that when fall rolls around there will be additional costs added to your budget. Hopefully, you planned for this increase in the budget when the school year began, but as we all know there are always unexpected costs that we didn’t think of. Here are a few things to expect as well as a few ways to save.

Clothes

When we send our kids off to school we already know about many of the costs. Back-to-school shopping can be crazy. New clothes are important if we want our kids to fit in with their peers. New shoes are also a popular item and they often need multiple pairs. If you live in an area that has cold weather or rain they will need coats and jackets. If possible try to reuse some of your kid’s clothes. I know they always want new clothes but try to mix in some new with some of the old, and don’t forget to utilize hand-me-downs if you have more than one child.

Supplies

Then there are the dreaded school supplies. A long list that never seems to end and probably a new backpack and lunchbox to go with them. There are ways to save money by finding good sales and also by re-using supplies from the previous year. I keep a plastic bin with unused and used school supplies that can still be used during the year and the following year if I still have them. This saves money and is a good way to be green. Continue Reading…

Why chasing a high credit score is a waste of time and money

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By Richard Moxley

Special to the Financial Independence Hub

This might sound weird, as our society has become obsessed with this mystical three-digit number, but it is true. Chasing a high credit score is really a waste of time and money. Here’s why.

The score you have access to is not the one the bank uses

While I agree that having good credit is extremely important, the score can be very deceiving. The biggest problem is that consumers do not have access to the credit score that the banks uses. I know that sounds weird and it shocks everyone when they hear it, but Equifax has recently updated its website with the following notice:

The Equifax Credit Score is intended for your own educational use. It is also commercially available to third parties along with numerous other credit scores and models in the marketplace. Please keep in mind third parties may use a different scorewhen evaluating your creditworthiness. (Emphasis mine)

As you can see, the credit score you have access to as a consumer is for “educational” purposes only and can be completely different than what a lender will see.

For example, when you log onto your profile with your bank or a third-party app like Borrowell, Credit Karma, or Mogo the three-digit number you see is for “educational” purposes and not the score the bank will use on your next credit application. It is even worse, when you find out that the score you are paying for directly on Equifax.ca and TransUnion.ca is not what your lenders uses. Unfortunately, it is common to see over a 100-point difference between the “educational score” and what the bank actually uses. This is just one reason why the credit score provided to Canadians is very misleading.

A high score doesn’t mean you have good credit

An 800-credit score (which is really good) doesn’t mean you’ve been approved for best rates and terms. The score is just one aspect the banks are looking for. Continue Reading…