Tag Archives: saving

Rekindling our inner creativity and frugality this Holiday season 

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By Maria Weyman, creditcardGenius

Special to the Financial Independence Hub

Gifts, parties, drinks, and yes … food! Is there a more expensive time of year than … now?

Staying on the straight and narrow road of financial responsibility means we can’t go about our lives like a zombie (oh wait, wrong holiday )…

But how do we stay frugal (yes, I’m using the F word), and keep fun within arm’s reach?

It’s all about creativity

… not sacrifice.

So, don’t worry, I’m not going to ask you to create two separate lists for needs and wants. Instead, let’s stick with one master list: where you list your full holiday needs and wants.

Now, here’s the thing. At the bottom of your list, write the max dollar amount you plan on spending for everything. But before you write that single number down … a little research would help, like:

How much disposable money –- after your fixed expenses and savings goals –- do you have in the bank?

(No, your credit card limit doesn’t count.)

Working with that single number –- your maximum budget –- it’s time to break it down into chunks depending on what’s in your list. Now we’re cooking.

You’ll feel a little bit of tension. An internal struggle when you’re deciding how and where to allocate your holiday spend. Completely normal. That just means our brain is getting warm and prime to let our creative juices flow. Because here’s a not-so-obvious secret:

Constraints and limitations drive creativity.

Make it a game

Because games are fun. And at its core, aren’t games all about solving problems and overcoming specific challenges?

Even more fun when you get to save, indulge yourself, and spoil the people you love in the process. And here’s the best part:

You get to create the rules.

Here are some questions and suggestions:

Review your list

When you review your list…

  • Is there anything that you can get pre-loved (say hello to Kijiji, Craigslist, and even Facebook)?
  • Is there anything that you can create yourself (using a little help from Pinterest and YouTube)?
  • Is there anything that you can borrow from friends and family?
  • Is there something that you can replace with something that is just as good or better?
    • Example: if you’re thinking of getting your bff that beautiful warm $50 scarf, how about a) inviting her over for home-cooked dinner?, or b) volunteer to watch over the kid(s) for an afternoon so she can have a “me time”?

Anytime you can DIY [Do it Yourself], borrow, replace or get something pre-loved…write down how much you’re saving. Obviously, the bigger the number, the bigger the genius you are.

What’s at stake? Well, that’s for you to decide.

Free is fun

Let’s stop and think about all the free things we’re getting online; amazing isn’t it?

So, back to your list. Is there anything you’ve listed that is available for free? Some ideas …

  • Free local events: Check Eventbrite for current and upcoming local events, some have tickets for sale and some are free.
  • Free stuff. Browse Kijiji and Cragslist free stuff and see if there’s a match on what’s on your list.
  • Other freebies: like games, baby stuff, etc.

7 DIY gift ideas

Ideas from easy to advanced …

  1. Personalized christmas tree ornament: grab a box of blank-canvas ornaments from the dollar store, markers, and stickers … and have fun!
  2. Vanilla infused vodka for baking, etc.: Better alternative than that boring store-bought “vanilla extract” (cheap vodka is welcome).
  3. Chocolate spoon mixer like this one is delish.
  4. Ready-to-go hot cocoa and marshmallow in a jar: drool-worthy ideas here.
  5. Homemade chocolate and caramel dips: you can find glass bottles at the dollar store and recipes for chocolate and caramel dips are abundant.
  6. Decorated candle holder. You can go from simple elegance to elaborate, some ideas here.
  7. Festive painted glassware: Grab a (wine) glass (you guessed it, from the dollar store), enamel paint (specific for glasses), paint brushes, and … some inspiration! The best news? Sky’s the limit to your pattern and design.

These ideas are by no means exhaustive, but I hope it’s a good starting point to get you thinking of the possibilities.

The bottom line

Gifts, parties, drinks, and yes … food.

We’re entering a time where abundance and indulgence are celebrated. And while, no doubt, there are worse things in the world, over-indulgence only feels good for a moment.

So let’s make sure the reality we come back to after this holiday is a happy one for you and your wallet.

Maria Weyman is Co-Founder of creditcardGenius, the only tool that compares 50+ features of more than 150 Canadian credit cards using math-based ratings and rankings that respond to your needs, instantly. Follow on Twitter and Facebook.

 

10 financial lessons to share with friends

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The personal finance community can be a bit of an echo chamber, reinforcing and repeating the same ideas on how to save, invest, and spend our money. This sort of tribalism can be intimidating for outsiders who are eager to learn but afraid to ask questions or know where to start, especially when it comes to more complicated topics.

The truth is not all Canadians are financially savvy. In fact, a Tangerine survey last year found that only half of Canadians consider themselves knowledgeable when it comes to personal finances.

As personal finance enthusiasts it’s our duty to move beyond this little corner of the Internet and start talking to our friends and family about money.

It’s not easy to talk in real-life about what we do with money, how much we save, how much we spend, and the foolish mistakes we make. But these are crucial conversations to help each other deal with money and the complex decisions about it that we all face.

We can start by sharing the kinds of tips and tricks that helped us build lifelong financial habits and skills. It’s what financial literacy is all about, right?

That’s why I was excited to partner with Tangerine for Financial Literacy Month and list my top 10 financial lessons to share with friends:

1.) Avoid credit card debt like the plague

It’s impossible to go through life without incurring at least some debt. I’ve had student loans, credit card debt, a car loan, line of credit, and finally a mortgage.

Carrying a balance on my credit card was by far the most harmful to my finances. Making the minimum monthly payment hardly puts a dent into the balance, and 19 percent interest ensures that balance will continue to grow.

Tackle it with the debt avalanche or debt snowball method, and once it’s gone commit to never again paying one cent of credit card interest.

2.) Track your spending

To free up that additional cash flow you need to understand how much money comes in and how much goes out every month. There’s no other way around it – how else will you know what you can afford to save?

Whether you use a mobile app, budgeting tool, or good old-fashioned Excel spreadsheet, the point is to track every transaction until you can glean some insight into how you spend your money. Use this information to make informed decisions on which areas of your budget you can cut, and where you’d like to direct any additional savings.

Related: Track your habits, save money

3.) Automate your savings

The key to building a life-long habit of saving is to make your contributions automatic and as painless as possible. Pick a day that coincides with your paycheque and set up an automatic transfer into your RRSP, TFSA, savings account, or RESP.

It’s called paying yourself first. Start with as little as $25 and increase it annually, or as your budget allows. This powerful strategy works because it treats your savings goals as ‘mortgage-like’ fixed expenses that come out of your account on a specific day.

4.) Save a percentage of your income

One rule of thumb suggests saving 10 percent of your take home pay for retirement. I say save a percentage – any percentage – of your income as long as you start with something and make it automatic.

One cool trick I learned was to bump up that percentage in tandem with a salary increase each year. So, for example, let’s say you earn $50,000 and saved 5 percent of that amount ($2,500). Then you get a 4 percent raise in the New Year, so now you make $52,000. Well, don’t just continue saving $2,500 – bump that up to $2,600 to stay in-line with your 5 percent savings rate. Continue Reading…

Forced Early Retirement? 7 things you should do right now

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By Michelle Arios

Special to the Financial Independence Hub

There are a lot of life situations that can lead someone to retire much earlier than they had initially anticipated. It could be illness, injury, the need to move quickly, an emergency family circumstance, or even a company closing its doors. Why you’re being forced to retire isn’t nearly as important as the silver lining you need to find in your situation, and what steps you’ll take to get there.

1.) Get a great Savings plan

Your normal savings account may not be enough to carry you through. It might help to change your current savings account to one that gives you a better interest rate, particularly if you’re going to consolidate your retirement accounts. It might also help to supplement your savings with some investments that will grow with time.

2.) Work out your new Budget

People in retirement often live on fixed incomes, especially if their spouse is also retired. You need to be sure your money can go as far as you need it to, and that might mean breaking apart your old budget and determining where and how you can best reduce costs while maintaining your quality of life. There are some easy-to-use smartphone apps that might help you do that.

3.) Downsize your Home

The expenses of maintaining a household are high. If you’re retired, you probably don’t need all the extra space anyway. Finding a roommate can help, and so can selling your previous home to purchase a smaller home that’s easier to maintain. Often times, utility bills will significantly go down on a smaller property. You’re also gaining some extra cash and a little more financial longevity.

4.) Find affordable alternatives

Monthly costs, like health insurance and cellular phone bills, can often add up to a lot of money. You might want to consider shopping around for a better deal. Continue Reading…

5 ways to turn your Savings into Capital Gains

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By Sia Hasan

Special to the Financial Independence Hub

Continuously adding to your savings account is a responsible and astute financial step towards a comfortable retirement. Unfortunately interest rates offered by banks on standard savings accounts make for really slow growth, which is barely enough to keep up with inflation. Fortunately, there are other investment options out there that can increase your money at a more decent pace, one of which is stocks. Here are five techniques to turning your spare cash into a portfolio that grows both in capital gains and dividend income.

1.) Start Small

You don’t need to pour all of your savings into stocks right away. Going about it slowly can minimize risk. For example, if you have $10,000 as your savings, start buying 10 to 20 shares of stocks per month. Consider increasing your order size or frequency of purchase as you gain more experience or as you get more data about specific companies. If company XYZ’s stock price has solid momentum, consider buying more of it.

2.) Dollar Cost Averaging

You can also do dollar cost averaging, which basically involves setting a budget to buy stock each month. For example, if you have $1,000 to invest per month and company XYZ’s stock costs $50 for this month, you buy 20 shares of it. The next month, it costs $40 per share, so you buy 25 shares. The month after that, it actually increase to $100, so you buy 10 shares for that month and so on.

3.) Strategize according to your Lifestyle

A methodical approach to investing is key to growing your investment portfolio consistently. Strategy removes emotions from the equation, which for an investor can be a detrimental quality or set of qualities to bring in the stock market. Figure out what strategy best fits you. Someone who is saving money month after month is probably occupied with a full-time job; hence there are limited hours in the day for monitoring prices and current positions. Continue Reading…

Do men and women have different Savings Habits?

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By Danielle Kubes

Special to the Financial Independence Hub

In an online survey about savings habits, financial comparison site Ratehub.ca reports that although Canadian men and women save almost the same amount of money, men have a greater level of confidence in their financial planning.

Inspired by 2014 Statistics Canada data that says Canadian women have lower financial literacy scores than men and were less likely to consider themselves “financially knowledgeable” (31% of women versus 43% of men), Ratehub.ca set out to discover if there truly is a gender divide. 

The company digitally surveyed a random sample of 1,087 Canadians in November, with respondents self-identifying their gender.

“Our survey revealed that while men and women differ in aspects of their financial planning, at the core, their personal finance goals and concerns are nearly identical,” the report says.

Both genders have similar financial goals

Indeed, both genders report almost the exact same financial goals. At the top of list of priorities is retirement, followed by travel and then having an emergency fund.

Both men and women prefer to save and invest in registered accounts, especially the registered retirement savings plan (RRSP) and tax-free savings account (TFSA). What they choose to invest in within these accounts — guaranteed income certificates (GICs), exchange traded funds (ETFs), stocks, or other products — is unknown.

Yet men and women diverge most in how confident they are that they’ll have enough money to retire: less than half of women, 41%, say they’re confident compared to over half of men surveyed, at 56%.

Odd, because both genders save almost the same amount of their salaries, with women saving 26% and men 29%.

The gap could potentially be explained in how able they are to grow those savings through investing. Eighty-five per cent of men invest their money, while only 76% of women do.

Of those that do invest, less women than men self-manage their investments, potentially indicating another worrisome lack of confidence in their financial knowledge.

This is supported by the original Statistics Canada data, which found women were less likely to state they “know enough about investments to choose the right ones that are suitable for their circumstances.”

Confidence doesn’t mean financial knowledge

But does confidence translate to actual financial knowledge? Apparently not. When Statistics Canada quizzed Canadians who rated themselves financially literate, one in every three women failed, while one in every four men failed. Continue Reading…