Tag Archives: saving

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…

Make & Save: The importance of actionable Personal Finance habits

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By Hellen McAdams

Special to the Financial Independence Hub

When it comes to actionable personal finance habits, earning more money and saving a good portion of it are near the top of the list. Sadly though, before you can ascend the tower of wealth, many of us need to first dig out of the basement of debt.

Escape Debt in 5 years

Did you know the average American household has approximately $137,063 in debt? (all figures $US.) That’s too much debt. But what if you were to discover it’s possible for the average household to get out from under the thumb of that kind of debt in as little as five years?

There are several ways to do this. Loan consolidation is a practice whereby you reduce the complication of managing debt by combining everything together. If you have a bunch of little debts that individually compound separately from one another, one possible solution could be to take out a small loan, pay them off, then pay off the small loan in a single payment from then on.

There are online loans of this type which can, believe it or not, be secured online, if you’re considering such.

Still, this is just a debt transition; it doesn’t truly get rid of that which you owe: it merely reduces the complexity of paying a dozen little things off in tiny increments; like cellphones, furniture, and medical bills. A better way to get your debt paid off more quickly is to downsize.

Debt Relief Strategy

This is where you have to establish good financial habits. This hypothetical revolves around $3,000 a month in earnings from the primary breadwinner of the household. That comes to $36,000 a year before taxes. Now say you’ve got $137,000 in debt hanging over your head. You need to find a way to pay that off with the money you’ve got. Continue Reading…

5 ways post-secondary students can save money

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By Brandon Silbermann

Special to the Financial Independence Hub

When it comes to education, there are important financial lessons to be learned by post-secondary students outside of class.

According to Statistics Canada, there are currently more than two million full and part-time students at Canadian universities and colleges, and for those who leave home to study, a four-year university education could cost as much as $90,000. The road to responsible money management is a lifelong journey and many post-secondary students would benefit from ongoing practice: no matter their financial situation.

As a millennial financial advisor with freedom to provide impartial advice to helps young adults and parents prepare for life on campus, here are my top five tips and tricks to help students save money and put themselves on a solid financial footing throughout the school year.

1.) Look for scholarships and bursaries

There are many different scholarships out there available to students based on factors such as their choice of major, financial need, academic performance and community involvement. Surprisingly, however, many scholarships and bursaries go unclaimed each year. Although it may be time-consuming to find all the options available to you, contacting your school to get a directory is a great start and may be well worth the effort. You can also access Canada.ca’s student financial assistance section to learn what is available to you and how to apply for help to pay for your post-secondary education.

2.) Hone your cooking skills and save big

Buying food at restaurants every day can quickly add up and put a damper on a limited student budget. Shopping at a local market or on student discount days at a grocery store is a smarter route. For example, Zehrs – a Loblaws brand grocery store – offer 10 per cent discounts off students’ groceries on Tuesdays if they present their student cards in Waterloo. You can also order a basket of ugly but delicious produce via second-life.ca or browse through your local grocery store for discounted fruits and vegetables nearing expiry. Certain supermarkets, such as Loblaws, Sobeys or Metro, now offer a range of “imperfect” fresh products at affordable prices.

3.) Pay down highest interest rate debt first

Continue Reading…