Tag Archives: spending

Budget 2022: as feared, an NDP-influenced Spendathon

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CTV News

Ottawa has just released its federal Budget 2022, which seems to validate the pre-release fears that a de facto Liberal NDP coalition would be a high-spending, high-taxing affair. You can find the full budget documents at the Department of Finance web site here. It is as expected “a typical NDP tax-and-spend budget,” as interim Conservative Leader Candice Bergen told the CBC.

Budget 2022 is unmemorably titled A Plan to Grow Our Economy and Make Life More Affordable, weighing in relatively slim by federal budget standards: just shy of 300 pages.  Of course, the NDP is all over this document, which is why I call the de facto coalition the LibDP.

Naturally, the NDP’s pet priority is included, with $5.3 billion over 5 years for national dental care. As CTV reported, the program will offer dental care to families with annual incomes below $90,000, with no co-pays for those under $70,000 annually in income. The first phase in 2022 will offer dental care to children under 12.

Big focus on affordable housing

Of the $56 billion in projected new spending over six years, $10 billion is going to housing over five years, with a one-time $500 payment to those struggling with housing affordability. And as expected,  foreign buyers will be shut out of the market for condos, apartments, and single residential units for the next two years.

They are also cracking down on home flippers, introducing new rules as of January 2023, such that if anyone sells a property held for less than 12 months it would be considered to a flip and be subject to full tax on their profits as business income (with some exceptions in certain special cases).

National Defence will get $8 billion over 5 years, There’s $500 million for military aid to Ukraine and $1 billion in loans.

Perhaps we should use CTV News’ phrase and describe the spending as “targeted”:

The budget proposes $9.5 billion in new spending for the 2022-23 fiscal year — with the biggest ticket items focused on housing supply, Indigenous reconciliation, addressing climate change, and national defence — while also set to take in more than $2 billion in revenue-generating efforts.

New “Minimum Tax Regime”

CTV reports that Budget 2022 “puts high earners on notice that the government thinks some high-income Canadians aren’t paying enough in personal income tax.”  The Liberals say they will be examining “a new minimum tax regime, which will go further towards ensuring that all wealthy Canadians pay their fair share.”

Here is the Globe & Mail’s initial overview (paywall.) Or click this headline:

Federal budget unveils plans for $56-billion in new spending, higher taxes, but short on growth plans

According to the Globe,  the planned bank tax is different from the initial proposal from the Liberal’s 2021 election platform: rather than a three percentage point surtax on earnings over $1-billion, the budget announces a 1.5 percentage point increase on taxable income over $100 million. That brings the tax rate on those earnings from 15% to 16.5%.

In addition to $4-billion for cities to build 100,000 new homes, Ottawa will provide tax-free home savings accounts of up to $40,000. Future first time homebuyers will get an RRSP-style tax rebate when they contribute and the money can grow tax free. First-time homebuyers will also get a tax credit of $1,500 and a home renovation tax credit of up to $7,500 to help families add second suites for family members. Continue Reading…

11 best Personal Finance formulae to live by

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What is one personal finance formula that you live by to help maintain expenses and create wealth?

To help you maintain expense and create wealth, we asked small business owners and professionals this question for their insights. From developing multiple streams of income to living beneath your means and giving back, there are several personal finance formulas that you can use to maintain your expenses and generate wealth.

Here are eleven best personal finance formulas to live by:

  • Develop Multiple Streams of Income
  • Set a Budget and Stick To It
  • Make and Save More Than You Spend
  • Seek Out the Best Deals
  • Overestimate Your Spending
  • Value and Invest in Yourself
  • Account For Every Dollar With Zero-Based Budgeting
  • Track Your Spending Monthly
  • Deposit Any Extra Cash to Savings
  • Set Clear Expectations With the 30/50/20 Rule
  • Live Beneath Your Means and Give Back

Develop Multiple Streams of Income

You need to develop multiple streams of income, if you can. Just trying to get wealthy from one source of income is not enough to build the sort of wealth you’re imagining for yourself. Starting with the income stream you have now, add to it. Invest, if you can, as dividends from the right stocks or mutual funds can be another income stream. In general, the more income streams you have, the greater your ability to create wealth. — Carey Wilbur, Charter Capital

Set a Budget and Stick to it

Setting a budget and sticking to it is a tried and true personal finance formula that works for anyone of any age, in any business. Fiscal responsibility is never overrated. Knowing how much you have coming in and going out, how much you can afford to spend and how much would be too much, can prevent you from making costly decisions. This is one of the key foundations of creating and maintaining wealth. — Randall Smalley, Cruise America

Make and Save more than you Spend

I live by the formula of making and saving more money than I spend. There’s no better way to create wealth than being responsible with what you earn. Save more than you spend, make smart investments when possible, and don’t deviate from your long-term goals. Work hard and stick to your budget, and your wealth will continue to grow. — Vicky Franko, Insura

Seek out the Best Deals

I try to save money wherever possible and always try to find the best possible deal on an item. A penny saved is a penny earned, after all, so I do my research in order to earn. If I see something I like, I shop around to be sure that I’m getting the best price. The same principle can be applied to anything, whether we’re talking about books, TVs or, like with us, insurance. — Brian Greenberg, Insurist

Overestimate your Spending

When creating my budget, I always overestimate my spending for each category. I round up every number so that there is a buffer for unexpected costs, and I’m never cutting it too fine. I find this removes the feeling of being too restricted by my budget and letting it rule my life by being in the way of spontaneous moments. When in reality, a budget is there to make your life easier and help you plan for the moments which bring you great happiness. It’s barely noticeable to put away a little extra for each spending category but combined this adds up and allows you space to live more freely. — Antreas Koutis, Financer

Value and Invest in Yourself

You are your own greatest and most important investment. That’s how I see it. Be sure that you’re paying yourself what you’re worth, commensurate with the value you bring to whatever you’re doing. Continue Reading…

How to raise money-smart kids

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Shutterstock

By Gaurav Kapoor, Founder, Mydoh

(Sponsor content)

Financial literacy isn’t an innate skill. Like most skills in life, financial literacy must be learned – the problem is who teaches it? Parents know they play a part, but they may lack the confidence, or the knowledge.

Helping your children develop good money habits as they enter their teen years is a great place to start their financial literacy journey. Teenagers are eagerly seeking out financial independence and may be earning money through an allowance or an after-school job.

As they look to spend their hard-earned money, it’s crucial to set them up for success. After all, money isn’t just about dollars and cents, it’s about the choices we make with it. Parents want to teach their children to be money-smart – to have skills to earn, budget and spend, but they also want to share the value, emotions and experiences that come with money.

This notion of early financial literacy is what motivated me to create Mydoh, the Smart Card for kids.

Check out my best tips below for raising money-smart kids with the help of Mydoh:

Leverage technology that helps your kids learn how to save, and spend, their money

Kids today are more tuned in to technology than ever before – so why not use tech to teach them financial literacy?

Mydoh is a Smart Card for kids that comes with a money management mobile app, available on iOS and coming soon to Android. Kids gain financial skills by earning money through tasks and an allowance (set up by their parents) and by making their own purchases (wherever Visa is accepted) using their Smart Card issued by RBC through the app, with a physical card coming soon. This gives kids the autonomy, competency, and confidence to make their own earning and spending decisions – learning values that help build a strong foundation for the future.

Through the app, kids can manage their own money in the real world, making decisions to spend and earn, while parents get visibility to their spending and can have better money conversations. Continue Reading…

Making the most of the money you already have

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Image via Pexels

By Jim McKinley

Special to the Financial Independence Hub

It does not matter if you have $1,000 or $100,000 in your account: you probably want to make the most of the cash you have. But how, exactly, is this accomplished?

There are many strategies. The Financial Independence Hub details some of the easiest and most effective below.

Get Help

If money management is your weakest link, look for an accountant or financial consultant to help you get a better grip on your financial future. You can find experienced financial professionals through different online job boards and platforms.

Manage your Debt

There is nothing wrong with having a house or car payment. These are debts that most people expect to take on. However, credit-card debt is something that eats away at your bank account more than you might imagine. According to Business Insider, average credit card interest rates in 2020 are more than 15 per cent. And these only compound, meaning that you pay interest on interest accrued each month as your balance continues to rise. Look at it this way: For every $100 you are in debt each month, you pay an extra $15. To keep more of your money, eliminate debt as soon as possible. Pay down your lowest balances first and then add that payment each month to your high-balance cards.

Check your Bank Accounts

When it comes to bank accounts, there are two primary types of accounts you might think about: chequing and savings. What you may not realize is that each of these has different subcategories, and some pay higher interest rates than others, and you may only be getting a small interest payment each month. Consider switching to a money market, which has a higher interest rate. Continue Reading…

10 smart spending tips from frugal Small Business owners

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How can small business owners be more frugal and spend smarter?

To help you and your small business to be more frugal and spend smarter, we asked small business owners and financial experts this question for their best advice. From polyphasic sleep to developing your IT skills, there are several tips to help your small business to be more frugal and to spend smarter.

Here are ten ways your small business can be more frugal and spend smarter:

  • Google my Business
  • Unsecured Loan or Line of Credit
  • Outsource to Experts
  • Free Trials
  • Check annual discounts for Services
  • Reevaluate your Digital Marketing Strategy
  • Budgeting ahead to Avoid Impulsive Spending
  • Use Free Software
  • Automate and Delegate
  • Only Spend if it adds more Value than it Costs

Google my Business

Google Ads offers small businesses a great opportunity to develop visibility in search result pages. By expressing a willingness to bid on keywords relevant to a business, small business owners can pay per click to attract potential customers to their website. However, as competition amongst advertisers increases, so does the cost per click. In our industry, keyword costs can be $50 – $100 per click. With rising advertising costs, small businesses have less and less margin for profits. To spend smarter, small businesses can invest in an organic search presence to increase their visibility for keywords without paying for each click. One simple step for small businesses is to start a Google My Business page to increase visibility on the local level. Alternatively, businesses can blog about topics similar to keywords in a Google Ads account to reduce paid ad costs and increase organic traffic. — Dan Reck, MATClinics

Unsecured Loan or Line of Credit

Pre-revenue businesses still need to spend in order to launch a new venture. Sometimes the best time to be frugal is when a small business owner is seeking financing and needs to pay extra attention to the interest rate that comes with an unsecured loan or line of credit. Many funding sources tout simple application processes and short pre-approval turnaround times. Be careful not to move too fast on a loan that carries a higher interest rate. Instead, take the time to do your due diligence because some upfront work can save on long-term frugality. — Craig Johnson, Unsecured Funding Source

Outsource to Experts

Let’s say that you’re a small business owner who wants to invest in something like SEO (search engine optimization). You can pay an SEO agency like us $2,500 per month, or $30,000 per year to perform SEO at an expert level. Or, you can hire an SEO manager internally for $65,000 to $85,000 annually to perform SEO for a company. Sometimes, it saves to outsource certain services to experts instead of hiring internally for a business need. Consider the alternatives before posting a job description to a career page. –– Brett Farmiloe, Markitors

Free Trials

Sending secure communications typically comes with a cost to ensure security and compliance. However, some communications companies offer free trials to test their service. For example, our company offers small businesses the ability to send a free fax. If a small business owner is looking to be frugal when it comes to communications, seek out these free trials as a way to save money and discover services that can truly support your business. — Eli Patashnik, iFax

Check Annual Discounts for Services

If you know that you are going to be using a service for an entire year, see if you can pay the entire year in advance for a discount. This often netted us 10-20% discounts on services that we were already paying for. Even if a service doesn’t appear to offer this type of discount, you should inquire as some companies will offer quarterly or semi-yearly discounts as well. I also recommend a quarterly review of your small expenses and ensure that everything is being used. There were many times, we were able to cut costs by simply realizing that we no longer properly utilized a specific service. — Matt Blake, Entrepreneur, Investor and Partner

Reevaluate your Digital Marketing Strategy

Look at your digital marketing ad spend, analytics and metrics. Are you meeting goals and objectives? There is a lot that can be done organically (non-paid) with content marketing — blogging, videos, podcasts — in conjunction with social media marketing, that will help with Search Engine Optimization (SEO) and drive traffic to your website without spending money. Continue Reading…