The ABCs of RESPs

Posted on May 2, 2014May 2, 2014 by Natasha McKenna

From: Canadian Living Magazine

Holding your newborn, you gaze lovingly into his eyes and imagine all the things he may one day become. Will he be an architect, an artist, a chef? Then it hits you — how on earth are you going to pay for all his schooling?

When your little one is ready to graduate high school, the projected cost of pursuing a four-year post-secondary education in Canada will be upwards of $55,000, depending where you live (including tuition, fees and books), and a mind-boggling $90,000 or more if junior decides to go away to school. Add in a specialized degree and the costs go up, way up, from there.

So what’s a parent to do? In a word, plan.

Be informed

Patricia Trott, manager, investor communications, with the Ontario Securities Commission (OSC), urges parents to do their homework before opening a Registered Education Savings Plan (RESP) by investigating what kind of plan they want, deciding who is the best provider of that plan and paying careful attention to the fees, limitations and terms involved.

“You want to make sure you understand all the issues, such as can you transfer the plan? What happens if your child doesn’t enrol in post-secondary education?” says Trott. “It’s very important to do your research.”

RESPs

The current darling of saving plans, an RESP allows contributors to sock away as much as they can annually for a lifetime contribution of $50,000 per child (the limit was raised earlier this year from $42,000), non-deductible. The funds grow tax-free until withdrawn (an RESP can stay open for up to 26 years), and the grant and growth portion of the education payments are then taxed to the student who is enrolled full- or part-time in a “qualifying education program.” Luckily, most students typically have little other income, so they’ll pay minimal tax on the money coming their way.

Look at the options

RESPs are available through banks and trust companies, credit unions, investment dealers, mutual fund companies and scholarship plan dealers. While not the only way to save for a child’s education, they are a popular option — more than 1.5 million Canadian children are beneficiaries of an RESP. You must have a social insurance number for yourself and your child in order to open a plan. Don’t have one for your child yet? You can download an application at servicecanada.gc.ca.

Financial institution RESPs

Most financial service providers offer self-directed or money-managed RESP plans. From there, you have two choices: an Individual Plan or a Family Plan. Anyone (parents, grandparents, extended family or friends) can open an individual RESP and contribute money for a child, referred to as the “beneficiary.” In a Family Plan, you can name one or more beneficiaries of the RESP, but they must be related to you. They may be your children — including adopted children — grandchildren, brothers or sisters.

Group (scholarship plan) RESPs

Scholarship plans pool the contributions of many investors. When you join a group plan, you agree to buy a set number of plan units according to a set schedule. Each unit gives you a share in the pooled earnings of the group, which are then paid out when it matures to qualifying students the same age as your child.

Get more money

As if rising tuition fees weren’t enough incentive to stash some cash, depending on your net family income, the federal government could add 40, 30 or 20 cents on the first $500 saved per child up to age 17, for every dollar you save in your child’s RESP. This grant is courtesy of the Canada Education Savings Grant (CESG), — for a lifetime maximum of $7,200. “It’s actually a pretty generous program,” says Trott. Should the RESP not be used 26 years after it’s opened, the amount you saved and the interest earned will go back to you, and the CESG may be used for another child’s education.

On the first $500 you save in your child’s RESP, the Canada Education Savings Grant will give you:

40 cents per dollar, if your net family income is $37,178 or less;
30 cents per dollar, between $37,178 and $74,357;
20 cents per dollar, if your net family income exceeds $74,357.

No matter what your net family income is, the CESG will give you 20 cents for every dollar you save up to $2,500.

To get the CESG in two easy steps, you must:

Apply for a social insurance number for your child;
Open and deposit money in an RESP for your child.

Ask your RESP provider to apply for the CESG on behalf of your child. It will be deposited directly into her RESP.
Modest income families may also be eligible for a $500 Canada Learning Bond, plus an additional $100 per year up to age 15:

If your child was born after Dec. 31, 2003, and
You receive the National Child Benefit Supplement as part of the Canada Child Tax Benefit (commonly known as “family allowance” or “baby bonus”). This usually applies to families whose net income is $37,178 or less.

Live in Alberta? You’re already ahead. Thanks to the Alberta Centennial Education Savings Plan, any child born in the province on or after Jan. 1, 2005 receives $500 towards her RESP. These kids will also get an extra $100 at ages 8, 11 and 14, provided the parents are residents of the province and their children are enrolled in an Alberta school.

For more information regarding RESPs and the CESG, log on to the Human Resources and Social Development Canada website, hrsdc.gc.ca.

Just in case winning the lottery doesn’t pan out, senior editor Robin Stevenson has started saving diligently for her daughter’s post-secondary education.

Tips to Stash the Cash

Plough any cash gifts your child receives into an RESP. Ask relatives to contribute to an RESP in lieu of large holiday or birthday gifts.
Encourage children to allocate a portion of their allowance or any earnings (babysitting, snow shovelling) towards their education. Visit the financial institution to deposit the money together. Remind her that some goals must be saved for in advance.
Resolve to make cuts where you can this year; even little ones add up. Swap just one high-priced latte each day for the office brew and save $80/month. Brown-bag your lunch just twice a week and save $60/month. Combined, that’s a savings of more than $1,600 a year towards junior’s education.

Sourced from: http://www.canadianfamily.ca/parents/organizing/abcs-resps/

Highway To The Danger Zone: How To Avoid Spending Money You Don’t Have

Posted on April 3, 2014April 3, 2014 by Natasha McKenna

From the Huffington Post

Most people have a strange relationship with money; even with good budgeting, there rarely seems to be enough to go around. But what do you do when your money burns holes through your pocket faster than it actually lasts in your wallet? It may be time to reevaluate your spending habits and, more importantly, come to terms with how much you can really afford. Here are a few financial tips to get you started!

1. Don’t let the freebies fool you
Countless people have been convinced to initially sign up for a shiny piece of plastic in exchange for a free t-shirt or a light-up pen; before you know it, you’re tearing through Groupon and Amazon like a demon possessed. You wouldn’t make a large purchase, such as a car or a TV, without researching first. Why would signing up for a credit card be any different? Remember that a credit card is a bigger commitment than you think and shouldn’t be decided on in a whim. Researching which credit cards are compatible with your hobbies can benefit you in the long run, as opposed to blindly signing your name away. This is especially prevalent for financially vulnerable college students, to the point where the U.S. federal government has banned credit card marketers from university campuses. No word on a Canadian equivalent to this regulation — yet.

2. Cash and debit over Credit
It’s painful for anyone to part with their hard-earned money, even if the expenses are absolutely necessary. That’s part of the appeal of credit; you don’t truly feel the money physically leaving your wallet at any point during your purchase. But don’t be too eager to repress that uneasy feeling of spending! By spending what you have on you at that moment, you’re more likely to avoid spending money that you don’t have – something that you might not otherwise notice building up on your credit bills. Paying with cash and debit will make it seem like you got hit hard today, but it’s better than racking up the dollars on bills that you can always ‘get to’ tomorrow.

3. Stick to a budget
Allot a specific amount for every expense you have for that week or month, and don’t be tempted to dip into that amount for other frivolous things. Budgeting on paper helps, and if you’re not the pen-and-paper kind, there are a multitude of phone apps that can aid you on-the-go. If you have $50.00 to spend on eating out that week, don’t go over that amount on your next dining experience. Have an eye out for a new piece of clothing you’ve wanted? Walk away from that dream jacket if it’ll take breaking the bank to have it. Put down the bucket of sweet, guilty-pleasure ice cream if it’s not on your grocery list. And speaking of lists…

4. Lists are a good idea
This is a good idea for visual learners who can work with written cues. Writing a list — even if it’s for something simple as picking up your dry cleaning, buying pet food and a new blouse for your job interview — can serve as a visual reminder on the things you are actually set on purchasing. Not on the list? Don’t buy it. Restrain yourself from buying things that are not on your list, as the things you write down on a piece of paper before you leave your house will be the things that you intended on buying, not the things you convinced yourself were good ideas at the time.

5. Never get yourself a reward with money you don’t have
It’s part of human nature to seek out pleasure and comfort after, say, a long day at work or back-to-back coursework. It’s good to treat yourself to a comforting pricey coffee or that new phone case once in a while, but treating yourself after every single accomplishment you make in your day-to-day life will quickly leave you with empty pockets. If you’re really waiting for a big-ticket item, budget and save up for the purchase. Not to mention, if having beers after a day at work becomes a way of rewarding yourself, it will most likely become the new norm for you. Don’t rely on material rewards to re-energize and motivate you, and let ‘rewards’ remain more sporadic than constant.

Sourced from: http://www.huffingtonpost.ca/2014/03/31/avoid-spending-money-you-dont-have_n_5051234.html

5 Reasons to File a Tax Return

Posted on February 5, 2014February 5, 2014 by Natasha McKenna

By: The Investor Educator Fund

If you owe tax, you have to file a tax return. If you don’t owe tax, you still might want to file a return to take advantage of certain tax credits.

1. You owe tax or want to receive a refund

If you are a resident of Canada for part or all of a tax year, you must file a tax return if you owe tax or want to receive a refund.

2. Recover any tax you overpaid from your pay cheque

You may have had too much tax deducted from your pay cheque and not benefited from all the deductions and tax credits you were entitled to.

3. Take advantage of refundable tax credits

Examples of refundable tax credits: Child Tax Benefit, GST/HST Credit, the Working Income Tax Benefit. You won’t receive these credits if you don’t file a return.

4. Create contribution room in an RRSP

If you have earned income, you can make RRSP contributions, which reduce your net income. If you don’t use your contribution room in any year, you can carry the unused amounts to future years. Learn more about RRSPs.

5. Carry forward or transfer any unused tuition, education or textbook amounts

If you don’t have enough income to use these tax credits, you can carry them forward to future years. Or you can transfer them to a family member.

When you don’t have to file a return

You don’t have to file a return if your tax is withheld at source – taken off your pay cheque – and you have no other sources of income or deductions, or you have no income to report.

Sourced from: http://www.getsmarteraboutmoney.ca/en/managing-your-money/planning/

5 Common Tax Mistakes to Avoid

Posted on February 5, 2014February 5, 2014 by Natasha McKenna

By: The Investors Education Fund

1. Moving expenses

You can only claim moving expenses that your employer hasn’t already reimbursed you for. If you have been reimbursed for some or all of your moving expenses, you must include this as income on your tax return.

2. Public transit costs

You can’t claim day passes, tokens or tickets. You can only claim a monthly or annual transit pass.

Find out how whether you’re eligible and how to claim public transit costs by watching this video from the Canada Revenue Agency.

3. Interest paid on student loans

You can only claim interest on student loans made to you under the Canada Student Loans Act, theCanada Student Financial Assistance Act, or similar provincial or territorial government laws. You can’t claim interest paid on any other kind of loan, even if it is to finance your education. Example: a line of credit. You can’t transfer the claim to anyone else, even if they paid the interest on the loan.

4. Union and professional dues

Your employer may withhold dues from your pay. This will be noted on your T4 slip and you can claim a corresponding deduction. You may also get a receipt for these dues from your union or association. But you can only claim the deduction once. If you have been reimbursed for dues paid, you cannot claim any of the dues as a deduction unless your employer has included them as a taxable benefit on your T4.

5. Other deductions (line 232)

You can only use line 232 to claim allowable amounts not deducted anywhere else on your return. You can’t use this line to claim personal or living expenses that are not legitimate tax deductions. Examples: funeral costs, wedding costs, legal fees paid for separation or divorce agreements.

Sourced from: http://www.getsmarteraboutmoney.ca/en/managing-your-money/

Gail’s 12 Steps to Getting Organized Financially

Posted on January 7, 2014January 7, 2014 by Natasha McKenna

By: Gail Vaz Oxlade

Set-Up

Gather all your paperwork.
Create a file folder for each of the following:• Chequing accounts
• Savings accounts
• Retirement accounts
• Investment accounts
• Credit card accounts
• Loans
• Personal lines of credit
• Mortgage
• Insurance: life, disability, health, critical illness, home, car
• Estate: wills & powers of attorney
• Tax returns
Welcome to 21st Century banking
If you don’t already have it, set up telephone or internet banking for your accounts.
Reduce fees by setting up a buffer
If you can afford it, transfer $1,000 float to your chequing account (pretend it isn’t there) and use that to minimize your banking costs.
Save automatically
Create an auto-debit from your chequing account to a savings account that will not be touched. Most people won’t put money into a savings account on a regular basis, opting to wait for a tax-refund or bonus before setting aside some money for the future. Establish an automatic savings deposit every month and your nestegg will accumulate faster than you think.
Create a Monthly Bill Summary
List your bills in the date order they need to be paid to prevent you from missing a bill. If you have bills that are paid automatically from your account, write an “A” beside these bills and remember to deduct them from your Spending Journal at bill payment time each month.
Set-up your in-baskets
Create an in-basket with two Bills folders labeled “1-15” and “16-31”
When a bill comes in, look at the due date and put the bill it in the appropriate folder. Recycle all the marketing crap in the envelope.
Create a second in-basket with 3 folders labeled “bank statements”, “bills paid” and “tax receipts”.Weekly
Make a date with your money
On the 12th and 28th of each month to pay bills, set aside the time in your schedule – you’ll need about 30 minutes, depending on your bills — to pay your bills.Always pay your bills in one place that you’ve equipped with your bill paying system, spending journal, envelopes, stamps, pens, pencils, a calculator, tape, a stapler and return address labels and recycling bin for all that marketing stuff you’re going to dump.

When you pay a bill, write the cheque or transaction number, amount paid, and the date you paid it on the bill. Put the paid bill in your “bill’s paid” file. Deduct the amount you’ve spent from your Spending Journal. If a bill has not been paid in full (tax bills are paid over several months, for example) put it back in your Bills Folder so you don’t forget it.

Monthly
Reconcile you bank statements
When you bank statements come in, put them in your in-box folder. Make a date when all your statements are in (it’ll depend on when you receive them) to:1. review your statements to make sure there are no mistakes
2. reconcile your Spending Register; clearly mark the cheques that have been returned to you and highlight the ones in your Spending Register that haven’t yet cleared the bank. A cheque that is taking a long time clearing the bank can lull you into thinking you have more money than you do. Go back at least a month to make sure all previous check have cleared.
3. talk about anything unusual

Quarterly
File
Once a quarter, file all your paperwork to keep your system current.
Talk
Have a dinner with your business partner and talk about the bumps, your goals and how you’re doing. Annually
Re-vamp your budget
Review your budget using last years cc statements and bank statements to see what you actually spent. If you spent more on a particular category, make sure you know why, or look for ways to trim.
Clean up
Go through your files at the end of each year and throw out bills and receipts no longer needed for auditing/budgeting purposes.

Sourced from: http://www.gailvazoxlade.com/resources/12steps_getting_organized_financially.html

33 Parent Tips For Saving Money At Christmas

Posted on December 3, 2013December 3, 2013 by Natasha McKenna

mother-son-christmas

By: Nicole Avery

This post is part of my 10 Week Christmas Planning Series. Click here to read more posts – Christmas Planning 2013.

Through out this series we have been discussing how much we spend on kids at Christmas and Christmas overall. A common theme has been that readers would like to be spending less than what they currentlty do. In the quick survey I conducted I asked for readers tips on hot to save at Christmas time. Below are a collection of tips from other parents, that might help you spend a little less this year!

The anonymous tips come from the survey. Tips with a name attached were given to me via my facebook page.

Presents for kids

Jennifer McMahon Clark shared a philosophy I had hear before, when buying for kids give them “Something they WANT, something they NEED, something they WEAR and something they READ.”
Steer clear of things that don’t last, use Christmas time as a chance to stock up on things they really need. Not stuff they will only play with for a week.
Rachel McNaughton shared that they spend “The [same] amount we spend on our sponsor children in Africa… Seems only fair!!”
Nicolette White Sporys spends $200-$300 each, but it – “Includes outfit for the day, art supplies, a book, a large individual present and a shared gift such as a tent. No gifts till they are 2 or 3 and are aware of Christmas. This year they are getting ballet lessons as I’m trying to move awayfrom stuff and towards experiences.”
Jenny Davies shared their Christmas eve tradition – “I make up a box on which they both get brand new pair of pyjamas each, new slippers, snowman soup, new toothbrush and toothpaste. I also buy a Christmas Story and a Christmas film for them to share. We sit & watch the film while they drink their snowman soup (hot chocolate and marshmallows). Then they brush their teeth with their new toothbrushes and toothpaste before getting into their new pyjamas and snuggling down to have their Christmas story read to them. I love making their Christmas Eve box up!”
Samantha McWilliam takes a save first approach – “I have 8 children and how much I spend on each child depends on what kind of year we had and how much money ended up in the Christmas account. We did however tell Santa that he needed to be consistent and spend the same amount on each child each year.”
Nat Egan shares – “Around the AU$200 mark…one main present, then just fillers. But stuff that they need anyway…lunch boxes, etc…they do get fun stuff too. But I like to “bulk” it out with the necessities.”
My kids get a santa bag that is left on their bed and a main gift that is left under the Christmas tree. The santa bag is filled with essential stuff they ould get anyway – undies, socks, school supplies, toothbrush, deodorant, hair products, something to wear Christmas day and bathers, maybe even a small lego and a treat. They can spend ages emptying out the bag and comparing their finds and are genuinely excited over everything. (I always received a santa bag when I was a kid and loved it. Confession – I still get a santa bag each year up at mum and dads, it still has much the same things in it and a giant tub of Milo!).
Keep in mind that in our country our children really don’t ‘need’ anything!
We always bought 2nd hand christmas gifts for our kids at baby and toddler age, plus one bought “big” present. Its not until they are older that we started buying more costly things they wanted.

Planning your Christmas shopping

Buy through the year at sales so you don’t find yourself scrambling buying anything and at the most expensive price at the last minute.
Try not to be “sucked in” by the $1 here and $3 there additions to the shopping basket. It’s amazing how much these things can add up. Plan before you go shopping and/or do a pre-buying trip to see what’s available if you’re not sure and then go home to think about it and make a list before you actually buy and then realise you already have things or have too much!
Don’t leave it all to the last minute. Have a list of who you need to buy for, pick up things as you see them, when on sale, put away.
Buy presents through out the year. Sometimes picking up an item second hand on Ebay allows for a greater value present at a lower cost.
Shop for toys in the July toy sales- most have Christmas laybys so you don’t have to try and hide them for too long. Do as much shopping online as possible, to avoid impulse buys. I find ezibuyand identitydirect are good sites for gifts.
Buy cards, gift tags and paper after Christmas ready for next year.
I start a list in June with items that the kids or hubby have expressed interest in. Then I watch for the sales in the next 6 months and buy things ahead of time. Usually everything is purchased by Dec 1.
Online window shopping to get an idea of what is out there and how much to pay. Sometimes I buy online if its cheaper, otherwise I only go to the shops I need to, not into all shops.
Setup secret Santa or kris kringles for nieces & nephews rather than buying for them all.
Co-ordinate (lots of talking or just a group email) with extended family members so they are aware of what ‘Santa’ might be bringing and they can get things related. Therefore there is no great need for Santa to have to bring all desired objects. eg. Wooden railway- Santa gives basic train and some track and then everyone else gives additional trains or track sets. Clever Santa could have sent messages or everyone was just thinking alike! or Santa gives the bike while Grandparents give the helmet etc. PS- this is not a last minute thing it needs to be done early when people haven’t started their Christmas shopping yet
Don’t leave it until the last minute, buy things throughout the year. We never ever use credit cards for Xmas so nice not be faced with a huge debt in Jan. Lay by is a good option, also loveBook Depository and Amazon can be very cheap but you need to order a lot to justify the shipping costs.
I set up a Christmas Budget account and put $100 in it each month. It covers my daughter’s presents and presents for other people and whatever’s leftover we spend on food & drink over the Christmas period. I also buy ALL the Christmas presents in the EOFY sales so save heaps. It is SO much less stressful now!!! I try to buy one outdoor toy each year, but by having this budget I get to, say, October and depending on how much I have left to spend it could be a football or a giant swingset thing!!!
Buying gifts through the year when on sale. Have started using ‘reusable’ wrapping (eg fabric gift bags, or scarve/like-minded extended family. Lengths of fabric as furoshiki) for our immediate family. (Small initial cost, but mostly lengths of fabric I already had) Also, doing a ‘Kris Kringle’ with extended family, so we buy a single, decent gift rather than many smaller gifts has saved a fair bit.
Make things yourself – start doing it early in the year and you can save heaps this way.
Keep a Christmas notebook with budget, people to buy for, presents bought / ideas, receipts and layby info to keep everything in the one place.
Keep a list of items purchased and put away – so you remember who you have purchased for and you don’t end up with 10 gifts for one child and only one gift for another!
1. Keep a running list of items the kids/other family members would like/have mentioned throughout the year 2. Buy any of these items when they’re on sale – online wishlists are great for keeping track and noting sales 3. i find books are great presents for almost everyone as you can nearlyalways find one to reflect someone’s interests for quite a reasonable price – bookdepository is great for this.
I buy 2 boxes of chocolates and have them wrapped and handy for unexpected guests.
I create my own Xmas hamper by buying extra of regular non perishables when they go on special every time I go food shopping from October. I also set a Colours theme for wrapping each year and find everything the previous year on sale if I can.
Don’t get caught up in the hype, and make as much as you can from scratch.
We don’t buy a lot of snack foods and fizzy drinks eg shortbread etc, we buy a few treats for a couple of days over Christmas and for entertaining, but try to keep a lid on it for cost and health reasons. We share dinner costs with family members and have a Secret Santa too.
Redeem fly buys to buy get a gift or voucher.
I get the toy catalogues that come out mid year and start planning roughly what to get them. I leave them out and the kids often start looking at them and telling me what they like. It might not save money as such but it ensures I can hone in on what they want and get quality not quantity.

Sourced From: http://planningwithkids.com/2013/10/30/33-parent-tips-for-saving-money-at-christmas/

7 Holiday Budgeting Tips for Couples

Posted on November 22, 2013November 22, 2013 by Natasha McKenna

By: Lynnette Khalfani-Cox

The holidays are fast approaching, and even if you know how to stick to a budget, the same thing may not be true of your spouse or partner. All couples face money challenges from time to time. But the extra spending that often occurs during the holiday season can put added financial pressures on a relationship.

The good news is that even if you and your significant other have totally different spending habits, you can learn to compromise, reduce financial conflict and take some other steps to ensure your financial harmony. Here are seven tips on how to manage your holiday budget—especially when your mate loves to spend money or doesn’t view personal finances the way you do.

1. Accept each other’s money personalities

To minimize spending disagreements, start by acknowledging and accepting your honey’s money personality.

Your mate may be a compulsive shopper who wants to play Santa and buy gifts for virtually all of your friends and family. Or he or she may tend to be Scrooge-like, and bristle at the thought of spending more than $25 or any one gift.

Whatever the case, this is likely an intrinsic part of who they are. So don’t start from the position that you need to “change” the other person.

Over time, some of their more excessive behavior may change—especially if you are a positive influence and handle money conversations sensitively without being accusatory.

However, when you don’t agree with your partner’s spending choices or fiscal habits, understand that you simply don’t have the same perspective about money, and you probably never will.

2. Create a realistic budget together

Don’t allow one person to shoulder the sole responsibility of creating a holiday budget or managing your joint accounts and holiday purchases. That’s asking for trouble when two individuals have completely different views about money and different financial practices.

Instead, set aside time to review finances together and create a realistic holiday budget based on your spending habits and your mate’s, as well as how much cash flow you both have. The idea is to establish a reasonable spending plan (i.e., budget) that both of you can live with and agree to stick with during the holidays.

Even though it may be tough to have “the talk” about money and holiday spending, keep in mind that couples that can work through thorny financial issues instead of just avoiding money conversations are helping to keep their relationships intact.

That’s because all that better financial communication can help you create more open dialogue about non-money issues as well. And good communication is a cornerstone of a healthy, thriving relationship.

3. Set spending limits

If your significant other just can’t stop spending or has a tendency to go on impulsive spending sprees when he or she hears jingle bells and holiday music, make sure he or she is aware of where things stand financially as the weeks go by.

You don’t want your mate to keep shopping every week, to go hog wild on Black Friday or Cyber Monday, and keep spending right up until Christmas Eve if it means he or she is blowing your agreed-upon budget or is being dishonest about how much he or she is spending.

Bringing up the issue without being confrontational can be tricky, but you both really do need to keep tabs on the overall household spending in November and December. Otherwise, you’ll look up later in the New Year and find that a whole slew of additional purchases were made that fell outside your budget.

4. Don’t feed a credit card habit

If you can’t pay off your balances in full, don’t fall into the trap of using credit cards for your holiday purchases—even if you’re earning cash back or any type of rewards.

The credit card habit can be very difficult to break when someone in the family enjoys shopping with credit for holiday toys, decorations, clothes or other items. Take steps to pay for as much as possible with cash, and encourage your significant other to bring cash—not just credit cards—on each shopping trip.

5. Do more holiday shopping together, including comparison-shopping

When you need to tighten up your holiday budget and your significant other still insists on additional shopping, plan on shopping together. Take the time to create a specific gift list so that random purchases don’t wind up in your shopping basket.

Also, be sure to set aside time before going on a shopping trip to research items, compare prices, and make the best decisions about what gifts you’ll buy, where, and at what price.

Sometimes just having someone along to shop with can be enough to ward off a mindless shopping spree, and may help your significant other make more rational purchasing decisions.

A word of caution though: don’t become Scrooge or the shopping police, constantly saying “no” or acting like you’re going to “fine” your mate for every shopping “violation.” If you become nothing but a holiday “killjoy,” your mate

will quickly tire of having you go along on holiday shopping ventures.

6. Agree on financial fidelity

Either one of you can blow your holiday budget if you keep financial secrets. Surprisingly though, many people keep money secrets from their spouses or significant others.

If you’re shopping on the sly, buying clothes, shoes or other goods and hiding them from your partner, you may think you’re avoiding an argument. In reality, you’re being financially unfaithful and are building up a wall of secrecy that prevents open and honest communication.

Even worse, if your mate finds out you’ve been keeping secret bank accounts, spending without his or her knowledge, or making other financial moves in secret, he or she may resent you and wonder what other secrets you’re keeping.

7. Realize that separate accounts are OK

It’s perfectly fine to have separate checking or savings accounts even when you’re in a committed relationship. In fact, separate accounts (again, one that your partner knows about; not a “secret” account”) can be healthy and beneficial for both parties in several ways.

Having your own checking account helps you learn to balance a checkbook and manage cash flow. It also reduces arguments about money, because it gives each individual a greater sense of financial autonomy. And finally, a separate account can be a nice way for the more fiscally “responsible” party in a relationship to demonstrate or model “good” financial behaviors to the other person.

After all, if you’re the saver or planner in a relationship, and your mate is always spending and constantly broke, it’s possible that your good habits might rub off on your honey, particularly if they see your separate account is never overdrawn or down to its last dollar—even if it is the holiday season.

Many couples that achieve financial harmony ultimately find that it’s best to have both separate accounts and a joint account as a way to most effectively manage their budgets.

And when you’re on the same financial page as your mate, money differences start to fade into the background—giving you both greater happiness and togetherness during the holidays and all year-round.

Lynnette Khalfani-Cox is a personal finance expert and co-founder of the free financial advice site.

Do You Lie To Your Spouse About Holiday Spending?

Posted on November 22, 2013November 22, 2013 by Natasha McKenna

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By: Andrea Updyke

A few years ago, my husband and I decided to create a pretty strict budget.

We wanted to pay down our student loans and be realistic about the fact that I was no longer bringing home a full-time salary. It was time to tighten the ol’ purse strings and it took a lot of planning. We did the usual things like cutting spending, canceling cable and other non-essentials, and saving a bit each month for emergencies.

One year, after a particularly costly Christmas, we realized we needed to add holiday spending into the budget. We knew that even saving just a few dollars a month would be better than having a big bill at the end of the year. We travel for the holidays every other year and it seemed like a no-brainer. I was doing a bit of freelance work here and there and we wanted to make the most of it. Of course, the only reason we were able to do this because we were on the same page.

According to a recent survey by McGraw-Hill Federal Credit Union,

Not only do today’s couples experience anxiety over holiday shopping, many partners also lie to each other to cover up just how much they’ve spent or plan to spend.

From a sampling of over 1,000 couples in 3 different segments: married, same-sex and divorced but remarried/in-a-relationship, MHFCU found the following to be true:

48% of all heterosexual couples disagree with their partner on how much to spend during the holidays.
43% of divorced but remarried/in-a-relationship couples disagree with their partner’s spending. However, the percentage drops to 37% for same-sex couples.
34% of heterosexual couples have lied to their spouse about holiday spending, while 25% of divorced/remarried or in-a-relationship, and same-sex couples lie to their partner.
More than 50% of married couples report paying with cash to cover up a large purchase and more than 1-in-10 has taken out a credit card in their own name to hide their spending.
Same-sex couples are more likely to retrieve/pay a bill before a partner notices.

At first glance, these numbers seem pretty shocking to me. I mean, I know we are talking about the holidays and it is the season of giving. But when lying and deceit gets tangled up in the process the magic seems to dull a bit for me. Just like any other area in a marriage/relationship, people aren’t always honest with each other. In and of itself that is just too bad.

I am fortunate that my husband and I are on the same page when it comes to finances. But that is because we are intentional about our goals and how we are going to get there. If you aren’t in agreement, things can go downhill quickly.

Sourced from: http://blogs.babycenter.com/mom_stories/11182013-do-you-lie-to-your-spouse-about-holiday-spending/

Who Is Eligible for Credit Counselling Services?

Posted on November 3, 2013November 3, 2013 by Natasha McKenna

By: Credit Counselling Services of Atlantic Canada

Credit counselling services involve the assessment of your financial situation and the development of a methodic debt relief plan. Credit counseling is good for anyone looking to reduce or eliminate debt or simply wishing to learn how to manage money effectively. It is about getting the right advice from expert counsellors on how to handle your finances with respect to your situation. Therefore, there are no restrictions to qualifying for credit counselling services.

Specific Amount of Debt – There are no limitations as to the debt amount that you must have in order to seek credit counselling. You can qualify for credit counselling services and benefit from the advice of certified counsellors whether you hold $2,000 or $200,000 in debt.

Income Level – Reliable credit counselling companies review your financial situation and offer you financial counselling, debt management solutions, and consolidation relief, regardless of your income. You are not applying for a loan with these companies, so your income has no relevance for credit counselling services, however, if a debt management program is your best option, you do need to ensure you have enough in your budget to make your monthly deposit.

Behind With Payments – You can benefit from credit counselling even if you are behind with one payment. You can even benefit if you are not behind with any payments yet, but you feel like you can no longer handle your current debt. Late payments come with damaging effects that can be hard to control or reduced once they set in. That is why it is advisable to seek credit counselling services before you are several months behind on your payments.

No collateral – You will be perfectly eligible for credit counselling even if you don’t have any assets. Credit counselling services focus on changing your habits in order to achieve debt relief and regain your financial independence. It is not about converting unsecured debts into secured ones, so there is no need to have collateral.

Filing for Bankruptcy – A credit counsellor can open the doors to new opportunities and show you alternatives you never thought you had. Even if you are in a desperate situation and considering bankruptcy, take the time to check with a credit counsellor first. One of the roles of credit counselling services is to offer tailored debt management plans that allow you to obtain affordable payments over a reasonable time frame. You will be avoiding the stigma and emotional impact of bankruptcy.

You are eligible for credit counselling services as long as you have debt and are interested in managing it without getting into more debt. As long as you are committed to finding a reasonable solution and are honest about your needs and situation, you can benefit from the experience of credit counsellors. Credit counselling services will give you access to a team of people with unique skills: credit knowledgeable negotiators, mediators, and facilitators. They are all finance experts with particular qualifications in debt management and budgeting.

Sourced from: http://www.solveyourdebts.com/blog/who-is-eligible-for-credit-counselling-services/

Achieving Your Vision Through Small Changes

Posted on November 3, 2013November 3, 2013 by Natasha McKenna

When seniors sit down with our credit counsellor they are often looking for that second set of eyes, an unbiased opinion or advice without emotions attached. “Are my living expenses too high?”, “Should I be spending less on entertainment?”, “Am I spending too much of my savings?” The answers to these questions are not black and white, and require us to closely look at the person’s budget and ask, “How do you want to live your life?”

By creating a monthly budget, you are able to determine if you are overspending or under spending, allowing you to make necessary changes to help you live within your means and prevent a financial crisis. It is important to remember that budgeting is not about penny pinching, it is about being in control of your finances and having vision.

Sit down and think about how you want to live your life. What makes you happy and brings you joy? What do you want to accomplish in the next five years? What legacy do you wish to leave behind? Now take a look at your budget and consider how you can change your spending habits to accommodate this vision.

There are many ways to cut back on expenses whilst continuing to live well. Let’s begin by looking at essential expenses: those things you require to survive. Housing is usually one of the larger expenses; you may want to think about a roommate, not only could they help you save money, but also offer companionship. You can also lower costs by trading in the high maintenance house/yard for an apartment or mini home, possibly even in an area where you can walk to shopping and entertainment.

Groceries and medications can add up. Be sure to do your grocery shopping on days when senior discounts are available, look for sales, and consider buying in bulk and splitting with a friend. When you require a medical prescription let your doctor know if you do not have a medical plan, and always ask your pharmacist if a less expensive generic brand is available.

Cutting back on non-essential expenses may appear easier, as these are things you do not require to survive. You do however require good mental health, and it is important to have fun and be social so consider low cost alternatives. Instead of going to the movies borrow one from the library, look for free community based classes and activities, shop at second hand stores or during sale seasons and eat out at restaurants that offer discounts to seniors.

Small changes can have a large impact on your budgets bottom line, allowing you to take that vacation you always wanted, leave something behind for the grandchildren, have an emergency fund and be healthy and happy!