Category Archives: Financial Matters

Should You Help Your Adult Children Financially?

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It’s hard not to offer financial help if your children need it. But make sure you’re being smart about it by following these four tips for helping your grown kids financially.

Long gone are the days where people got a great job out of school, got married at 20 and started having a family early in life. Today, many people are living at home longer and mooching off their parents for what seems like an eternity. Even if adult children do have a family of their own, they’re often still asking their parents for financial help.

It’s tough for parents to say no, but at some point, they have think about saving money for their own retirement. However, parents don’t have to cut their kids off completely. Here are four good ways parents can help provide financial support to their children.

1. Offer financial help with education
A lot of grandparents help pay for their grandchildren’s education. School costs are enormous, so this is a great way to help the family and do it in a way that has long-lasting benefits.

Anyone can set up an RESP, so open one for a grandchild and put their birthday money in it every year. By the time they get to university, they’ll hopefully have enough saved up to get them through school.

2. Help with a down payment on a home

If you have money to spare, consider helping your adult child with the down payment on their first house. The hardest thing for most young adults to do is get into the real estate market, but it’s much easer to stay in it once they’re there.Not only are you investing in your kids’ future by doing this, but there’s a good chance that their property will rise in value over the years. If they end up selling their house one day, you may be able to get some of that cash back — or at least know that you’ve helped them make a wise financial investment.
3. Create a trust
If you want your child to have some money when they’re older, set up a trust instead of just handing over the dough. The trust allows you to stipulate rules, such as at what age the child gets the money and what they have to do with it.It’s a good tool to make sure your children spend that money responsibly. While you’re waiting for the money to be doled out, you can invest it in the market and, hopefully, grow the assets.4. Buy a business
Does your adult child have trouble keeping a job? It may be because he or she just hasn’t found the right one. Consider buying your offspring a business. Entrepreneurship drives the Canadian economy so there are plenty of companies to own.Purchase something they’re passionate about. Keep an ownership stake so you can get regular dividends and, if they eventually sell, you can get some of the cash back.

The idea is to be productive with your money. Rather than just giving your adult child a credit card to shop with, give them something that has positive returns — both financially and personally.

By Bryan Borzykowski

Sourced from: http://www.canadianliving.com/life/money/

Tips to Consider When Talking to Your Kids About Finances

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School’s out for summer! Now’s the time to talk to your kids about money.

June 27th, 2013 by TD Wealth Management

It’s that time of year when textbooks go back on shelves, pencils and pens go back in their holders and staplers sit stagnant on desks – school is out for the summer. But, that doesn’t mean learning should end when the final bell rings.

The summer months can be a great time to teach children about financial literacy. From budgeting for a trip to the grocery store, to keeping track of expenses or saving for a special purchase, instilling early savings habits and money management practices can have a positive impact on kids’ financial future.

For some parents, offering too much information or not enough is where it can get tricky. So, how do you find the right balance?

Here are a few tips to consider when talking to your kids about finances…

·         Find age-appropriate ways to talk about money – It’s important to make money lessons relevant for your child’s age so they know what they should be saving for. For young children, it could mean saving for a special toy or a bike, and for teenagers and young adults, it could be investing in post-secondary education or planning to move out of the house on their own.

·         Explain that saving and investing can help achieve their goals – Educating your children on savings and investing products can help them understand why they should be putting money away, and how to make it grow faster. If they’re entering college or university, consider teaching them about interest and the basics of generating returns on investments.

·         Talk about savings as an investment for their future – Teaching your children to ‘pay themselves first’ can help introduce the value of saving for a long-term goal. For most children, a savings account is the first step. When they start to generate a steady stream of income, it might be time for them to consider using a service that automatically puts money aside.

Make it real

Learning a thing or two about the value of budgeting, saving and investing can help children realize that it’s not always easy – and that it takes some planning and practice to reach their financial goals. It’s important to start the conversation early and continue having it over time. The lessons may work best if they are set in real-life situations, instead of just a single sit-down talk.

Kim Parlee is Vice President at TD Wealth Management and host of MoneyTalk on Business      News Network. TD Waterhouse provides a full range of investment and wealth management  services.

Elder Financial Abuse: Protecting Youself

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It is our human nature to want to give and help others. Nothing makes us feel better than knowing we have been of assistance to someone during a tough time, especially those we hold near and dear. The reality is that we must look after ourselves before we can help others, especially when providing financial assistance.

 

The bank of Grandpa/Grandma or Mom/Dad is open for business with a high influx of frequent clientele. The benefits: No credit check, no interest, no harassing creditors, and no consequences in the case of deferral. Borrowing from this bank is very enticing, so much so that lenders may find themselves in a position where they are being taken advantage of. Financial abuse is becoming a buzz word; abuse, exploitation, manipulation, mistreatment, cruelty; regardless of your term of choice, we need to realize that seniors are at increased risk.

 

According to the National Committee for the Prevention of Elder Abuse, the elderly are an attractive target: persons over the age of 50 control over 70% of the nation’s wealth and often do not realize the value of their assets (particularly homes). Additionally, the elderly are viewed as less likely to take action against their abusers as a result of illness or embarrassment, and culprits assume that frail victims will not survive long enough to follow through on legal interventions. It is reported that 1 in 12 seniors have experienced financial abuse, and with a struggling financial climate, predicting future trends is scary.

 

Currently, debt levels are high, economic growth is modest and the split between rich and poor is wide. Today’s senior population has a significant cautious financial mentality – they are savers. They may not have a lot of money, but they have been prudent and responsible. Unfortunately this mentality is not as prevalent in the younger generations, leaving many people in financial crisis. With bad credit ratings and high debt ratios children and grandchildren are turning to the greatest helpers of all: seniors.

 

Helping can start by paying to house a loved one and lead to lending money and then guaranteeing or co-signing a loan. The act of signing for another person’s debt involves a legal obligation to make payment on the debt should that person fail to pay. In this situation the transition from helping to abusing occurs when the senior is not in a financial position to lend or repay the entire amount without suffering financial harm or when they have been unwillingly forced. So before we jump to help we need to ask ourselves: Could I afford to give the same amount of money away as a gift?

 

Helping those we love is one of the greatest joys in life, however there are numerous ways to help others without compromising financial integrity. Always take time to think about your decisions, be cautious and remember there is help available for those experiencing financial difficulty.

May You Shop & Save

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By: Gail Vaz-Oxlade

Sourced from: http://gailvazoxlade.com/blog/archives/4868

You probably know that certain times of year bring big savings for shoppers. After Christmas you can pick up decorations and wrapping paper for a song. And the best time to buy new sheets and towels is during the January White Sales.

Spring brings it’s own bargains. May is a good month to check out your local thrift stores to see what’s on special. With people cleaning out their homes, some to make space and some to move in the summer, donations of used furniture and household appliances tend to spike. And spring-cleaning brings a fresh crop of clothes through which you can browse.

Want to buy your appliances new? They’re going to be on sale just about now. Retailers bring in new inventory in June, so May’s the perfect month to buy an older model for less. Ditto vacuum cleaners; if you’re in the market for a new one, this is a good time to look at the older models that have gone on sale.

Spring is also a good time to buy athletic apparel and shoes. Retailers like to help blow away the winter blahs by offering discounts to lure customers back outdoors. Since they’re likely shedding last year’s inventory to make space for the freshest of the season, this is a good time to get deep discounts.

New mattresses models arrive in the summer, so May’s the perfect month to pick up the previous year’s discounted model.

With barbeque season just around the corner watch for sales on ketchup, mustard and other condiments. And if you plan to replace your worn out pots and pans, this would be a good time to watch for a sale on the set you’ve been eyeing.

If you want to be able to take a cordless phone out with you are you’re flipping those burgers, May’s the month to go shopping. Consumer electronics often go on sale in the spring.

Speaking of phones, you might also want to take the opportunity in May to negotiate a better phone/TV deal since viewership tends to drop off dramatically during the summer. Now’s the time to negotiate a deal with your phone/cable/satellite provider.

Remember to shop around. While retailers used to be fairly consistent about when they marked stuff down, more consumer pressure means better deals all year round. Check prices online. Watch the sales flyers. Compare prices and save.

What’s your favourite online resource for comparison shopping and finding coupons or coupon codes?

Why Most Budgets Don’t Work

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By: Gail Vaz-Oxlade
Sourced from: http://www.torontosun.com/2013/02/27/why-most-budgets-dont-work

People are always willing to volunteer their wisdom about budgets to me. I’m a budget-discussion magnet and, nine times out of 10, people want to tell me why budgets don’t work. I agree. Most people’s budgets don’t work for a few basic reasons.

Here’s my Top 5 list of why:

Wrong income projections

I can’t believe the number of people who don’t know how much money they make. I know there are a variety of pay periods — monthly, semi-monthly, bi-weekly and weekly — but all you have to do is look at how much is coming into your accounts to know how much you actually make. If it varies from one month to the next, then use the lowest income you have as your basic income.

Too few categories

People generalize their budgets too much to get an accurate picture of where their money is going. I swear if I see one more budget with “spending money” as a category, I’ll spit. It’s all spending money. What are you spending it on? You have to have enough categories in your budget to give you a real sense of where the money goes and where you may be able to cut costs.

Missed expenses

Not all expenses come in every month. Insurance bills can come annually. Property taxes can come quarterly. Service contracts, dental bills and health-club renewals are all periodic expenses. If you don’t include them in your budget, you won’t have the money at the ready when the bill comes in.

Cash

People spend cash without keeping track of where it’s going and that throws their budgets out of whack. Some people use ATMs like a wallet, pulling $20 here and $40 there. Then the money flows away without any record of where it’s gone. This can be a problem if, for example, you know you have a bill coming due in a couple of days, but your partner doesn’t and (s)he goes into the account for cash, then you won’t have the money available to pay the bill.

No plan to save

Despite how well known the “pay yourself first” rule is, people still don’t follow it. They wait to see how much they have left to save. And it’s usually zero. Zip. Zilch. If you’re serious about saving, it has to be a line item on your budget. You have to identify a specific amount you’re going to save (both for long-term savings and for emergencies), and you need an auto-deduction to a savings account to make it happen.

Gail Vaz-Oxlade’s latest book, Money Rules, is published by HarperCollins and will make you say, “Really? I didn’t know that!” Visit her website at gailvazoxlade.com.

Stress- Does It Affect You Sexually?

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Tips on How to Handle Stress in Your Relationship.

In today’s world where people are struggling with issues such as employment, financial troubles, ailing family members, marital problems and other difficulties, stress is becoming more and more prevalent and crushing.

For some of us, stress has become normalized to the point where we do not even recognize the strain we are living under. But stress is insidious. It has a way of coming out when you are least expecting it. You might think you’re on top of things, but you transfer the result of stress to other areas of your life. And usually, you dump it on your nearest and dearest.

Everyone knows that stress can affect your mood, your sleeping habits, and your waistline, but did you know that stress can also affect your sex life?

Stress can completely derail your libido and sexual response.

Just as prolonged stress affects health, so too does prolonged stress affect one’s sex life. Stress is perhaps the number one culprit in men’s and women’s low sexual desire. Too much stress often chips away a person’s libido (desire), by affecting hormones and mood, and by interfering with the quality time that helps a couple stay connected.

Stress can cause uncomfortable mental and physical reactions such as feeling exhausted, grumpy, and anxious, and also making moments difficult to appreciate or be with your partner.

Laura Berman, Ph.D., director of the Berman Center for women’s sexual health in Chicago, says that “stress makes you tired, distracted and unmotivated to do anything, much less have sex.”

We also must be aware that stress isn’t the only reason why couples can have a declining sex life, but it can be one of the major factors. Dr Berman said, “Hormones, brain chemicals, stress, medications, and diet and exercise habits can all play a role.”  Taking the time, and putting forth the effort to make a few lifestyle changes can create a big difference, especially those changes which relate directly to reducing stress.

It is important to understand how stressful events affect your marriage or relationship. Since you can’t avoid stressful situations, you have to be able to recognize and manage them. Finding a way to have a conversation about what is causing you stress, where you and your partner could talk about it and feel relieved and satisfied, can make your relationship stronger. Here are some tips on how to handle stress in your relationship.

Figure Out What is Bothering You

Stress is tricky. We often say “I’m so stressed out!” but have trouble figuring out what is causing these feelings. Take the time to find out where the problem is rooted, and share this information with your partner. This will better enable your partner to help you cope with your stress. With increased awareness of what you are worried about, together you can work on ways to reduce your stress levels.

Recognize that not every problem (or stressor) has a solution, but talking about it and sharing your feelings can help you manage it. Understand that if you don’t figure out how to successfully handle stress with your partner, problems in your marriage may emerge.

Stay Connected

Sometimes couples spend more time confiding in their friends rather than their spouses as they feel their partner might not understand them. Turning away from your partner during stressful events can be one of the most damaging behaviors in a relationship. This can lead to feelings of rejection. Silence leads to greater frustration and increased anger, which can drive the two of you apart.

Try to strengthen your relationship by turning to each other often. You can do this by simply talking about the every-day events that happen in your lives, like the news, a good movie you saw, or the accomplishments of your children. This builds the confidence and trust you both need so you can discuss heavier and potentially stressful topics when they arise.

Maintain Intimacy

Intimacy is an important part of any successful marriage. While many people think intimacy pertains only to sex, there is much more involved. By being open and honest we develop emotional intimacy. When we are stressed this is especially important. Intimacy gives your partner a chance to support you and in return, you are more likely to support them when they are stressed.

Tracking Your Spending- Making it Work for You!

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Tracking spending; just reading those two words makes some people scared. “It takes too much time, it is impossible, it is pointless. “

Here is a big idea for you: Small behaviour changes will result in big savings.

The first thing we need to think about when tracking spending is our needs and our wants. A need is something essential (shelter, food, clothes, medication) while a want is something nice to have (electronics, jewellery, seasons tickets). Ask yourself; is this purchase a need or a want? There is nothing wrong with spending money on wants, but before we do this, we must be sure that we have enough money put aside for our needs.

Nobody is perfect and we all face temptations. Whether it is the new handbag, the toy for your grandchild or that case of beer on the weekend, we have all been there. The first step in curbing unnecessary spending is to be aware that you do it. Take a minute to watch this video and think about the unnecessary spending you may be doing.

http://www.getsmarteraboutmoney.ca/en/managing-your-money/planning/budgeting/Pages/video-track-your-spending-track-o-matic.aspx?group=Funny%20money&page=1#.URKFuYYgx8w

Using ATMs from other banks, your daily coffee, ordering take out. What about your cell phone… the ring tones you’ve bought, the roaming charges and those picture messages, not to mention the high priced satellite TV you are watching. Point being, we all have our wants, weaknesses, habits or temptations that are costing us money. In thinking about what your wants are, ask yourself these questions:

• When does a want become a need?
• What motivates you to buy- advertising, friends, trends?
• Does the urge to buy die the next day?
• Do your purchases make you happier?
• What “needs” are now collecting dust?
• What can you learn to live without?

How much money do you spend on your wants which could be better allocated to your needs or savings? Although we can all estimate, there is only one way to be certain, and that is to track your spending. By tracking where your money is going, you will be conscious of your weakness or “latte factor”. “We’ve all go a latte factor, regardless of our income”- David Bach (www.fcac.gc.ca).

There are numerous tool and methods for tracking your spending. Today we will suggest two different methods, one for the non-tech person, and the other for the tech guru.

Notebook or Journal: Are you the type of person who likes putting pen to paper? Do you make lists or write notes? This method may be the best for you. Get a notebook or journal of sorts and place it beside your bed. Every night before bed take 1 minute to write down all the places you spent money that day and the amount spent.

Tim Hortons (coffee)- $1.65
Esso (gas)- $45.00
Bell Aliant (cell phone)- $85.00
Shoppers Drug Mart (toiletries)- $22.00

 

At the end of the month you are going to back track through the notebook and total how much money you spent in each category- coffee, gas, eating out, clothes, groceries etc. This method of tracking is simple; it only takes a few minutes each night. It is important to remember to write in your journal every night, as we often forget quickly.

Phone Applications: Are you always on your phone? Is it always within reach? Going to your App store and search spending tracker or budget tracker, it may be a lifesaver!

There are numerous free applications waiting for you. Be sure to read the reviews to see what app will fit your needs. Generally, many of these apps use the same principle; every time you make a purchase you pull out your phone and input the information: how much you spent, where and on what.

Some apps use the concept of envelopes. You can create different envelopes or categories and allocate a certain amount of money to each envelope. Throughout the month you will see how much of the allocated money you have spent from each envelope, and whether you are overspending or under spending. For example, you may notice it is only half way through the month but you have already spent three quarters of your grocery budget.

Additional ways of tracking your spending may include using desktop software, through online banking, or by saving receipts. It does not matter how you choose to track, what matters is that you start to become aware of where your money is going. This is a skill that you will carry throughout your life, and hopefully in the long run it will allow you to become much more financially stable!

For more information on this topic visit www.fcac.gc.ca , www.yourmoneyyourlife.org , www.getsmartaboutmoney.ca

Grow Your Own Money Tree

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Published in G! Magazine December/January Issue
Article By: Mazen Ellaz

If you can dream it, you can achieve it. But first, you have to save for it.

How to get rich without feeling the pinch.

So, you want your money to make you money. Who doesn’t? At a time when every penny counts, it’s more important than ever to have savings to fall back on when you need it. The good news is that it’s never too late to start saving for the things you want; you just have to commit to savings and earning money on money is easy. However, if you’re reading this and you’re 20-something who doesn’t already have a savings account, listen up: start NOW! Why? Because you, my 20-something friend, have time on your side.

Say, for example, you’re 25-years-old, you’re working, making money, and living it up (as most 25-year-olds do). If you were to take one (just one) weekend off a month from frivolous spending – no movies, no clubbing, and no eating out at restaurants – and take $100 and put it into savings, you’ll have $50,400 plus interest by the time you’re eligible for retirement. But if you wait until age 30, that total drops to $44,400 plus interest. That’s $6000 you’re potentially missing out on! The longer you invest, the larger the growth. As little as $50 a month will add up.

The question is how can you save each month without feeling the pinch? It’s tough but it’s doable. Do you really need that cup of coffee, latte, or cappuccino every day, or is it that you want it? To really put things into perspective, which would you rather: a momentary caffeine/sugar fix, or a tropical vacation, a new car, or your dream home?

The trick is to pay yourself first, a golden rule I learned from a book called The Wealthy Barber by Dave Chilton. When you get your paycheck, take 10 percent of your income and invest it into a savings account. This 10 percent doesn’t include your retirement savings; this money is for you and you alone. Set it aside and forget about it. You’ll be surprised how easy this becomes a habit and how quickly your savings will start to grow.

To make saving even easier, set up a pre-authorized transfer service that will automatically transfer a set amount of money at a specific time you choose from one account to another. That way, you never have to physically “part” with your money.

Look at what you are choosing to spend your money on. The key to a successful savings plan is to distinguish between your wants and your needs. So, what exactly qualifies as a need? Basically, anything that you have to have, like shelter, food, clothes, and health care. A want, on the other hand, is something you would like to have (a new car, a big house, brand name clothes, etc.). Don’t misunderstand, you can have all the wants you want, but quite simply, you’re going to have to budget for them.

To make real progress, you have to take control of your cash spending and not just hope everything will work itself out. Believe me, the most powerful financial tool that you have is your savings. Do you think all of those rich people out there are smarter than you? Nope. It’s because they know saving is a must to get what they want. Do as the rich do, even if you’re a brokester because one day, it will pay off.

Mazen Ellaz is a special financial contributor to G! If money talks, he’s the guy who can tell you what it’s trying to tell you.

Couples and Taxes- How to Reduce the Stress

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Some would say there are only two things we can be sure of in life; death and taxes. Not surprisingly, both can cause tremendous stress. Financial stress is a major factor in health problems like depression and decreased immunity, and a leading cause of divorce.

That being said, obviously nobody wants filing taxes to be the last straw that broke the camels back! So how do you and your partner properly prepare with that April 30th due date looming? A little effort in advance can go a long way in helping to prevent stress and tension.

Be organized. Be sure that you have a designated spot in your home where you both set aside all the important papers that you may need to file your taxes. This can simply be a drawer or a filing cabinet. By having everything on hand, when the time comes you will avoid scrounging, or blaming each other for losing that important receipt; or spending precious time looking for it!

Review. Throughout the year, set aside time to sit down as a couple and review your financial situation. There is nothing worse than getting the surprise of your life when you start doing your taxes. This way you will be able to better prepare for any money owed and it will give you a clear picture of your financial position. You may have to give up the trip down south for RRSPs, but at least you are making cognizant, educated decisions together!

Stay informed. If you decide to wear the hat of accountant, make sure you stay current and up to date on new changes. Generally every year there are small changes made to tax regulations, it is important that you go online, research, or visit a professional. Who knows, you could be missing out on money!

Start early. We are all guilty of procrastinating in one way or another. Carrying this into tax filing is simply not a good idea. Not only will you spend sleepless nights, you may miss out on valuable information and make mistakes. Not to mention your spouse will be cold in bed alone, and working under a deadline just simply is not fun.

Make it fun. You are probably asking, “Is that even possible?” Well it is time to think outside the box! Put on some nice music, a little aromatherapy, a comfortable place to work and a good cup of coffee. Remember when you were in university and you used to go buy treats to have while you were studying for exams?… You are never too old for some M&Ms and sour candies.

Take baby steps. Do not overwhelm yourself. Break the process into smaller steps and set aside time each week to complete one. By using this approach it is probable that you will pay more attention to detail, learn more, and experience less anxiety.

Reward yourself. Or even better, have your spouse reward you! If you have been sitting at the desk all day ask your partner to prepare a nice meal to acknowledge your hard work. Not only will this give you something to look forward to while you work away, but it will provide your spouse with a way to thank you for your efforts. On the other hand you may wish to get up and do some exercise, get out of the house, or head out to socialize with friends.

Get help. Remember, if taxes cause great stress to you, your partner, or your relationship, it may be wise to get professional help. Speak openly with your partner about why and how you think a professional could help. Come to an agreement about who you would like to engage for help, maybe you are not comfortable with going to a family member and would prefer a more confidential source. Always remember, sometimes a little investment can go a long way!

The Canadian Revenue Agency provides a tax return preparation service for low to modest income Canadians who have a simple tax return. If you wish to learn more about this service visit www.cra.gc.ca

Happy tax filing everyone!

Important Dates and Information for Filing 2012 Tax Returns

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  • Personal tax returns (except you or your spouse or common-law partner is self-employed) are due April 30th 2013 and any balance due has to be paid that day and otherwise interest will be assessed. Tax returns for self–employed and their spouse or common-law partner is due June 15th 2013 but balance due must be paid April 30th 2013.
  • You can file hard copy return or NETFILE or EFILE (EFILE can be done by tax preparer).
  • TELEFILE option is not available.
  • If you need a tax package (hard copy) you can order one from CRA and it will be delivered after February 4th 2013. The packages will also available to postal outlets and Service Canada offices from February 4th 2013.
  • The NETFILE transmission service will be open from February 11, 2013, until November 30, 2013, for the electronic filing of your 2012 personal income tax and benefit return. Tax returns filed via NETFILE must first be prepared using one of the 2012 commercial tax preparation software packages or Web applications certified for NETFILE.
  • List of certified software for NETFILE can be found here.
  • You employer has to provide your T4 slips by Feb 28th 2013.
  • Your investment provider or banks have to mail your T5 slips by Feb 28th 2012 and T3 slips by March 31st 2012.
  • You can log in to My Account at CRA to find your RRSP contribution limit. RRSP contributions made in the first 60 days of 2013 (i.e. contributions made till March 1st 2013) can be used in 2012 tax returns)

Sourced from http://canadianaccountanttips.blogspot.ca/2013/01/important-dates-and-other-information.html