How to Best Start An Emergency Fund in 2018 Living Pay Cheque to Pay Cheque

Many Canadians are living pay cheque to pay cheque. It is a plain fact. If this is you, please know you are not alone. I’ve been there done that. If one of your New Year’s resolutions is to start saving a bit of money in 2018, let us start with the best way to start an emergency fund in 2018 even when you are living pay cheque to pay cheque. Yes, it can be done.

The Reality Check

First up, before you can move forward, we have to look at our past. We have to look at our current and past habits. Can I challenge you to look at your budget if you have one? If you don’t have one you want one, stat! For me, the best way to do this was to track my spending. Write down every penny you are spending as a family. This may seem daunting at first but by carrying a small notebook with me, I was able to track my spending. You can do it too!

The Road Map

If you don’t already have a budget in place, this is where you start. Look at what you have been spending. Look at your priorities. I was surprised at how much I spent in certain areas in mindless ways. Every penny does matter when you are living pay cheque to pay cheque. Set your priorities, if savings is a priority that you really want go for it! Find areas you can cut or do less. Starting small is ok. Even $10 a week makes a difference over time.

If you need help on how to set a budget here are a couple of posts from friends of mine that helped me:

  1. 7 Steps to a Budget Made Easy

2. Gail’s Guide to Starting a Budget

Quick Start Your Savings

I know as I look around my home there are several things I am not using. Right now, there is that bread maker I got last Christmas and used twice, there is the old camera collection that is gathering dust, and the pile of books I have read. Take a look around your house, what if you sold these and started your nest egg, your emergency fund with the proceeds? Most of us have a few things we can sell for a profit. I use Kijiji when I have things to sell.  By selling even $200 in goods it gives you a starting balance.

Add to Your Income

For those of us who are parents, it can seem hard to find the time to add to our income. It isn’t always easy for anyone. You can freelance your skills if you have one. I know several friends who supplement their income writing for blogs and brands. I know some younger girls who babysit. Others I know dog walk. What could you do for a few hours each week to supplement your income? Can you ask for more hours at work? Use this income minus transportation costs to go straight into your emergency fund.

By taking these actions, I was able to start my own savings account when I was living on less than $26,000 a year in Toronto. It can be done. When there is a will there is a way. Let me know what are you doing to ensure you have an emergency fund?

 

 

 

RRSP and TFSA’s What You Need to Know

 

Blue Piggy Bank WIth CoinsA couple a weeks ago I noticed the ad for the RRSP deadline which is at the beginning of March, which got me thinking about RRSP’s and TFSA’s. Like many Canadians I wonder where should I be putting my money. Should I be saving more, pouring the $5,500 into a TFSA or should I be trying to max out an RRSP? So I started looking at both more seriously.

Here are the Basic Facts

RRSP FACTS:

  • With an RRSP, you can use your contributions as an income tax deduction and  who knows you might receive a refund each year, based on your income and your credits.
  • When you cash in your RRSPs in the future, like when you retire, they are treated as earned income and you’ll pay income tax on them.
  • You can contribute up to 18 per cent of your earned income a year to an RRSP, up to maximum of $22,970
  • These are harder to access, and if you do there are tax implications.

TFSA FACTS:

  • You can contribute up to $5,500 a year.
  • They do not get you any tax credit advantages, no deductions for the year, and does not lower your tax bracket.
  • You do not pay taxes on any withdrawl.
  • Very easy to access.

So what should you choose. First if you are low income, and are like me earning under $50,000 a year in income, the TFSA is the route to go. When you have a higher income and are looking at your tax brackets and the like then you want to consider adding to the RRSP. For each person the story and approach will be different depending on where you are at in life. I know for me, I found it a bit confusing.

Now today, as part of the #cdmoney chat I will be sharing a great TEST From the Toronto Star that they published last year. The #cdnmoney chat on Twitter from 7-8pm EST Tuesday, Feb 4th.  But for you readers here is a link to there post: The Toronto Star article can be found here.

Other good posts, articles and resources that I found while doing my research:

The Best Strategies for Your RRSP and TFSA when Money is Tight.

Where to Stash Your Cash RRSP or TFSA

What are some of the resources you have turned to trying to figure out where to put your money this year?

 

 

The Best Budgeting Tips from Canadian Personal Finance Writers

 

budgetOn Saturday over on Twitter I asked the question what is your #1 budgeting tip of a few friends who write about personal finance on a daily basis. I asked them because this is the topic of our #cdnmoney chat tomorrow night.

So what were the responses? What did these money writers think was important?

My friend @BigCajunMan was the first to respond.

bigcajunman

My friend  @iammrsjanuary  said her number one tip was

iammrsjanuary

@BoomerandEcho offered this one

boomerandecho

My friends at @GroceryAlerts shared this one

grocery alerts

Then @rcarrick who writes for the Globe and Mail shared this one.

robcarrick

 

All were great tips that would help anyone struggling to get their budget under control. What is your best budgeting tip? Why not join me for the #cdnmoney chat tomorrow night and share yours from 7-8pm on Twitter, pr you can let me know yours on in the comments as well.

 

 

 

 

 

Improvements in Your Home That Are Worth Refinancing For

home imporvements

The decision to redevelop your current financial decision may help you to increase the value in your home and assets, or it could reduce the overall value. Oftentimes, the decision to restructure finances comes up when you’re trying to get a lower deal on your mortgage rates or otherwise save money. However, the decision to refinance can also be motivated by the desire to improve your house’s value. Here are some of the improvements that may be worth the increased temporary costs.

Bathroom Upgrades

According to the “All Safe Home Inspection Manual,” the bathroom is one of the easiest rooms to improve to upgrade the overall value of the house. Water efficiency installations and fixtures are good choices. Luxury items are more debatable, but making sure that the pipes and fixtures are up to date can significantly improve your house’s value. Switching from carpet to tile is another simple upgrade that will also make a big different in the value, and it could even help you save money on your house insurance.

Handicap Accessibility

After holdings from the ADA, handicap accessibility is one of the hottest upgrades that you can bring to your house. Even if you don’t need handicap accessibility, you can significantly improve the value of your home by incorporating improvements that make it more accessible. For refinancing purposes, make sure that you are clear about what your purpose is. Installing ramps for the doors, door handles that can be opened with one hand, widening doors, and other similar features will be seen as beneficial and are fairly easy to obtain refinancing for so long as your credit is good.

Solar Light Panels

Improved energy sources such as solar light panels are another great improvement that you could consider getting for your home. They are considered excellent, and, in some cases, you can even get tax discounts for installing them. Just make sure that you purchase the right ones. Some banks have started getting involved in these green energy solutions. But you will only be able to get these decreased rates and refinance structures if you purchase the right kind of solar panel.

Finished Basement

Basements can increase or decrease your home’s value very quickly. However, many people just leave their basements alone. Rather than letting the basement grow mold or gather dust, consider finishing it. Getting a drop ceiling and having tile floors installed are two simple and fairly inexpensive improvements to your home. Choosing tile and other easy to clean surfaces works best for basements that sometimes flood. Just make sure that you check your home insurance policy. Some policies will involve an immediate upgrade fee if you improve the value of the basement.

Refinancing can be beneficial for improving your house’s value. Even though it is typically used to obtain a lower rate on your mortgage, you can cash out some additional funds in the refinancing to make it possible to upgrade your home. Fixing up the bathroom, making the house more handicap accessible, installing solar light panels, and even finishing the basement are good reasons and can substantially increase your home’s value.

*this is a guest post, a new post written by me will be up shortly

credit score

How to Improve Your Credit Score

credit score

Improve your credit score step-by-step

Your credit score has an important role to play if you’re hoping to get your hands on a credit card, so it’s well worth finding out what yours is. If your rating isn’t great at present there’s no need to worry as there’s plenty of ways to turn things around. Why not try some of the following ideas?

Get mistakes amended

Mistakes can happen and these can sometimes have a real impact on your credit rating. If you feel something’s wrong or an entry doesn’t seem familiar notify the credit reference firm. They will then add a notice of correction, which lenders need to consider when you make a credit card application.

Use a credit builder credit card

Whether it’s that you’ve never used a credit card before or are struggling to be accepted for traditional forms of plastic, a credit builder credit card could help to up your score. These come with a higher Annual Percentage Rate attached to them, but are well worth using if you’re organised enough to pay off your balance in full and on time each month.

Get on the electoral roll

One of the easiest ways to boost your score is signing up to the electoral roll. Lenders use this as a way of finding out that you’re who you claim to be, so it can have a real impact on your application. If you’ve recently moved house it’s worth checking you are registered, as it has been known for people to mistakenly believe they are.

Avoid making multiple applications

Every time you apply for credit a footprint is left on your credit file. Although lenders won’t be able to tell if you’ve been accepted for this, it doesn’t look great if you’ve made several applications in a short space of time. A better idea is to ask for one at a time, await the outcome and if not positive look to put it right.

Cancel cards not in use

If you have a number of credit cards in your wallet it might be worth contacting the provider to cancel the account. Lenders can be wary of people with multiple credit cards, even if there is only a minimal amount of debt on them. And if you continue to use any of your cards make sure you pay off the balance on time and don’t exceed the credit limit.

 

 

A Look At The Cost of Raising Children

budgetThis past Friday the Fraser Institute released “The Cost of Raising Children.” Christopher Sarlo, an economics professor at Nippissing University and senior fellow at the Fraser Institute, states that raising a child in Canada costs approximately $3,500 per year. I say they are way off, and most Canadian parents I know simply say there numbers do not make sense.

I am a single parent, and have been raising my daughter solo style since she was 2 days old, and I even as a single parent have spent more then that every year of her life, even when I was on welfare.

They tried to say that it could be done on  $4,115.04 per year for 12-year-old children and $2,264.38 for four-year-old children.

Let’s just say this I get currently $380 a month for Child Tax that is $4560 a year, so even the federal government knows it costs more to raise a child in Canada.

I laughed when I saw their numbers, I am a common sense mom, I coupon, attend free events, and have never vacationed to anywhere with my daughter. She has never seen a sleep away camp, never seen Disney, and the only places she has visited is Nova Scotia to see family.

She has never had the latest and best toys unless they were gifts. We shop at Value Village, and love sales at Walmart, Target, Old Navy and the like, and we spend more then that on the basics, just to live.

Last year for clothing I spent $612 for my 15 year old. I thought I did well.

When they came up with these ridiculous numbers they used something called the Montreal Dispensary Diet..um, can I ask what happened to common sense?

The necessities of raising a child are expensive, even this single parent mom earning less then $26,000 has had child care costs, day camp costs so I could work.

Let us not forget medical costs for the working poor yes there is Trillium but there are still base costs that one does spend–last year alone I spent $1610 on medical costs earning less then $26,ooo a year. There are certain costs that are not covered.

School costs were also not considered. Supplies, and field trips had me spending $324 last year.

Recreational activities which help a child develop where not considered I spent $325 on this last year.

This is before food and housing..I am a barebones mom, and I couldn’t even subsist at the level they state..show me a single Canadian family that does..I say it is not possible even if on welfare. I know I spent more or had access to freebies or subsides that would cover the costs.

So my dear Fraser Institute how about coming out with a study that actually makes sense.

One that includes some of the real basics like child care, medical costs, and school costs.

Lets get realistic.

What did you think of the study?

My thoughts it was a waste of money and did Canadian parents a disservice.