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Financial Literacy Starts at Home

By Sheila Walkington, Co-Founder and CFO Money Coaches Canada

 Money Coaches Canada: Financial Literacy Starts at Home

When it comes to topics of money and Canadians, Money   Coaches Canada has a great vantage point. Through our interactions with clients, our involvement with the media, our  frequent blog posts and our social media connections—we are in the privileged position of hearing Canadians’ hopes, interests, aspirations and concerns related to money and personal finance.

Over the years, we have written extensively on nearly every topic related to personal money management. One of the topics that elicits the greatest response is kids and money. And the comment we hear most is: “I wish I had learned to handle money sooner.”

When it comes to teaching kids about money, there are a lot of different opinions on how, and where (at school or at home?) it should be done. But there is agreement on one thing; kids need a financial education so that they can make intelligent choices about money at every stage of life. Continue reading

Posted in Kids and Money, Money Coaching, Relationship to money


Don’t Let Back to School Break the Bank

By Karen Richardson, FPSC Level 1® and Christine White, P.Eng., FPSC Level 1®

The back to school cliché is that kids dread it and parents are gleefully counting the hours. But in reality, lots of kids are excited to go back to school (albeit an excitement that usually fades with the first homework assignment) and many parents dread September because it feels like open season on their bank accounts. Back to school spending seems to escalate every year, but it doesn’t have to be that way. You may not be able to keep your kids excited about school, but saving on back to school expenses is possible with some planning.

Back to school basics

Don’t start from scratch

A costly mistake many parents make is buying everything new. School ended roughly 8 weeks ago. It is entirely likely that much of what your children wore last spring still fits them. The same goes for school supplies; rulers, binders, folders, pencil cases, calculators, erasers, etc… are often in fine shape for the new school year. Before you head to the mall make an inventory of what you already have.

Kids don’t need everything on the first day

Even if your stock taking reveals that the kids will need several new items to get through the year, they won’t likely need winter boots in the first several weeks. Keep purchases to the essentials by building on what they have and then start watching for sales. The holidays are just around the corner and adding to the kids’ wardrobe through birthday and Christmas gifts is also a great idea. Continue reading

Posted in Budgeting and Cash Flow, Money Coaching


Questions to Ask Your Financial Advisor

By Noel D’Souza, CFP®

iStock_000043073486_MediumGetting good financial advice in Canada is a tricky matter – trickier than it should be, in my opinion. The main challenges facing a seeker of financial advice come down to:

  • Can I find someone qualified to assist me with my particular needs?
  • Can I rely on this person to have my best interests at heart?
  • Are we a good fit to work together?

Given these challenges, what is a person to do?

As with so many things in life, being an informed consumer will serve you well. But again, there’s a bit of a Catch-22 here. There’s an inherent imbalance in knowledge when one is seeking advice of any kind. If you’re like me, think of the last time you visited a mechanic and were told “Your right rear differential thing-a-ma-jig is leaking fluid and needs to be replaced. It will take 2 hours and cost X $. Should I go ahead with the repair?”

Huh?!

After all, you’re seeking advice from an expert because you don’t have the knowledge and experience in that area, right? But there are a few basic principles to remember and questions to ask that will serve you well. Continue reading

Posted in For your information, Money Coaching


How to Live the Life You Want with the Money You Have

By Sheila Walkington, Co-Founder and CFO

How to Live the Life You Want with the Money You Have

Money does not buy happiness. You’ve heard that before. Many studies of happiness have shown that relationships, a positive attitude, working towards goals and helping others, are at the core. Even exercise and pet ownership are considered contributing factors. How much money is in your bank account doesn’t even make the list.

On the other hand, constant struggle and worry about money can certainly rob you of happiness. Luckily, whether or not you struggle with money has less to do with how much you have and much more to do with your mindset. That’s why being a Money Coach brings me so much happiness. I have the opportunity to help people stop struggling and gain mastery over their money.

I also have the opportunity to dispel the misconception that money mastery is synonymous with giving up all the fun stuff you enjoy, and thinking only of a distant retirement or being prepared for a “rainy day.” As a Money Coach, I don’t set your priorities; I help you determine what matters most to you. The approach Money Coaches Canada, co-founder Karin Mizgala and I developed in our book Unstuck, is focused on the concepts: Dream, Plan, Live. Continue reading

Posted in Budgeting and Cash Flow, Money Coaching, Relationship to money


I’m Working Really Hard, But Not Getting Ahead. Five Misconceptions Keeping You Stuck

By Alison Stafford, CFP®

How often have you thought—I could get out of debt and save more for retirement, if only I made more money. It appears to make sense; that more money would be the answer to your financial worries. So it may surprise you, that debt often increases with higher income levels.

Stats Canada reported that households earning at least $100,000 had an average debt of $172,400. Compare that to households earning between $50,000 and $100,000, which had an average debt of $95,400. More income, more debt.

If your first reaction to that is despair, you need to think about it in a different way. If you earn over $100,000 a year and still find yourself in debt, the challenge isn’t income, it is mindset. And that puts you in the driver’s seat of change, so that is a good thing. Getting out of debt, saving for a home, or funding your retirement, don’t have to be dreams. They can be practical, achievable goals, if you are willing to let go of some common money misconceptions.

We’ve identified the top five beliefs that sabotage high earners, and offer new ways of looking at your spending and saving habits. Continue reading

Posted in Budgeting and Cash Flow, Debt, Relationship to money


Allowance: Tips on Giving Children Allowance

You are standing in the check out line at the grocery store dreading the nagging you are sure to get from the kids about buying another pack of gum. All the stuff at the check out line is a total temptation for the kids, and a total irritation for you. Sounds like it is time to start giving your children an allowance so they can start spending their own money.

It can be a difficult thing to start, there are so many questions about how to do it and how much to give. Continue reading

Posted in Kids and Money


Are You On-Track To Retire in 10 Years? Do These 5 Things Right Now To Be Sure

By Sandra Mann, CPA, CGA, FPSC Level 1®

Are You On-Track To Retire in 10 Years? Do These 5 Things Right Now To Be Sure

 

With 10 years to retirement, your daydreams may be turning to a morning latte on your deck, instead of a tepid coffee on your commute. But before you buy that Life Begins at Retirement bumper sticker and toss out your alarm clock, you have some work to do. It’s imperative that the financial decisions you make in this last decade before retirement are forward focussed and carefully planned.

Here are 5 things you must do now to ensure a smooth transition into the next chapter of your life. Continue reading

Posted in For your information, Money Coaching, Retirement savings


How Can My Home Equity Support My Retirement Goals?

By Christine Williston, B.A., FPSC Level 1®

For older Canadians, with a paid or almost paid mortgage, ever increasing home values feels like watching winning numbers come up in the lottery. But how best to cash in the ticket? Or should it even be cashed in at all? The answer of course, depends on individual circumstances.

The optimal financial scenario for anyone approaching retirement is; a good pension, substantial savings, solid investments, and a mortgage free home. But quite often, life falls short of optimal scenarios. Many people arrive at retirement age, living in a very valuable asset, but with limited cash flow to live the way they imagined. This is often referred to as being house rich and cash poor and it can be quite a challenge to decide how (or if), to access that equity. But before you make any decisions, it’s important to have clarity on your situation. Continue reading

Posted in Ask Your Money Coach, Money Coaching, Retirement savings


Income tax challenges for the self-employed

By Melanie Buffel, BA Psych, MBA Candidate

iStock_000018832279SmallWhen people choose self-employment, they are often attracted to the challenge and excitement of creating a business they are passionate about. They may look forward to a more flexible work schedule, or the possibility of earning more than they did as an employee. The one thing most people don’t get excited about is keeping track of all their expenses and planning for their income taxes.

If you are self-employed, you need to be aware of a looming tax deadline. Sole proprietors have until June 15th to file (as do their spouses), but their balance owing is due as of April 30th. If you aren’t paid up by then, interest will be charged until you are.

When your numbers are in order, then reach out to the CRA with a proposed plan to pay off your balance owing. Keep in mind that you’ll also need to save the money for the taxes you are incurring on your new income…it’s a classic case of between a rock and a hard spot but with careful planning and focus on generating your target income, it can be done!

Procrastination in handling the financial side of your business can result in frustration, or even panic, as the tax deadline looms. To help, I’ve outlined a few suggestions on what to do if you find yourself unprepared to file this year’s return and what you can do differently going forward.

But first, let’s look at some of the challenges and pitfalls you may encounter as a small business owner.

There are some real tax challenges for the self-employed:

  • Your income may vary month-to-month making it difficult to estimate annual earnings and thus the appropriate tax rate.
  • A varied income also makes it hard to create a cash flow plan.
  • Even if you create a plan it can be difficult to honour it when cash flow is tight.

Then there are the pitfalls of inexperience:

  • Losing track of receipts.
  • Mixing personal expenses with business expenses.
  • No clear sense of how much to set aside for income taxes.
  • Falling behind and still trying to catch up on last year’s taxes owing.
  • Missing the filing deadline and incurring penalties.
  • Not using a bookkeeper or professional accountant to help with your tax preparation/filing.

So what do you do if you find yourself unprepared for this year’s return? Continue reading

Posted in For your information, Money Coaching, Small Business


How to Make the Most of Your Inheritance

By Janet Gray, B.A., B.Admin, CFP®, CHS, EPC, CPCA

Waiting for an inheritance is not a solid financial plan. But the fact is, Stats Canada reports that the total net worth of Canadians over age 65 is $2.18-billion, and much of that legacy will be passed on. Those on the receiving end of a generous bequest have the opportunity to make a real impact on their financial well-being, but only if they make the right choices in the short and long term.

There are many ways to use a large inheritance, and we’ll look at several of them in this article, but whenever you receive any kind of financial windfall, the first thing you need to do is catch your breath.

Take a Deep Breath and Park Your Money

The gift of an inheritance is bound to the sadness of loss. Allow yourself time to grieve. Don’t make important decisions for at least three or four months. Park the assets in a high interest savings account until the emotional fog begins to lift. In fact, parking your money is good advice for any sudden financial windfall. The shock needs to normalize before you make decisions.

When you are ready to make some decisions, they should be made under the umbrella of a comprehensive financial plan.

Here are some of the options to consider. Continue reading

Posted in Ask Your Money Coach, For your information, Money Coaching, Will & Estate Planning