COVID-19 Update


5 Ways to Lessen the Impact of COVID-19 on Your Retirement Plans

By Karin Mizgala, co-founder and CEO Money Coaches Canada

This is a hard time to focus on the future. If your employment or income has been impacted by COVID-19, understandably your short-term security and immediate bills are your primary concern. That makes sense, you need to take care of yourself, your family and your community and to make sure everyone is safe and healthy.

Eventually the crisis will pass and things will return to “normal,” well maybe a new “normal,” but one where we can breathe again and start thinking about the future.

There are however, some habits you can change and actions you can take now. It’s important that the choices you make today are in the context of a proactive game plan for both short and long term financial security. Continue reading

Posted in For your information, Investing, Money Coaching, Relationship to money, Retirement savings

Cash Flow in the Time of COVID-19

By Sheila Walkington BBA, CFP®

No matter what your financial circumstances, you’re probably at least a little bit freaked out by the impact that COVID-19 is having or could have on your day to day cash flow. Whether you are employed, self-employed or drawing income from your investments in retirement, COVID-19 doesn’t discriminate. It’s hitting us all where it hurts financially, myself included. 

The antidote to fear is knowledge and a plan.  Continue reading

Posted in Budgeting and Cash Flow, Money Coaching

Is Now a Good Time To Invest?

By Karin Mizgala, co-founder and CEO Money Coaches Canada

Non-Registered InvestmentIn the conversations we’d had with our clients in the recent weeks, there is certainly concern and questions about the market and economic fallout from COVID-19, but most are staying the course with their investment plan.  

And perhaps that’s the point. They have an investment and financial plan. While no one could have anticipated the timing and severity of the current pandemic, our clients do have a plan that is based on realistic rate of return assumptions that takes the ups and downs of the market into consideration. They have the comfort of knowing that the investment and financial decisions they have made so far are based on a full analysis of their goals, values and their personal and financial circumstances.   

A client of my colleague Sheila summed it up: “we are grateful we have had your guidance for so long and can focus on health instead of worrying about money at a time like this”.

In fact, we’ve had more questions from clients about whether this is a good time to invest with money they have sitting in cash.     Continue reading

Posted in Money Coaching

Should I Defer my Mortgage Payments?

By Sheila Walkington BBA, CFP®

As the financial impact of COVID-19 is being felt by more and more Canadians, we are working with our clients to help them find the best solutions for their circumstances. There are many financial support programs offered by the government, banks and businesses that are emerging. Details are still being worked out, and in some cases changing which can be frustrating when trying to make informed and responsible decisions.

With this in mind, we will share the most pressing questions our clients are asking and the information and advice we’re providing.  As new information emerges, we will do our best to keep you updated and informed on how we are addressing the issues with our clients.     

Should I defer my mortgage payments?

If you are experiencing financial hardship from income loss or reduction due to COVID-19 and don’t have the means to pay your mortgage, then it may make sense to apply for a deferral with your lender.  Continue reading

Posted in Money Coaching

5 Tips for Surviving Economic Uncertainty

By Karin Mizgala, co-founder and CEO Money Coaches Canada

It certainly has been a challenging start to Spring as we’re all grappling to make sense of the events around us. What will the immediate impact be on our jobs, businesses, investments and our physical and emotional health? When will we be able to “get back to normal”? And what will the longer-term implications be on our economy, our children, our retirement?

calculator-385506_1280The most difficult thing for all of us is that no one knows for sure, and that includes our experts and leaders. Instead, we are being asked to sit tight, stay in the moment and wait. This is not comfortable for an action-oriented world where speed and growth have been our norms.

On top of that most of us are facing immediate consequences within our own families and communities. In the last 2 days I got word that my niece was laid off and prospects in the fashion industry are well, nil for the foreseeable future. My sister-in-law’s father is in the hospital with a blood clot – and because of COVID, no one is allowed to visit him. A good friend is very ill but tests and surgeries are being postponed. Continue reading

Posted in For your information, Investing

Ask a Money Coach: Which Tax Software Would You Recommend?

Few people look forward to tax time, but with the help of a good software program it doesn’t have to take long or be painful. Most of the well-known options available to Canadians are quite similar, so how do you choose which one to use? The differences arise around support and which features are offered at what cost. Here is a quick overview of some of the most popular options. Continue reading

Posted in Ask Your Money Coach, For your information, Money Coaching, taxes

Honoring Women and their Supporters on International Women’s Day

By Karin Mizgala, Co-Founder and CEO Money Coaches Canada

As I reflected on the upcoming International Women’s Day, I started thinking of all the trailblazing women before me with deep appreciation for the battles they fought and the victories that have been won.  While I am impatient for the day that there is full equality for all women and minorities, my historian husband often reminds me that there has been unprecedented social change in an incredibly short blip in history. 

It is true that even one generation before me, it would be almost unheard of for a woman to run a successful business, own a home, manage her own investments or even get a credit card without her husband’s signature (that didn’t change until 1974).  Continue reading

Posted in Money Coaching

Exchange Traded Funds: Everything You Wanted to Know But Were Afraid to Ask

By Karin Mizgala, Co-Founder and CEO Money Coaches Canada

Most Canadians are very familiar with mutual funds. In simple terms, a mutual fund is made up of a collection of individual stocks, bonds or other securities carefully chosen by a fund manager, with the goal of generating returns for the investors while balancing risk. Investors pay a management fee, referred to as the Management Expense Ratio (MER), to cover the cost of the management, marketing and administration of these funds. In Canada the average MER is around 2%.

With greater focus on the cost of investing and fee transparency in Canada, it’s not surprising that there is growing interest in Exchange Traded Funds (ETFs), which in most cases, have lower fees than mutual funds. But what else should you know about this up-trending investment option before deciding if ETFs are right for you? Continue reading

Posted in Financial Literacy, For your information, Investing

Should You Help Your Kids Buy a Home? 3 Questions You Need to Ask Yourself Before You Ante Up

By Karin Mizgala, co-founder and CEO Money Coaches Canada    

Buying a home, especially for first time buyers, has  become increasingly challenging over the last decades. In 1985, according to the Toronto Estate Board, the average home in the city sold for $109,094 and the average Torontonian was earning $31,956. That’s means if you put your entire salary towards a home, it would have taken you 3.4 years to pay it off in 1985.

According to Statistics Canada the median salary for a Toronto family in 2017 was $83,000. Assuming a 2.5% average salary increase, that would be $89,000 in 2020.  That’s a significant jump from 1985, but according to the Toronto Real Estate Board the average price for a detached house in the city of Toronto in 2020 is $1,163,000. So despite that increased annual wage, putting your families’ entire salary towards your home, it would now take 13 years to pay it off.

It’s true that cities like Vancouver and Toronto are known for having high housing prices, but even smaller cities like Ottawa are becoming more challenging for first time buyers. A shortage of available houses in that city has created a bidding war situation, with highly desirable properties often selling far above the asking price.

Young adults, many of whom are already carrying an average of $25,000 in student debt, look at the high cost of entry to the market and wonder how home ownership will be possible for them. And many of them are turning to mom and dad for help.

Parents, often homeowners themselves, know that getting into the housing market can provide their child with stability, security and financial growth, so it’s very tempting to want to help them realize their goal.

But help of this sort doesn’t happen in a vacuum, it can have a huge impact on your life and your relationship with your kids. It’s vital that you answer these three questions before you start visiting open houses. Continue reading

Posted in Kids and Money, Money Coaching, Retirement savings, Will & Estate Planning

Are RRSPs Still a Good Investment?

By Karin Mizgala, Co-Founder and CEO Money Coaches Canada

With the March 2nd RRSP (Registered Retirement Savings Plan) deadline looming, it’s often the only time of year we give retirement savings much thought. March 2nd, 2020 is the deadline for contributing to an RRSP for the 2019 tax year. 

Are RRSPs still a good investment? Should you be paying down your mortgage first? Or are Tax-Free Savings Accounts (TFSAs) a better savings strategy? These are some of the questions we hear from our clients who understandably are confused by the many and varied options. And while in general, I tell them investing in RRSPs is a good idea, there’s by no means a one-size-fits-all answer.

While most financial institutions extol the virtues of RRSPs (it is a big part of their business after all), I see more articles and debate about their usefulness.

From RRSP supporters, we hear about the benefits – you can deduct RRSP contributions from income. So, as a result, you pay less tax and the income earned in an RRSP is tax-sheltered.

On the flip side, naysayers argue that RRSPs aren’t really a tax savings vehicle, just a tax deferral because you must pay tax when you withdraw the funds. The drawback is that if you are still in a high tax bracket when you withdraw the money at retirement, you pay tax at that higher rate, and you might also lose your Old Age Security pension benefits. Or, if you still have a large RRSP at death (unless you have a spouse), your estate will be hit hard with tax rates that can lop off 50% or more of the estate value of your hard-earned RRSP savings.

Truthfully, there is so much to consider. But it’s important not to get overwhelmed. Let’s start by painting the portrait of the ideal RRSP investor and then looking at a few other questions we frequently address from would-be RRSP investors.    Continue reading

Posted in Money Coaching, Retirement savings