Saturday, 17 December 2016

What CRM2 Means for Your Investment Statements

New Investment Account Statements

I've been a little MIA lately so first off let me apologize for that! December is always a busy month, and we are hosting Christmas this year which means I've got a long list of things to do before next weekend. I was also flattened by a bad cold last week and am just now feeling human again. Basically, I've had zero motivation to do anything but lie on the couch and watch Law & Order SVU on Netflix. Enough for my excuses, let's get to a real post! 

There's a pretty good chance you've never heard of CRM2, but if you're an investor, you should familiarize yourself with the basics to avoid any confusion when you get some weird statements in the New Year. Let's first get the acronym out of the way (finance people sure love a good (bad) acronym); CRM2 stands for the 'Client Relationship Model part 2'. And what it means for you is more transparency when it comes to the fees you pay for your investments and the returns you are earning on said investments. Sounds great right? Yes, it's a good thing, but there are some factors you need to keep in mind when you're evaluating the new reports. You may have heard some negative opinions regarding CRM2 and financial advisors complaining about how it's going to ruin's not, or at least it shouldn't. The advisors who are most concerned about the effects of CRM2 are the problem children that have made it necessary in the first place by not properly disclosing fees and manipulating performance data.  

The new CRM2 model was implemented on July 15, 2016 but all investment firms were given one year to gather the necessary data before they had to start sending the reports to clients....that would bring us to July 2017. So why are we talking about this now? Well, a lot of firms in the industry have decided it's easier to run the numbers based on the calendar year, so most of you will see the more detailed statements hit your mailboxes (inboxes) in January. 

Fee Disclosure - How much are you actually paying? 
The biggest factor in this is likely to be the cost transparency. As investors, we pay certain fees to get into the market, and these include commission charged directly by your advisor, mutual fund fees, administration fees charged by your financial institution and taxes. Some of these fees you'll be aware of but others, like the mutual fund fees, have always been embedded within the investment and not openly disclosed. Now you'll get a neat little print out of everything you have paid to your to your financial institution. One thing to note if you've got an advisor you work with is that they are not lining their pockets with all of that money...a lot of what you pay will go back to the bank or dealer they work for. 

This is a change for the better but maybe take a deep breath before you read the actual dollar amounts. Your advisor may be really open about fees but only ever talk about them as a percentage of your portfolio. A 2% fee on a $100,000 portfolio might not sound like much, but that's $2,000/ are those the same thing right?! It helps to think about all the things your advisor provides for you...maybe they prepare financial plans (they should be!), maybe they run free seminars, maybe they give you advice to reduce your tax bill, or can walk you through your pension plan. All of these things would cost you money if you went to a fee for service planner....we're talking $500+ to get a comprehensive financial plan. 

There is an exception that you won't find on the new reporting and that's mutual fund MER's (management expense ratios). These fees are charged directly by the fund company and are their cost of doing business. Because they aren't paid out to your advisor/dealer, they are exempt from CRM2. The MER will depend on the fund with more aggressive funds usually charging higher fees (more active trading); a bond fund will usually cost between 1% and 1.5% while an equity fund will be >2%. MER information is included in the 'Fund Facts' document you should receive before purchasing a mutual fund. You will see information regarding trailer fees (what the mutual fund company pays your advisor for buying the fund) and DSC (deferred sales charges). DSC funds are bad news, and a lot of firms are moving away from them, so if you're being pushed towards in that direction, you might want to run away.  

Performance Disclosure - How much are you actually making? 
The whole reason you invest your money is to make more of it, so you want to see your statement balances going up, up and up some more. Naturally, this doesn't always happen, you're going to have some bad months or even years, but over the long term, you want to be growing your net worth. The new performance disclosure with CRM2 is going to give you easier access to that information on a more standardized level. Prior to this, dealers could choose their method of calculating your returns, but now all Canadian dealers have to use a money-weighted calculation...I'm not going to go into detail about that here, but you can read this article if you'd like more info. You will now be given annual information that includes any deposits and/or withdrawals from your accounts, the change in dollar value of your account, and rates of return based on the last one, three, five and ten years. Because this initiative was only introduced in July of 2013, the dealer only needs to go back to this point so you won't be seeing a five or ten-year return in 2017. These values will also be impacted by how long you have held your investments with your current firm if you've only been a client for two years your returns will only date back that far. 

Seeing positive returns on your statement is great, but you have to keep your risk level in perspective. If you're a low-risk investor you cannot expect to see double-digit returns on either the positive or negative side and shouldn't be disappointed with returns under 5%...if you put that money in a 100% safe savings accounts, you'd be lucky to get 1%. Also, keep in mind how the market has done as a whole. If an appropriate benchmark (an index with similar investments to yours) is sitting at -20% for the year and you're at -8% you really didn't do so poorly did you? 

It can be frustrating to see all the fees you are being charged in a year when your returns are low but as long as your longer-term returns are positive and your advisor is providing you with services you feel are important you shouldn't stress about it too much. However, if you see poor returns year over year, it might just be time to look for a new strategy.

Those are the basics of the new CRM2 model if you have any questions feel free to leave them in the comments. And keep an eye on your January (or maybe July) investment statements to see the new detailed reporting. 

New Investment Account Statements

Wednesday, 7 December 2016

Why I'm a Downtown(ish) Dweller

Perks of Downtown Living

It might not look like it from the summery looking shot above, but winter struck Edmonton with a vengeance this week, and it doesn't look like there is much relief in the near future. The one positive is that we got a little bit of snow, so everything is now white instead of brown, but that doesn't nearly make up for having to suffer through -30 temperatures for the next week or so. I really hate the cold weather...I realize I'm not alone in this and that I did decide to plant roots here in Edmonton but complaining about the weather (not risk taking) is about the most Edmonton thing we can do ;) 

One thing this weather makes me appreciate is where I live; there's no long commute for this girl! When we decided to buy a house six years ago the most important thing for us was to be centrally located, and we made that happen by buying in Westmount (a great little neighborhood just off downtown). Chances were pretty good at the time that we would both have jobs downtown (which we do) and being close to work to avoid a long daily commute topped the necessity list. 

I grew up in St. Albert (a suburb of Edmonton) and suffered through the commute down to the University for years so when house hunting became a reality, I knew that would be a deal breaker. Rush hour makes me crazy (even on my current 5-minute drive), add winter road conditions to the mix, and you get one very cranky Sarah. I don't even have winter tires on my car (I know, sacrilege) because of how little I actually drive. And when the weather isn't so apocalyptic cold I can even walk to work...exercise and convenience. There's also the added perk of cheaper vehicle-related costs. My limited driving means that I don't have to allow much of my budget to gas; I usually only fill up my tank once a month, and it costs about $45. This also translates to low mileage on my car and less frequent maintenance requirements. I purchased my car brand new in October 2010, and it currently has just over 62,000 km on it. I've also never had to have anything major fixed on it (I'm knocking on wood right now because my warranty also just expired). One last thing that you may not have considered is cheaper auto insurance. Lots of companies will give you a bit of a discount for having a short commute or for using your car only for pleasure. Less gas and maintenance and discounted insurance all put extra money in my pocket because I made the decision to live and work in the same area. 

The lack of a lengthy commute was the big thing for me, but there are also plenty of other advantages to living near the core. For most cities I've traveled to there tends to be more activities in the downtown core than in other parts of the city and this is certainly the case in Edmonton. I'm sure there are exceptions (my downtown bias might be showing), but most of the good restaurants we have are located in or around downtown whereas the suburbs usually have more chain restaurants. Sure, every once in awhile you might just want Swiss Chalet for dinner and not have any locations near you (this is actually a thing for us; someone bring me a festive special!) but most of the time we go out for a nice meal it's to a local restaurant and not a chain. The same logic also applies to events and festivals. Our new downtown arena has made this even more true, but even before that most of the concert venues, theaters and festival grounds are all within easy access to our house and makes it more likely that we'll actually get out and experience things. If I had to drive 30+ minutes to go see a show, it would limit how often I'd be willing to do that. 

Living downtown isn't all sunshine and roses, there a few things you should consider. The most common con you hear about buying a home central is that you get less bang for your buck, meaning you'll pay more for a smaller home. And that's not wrong, so if square footage is the most important thing on your house hunting list, then the suburbs might be perfect for you. For me, this really wasn't even worth considering...more space means more cleaning, and I really hate cleaning. Our current place is about 1300 square feet, and it's perfect for us. We'll likely need to up-size if we add kids to the mix but that's a problem for another day, and I'll enjoy only having to clean 1.5 bathrooms for the time being. There's also a good chance your dollar won't stretch as far as you might think. If you factor in the added commuting costs to your budget some of that suburb advantage will disappear. 

One factor I can't write off and has caused us a few headaches is the age of the homes. By their very essence, central neighbourhoods are old, and that means you're likely going to end up with a house that's got a little history in its walls. Now don't get me wrong, I think old homes are charming and mature neighbourhoods have so much more character with their unique (non-cookie-cutter) homes and mature trees, but brand new homes give you more stability. If you buy new, you aren't going to have to worry about your furnace conking out in the middle of winter, replacing a leaky roof, or lining up pictures on crooked walls. Side note, I just had a complete mental block on how to spell crooked....I've grown to embrace the quirks in our 80-year-old home, but a small part of me would appreciate not always having a nagging worry about what the next big expense will be. But why can't I have it all?! Maybe that's what you're asking right now, and sure, if you've got the bankroll to do it you can buy a new build in an old neighbourhood. It's going to cost you, though...back to the old bang for your buck cliche. That is actually my end goal one day, tear down our current place and rebuild on the same lot. We've got a big, corner lot on a perfect block and I can't imagine moving so now we just have to win the lottery ;) I do think it would be so much fun to plan and design a new place, that might just be the biggest perk of a new long as I don't have to move out to the boons! 

What are your thoughts? Where do you guys fall on the downtown vs. suburbs debate? 

Perks of Downtown Living

Friday, 2 December 2016

7 Ways to Pinch Pennies

Money Saving Tips

Maybe the Christmas season has you seeing red and dreading the January credit card bills, or maybe you want to set some money aside for a new car, fancy vacation or just simply increase your cash flow. Whatever the case, everyone can use a little extra cash in their wallets, especially at this time of year. Today I'm going to share a few of my favourite penny-pinching tips. 

If you are dealing with a little (or a lot) of debt, you can check my post here to help you get started on a repayment plan. Every little bit of extra money really comes in handy too when you're trying to kick start your debt elimination. 

Here we go folks, try a couple or try them all and make sure to brag about how much you cut out of your budget in the comments. 

Ditch Unnecessary Monthly Expenses
Perhaps you're a sucker for magazine subscriptions, still have a home phone, or maybe you pay for Spotify premium and hardly ever use it (note to self...) Whatever your weakness is, monthly expenses can do some serious damage to your budget and save you some serious coin if you're willing to let go. The easiest way to do this is pull up your last couple months of bank account and credit card statements and see what you are actually paying for. If there's anything you can live without cancel it, right now, you can always get it back later if you find you really do miss it. If you've got a magazine subscription and maybe one too many TV streaming services that can be cancelled you could save yourself around $15 a month or $180 a year. That's not nothing folks. Or maybe you can go even bigger and cancel your cable altogether, even if you just do it for the summer months when you're likely watching less TV you'll save a ton of money. We still have cable in this house, but I would be a-ok cancelling except for watching sports. We're big Oilers fans and there really just isn't a great option to live stream sports at this point. I know Sportsnet has a streaming service for all their channels, but it's $25/month which is as much as our basic cable package...seems crazy. 

Negotiate with Service Providers
It really is worth your time to run through your list of recurring bills and make a few phone calls to negotiate a lower rate. Even if you're still under contract it's worth giving it a shot, there might be something you're paying for that you don't use; a speciality TV channel package, or voicemail on your phone (who doesn't hate voicemail). If you're out of contract, then it can be even more worthwhile as you can use the threat of leaving to get the most bang for your buck (ask for the retention department as they are usually the ones who can give the biggest discounts). Do some research before calling to see what other providers are offering to new customers and use those numbers in your negotiations. And if you're not having much success, don't be afraid to switch providers. We switched our TV and internet to Telus last year because they offered us a really fantastic promo. Just remember that promo rates are temporary, so make sure the regular rate is cheaper or comparable to what you're currently paying, so it doesn't end up costing you more in the long run. These tactics can be used for internet, cable, cell phones, insurance...just about anything you have to sign a contract for. 

Make a Budget and Stick to it
You don't need some crazy detailed, elaborate budget but you do need to figure out what money is coming in and going out every month. Run the numbers to work out how much you actually need to live on each month and set that aside, whether that's kept in your chequing account or you take it out as cash. Don't forget to leave yourself a little room in the budget for fun. I'm a big believer in living for now and living for the's a balancing act. Living on a too tight budget can just end up making you frustrated and not having enough motivation to stick with it. Budgeting is just like dieting, you need to leave room for the odd treat to save yourself from eating an entire pizza. Any leftover cash flow will go towards savings or pay off debt, and I want you to set these up as automatic payments. That way money goes where it's supposed to as soon as it comes in, so you're not tempted to spend it on that cute blouse you saw at the mall (or online, because who still goes to the mall). Give yourself a couple of months to tweak the amounts if needed, but if you're serious about this, you want to stay strict with yourself. Your budget can be as simple as a post-it note on the fridge, but there are also great apps you can use so your budget is always accessible on your phone. I like Mint, it's free and links up with most Canadian banks and lets you track bank accounts, investment accounts and credit cards. 

Sell Stuff
Have a basement overflowing with stuff you don't use anymore? Get listing on Kijiji and make some extra cash! What could be better than getting paid to purge?! I know some people really hate cleaning out their closets or getting rid of things, but I actually love it. I find it so frustrating to pull something out of my closet that I hate or have kitchen cabinets overflowing with appliances that never get used. As long as the things you want to get rid of still have a little life left in them then you should definitely be listing them on Kijiji instead of tossing them in the trash...environmentally and economically friendly. You can sell just about any household items on Kijiji, another's person's junk right. Make sure to set realistic prices (check out some similar listings) and be prepared to barter with people. If your item does sell within the first few days, it's a good idea to delete and re-post the ad, so it goes back to the top of the list, older ads tend to disappear into obscurity. 

Get Paid to Shop Online
I love getting my shopping done online, and you can often get better discounts than you can in store, especially if there's free shipping available. I don't think I've stepped foot in a brick and mortar store for Christmas presents yet this year, everything has been done either online or at a couple of local craft sales. Another perk is that there are sites you can use to get rewards for buying stuff online. My favourite is Ebates because you get actual cash back from shopping at lots of online stores you're probably buying from anyway (think Amazon, Sephora, Old Navy, etc.). Swagbucks is another good option and lets you earn rewards for online shopping but also doing surveys and other tasks. For both sites, you set up an account and then link through there to any of the sites they partner with and then do your online shopping just like normal. For Ebates you will earn cash back, and they will send you a cheque when you get to $25. Swagbucks is a bit different in that you earn points (Swagbucks) and you use those points to redeem for gift cards.

Pack a Lunch
Everyone already knows this, but it's worth the reminder because it will save you a ton of money. Eating out is expensive so if you can cook most of your meals at home, you should. I'm horrible at packing lunch, but we are good about cooking dinner at home, so I try to pick meals that will have enough for leftovers the next day. If I have to make a sandwich in the morning, I'm setting myself up for failure but if there's a container of leftovers I'm good to go. Plus, I hate wasting food, so I'll make sure those leftovers get eaten. The hardest part of sticking to a bag lunch plan for me is resisting the temptation when co-workers go out. My office is terrible for eating out way to often so we've made a deal (that we try very, very hard to stick to) that we can only eat out once a week. 

Use the Library
I only just got a library membership last year, but holy man is it ever amazing! Depending on where you live this might not be as beneficial for you, but the Edmonton Public Library is seriously impressive. Membership is 100% FREE, and they have a huge selection of books, ebooks, movies, music...pretty much everything. Sure, sometimes you need to need to go on a waiting list for more popular books (I think I'm still number 1 million and some for 'The Nest'), but if you're an avid reader, there is no other way to read as much as you want for free. The EPL website is easy to use, and you can download ebooks, save books to read in the future and access online resources. When you put a book on hold, they even transfer it between libraries so you can always pick-up at the most convenient location while still having access to resources across the city. And, if there's a book the EPL doesn't have you can request it, and they actually do listen!

There you have it, 7 ways to limit to expenses and free up some extra money to pay your bills or stash away for the future. If you'd like to share any of your favourite penny-pinching tips feel free to post in the comments.  

Money Saving Tips

Wednesday, 30 November 2016


Barcelona Trip Guide
I am kind of in shock that it's already been two weeks since we got back from Barcelona, it honestly feels like we landed two days ago...jet lag is for real folks! I'm finally getting down to business though and have put together the following recap of our trip and to share the wonderfulness that is Barcelona.

First off a quick shout out to AMA for helping us out and organizing a fantastic trip that ran smoothly from start to finish. If you're a regular follower of the blog, you may remember my moment of rage when initially trying to get things sorted out, but that has all but been forgotten. 

Travelling overseas is always a bit of a hassle because of the crazy long and painful flight, but we flew KLM and were really impressed. It's still just plane so keep your expectations moderate, but all of our flights were perfectly on time, and they feed you, like a lot, and even offer free booze. Perks! There's no free WiFi, but the in-flight entertainment had a big selection of movies and games. There's a direct flight from Edmonton to Amsterdam (that has been available for really low prices so keep your eyes open), and then it was just a quick flight to Barcelona. The Amsterdam airport is pretty big, and we had a bit of a layover on the way there to explore but our connection on the way back was tight, so we had to hustle...the only stressful part of the flights. 

Once we got to Barcelona, we jumped on the bus (they have a cheap airport shuttle that went right close to our hotel) and went to our hotel to get settled. We stayed at the H10 Urquinaona Plaza which I have no qualms about recommending to anyone. It was only a couple of blocks from 'Las Ramblas', which is the big touristy spot in Barcelona, and we were able to walk to almost everything we wanted to see. Our room was also pretty spacious with a king size bed and a small balcony with a beautiful view of the Plaza. If you happen to stay at the hotel, I would request a room that faces the square instead of one of the interior rooms as those looked to be much smaller. 

Boring stuff over, now onto all the sights....and all the pictures :)

Barcelona is known for its architecture, and Sagrada Familia is by far the most famous, so of course we had to visit. I actually studied some of Gaudi's work in a random art history class I took in University but trust me when I say that pictures do not do this place justice. The details in the stonework are ridiculous, the ceilings are so high, and it's so bright and open inside compared to any other church I've been in. We went on an organized tour (with a guide who looked like a young Robert De Niro), and it included a trip up one of the towers. There's an elevator that takes you 65m up, and then you climb down a tight staircase back down to the ground. The views on the way down are beautiful (top right and bottom left below) and make it a worthwhile add-on. Sagrada Familia is still under construction (has been since 1882) but they are hopeful it will be finished in 2026 (the 100 year anniversary of Gaudi's death). I would love to go back when it's all completed to get another look. 

Barcelona Trip Guide
The second organized tour we took was up to Montserrat, a monastery built up in the mountains on the side of a cliff. We did a tour that included the cog train ride up, which was pretty cool and looked to be an easier ride up than the bus. We did, however, bus back down and the road is steep and twisty; I'm known to get car sick sometimes but survived the trip and was happy to do it. The views are beautiful, and the monastery itself is an impressive they built such an intricate building in that location blows my mind. Make sure to grab some cheese from the sellers along the road, we brought a couple of blocks back home with us (so delicious!) 

Barcelona Trip Guide
We also had to pay a visit to Park Guell, another attraction that showcases Gaudi's unique architecture. It was crazy windy the day we went, but that didn't take away from the whimsical design that is featured throughout the Park. There is a free access area with hiking trails up in the hills, but you really want to buy tickets and get access to the monuments section to really get the full impact. I loved all the detailed mosaics, they're so colourful and fun.

Barcelona Trip Guide

Barcelona Trip Guide

We had a total of eight days in Barcelona which sounds like a long time for one city, but we were busy every day and never ran out of things to see. On our second last day, we actually did a hop-on-hop-off double-decker bus tour so that we could see all the sights we hadn't made it to. We did the tour on a Sunday which worked well because the city really grinds to a halt on Sunday with most businesses closing up, but all the tourist attractions are open. The tickets were kind of expensive, and you could easily use public transit (the bus or metro) to make your way around the stops, but the bus tour made things easy and efficient. Here are just a few highlights we made stops at: 

Barcelona Trip Guide
Gaudi's Casa Mila (La Pedrera)
Barcelona Trip Guide
Gaudi's Casa Batllo
Barcelona Trip Guide
MNAC - Museu Nacional d'Art de Catalunya
Barcelona Trip Guide
1992 Barcelona Olympics Flame
Barcelona Trip Guide
Parc de la Ciutadella
Barcelona Trip Guide
Barcelona Cathedral

Barcelona Trip Guide
Arc de Triomf
A must visit (another one) in Barcelona is the Mercat de Sant Josep de la Bouqueria, which is a huge food market situated along Las Ramblas. If you're any sort of foodie or just like to eat this is the place to be! It's overflowing with local vendors featuring everything from fresh seafood to cured ham, to handmade marzipan. You HAVE to grab one of the fresh juices (lots of stands have them), and the displays look so stunning with their bright colours...I may have had two, and if I could bring one thing from Barcelona to Edmonton, it would 100% be those juices. There's also a bunch of tapas restaurants within the market, and it's a great way to grab a quick bite. 

Barcelona Trip Guide
When you travel with a guy with a not so slight obsession with fish tanks you have to make a visit to the aquarium. It wouldn't ever be at the top of my must-do list, but I was actually pretty impressed. There are a ton of tanks featuring all sorts of fish and sea animals and a huge underwater tunnel with sharks and stingrays. And they had penguins, who doesn't love penguins? 

Barcelona Trip Guide
One of my favourite things about Barcelona were all the tiny, intricate alleyways in the Gothic Quarter that are lined with shops and restaurants. You could walk for hours (and we did) up and down alleyways and never find your way back to where you started. It's such a unique layout for a city (nothing like the big wide, non-pedestrian friendly streets of North America) and I absolutely loved the old school charm. There's also graffiti art painted on many exterior doors so even when stores are all locked up it still feels really welcoming. 

Barcelona Trip Guide

Barcelona Trip Guide
Probably the only part of Barcelona that was a bit of a let down was the food. I shouldn't be surprised though as Spain is known for its Paella and that's just not really my thing. Obviously, we ate some, and it was tasty, but even the best Paella in the world won't make it to my top foods list. They did, however, have giant jugs of Sangria, and you can't go wrong with that. We also ate our body weight in tapas over the trip, and I became hooked on the croquettes that you could find everywhere. This isn't to say we didn't have great meals during our stay, we had some really yummy sushi and a delicious burger at an Irish pub (because sometimes when you're hangry after a long day of exploring you just need a burger).

Barcelona Trip Guide
Phewf, longest post ever! To sum up, Barcelona is amazing...go visit!

Barcelona Trip Guide

Thursday, 27 October 2016

Why I Love the Shoppers Optimum Program

Shoppers Optimum Program
It feels like every single store in the universe has some sort of rewards program they offer, and if you're anything like me, your wallet is loaded down with all kinds of cards. At least now lots of places have apps, so it's your phone that gets loaded instead of your wallet (much easier to carry). Of all these programs, though, one of the longest running and most rewarding is the Shoppers Drug Mart Optimum program. I've been collecting Optimum points for years and years and have received hundreds (probably even thousands) of dollars of free stuff over that time. There were concerns back in 2014 when Loblaws bought Shoppers that there would be significant changes to the program and then us Optimum members would get screwed. That really wasn't the case, though, they have kept things almost the same and Loblaws actually adopted it's on PC Points program that is also quite good.

Why is it so Great?
On its face, the program doesn't look like anything special. You show your Optimum card when making a purchase at Shoppers, and you'll earn points at a rate of 10 points per $1. You'll need to build up at least 8000 points to make a redemption and would get $10 at that level. The redemption levels look like this (usually, more on that later):

Now, having to spend $800 just to get $10 back does not exactly sound very generous, but the big advantage of the program are the constant offers they have available to boost those earning amounts. I don't even bother shopping at Shoppers Drug Mart unless there's an extra point offer available because their regular prices tend to be a bit higher than I can find elsewhere. Just as an example of the type of offers available, right now I have 10,000 bonus points if I spend $60, 1000 bonus points if a buy a Tresemme product or 800 bonus points if I buy eggs. If I spent exactly $60 (before tax) and used all three offers, I would get 11,800 bonus points plus my regular 600 points. That would give me enough points for $10 of free stuff and points leftover. Oh, the wonder of it!

Sure, it's a bit of work to figure out what are the best days to shop and the best offers to use but it's worth it. Try to save up your purchases and do a bigger shop on the days that will give you the biggest bang for your buck. It also pays to take a look at the flyer for the week to see what products are on sale or may have bonus points available. I don't actually shop at Shoppers a lot, but usually once a month I'll plan a trip and stock up on the essentials for the next while. The best offer days to hit up are when they have 10x your points when you spend $50 or more or when you can get 18,500 points on a purchase of $75 or more (that one is happening this weekend, October 29-31). Make sure you also download the app because you'll get offers specific to you and your purchase history.

The Big Redeem
The best part is the day you get to redeem your points for free stuff, but there's also a few tricks to make sure you get the most bang for your points. You can tell just by looking at the table above that it makes sense to hold onto your points until you reach the 95,000 level. The lowest level gives you a return of only 800 points per dollar whereas the highest level will bring that return up to 558 points per dollar. An even better reason to stock up your points is that once in awhile there will be a 'Spend Your Points' event and your points will be worth even more. There's no guarantees on the actual amount, but the last couple have bumped up the 95,000 level to $200 (extra $30) worth of free stuff, and the 50,000 level went up to $100 (extra $15) of free stuff. Now we're talking!

Let's look at a quick example. If you only shop on the 10x your points days and only do the maximum redemption on a 'Spend Your Points' day, you would need to spend $950 to get $200 back. That's a pretty good perk if you're buying things you would have to buy anyways!

Beauty Boutique
I've talked about my Sephora addiction before, and that doesn't seem to be decreasing at any point soon, but Shoppers also offers a high-end beauty product boutique so you can earn Optimum points at the same time. They offer a lot of the same brands you'll find at Sephora (think Clinique, Stila, Benefit, Dior, etc.) and also have free shipping over $50 and free returns. Keep your eyes open for special points offers on products you already use and sign up for their email list for even more promotions.

So Long Credit Card
Some of you who are already Optimum point pros might be thinking, hey, what about the RBC Shoppers Optimum Mastercard and debit card? Well, both options have been halted, and no new applications are being taken. At this point, existing customers are still able to use their cards and earn extra points, but I wouldn't be surprised if you find yourself searching for a new card at some point. If you want some more information about the split, you can check out this article. This isn't that unusual if you're also a Costco member you probably remember when they switched their allegiance from American Express to Mastercard last year. 

The credit and debit card options were a good way to earn extra points and even earn points when you shopped at other stores, but I never had either and have still done pretty darn well collecting points. Hit up those extra points days and hoard your points until special events and you'll end up walking out the door with a cart (one of those adorable Shoppers mini carts) full of free goodies. You'll also get to bask in the jealous stares of the people behind you in line when your $200 bill drops right down to ZERO

Check out the Shoppers Drug Mart website for more information on the Optimum program and make sure you download the app (Apple or Android) so you can take advantage of your specific offers. 

Shoppers Optimum Program

Monday, 24 October 2016

10 Tips for a Money Savvy Christmas

Christmas on a Budget

Christmas is fast approaching, and I don't know about you guys, but I'm thinking ahead and getting started on my planning. We are hosting this year which means there are more things to prep for so I'm hoping to get most of my shopping done early so I can worry about other things at the last minute. How about all of you? Do you know what you're doing for Christmas and has anyone started their shopping? 

As much fun as Christmas is, it can also be a real drain on your savings so today I've got a few tips to help you stretch your holiday budget. 

1. Start Early...Like NOW
We're already creeping up on the beginning of November, and the sooner you start your Christmas shopping, the better. Starting early means, you'll have more time to set money aside, more time to seek out the very best deals and more time to make things if that's the route you're going. It's even a good idea to keep your eyes open year round for something that would make a great gift, especially if you're travelling and can pick up something unique. You can even get super keen and start next years prep on Boxing Day. This is the best time to get some new holiday decor for the following year as everything will be on clearance.

2. Go for Secret Santa
This isn't such an issue for me as I have a tiny family, but if you're part of a big gang, then I highly recommend pushing your family to go the Secret Santa route. This will automatically make a drastic cut in your holiday budget because you'll only have to buy for one person instead of who knows how many. It also means you can put a little more effort (money) into making that one gift super awesome. If you have kiddos in the family, you can continue to buy for all of them (Christmas really is about the kids right? I only say this because I'm still the youngest!) and just do a Secret Santa for the grown-ups. I know some of you are probably wondering how you can broach the subject with the fam, but I can pretty much guarantee that if you're worried about the cost of shopping for everyone most of them will feel the same.

3. Quality over Quantity
I LOOOOVE stockings, they are my favourite part of Christmas, but I like when I get stocking stuffers that I will actually use and not just dollar store junk. No one wants to be stuck with a bunch of weird knick knacks that will just end up in the trash so put a little thought into the little things and go for just a few, higher value items. Stockings are also the perfect place to use up some of those samples that are cluttering your cupboard. If you're a Sephora addict (raises hand) then you'll know what I'm talking about and any other beauty product junkies on your Christmas list will appreciate a good quality sample. Quality over quantity can also go for your holiday decor; a few tastefully placed items can look better and end up costing less than if you cover every surface of your home with cheap decorations.

4. Shop Local
My favourite places to find unique gifts are at farmers markets or craft fairs that feature local makers. We hit up the Etsy Made in Canada Market last month and have already checked a few people off the shopping list with some really great (and reasonably priced) finds. Locally made jewellery is one of my favourite things to buy for the ladies in my life because it is unique, easy to pack if you're travelling and you can get great deals on things that look way more expensive. It's also nice to be able to share a little part of your city with people who might not live in the area. Edmonton has some fantastic local vendors, and they're amazing goods will give you bragging rights ;) A few of my favourites are Jacek Chocolate Couture, Cloud & Lolly Jewelry Studio, DogDog Goose Houndmaid Goods, Salgado Fenwick, and Evoolution.
Image Credit: Jacek Chocolate Couture
5. Craft it Up
Maybe you are crafty yourself and don't even have to rely on local vendors for handmade Christmas gifts. There are lots of DIY projects you can try your hand at that make really great and meaningful gifts for your family. I taught myself how to crochet a few years ago (YouTube tutorials all the way), and I've made scarves, blankets, and toques as gifts, and people really do appreciate handmade long as they are usable. My mom still wears the first scarf I made her and looking at it now it's kind of embarrassing because my skills were seriously lacking at the time. Pinterest is a great resource for finding DIY Christmas gifts, but I recommend taking a read through some comments before attempting any project as there are definitely some duds out there. And don't forget about Christmas baking, a fancy (not fancy) tin of home baked goodies makes a frugal Christmas gift for co-workers, teachers or neighbours.

6. Sign Up for Email Lists
It's inevitable that you'll end up having to hit up some regular old store for at least a few items, so you want to make sure you get the best deal possible. If you know which stores you'll be buying from it's not a bad idea to sign up for their email lists. It seems like every store nowadays gives you some sort of offer for signing up and they'll also email you out special offers from time to time. You should also do a quick Google search before making any online purchases to see if there are any available coupon codes you can use to save a few extra dollars.

7. Making Use of Online Perks
Online shopping is so much more time efficient and way less stress than tackling the crowds at the mall in December, and it also gives you the chance to save extra money. Not only can you search for coupon codes but there are also sites that will pay you back when you shop. If you are an online shopper and don't have an Ebates account, you are seriously missing out. Ebates is free to join, and it gives you cash back rewards to shop at many online stores you probably already frequent (think Sephora, Gap, Hudson's Bay, etc.) You can get up to 8% cash back at some stores, and they will send you a cheque in the mail or deposit funds to your PayPal account. It really is that simple, just go to Ebates, set up an account and before you make a purchase online Ebates first and link to the store through there and you're all set. Another useful resource that works in the same way is Swagbucks, but instead of getting paid in straight cash you earn Swagbucks rewards which you can redeem for gift cards. Swagbucks also has other ways of earning rewards like surveys, a search function, etc. so if you're willing to put in some extra time you can make even more. If you only want to use such a service for online shopping, then Ebates is the way to go.

8. Try Your Hand at Thrifting
Searching thrift stores for the perfect gift can be a daunting task, but if you're looking to add some holiday decor to your own home, they can be a good option. I was at Value Village last week looking for Halloween costumes, and they already had Christmas decorations out. I was tempted by a few things, but our selection of decorations is already pretty extensive. I remember our first Christmas in our house was hard on the budget. We had always just had a small tree in our condo and didn't have any outdoor space to put up lights so we ended up splurging on a bunch of things and I wish we had thought of scoping out thrift stores to cut down on the cost.

9. Nix the Fancy Wrapping Paper
For something that just gets torn up and thrown in the garbage, wrapping paper sure is expensive. And if you buy the stuff from the dollar store it's so thin that I always ended up tearing it to shreds before the presents even make it under the tree. Plus, lots of wrapping paper can't even be recycled so not only is it pricey, it's also bad for the environment. What can you use instead? Plain old brown paper. Cheap, easy to wrap with, always recyclable and you can decorate it yourself. Pick up some ribbon (dollar store ribbon works fine), and beautify things a little. You can even grab a few Christmas stamps to make things a even more decorative. Brown paper also gives you the option to write right on it so you can skip the gift tags as well. Win win!

Image Credit: DIY Network (Ellen Foord)
10. Get Specific About your Wish List
This one might be a bit awkward for some people, but my family has always been open about letting everyone know what we actually want for Christmas, so there are no disappointments on Christmas morning. Sure, it takes away some of the surprises, but it means you won't have to put on any fake displays of joy and won't have to make any returns. There's always a few things I think of during that year that I would love to replace but don't really want to spend the money on so I add those to my wish list. This year it's a new cutlery set...I still have the crappy old Ikea cutlery that everyone buys when they first move out, and an upgrade is long overdue. Who wants to spend money on new cutlery, though? My parents, that's who ;)

Christmas on a Budget

Friday, 21 October 2016

So, Those New Mortgage Rules?

Canadian Mortgage Rules

There's been a whole lot of chatter going on about the new mortgage rules instituted here in Canada, and I've finally had a chance to put pen to paper (fingers to keyboard is more accurate I guess) and share my thoughts with you guys. 

The Stress Test
Ok, let's start with the most controversial change. The stress test comes into play for anyone who is getting an insured mortgage. What exactly is an insured mortgage you ask? It is when you are putting down less than 20% down and have to get the extra CMHC insurance. If you are in that boat, you now have to qualify for a much higher interest rate than you will actually be paying on your mortgage. As of right now, you should be able to get an interest rate on your mortgage under 2.5%, but the qualifying rate you have to meet is currently set at 4.64%. Quite the jump hey? The Bank of Canada sets the rate, and they figure it out by taking an average of the posted rates by the top five Canadian banks. So even though you have your lower rate locked in for (most commonly) five years, you'll still have to meet the standards for the higher interest rate, and this means the bank won't lend you as much money. 

But why? Basically, the government is forcing you to be responsible and not overstretch your budget. They don't want you to spend right up to your max and then not be able to afford your mortgage payments if rates skyrocket when you have to renew. Makes sense...sort of. I'm all for not overextending yourself when buying a home and I don't necessarily think that it is your right to own property. However, it is already a huge challenge for the younger generation to get into the housing market and making things harder is not a great option. 

Just over six years ago we bought our first house and looking back now there's a pretty good chance we wouldn't have qualified based on the new standards. At that point, I had only been out of school and working full time for about a year, and the bf was in school and only working part-time...what in the world was the bank thinking giving us hundreds of thousands of dollars? But you know what, we made it work and are in a pretty good position right now. Five years can be a long time, especially when you are at the start of your career. I'm making substantially more now than I was then and the bf is also working full time. Maybe we stretched a little at the beginning, but I never felt like we were uncomfortable or lacking in any way. Yes, it's right to be cautious and you need to go into buying a home with a budget you can live with but factoring in some growth over those five years isn't exactly far fetched. 

This stress test is obviously going to impact first time home buyers the most, as they are more likely to go in with less than 20% down but let's not forget about those people who are looking to upgrade. Say you bought a condo three years ago in Vancouver and are now planning on adding a baby to the mix and need some more expansive digs. Do you have over 20% built up in equity on that condo? If not, and you haven't saved up the balance, you are going to be in the same boat. Vancouver just recently introduced that new 15% tax on foreign buyers and their housing market has taken a hit so this could be more and more common going forward. 

The added pressure on first-time buyers is also going to have an impact on the rental market. Not so much here in Edmonton, but in those hot markets like Vancouver and Toronto occupancy rates are really low, and it's already a challenge to find a decent rental. With more potential home buyers being forced to hold off there will be more people competing for rentals. And what does competition do? Drives up prices. Now you'll have a population are paying higher amounts in rent but also have to try to save more for a down payment. That's a tough situation...

Principal Residence Loophole
When you sell a home that is considered your primary residence you don't have to pay tax on it, thank goodness for that otherwise no one would ever be able to upgrade their home! The rules for this were never governed that tightly, and there was no reporting system for tracking that information. The government is now closing up a big loophole with this exemption, and you will only be able to claim a property as your primary residence if you are a Canadian. Kind of feels like this should go without saying, but now it's official. All of us Canadians will still be able to take advantage of the exemption, but we will now have to report any sale of a principal residence when we file our taxes so the government can track it. There are situations where someone has owned two homes, sold the one they lived in and claimed it as their principal residence (that's fine) and then moved into the second house and later sold that one also as a principal residence. Both sales are ok, but you need to factor in the time you owned the second home and didn't actually live in it. That amount of time would not be exempt and any gain in value during that period would be taxed. This is not really a rule change, but the stricter regulations now make you more accountable. Loophole closed! 

Mortgage Default Insurance
Any mortgage that has a down payment of less than 20% is required to be backed by CMHC, which provides 100% coverage if there is a default on the loan. The full amount of the program is supported by the government (aka your tax dollars), but there is also a mortgage default system that is a little more behind the scenes. Banks will also take out their own default insurance on a loan that does have more than a 20% down payment and a portion of this is often also covered by the government. The whole thing is kind of convoluted, but the proposed changes include some form of risk-sharing (yet to be determined) between the government and the banks. This could be in the shape of a deductible and/or increased rates after a claim. This would be just like your home or car insurance; if you make a claim you likely have to pay a deductible, and your rate will go up in the future. Now as consumers this doesn't affect us, but we can be fairly certain the banks won't just eat these extra costs. Instead, they will pass the cost onto their customers in the form of higher mortgage rates. It sounds like this is still a work in progress, but changes are supposed to be set up in January. 

There we have it, a not so quick review of the new mortgage rules that were introduced. I like the tightened restrictions on foreign buyers and sellers, and I don't even mind the changes the mortgage default insurance, but I think the controversy surrounding the stress test is justified. What do you guys think? Do you support the new rules? 

Canadian Mortgage Rules