Friday, 29 January 2016

Fast Fashion vs. Slow Fashion

Are you willing to embrace slow fashion over fast fashion?

I don't particularly like this about myself, but I am a total sucker for cheap clothes and accessories. You'll often find me grabbing a couple of items from Joe Fresh when I'm doing the weekly grocery shop. Not proud of it, but I can't seem to help myself! The 'fast fashion' industry that includes the likes of Joe Fresh, Forever 21, H&M, Old Navy, etc. thrives on our consumerist desire to buy quantity over quality. And I completely get that temptation, but I'm starting (trying) to change my tune. I am one of those people who have a wardrobe full of stuff but, more days than not, find myself flipping through my clothes and not wanting to wear any of them. I'm starting to get the appeal of going minimalist in my wardrobe and investing in some quality, classic pieces that I'll actually enjoy wearing. 

There's been quite a bit of negative press surrounding the 'fast fashion' industry lately because many of the companies don't exactly score too highly on the 'being a decent human being' scale. Most outsource the making of their clothing to countries that have little to no labour regulations and employ people who have to work in horrible conditions for very little money. Understanding what goes on behind the scenes will make a big difference in how you approach clothing, and you might just think twice before tossing that $10 blouse in your cart. Here are a few stats that hit home with me: 
  • Approximately 168 million children between the ages of 5 and 14 are forced to work in developing countries. 
  • Women count for 85 to 90% of sweatshop workers and can be forced to take birth control and routine pregnancy tests. 
  • Doubling the salary of sweatshop workers would only increase the consumer cost of an item by 1.8%
  • Sweatshop workers earn as little as 24 US dollars per month to produce fast fashion garments. 
Another big issue is the amount of waste that generated by the fast fashion industry. The lower quality and cheap prices mean that people don't think twice about tossing items of clothing after just a few wears and replacing it with something new. Think about all the human labour, water, and oil it takes to design, create, ship and sell each item and how much could be saved if we were all willing to cut back. More stats for you: 
  • The average American throws away 70lbs of clothing and textiles every single year.
  • The average woman owns over $550 worth of unworn clothing.
  • Second-hand stores only resell about 20% of the clothing they receive, and about 10.5 million tons of clothing ends up in American landfills every year. 
My goal here isn't to make you feel guilty (well maybe a little) and never buy cheap clothes again, but I hope we can all take this knowledge and make small changes in our purchasing habits. Knowledge is power, and we can use that to demand more from the companies we buy from. 

What can you do? 
If you're inspired to change your shopping habits (good on you!), there are plenty of options to get your fashion fix without all the bad vibes. 
  • Shop local: Hit up your local farmer's markets or craft sales, and there's a good chance you'll be surprised by how many local artisans are around making clothing.
  • Etsy: If you can't find anything local then turn to Etsy. Search through the clothing and accessories category, and I can guarantee you'll find something you love. The prices are often more reasonable than you would think and you'll be supporting someone's passion instead of a big corporation. I like to use the search function in Etsy to limit my options to sellers in Canada; I find the shipping is more reasonable and there's no concern about customs/duties. 
  • Thrift Stores: I will be the first to admit that I'm not exactly a thrifter (is that a word?) I'd never really considered checking out thrift stores for new (to me) clothes but it's actually better than you would think. Last year we were at Value Village picking up Halloween costumes, and I started to browse through the women's clothing, and actually came home with a couple of pieces I really love. 
  • Clothing Swap: Instead of throwing out or donating the clothes you're sick of consider hosting a clothing swap with a few friends. Chances are you have some items that you're bored with or just don't suit you but might be a perfect fit for one of your girlfriends. It can be a fun girls night activity and won't cost you anything (except the cost of a few cocktails). 
If you want some more info, this article from The Atlantic is an excellent read. 

I'm just scratching the surface on this issue, but if you want some more info you should check out this bit John Oliver did on the fast fashion industry: 

And this article from The Atlantic is a great read too. 

Are you willing to embrace slow fashion over fast fashion?

Thursday, 21 January 2016

Miss Bree's Rescue Story

Anyone who knows me knows that I'm an animal lover and further proof comes from the fact that we share our home with two dogs and two cats. We have Baxter our boxer who we got from a breeder five years, our two cats who both came from the Edmonton SPCA as kittens and then Bree who we got from a local rescue organization. The rest of our critters grew up in the lap of luxury, but Bree had a pretty rough start to life, and I thought I would share her story with you and maybe (hopefully) inspire you to adopt, foster or donate to local rescues. We've obviously gone both ways with rescuing a pup and buying one from a breeder and let me tell you, I'm a convert. Don't get me wrong, Baxter is fantastic but he does have some health issues that often come with a purebred dog and adopting a rescue can just be so rewarding. 

Almost four years ago I was set on getting a second dog and was browsing the websites of some local rescues when I stumbled upon this picture: 
I was instantly sold (those ears though!) and knew she was the one. The bf, however, was less than convinced. He was not into the idea of adding a second dog, but I was determined. I actually tricked him into going to an adoption event that Bree was at, hoping he would change his mind. It was love at first sight for me, and I knew the moment I met her that she would mine...and let's just say that I tend to get my way if I'm determined enough ;) 

Anyways, after a bit of a battle I won out, and Bree's foster mom brought her to our place to see how she got along with Baxter and our cat. Everything went smoothly, and she's been living with us ever since. 

When we got Bree, she was only about 1.5 years old (best guess) and she had grown up on a reserve just outside of Edmonton. She had to spend the first chunk of her life outside and fending for herself. When she was taken in by the rescue, she was painfully skinny, shy, losing her fur and worst of all she was VERY pregnant. After only a few days in care, Bree had a litter of 11 (!!!) puppies. Even in her weakened state, she did her job as the mom and still acts like the momma bear, especially with our cats...always the babysitter. Flash forward about 8 weeks, and many of Bree's pups were getting adopted, and that was when she came to us. 

Very pregnant but still showing ribs.

Looking tired with 11 puppies.

Sweet momma. 

Way too skinny after giving birth. 

Bree has come along way since those early pictures, but it wasn't always the easiest road. Rescue dogs are amazing, but they often come with some quirks. Bree was not used to living in a house, we were lucky that she came to us house trained but she had a case of separation anxiety and was just not comfortable in enclosed spaces. We wanted to try and crate train her but that was a no go, she was able to break out of any kennel within seconds! There was also one scary experience where she escaped from our house...from the second floor! We had both dogs in our upstairs bedroom, and one day I came home, and Bree was gone...she had broken out of her crate, pushed out the window and jumped a full two stories down to the ground. I was freaking out and thought she must have for sure broken her leg. I ran out the front, around the corner and there was Bree, happily sniffing around the neighbour's yard! She even came running up to me when she saw me after a thorough check-up I confirmed that she was no worse for wear. After that, she got free roam in the house, and there was only minimal destruction...dogs are why we can't have nice things! 

Almost four years later and Bree is much more relaxed and absolute sweetheart and more than a few pounds heavier. 

Looking healthier this past fall.

Curled up in her spot.

Out for a hike.

Posing for the camera.

If you're considering adding a critter to the family, I really recommend checking out local rescues to find your new addition. The rescue we got Bree from is no longer running but here are some other great places to look at. 

Sunday, 17 January 2016

Let's Talk TFSA's

Tax-Free Savings Accounts

Who out there currently invests in a TFSA? Ideally, everyone has their hand raised, but I know that's not the case. Maybe you're still catching up on debt repayment or have been focusing on RRSP's instead. In today's post, I'm going to talk about why TFSA's are so great and hopefully even convince a few of you to open one. 

The government introduced TFSA's in 2009 as an alternative to RRSP's and as a way to encourage Canadians to save more. Anyone who is over 18 and a Canadian citizen can open a TFSA. Most financial institutions will offer them so you can go to your local bank or get in touch with your existing financial advisor. The big perk of the TFSA is that the money you deposit can grow tax-free inside the account. Usually, if you were to invest in the same funds outside of a TFSA, you would be taxed on any interest, dividend payments or capital gains every year. Within the TFSA you could double your initial investment and not have to pay one penny in tax. If you are used to making RRSP contributions, you know that you can use RRSP contributions as a deduction on your taxes. Unfortunately, TFSA's don't give you the same benefit. TFSA's will allow your money to grow tax-free and you never have to pay tax on withdrawals. RRSP's give you a tax deduction and let your money grow tax-free, but you do have to pay tax on withdrawals. 

At this point, you might be wondering if you should be contributing to a TFSA instead of an RRSP and that's a valid question. So valid that I've actually written an entire post about it, you can find that here if you're interested.

There are limitations to how much you can contribute to a TFSA each year. In 2009 when the program was initially announced, you were given $5,000 of contribution room. Each subsequent year you get additional contribution room in your TFSA so in 2017 the total contribution room is $52,000. There have been some variations in the contribution limits each year, but I've broken them all down for you below. One thing to note, if you didn't turn 18 until after 2009 your room would only start adding up in the year you turned 18. So if you turned 18 in 2012, you would only have room from 2012 forward ($37,000).

The yearly breakdown has gone as follows: 

2009 - $5,000
2010 - $5,000
2011 - $5,000
2012 - $5,000
2013 - $5,500
2014 - $5,500
2015 - $10,000
2016 - $5,500
2017 - $5,500
TOTAL - $52,000

When you put money in a TFSA, you are able to purchase a variety of investments, just like in an RRSP. You can hold stocks, mutual funds, bonds, GIC's, etc. This will depend a bit on where you set-up the account as some institutions are limited in what they can hold. TFSA's are ideal for a variety of saving strategies (retirement, travel, down payment, etc.) but you won't be able to take full advantage of the perks if you leave the money sitting in cash. TFSA's do their job when your money grows, so if it's not growing (or at a very low-interest rate), you aren't really getting the benefit. This is the reason I wouldn't recommend using your TFSA for your emergency fund. You always want your emergency to be secure and accessible (which means uninvested), so it's best to save the TFSA for actual investing. 

Another benefit of the TFSA is that you can withdraw funds at any time and you actually earn back your contribution room. You do have to wait to re-deposit the funds until the following calendar year, but you will get back the full amount you withdrew. Even if your TFSA grew to more than the total contribution amount and you pulled out the whole thing, you'd still get back that withdrawal amount. As an example, you could have made an initial deposit of $40,000 in 2016 which grew to $70,000. If you withdrew the whole $70,000 in 2017, you would be able to deposit that full $70,000 in 2018. This makes your TFSA a good place to save for both short term and long term goals. 

If you currently hold investments in a non-registered account, it might make sense to start shifting them over to a TFSA (if you don't already have one). You can absolutely do this and do not need to sell off your investment prior the transfer. Transferring the investment from a non-reg account to a TFSA is considered a taxable event, so you'll have to even up with CRA on any capital gains, but you'll be able to continue to hold the investment, and any future growth within the TFSA will be tax-free. If the investment you hold is worth more today than when you bought it you will have to pay the tax on that gain when it's moved. If the holding is at a loss, you won't pay any tax, but you also wouldn't get to use the loss when filing your taxes. Usually, when you sell something at a loss, you can use it to balance out some gains you have. This means that the best time to move investments into a TFSA is when it is as close as possible to the price you bought it at. Crystal clear? 

TFSA's are a really great tool for saving money, and they provide you with a lot more flexibility than an RRSP and better tax treatment than a non-registered account. If you have any questions or have a TFSA strategy you'd like to share, please do so in the comments. 

Tax-Free Savings Accounts

Tuesday, 5 January 2016

Debt-Laden: Stopping the Cycle

How to get control of your debt

No matter how much you plan for it, spending always seems to get a little splurgey over the holidays and leaves a lot of people feeling strapped for cash in the New Year. Whether you've got some recent debt to get paid off or have been struggling to keep up with your bills for awhile, there are a couple of methods you can choose to help get you current. 

This feels like a timely post because not only are people struggling with holiday bills but, as we all know, the economic conditions in Alberta are less than stellar. Too many people are facing a job loss, and it is so easy to get into debt when you don't have money coming in the door, even if it's just for a few months. I get it, debt has become such an accepted part of our lifestyle but let's see if we can get organized (and motivated) to kick that habit and start getting ahead.

There are two primary methods for debt repayment, and we're going to look at both of them. In my opinion, the first option is the way to go, but both options will work, the most important factor is getting started and sticking to either system. The other thing you're going to need to do is to stop charging things and increasing debt. You're going to have to start living off cash and debit, at least until all your debt is cleared. As I've said before, I'm not against using credit cards for your spending, but I am if you're not paying off the balance in full every month. 

One little tip to do before you choose a method is to get on the phone with all of your credit card companies and ask them to lower your interest rate. It might not earn you a huge drop, but even small amounts on a couple of cards will add up. I think it's a worthwhile step if you've got a bit of time.

The Debt Avalanche Method
Up first we've got the ladder method where you basically pay off your debts from highest interest rate to lowest interest rate, simple right? What you want to do is make a list, on a napkin, post-it, fancy spreadsheet; whatever you want just go and do it. The information you're going to want to jot down is what the bill is, current balance (approximate is fine), interest rate, and minimum monthly payment. You'll need this list for either method so seriously, if debt is a problem for you go do this right now....I'll wait. Ok, done? Perfect, for the ladder method you're just going to order that list from highest interest rate to lowest interest rate. Now the organization part is done, so easy. The hard part (but rewarding!) comes now that you actually have to start paying! What you're going to do EVERY MONTH is pay the minimum amount on all of the debt items except for the highest, for that one you are going to put on every last dime you don't need to live on (time to get cheap folks). Then once that top one is paid off you just keep moving down the list until everything is all paid up in full, and then celebrate...but not on credit :)

The Bay Card$390.0018.99%$11.70
Student Loan$10,500.005%$315.00
Car Loan$4,500.003%$135.00
The ladder method will end up being saving you a few bucks in interest charges over the life of your debt which is why it's my first choice, but if you think you would benefit from some quick wins, then you should keep reading as the next option may be a better fit. 

The Debt Snowball Method
The snowball method was made famous by personal finance guru Dave Ramsey who's an author, speaker, blogger, etc. If you want some more reading his book 'Total Money Makeover' is a good read, it can get a little preachy, but his basic concepts are solid. In his method, you are going to take that same list of all your debt but instead of organizing it by interest rate you are going to rank it my current balance, and this time from smallest to largest. Then you do the same thing, pay the monthly minimums on all but the first (smallest) balance and knock them off one by one. The idea behind this is that the small and quick wins at the beginning will boost your motivation to tackle the larger balances down the page. 

The Bay Card$390.0018.99%$11.70
Car Loan$4,500.003%$135.00
Student Loan$10,500.005%$315.00
Everyone picked their poison? Honestly, don't think too hard on this one, just go with your gut and move on. The real brain power will come when you start working out your budget and figuring out all the ways you can pinch some pennies to get the debt repayment rolling. I've got your back though, keep your eyes on the blog for a post in the next couple of days. 

How to get control of your debt