Thursday, 28 July 2016

The Canada Child Benefit

Canada Child Tax Benefit

This was the month the new Canada Child Benefit came into effect, and a whole bunch of parents got to go on a shopping spree ;) The Liberal budget (I talk a bit about that here) introduced this revamped program as a replacement to the existing Universal Child Care Benefit and the Canada Child Tax Benefit. The goal of the new program is to eliminate the tax break for the wealthy while increasing payments for low-income families. Payment amounts will now be based on income instead of being standard across the board; the less your family earns, the higher your monthly payment will be. Makes sense right? Well, let's talk about that. 

First, let's talk about how much money you could potentially be getting. The income threshold to get the maximum payment is currently set at $30,000 for a family. That maximum will be $533/month ($6,400/year) for children under the age of 6 and for children aged 6 to 17 it will be $450/month ($5,400/year). One critical fact is that this is TAX-FREE money so when I say $533/month I actually mean $533/month in your pocket. These maximum amounts will decrease as your family income increases, and if you've got a household income of over about $150,000 the amounts you'll be receiving will be quite small. The actual cut-off levels depend on how many children you have and their ages. For example, if you have 4 children all under 6 (yikes!) your family income would need to be over $249,000 to be completely cut off but if you only have one child between the ages of 6 and 17 that cutoff goes all the way down to $157,000. 

If you have children and want to figure out how much money is coming your way now and potentially in the future, you can play around with this calculator. 

In theory, I like the new program better than the old one. Families with such high incomes don't really need the extra $160/month they had been receiving, but for families with incomes under $30,000, the increased amounts can significantly impact their lifestyle. However, I do have a few issues...
  • What happens when your child turns 6? Sure, if your kids have been in daycare as young children and are now in full-time school those costs would have decreased, but this won't be the case if there was a stay at home parent. All of a sudden you are going to see a drop in your monthly income just because your child had a birthday and how many people will actually be prepared for this? For the under $30,000 income level, this would be a drop of $83/month of $996/year, and that's not nothing. 
  • What about the next election? Governments are on a four-year timeline. If the Liberals don't get in when the next election happens in 2019, there's a pretty darn good chance the new governing party will want to put their stamp on the Canada Child Benefit, and this could mean cuts to the monthly payments you are receiving or even removal of the program entirely. 
  • Now this one gets a little judgy, but hear me out. Do we really want this extra (and potentially temporary) money influencing someone's decision to have a child (or have additional children)? If your family income is under that $30,000 threshold and you have four children aged 1, 3, 5, and 7 you will now be getting $2,049/month or $24,588 from the CCB. That's quite a bit of money and would almost double that families annual income. Does that now make a case for adding another couple of kids to the mix? 
It's obvious that one of the goals of the program is to encourage people to have children. The fertility rate in Canada was 1.59 for 2015 and has been hovering around that level for the last few years, and this means that we are well below the replacement level of 2.1 births per woman. Basically, without immigration, our population would be shrinking. 

With that in mind, does it really make sense to only provide the benefit to children born to lower income families? As a social program yes, it makes sense to aid those who need the money most, but as a program to encourage population growth, not so much. For that, it might make more sense to look at programs that subsidize child-care costs or more extensive parental leave legislation. Programs like those would make it more affordable for parents who want to get back into the workforce which provides a positive stimulus to the economy. Giving the highest benefit to the lowest income earners does the opposite; it encourages families to maintain a low income and have more children to get the highest (tax-free) payout from the government. Not to sound too harsh, but I know where I'd prefer my tax dollars to go. 

What do you guys think about the new Canada Child Benefit? Supporters? Haters?

Canada Child Tax Benefit

Thursday, 14 July 2016

Money for Memories

Spending money on experiences vs things.

You might have read my rant last week about the less than stellar service I had received from AMA Travel but they've redeemed themselves, and we are officially booked to go to Barcelona in November. Hooray!!! We'll be spending 8 nights (7 full days) taking in all the sights, food and sangria that Barcelona has to offer. If any of you have any tips on what to do or where to eat while we're there feel free to let me know in the comments, I'm always looking for good tips! 

This trip is all thanks to my parents who gave me an AMA gift certificate for my 30th birthday so we could treat ourselves to a holiday. My initial plan was to hold on the gift certificate and use it for a few trips to the mountains and maybe flights to BC to visit family. That sounded pretty lame though, and I knew it wasn't what my parents had in mind when they came up with the idea. Once I started looking at trip deals, I realized how cheap you could fly to Europe. Some incredible sales were popping up so the initial plans were vetoed and a trip to Europe was the new plan. After missing out on a deal to Paris, we jumped when flights to Barcelona dropped to less than $500 each (round-trip, taxes in!) That sounded like a real trip, and something that I would really remember! 

This also got me thinking about the importance of spending money on experiences instead of material things. I like new things as much as the next person and have been known to drop too much money on clothes, shoes and make-up, but there are very few things I own that I wouldn't trade for an amazing experience. Plus, I have a bad habit of buying something I think I love and have it sit in my closet for months and months. That never happens when you spend your money on trips, concerts, festivals, or whatever other "experience" type splurges you can think of. The memories you create from such activities will stick with you longer than that new dress you've been eyeing. This is proven science!  Leaf Van Boven and Thomas Gilovich wrote a paper on this very subject and concluded that the level of happiness you get from buying things vs. experiences starts out similar, the happiness from things fades much faster. After some time the memory of the experience will bring you more happiness than the physical object, which you might not even own anymore. 

I feel like I'm in a place right now to take full advantage of this. My budget has stabilized, and my spending money is no longer tied up with other priorities. What do I mean by that? Well, after we moved into our house there were A LOT of extra expenses and most of my spending was diverted to things for the house. It's amazing how much your first home will cost you! Not only were there the essential purchases, like a lawnmower for our new backyard, but I also wanted to fill my new (to me) house with new things to make it feel more like home. Flash forward five years, and I no longer have that same desire to buy things for the house, and we've done most of the major projects we wanted to complete. Now that money can be redirected to other things, and my goal is that experiences top that list. 

What kind of experiences am I talking about? 
I love to eat (I'm sure that comes as no surprise to anyone), so trying out delicious new restaurants is one of my favourite things to do. Eating out can be a tough thing to fit into your budget because there's a crossover between the essential act of eating and the entertainment factor of going out. For me, I have a section of my budget for groceries (essential fixed cost) and then eating out at a restaurant would have to fit into my entertainment (non-essential spending) fund. 

I also enjoy going to concerts and sporting events. The atmosphere of being at a live event almost always makes it worth the price of admission! We also have a brand new arena in Edmonton for this upcoming hockey season, so I will most definitely be spending some money to check that out. 

The last thing on my list would be to travel. Unless I win the lottery, I will have to continue to limit the number of trips on the agenda, but that doesn't mean it's not an important part of my budget. Contributing a bit of money each month to a 'vacation fund' gives me something to look forward to and means that I won't have to go into debt to travel. 

What kind of spending is most important to you? Do you have something you regret buying or something you would pay for again in a heartbeat? 

Spending money on experiences vs things.

Thursday, 7 July 2016

Summer Work Wear

Work Wear for the Summer

I don't know about you guys but my motivation for getting dressed up for work takes a nose dive when the hot weather hits, and it becomes way more of a challenge to put together professional looking outfits. Here's a few of my favourite items in my summer wardrobe that get a lot of wear and keep things easy. 

Relaxed but Polished Sleeveless Blouse
Here is the sleeveless version of the same Portofino shirt, which is perfect for summer. It looks good on its own, or you can layer it under a blazer or cardigan. I usually size up in the sleeveless version for a more relaxed fit. It pairs perfectly, either tucked or un-tucked, with the Express ankle pant listed above. 

Summer Dress that will take you into Fall
Dresses are an absolute must for me during the summer months! There is nothing better than an airy dress on a hot day, and this one fits the bill perfectly. The large pattern on makes this dress stand out, but the neutral pattern keeps it perfect for the office. 

Patterned Blouse
Even though it's summer, I still like to stick to neutrals for the most part (as you can see from my picks) but I do like to change things up with a pattern. These Portofino shirts from Express are so great, I have a bunch of them in both the long sleeved and sleeveless versions. They fit really well and come in a ton of colours and patterns. The bee pattern is really unique but not over the top and can be dressed up or down.

Essential Cardigan
Anyone who works in an office knows the struggle of having to dress for hot temps outside and overly air conditioned offices! I always keep a cardigan (or two) at the office to prevent freezing, and this is a cheap option that gives you a bunch of colour options. 

Simple Stud Earrings
My lack of inspiration in the summer months is especially fatal when it comes to wearing jewellery, so I tend to keep things simple. There is nothing worse than wearing a stack of bangles only to have them make you gross and sweaty. Tiny stud earrings are my go to, and I have been wearing these little triangles non-stop. They come in a set of 10 pairs from Forever 21 for less than $8, so you can stock up and not worry about losing a pair! 

Fun and Flowy Midi Skirt
How cute is this skirt? I love skirts in the summer for the same reason I love dresses, air flow! This one is nice and lightweight, and the pleats fall so nicely. The silver metallic colour is a fun twist but still neutral enough to make it easy to pair with a colourful shirt.

Fancy Flats that feel like Flip Flops
Once you go Poppy Barley you will never go back, they are a splurge but oh so worth it. I could not love these flats more! They are so, so comfortable that it will feel like you are wearing flip flops, but since flip flops are an absolute no-go at the office, you should wear these. Comfy, cute and exceptional much good! 

Boxy Blouse
I've (somewhat) jumped on the cropped shirt trend that's everywhere right now, but nothing too cropped and only with high-waisted pants or skirts. This blouse has been on constant rotation in my wardrobe for the last few months because it's short enough that it works well with high-waisted skirts but is still long enough to wear with jeans without having a bunch of extra fabric to tuck in. 

Ankle Length Dress Pants
I own four pairs of these pants in various shades and patterns...pretty much enough said! I love Express dress pants, and these are the best for summer. They have a perfect mid-rise, and the fabric has just enough weight to hang nicely without being overly warm. I wear these with flats all the time (I'm a flats person) but they look great (probably even better) with a pair of pointed-toe pumps.

Work Wear for the Summer

Tuesday, 5 July 2016

Combining Finances

Combine finances as a couple or keep things separate?
Do you have a joint bank account with your spouse? Combining finances is one of those things that you'll have to make a decision on if you are married or in a long-term relationship. I'm in the 'no' least for now. I’ve been with the bf for over 10 years, but we’ve never taken the jump to going joint. Honestly, I don't really have a good reason why not. We bought a house together (6 years ago), have pets together, and while we may not yet be married, we are pretty darn committed. Our mortgage is in both our names, but other than that we split most of the bills and keep our bank accounts, investments and credit cards separate. I think for us it’s just been easier to keep things status quo. Setting up a new bank account and changing over all the automated payments is a pain, and that job would 100% fall to me, and I'm lazy. There's also a part of me that kind of likes being able to spend my money on what I want with no questions asked (the bf is pretty easy going but there may be a slight Sephora addiction I’d be answering for…)

Notice how I said my money there? I caught that too. Over the 10 years, we have been in all sorts of situations. I was in school and he was working, he was in school and I was working, we were both working, he lost a job, I changed jobs, and now we're both working again. Even though we've had each other's backs through all of that, there is still a part of me that is selfish (blame my only child upbringing or, you know, just being a human). If lump all of our money together into one account it will feel like 'ours', and it will be harder for me to justify the purchases I want to make. I'm not naming any names, but one of us has a salt-water fish tank hobby that the other one does not want to know the real cost of. That person doesn't want to know that a $70 fish just decided to commit suicide by jumping out of the tank and getting eaten by a cat. #relationshipgoals

As you can see, it's not always just as easy as flipping the magic switch and having effortless joint's a compromise folks! My issues aside, let's get into the nitty gritty of why you may (or may not) want to combine finances with your spouse...

The Good
  • Simplicity: This has got to be the biggie! One account where all your paycheques are deposited and all your bills are paid from; no transferring money back and forth between accounts to make sure everything is as even as possible. In our not so simple system, we are each responsible for a set of bills that total similar amounts but it's far from perfect and the simplicity of a shared account is tempting. 
  • Cheaper: If you’re not using no-fee bank accounts (you should be, I’ve talked more about that here) you could potentially cut your fees in half by having one shared account instead of two separate ones. If you are sending each other money via email transfers every month that will also be costing you each time, I know mine is $1.50 per transfer. There’s also chance that the bank will offer you a better interest rate if combining your accounts leads to carrying a larger balance. 
  • Communication: You will now both be able to see where, when, and how much the other is spending and that's likely to spur some conversation. I don't think this is a bad thing, but it's a good idea to have a detailed budget before you get started to avoid unwanted surprises. 

  • The Bad
  • If your incomes aren’t in the same range, the higher earner may feel like they are taking on more of the burden for paying bills and the lower earner might feel guilty spending money they didn’t bring in. I am certainly not above this, we’ve been back and forth enough that I think we’re on even terms but there for sure have been times I’ve been the money maker and have felt a little cranky when the bf buys something I don’t consider necessary. It’s really hard to set aside your feelings when it comes to money, hence why it’s one of the biggest stressors in relationships.
  • Balancing the chequebook and budgeting can be more of a challenge when you’re tracking two people’s spending
  • Less privacy: Sure, we should feel like we can be open with our partners but sometimes you don’t want them knowing where every penny goes and how are you supposed to surprise them on their birthday? Really though, if you're hiding what you spend money on then there's likely a bigger problem. To put a positive spin on it, the lack of privacy can be an extra level of self-control that might help save money over time. 
  • When finances are managed jointly, there’s usually one person who takes the lead, and if something happens to that person, the other half could be stuck trying to figure things out at an already tough time. If you do go joint, make sure you both stay in the loop and know what's up. Another thing is to ensure you are both listed on any bills (utilities, cable, etc.), the last thing you want is for a company to refuse you information if your spouse passes away unexpectedly. 
The Ugly
  • Credit impact: if one of the joint account holders gets into trouble with creditors then your shared assets could take a hit. Up to 50% of a joint account can be seized to cover unpaid debts. 
  • Both parties on a joint account can give instructions on the account, so if the relationship ends in a blaze of fury, one person could potentially clean out all the assets in the account. Yes, you could go back and sue them, but then you'd find yourself in a lengthy and expensive court battle. The hope is that you'll never find yourself in this type of situation, but if things start to go south then make sure you take precautions. 
One thing to know about setting up a joint account is that you have a couple of options available to you in regards to how the money will be treated if one of the holders passes away. The first option is ‘Joint Tenancy with Rights of Survivorship’. This basically means that if one of the account holders dies all assets in the account will be passed directly to the other holder. The benefit of that is that the funds don't have to go through the estate. The other option is ‘Tenancy in Common’. This means that each person owns a specific portion of the account, so if there is a death you would only get your portion and the deceased's portion would go through their estate. Either way works, but it is something to think about if you’re taking the plunge towards joint finances.

How do you guys feel about combining finances; do you prefer to keep things separate or like the simplicity of a joint account? 

Combine finances as a couple or keep things separate?