Wednesday, 28 September 2016

Buying Glasses Online (Clearly.ca Review)

Saving Money of Glasses
My eyes aren't horrible, but my long-distance vision is bad enough that I need to wear glasses. What does that make me, near sighted or far sighted? I can never remember which is which! I've worn glasses for about 15 years and only started wearing contacts a couple of years ago, and even then I still wear glasses more often than not. 

If you've ever had to shop for glasses you'll know that buying them from your optometrist's office can be CRAZY expensive...my first pair of glasses were almost $400, and that was 15 years ago! That's a ton of money and if you don't have health benefits that cover glasses...yikes. Even if you do have coverage, it often isn't even enough to get the pair of frames you want. My coverage is only $200 every two years, and this runs out quick when I'm also claiming for contacts. 

That high price left me looking for a cheaper option, and that's where Clearly.ca came in. I've been ordering glasses (and more recently contacts) from their site for years and am a fan. I like having a couple of different frames so I can change things up every so often and by ordering online, I can do this without completely breaking the bank. Over my years of ordering from them I've found the ordering process simple, delivery very fast, quality is good and returns are super easy. 

Now, one thing to note is that Clearly recently rebranded and made a bunch of changes to their website that I'm not exactly loving. They removed some of their advanced search options; there used to be an option to only search frames with nose pads (essential for me...I have a weird nose or something) but that's gone. I also returned my last order because I found the lenses had a lot more glare than normal. I've always used their standard (free) lenses with no issues, but they just didn't cut it this time. I did receive a new pair with the anti-glare coating, and they are significantly better so I would suggest forking over the extra $30 for that.

Probably my favourite thing about Clearly is their return policy. You can return your glasses up to 365 days after your purchase (in unworn condition of course), and they will cover the cost of shipping. The process is super easy (I've done it a few times), you just call in, and they'll email you a return shipping label to print and then just attach that to the box and pop it in a mailbox. I've never been hassled on the phone about a return either, the customer service reps are great. Sometimes it can be a bit of a challenge to know if the frames you've picked out will suit you, so the simple return process means you'll never be stuck with a pair of glasses you don't love. 

The ordering process is also pretty straightforward. First off you'll need your prescription so if you didn't get a copy the last time you were at the optometrist you should be able to just call them up and have them send it to you. You'll be able to input it straight into the Clearly website and store it for future use. Then shop away, there is a huge selection and lots of different styles to choose from so you shouldn't have a problem finding a pair (or three) that you like. Prices do vary so keep an eye on that as some frames start as low as $60 and others as high as $400+. I don't think I've ever spent more than $100 on frames and they've never felt cheap. Once your frames are picked out you'll be given options for the type of lenses you want, I always go with the standard but would recommend getting the anti-glare coating...I did find it made a difference on my most recent pair. If your prescription is quite strong, there are also options to have the lenses thinned, but that's not something I've had to deal with. Then submit your order, and they'll show up on your doorstep in just a couple of days (shipping is really quick). 

If you wear glasses and are in need of an upgrade I highly recommend giving Clearly.ca a shot, with the low prices and free returns you really can't go wrong. Right now you can use the coupon code FRAMES20 for 20% off your purchase. 

Here are a few frames that are currently available that I really like: 
These are the ones I just got, they're great.

A nice basic frame...

If only these had nose pads...

Black, but not basic...

**Disclaimer: Clearly did provide me with a free pair of glasses after my last return, but the opinions in this post are my own and I've been a longtime customer. 


Saving Money of Glasses

Monday, 26 September 2016

Home Buying Series: Home Buyer's Plan (HBP)

The Home Buyer's Plan


Our home buying series continues and this week we are looking at the Home Buyer's Plan; a convenient tool that helps you use your RRSP's for buying your first home. The last couple of weeks we've been talking about Renting vs. Buying and Saving Your Down Payment

With the Canadian housing market the way it is, it can feel impossible to save enough money up for a down-payment on your first home. You need to have a minimum of 5% for a down-payment to get a mortgage, and any down-payment under 20% requires insurance coverage through CMHC (Canada Mortgage and Housing Corporation) which will cost you a pretty penny. But let's be honest, 20% can be impossible these days, so it's not unlikely you're just aiming for the 5%. Just a note, CMHC also changed their rules recently, and you now need 10% down for any portion of your mortgage that is over $500,000. 

One thing you are able to do to help out with your down payment is to make use of the Home Buyer's Plan (HBP). The HBP allows first time home-buyers the chance to pull money out of your RRSP with no tax to use towards the house purchase. You can withdraw up to $25,000 within one calendar and if you're buying with a partner the amount would double to $50,000 (assuming they are also a first time buyer). The process is pretty simple, there's a quick form you need to complete and submit to your RRSP provider, and voila...tax free money in your pocket!


Ok, it's not quite that painless, you do need to pay the money back, but you do have 15 years to do it. No putting it off, though, you'll have to pay back 1/15th of the amount every year, starting the second year after you pulled out the funds. If you don't make your scheduled repayments it will cost you, the amount you were due to pay that year will be counted as income and taxed at your marginal tax rate. The amount you owe in repayments each year will show up on your notice of assessment, but it will also just be the original withdrawal amount divided by 15. The repayment amounts don't act as regular RRSP contributions, as in you don't get a tax refund on that amount...you got that the first time around. 

The big advantage of saving for your down-payment within your RRSP is that you'll get money back from your contributions when you file your taxes and that can be an extra bonus in your saving. The HBP may also give you access to funds contributed via a work plan. If your employer contributes funds to a Group RRSP you and doesn't have withdrawal restrictions you may be able to pull those funds out as well. 

A couple of things to take note of before you plunge ahead. Those RRSP funds are supposed to be for your retirement, so promise me now that you'll ramp up your retirement savings once this house purchase has settled down? It's important to remember that if you left that money in your RRSP, it would sit there and earn you some interest and/or growth that you'll miss out on. You also want to make sure that you don't invest in anything too risky while you're building up your down-payment. The last thing you want is to be stuck in a down market (like now) when you need to pull out money. 

Another thing for first-time buyer's to remember is that you can claim up to $5,000 when filing your taxes for the home buyer's amount. The full amount can be claimed by you or your spouse (if applicable), or it can be split. Every little bit helps, that first year owning your own home can be pricey. 

Feel free to post questions or comments below, and you can also check the CRA website for more information. Next week we'll be continuing the home buying series and will be focusing on getting your mortgage pre-approval. 

Check out the other posts in this series: 

1. Home Buying Series - Renting vs. Buying
2. Home Buying Series - Saving Your Down Payment
3. Home Buying Series - Home Buyer's Plan (HBP)
4. Home Buying Series - Mortgage Pre-Approval
5. Home Buying Series - House Hunting
6. Home Buying Series - Closing Costs

The Home Buyer's Plan

Monday, 19 September 2016

Home Buying Series: Saving Your Down Payment

How to save up a down payment


Continuing on with our Home Buying Series this week and today we're turning the focus on the good old down payment. Last week we talked about the pros and cons of renting vs. buying so if you missed that you can check it out here

You're ready to buy a house...how exciting!!! Happen to have a spare $50,000+ kicking around? Probably not but the chances are that's what you're going to need to save up to put down a solid down payment. In Canada, you have to put down at least 5%, and if you want to avoid paying for the extra insurance coverage through CMHC, you'll want to get that amount up to 20%. It's not a deal breaker, but if you are willing to spend the time to save the extra money, it can be worth it. If you are buying a $400,000 house with only 5% down you will end up paying $13,680 in CMHC premiums...that's not nothing. I do realize that saving up $20,000 is much different than saving $80,000 but do what you can. Play around with the mortgage calculator to figure out how much you can afford and how much you'll need to save to get into your dream home (or scaled back starter home). 

Mortgage payment calculator

Mortgage calculator by ratehub.ca

Once you know how much you need to save you can get started on the actual saving plan! 

First up is to figure out any resources you already have that you can tap to get started. Maybe you already have some money saved up in your savings account or TFSA? Perhaps your parents have offered to gift you some money for a down payment? Those are easy resources for money but don't forget about your RRSP's. If this is your first home purchase, you can take advantage of the Home Buyer's Plan and pull money out of your RRSP's tax-free. We'll be going into more detail about the HBP next week but for now, just know that your RRSP's can come into play. 

Where is the best place to save? 
You want your money to grow tax-free as much as possible, so this makes your RRSP and TFSA the first choices. The advantage of your RRSP is that you will also get a tax refund on the amount you contribute so that can help bump up your savings. Remember, though, you will have to pay back all withdrawals from your RRSP but since you'll be such a pro at saving this shouldn't be a problem. I would go RRSP first and if you run out of room there then go to your TFSA before looking at non-registered savings accounts. 

What to invest in? 
If your time frame is short (less than 5 years), you'll want to stick with secure investments to protect your principal. Shop around for the best rate on high-interest savings or a money market fund and look for an institution that won't charge you administration fees for an RRSP and/or TFSA. 

If you aren't planning to buy a home for more than 5 years, you can start looking at other investments such as mutual funds or even stocks. You still don't want to take any significant risks though so keep things conservative. 

Make it Automatic
Once you know how much you need to save, where you're going to save it, and what you're going to invest it you need to make it happen. The best way to do this is to set up your contributions to run automatically so you can't be swayed by that new pair of shoes or just plain old forget. Set-up your contributions to coincide with your pay cheque; if you get paid bi-weekly then have your contributions run bi-weekly. Set a goal date to have the money saved up and figure out how much that works out to each period. If you want to save $50,000 towards your down payment in 3 years and will be making bi-weekly contributions, you'll have to save about $960 each pay period...is that doable? If not you'll need to adjust your numbers. 

It's not going to happen overnight but saving up for a down payment is a necessary evil when buying a home. It will be worth it in the end, though, and think of all that equity you'll have :) 


Check out the other posts in this series: 

1. Home Buying Series - Renting vs. Buying
2. Home Buying Series - Saving Your Down Payment
3. Home Buying Series - Home Buyer's Plan (HBP)
4. Home Buying Series - Mortgage Pre-Approval
5. Home Buying Series - House Hunting
6. Home Buying Series - Closing Costs

How to save up a down payment

Monday, 12 September 2016

Home Buying Series: Renting vs. Buying

Ready to buy or should you keep on renting?
Buying your first home is most likely the biggest financial decision you will ever make so over the next few weeks we're going to delve into that process with a new Home Buying Series. We'll start off today by figuring out if you're ready to jump into home ownership and continue through all the steps including posts about the Home Buyer's Plan, mortgages, closing costs, etc. 

First things first, are you even ready to buy? The common bias is that it is always better to buy than to rent but you need to know that there are pros and cons to both. Today we're going to look at some of these pros, and cons so you can better gauge whether or not you are ready to make the jump into home ownership. 

The biggest argument against renting is that you aren't building any equity, but this isn't always true. Rental payments are often lower than what your mortgage payment would be, and you also don't have the additional costs associated with owning a house which should mean that you have some extra cash flow. If that's the case you should be investing that surplus and building up your savings...and what does that mean? You're building equity! 

Home ownership also comes with a whole lot of responsibility. You no longer have the ability to call up your landlord if the furnace craps out or the sewer backs up, you have to deal with this yourself, and you're on the hook for the cost. 

There's also a lot of additional costs you will face when you buy a house. More often than not your water, power, and gas bills will be included in your rent, so you don't really think about them but those will now all be over and above your mortgage payments, plus you'll have property taxes and house insurance to pay for. There will also be lots of one-time purchases that will come up, especially if you're moving from an apartment to a house for the first time (like we did). Have a lawn? You'll need a lawnmower. Sidewalks? You'll need snow shovels. You get the idea. 

Houses cost a ton of money, shocking right? If you can, you'll want to save up a 20% down payment so that you can avoid paying the extra insurance premiums from CMHC (Canada Mortgage and Housing Corporation). That means if you're buying a place that's $300,000 you'll need $60,000 for a down payment...better get saving right? You'll also need some extra to cover lawyer fees and all those little extras we already talked about. 


Buying your first home is undoubtedly going to be a huge expense and will take a lot of planning and saving. However, it can also be a great investment. It's a challenge to build the same amount of equity through saving and investing as you can paying down your mortgage. Interest rates are low right now (but be prepared for them to go up) so your mortgage payments will be about as small as possible, and you'll be paying more to your principal than to interest. Hopefully, the value of your home will also increase over the time you own it, and you'll build more equity that way. This is not a guarantee, though, especially if you live in Vancouver or Toronto where the real estate market is kind of bonkers. Do your research on house prices in your area and what neighbourhoods are most desirable. 

Another big pro of owning your own place is that it's all yours and you can do what you want to it. Renting comes with less responsibility, but you also don't have the pride of ownership you get from owning your own place, and you don't have much flexibility when it comes to decorating and renovating the way you want. Putting your own touch on a home makes a huge difference, and it's nice to be able to try out a new paint colour without getting permission from your landlord. 

Before jumping into the housing market with both feet make sure you weigh your options and figure out what makes the most financial sense for you. If you've got any questions feel free to ask away in the comments and stay tuned for next week when I talk about saving for a down payment. 

Check out the other posts in this series: 

1. Home Buying Series - Renting vs. Buying
2. Home Buying Series - Saving Your Down Payment
3. Home Buying Series - Home Buyer's Plan (HBP)
4. Home Buying Series - Mortgage Pre-Approval
5. Home Buying Series - House Hunting
6. Home Buying Series - Closing Costs

Ready to buy or should you keep on renting?

Friday, 9 September 2016

Are Group RESPs a Good Thing?

Group RESP's


I've talked on the blog about RESP's before (you can find that here), but one thing I haven't discussed is whether or not you should do your RESP saving through one of those Group RESP programs that are floating around. Short answer...not so much, but let's talk about why. 

The basic premise (aka the sales pitch) actually sounds pretty good. You invest your money with a whole bunch of other parents who have children born in the same year, and you'll get a share of the investment when your kid ends up in post-secondary. The perk comes from any kids who don't go on to university and therefore forfeit their share of the profits for everyone else to split. Hopefully, that's not your kid ;) Those extra shares mean a higher overall return for the beneficiaries who do go to school but without any added risk. Sounds too good to be true...and it certainly can be. There are a couple of perks for pooled plans that we should talk about. First off, you won't have to worry about choosing investments if that's not your thing as all the investment decisions will be made for you by the plan administrator. Second, once you sign up, you are committed to making regular contributions to the plan. If you miss a deposit or want to stop altogether, you can face pretty steep penalties and will often lose any growth your contributions have earned. Why is that a good thing? Well, it will make you think long and hard about missing any contributions. Basically, you'll get back the money back that you put in (minus fees and penalties) and have to start from scratch. 

Next up, the not so great. There are a few cons you should be aware of before signing up. 
  • Higher fees than a family or individual plan set-up at your regular financial institution. Most group programs function through direct sales so to cover the commission costs you will be paying high start-up fees. Avoiding fees altogether is nearly impossible, but you'll save yourself money by going it one your own. 
  • Annual investment returns can be quite small because group plans are tied to fixed income products; higher security but lower yields. There are restrictions in place as to what the administrator can and cannot buy, and this usually limits them to conservative, more secure investment options. Your additional return banks on a portion of the beneficiaries in your group not going to school. 
  • Additional restrictions on contributions and withdrawals may also exist. Most plans will lock you a set deposit amount that can either be made monthly or annually. There's no flexibility if you lose your job or need to redirect savings temporarily. And when your child does start attending post-secondary schooling, the withdrawal rules can be equally as inflexible. Regular plans allow you to pull out funds for part-time or full-time students and you can even pull out more money than you might need. Withdrawals from group plans are often limited to only full-time students, and there are more limits on how much money can be taken out at one time. Withdrawals can (with some plans) even be declined if your child doesn't go to University right after high school. What the what? You NEED to read the fine print before signing up for anything. 

Although RESP group plans can be quick and easy to set-up and will force you into saving, the lack of flexibility and high fees outweigh any pros. Before signing up for one, you need to make sure you know all the restrictions and limitations before you start making deposits. You will likely figure out that you are better off just setting up and plain old individual or family RESP plan to give yourself more flexibility and control. 

Group RESP's