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Paying Off Debt

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Maybe you’re sitting there looking through credit card statements and bank transactions wondering how the heck you got yourself into this financial mess. Or maybe you think you’re on the right track but not quite sure what you need to work on next. Today I’m going to break your finances down for you into 10 steps, so you have a coherent plan (and a fun little infographic) to follow. The system is straightforward, but I’m not going to tell you it will be easy. Paying off debt, saving money and applying for insurance require you to do some work and might make you feel a little guilty about how much money you spend on fro-yo (or coffee, or avocados, or speeding tickets). For that, I’m sorry (only a little though), but I promise that once you’ve made it through each of these ten steps (especially the last one), you’ll be…

Life is anything but predictable, and sometimes a curveball will come flying out of nowhere. Maybe you’re coasting along quite nicely when, all of a sudden, your furnace bites the dust or your dog swallows a tennis ball and needs emergency surgery. Whatever it is, you are now stuck with a big bill and aren’t sure how you’re going to cover the cost. The question you might be asking yourself is whether or not you should consider withdrawing money from your RRSP. Short answer…No. Don’t worry, I’m not going to just assume you’ll accept the short answer so, long answer time. The biggest problem with pulling money out of your RRSP is the tax. Every time you withdraw money from your RRSP, the government requires withholding tax be taken off by your financial institution, and it is no small amount. For withdrawals less than $5,000 you will have to pay 10%…

Through my 30 years of living, I’ve had moments where I’ve been great with money and moments where I’ve been down right bad. I don’t have any big ticket purchase regrets, but I’ve bought loads of small items that were a complete waste. And you know why? I didn’t realize the consequences of irresponsible spending until I was much older (and I even had good financial role models in my parents). I was lucky to not get myself into more trouble because of my lack of knowledge. When you’re a teenager you don’t necessarily concern yourself with the future but poor spending habits can be established at that age, and you can get yourself in a debt hole real quick. If you follow the blog regularly, you already know that I have pretty strong feelings about financial literacy (see here and here), and that’s because learning about money earlier is…

You’ve likely already heard that the Bank of Canada raised their overnight interest rates last week from 0.5% to 0.75%, but do you really know what that means and how it affects you? For the last decade, we’ve been living with historically low rates in Canada. This is the first time in 7 years that rates have gone up. If you’re a millennial like me, you’ve lived almost your entire adult life under these conditions, but that doesn’t mean it’s the norm. Take a look at the graph below; it was way back in 2008 when rates plummeted after the financial meltdown. I was still in University way back then with little to no clue (or interest) in how that would affect me. Flash forward to 2017, and I have to say that I have benefitted quite substantially from the low-interest rate environment. We bought our house in 2010 and at…

I hate the fact that you go through 12 years of school and come out the other side knowing little to nothing about finance. You’ll be taught how to solve complex algebra equations but have zero clue how interest rates work and how detrimental credit card debt can be. I promise you, the ability to do algebra has never once helped me get a job or complete a work project, but knowing how to balance a budget sure has. There has been some movement to correct this, but not fast enough. You know what that means though? You are in charge of making sure you know what’s up! Sure you can blame a lack of education as the reason you are in debt and don’t have a handle on your money, but nobody is going to give you much sympathy. Everyone’s in the same boat. Humans are not built with…

Have you ever felt pressured into spending money? I’m sure 99.99% of us answered yes. And I’m also going to guess that the most common reason behind that pressure is because your friends are planning or buying something you want in on. The fear of missing out is real. And it’s powerful. Here’s an example… Garth Brooks did a nine-concert stand here in Edmonton and it was all everyone could talk about for a while. Am I a Garth Brooks fan, nope? Did I almost convince myself I should buy tickets to the show just because EVERYONE else was going? Absolutely! But I was talked off the Ticketmaster ledge by my more rational minded (aka. more country music hating) friend. And when the concert dates arrived was everyone raving about how amazing he was and flooding my social media accounts with pictures. You know it. Am I sad I didn’t…

How many of you check your credit score every year? I’m sure there are a lot of you out there who are just like me and really and truly mean to check it but end up pushing it off. It’s not exactly the most thrilling task you have on your to-do list. Well, NOT THIS YEAR! Take this as your gentle reminder to go, right now, and make sure no surprises are lurking in the deep, dark world of credit reporting. But, why? I know, it sounds like a hassle, but it is for your own good. Sometimes mistakes happen. There might be an incorrect entry listed on your credit report, and that can cause you serious grief. The last thing you want is for your bank to discover the mistake when you’re applying for a mortgage, line of credit or new credit card. You could end up getting rejected…

If you’ve been keeping up with my Home Buying Series over the past few Mondays, you’ll already know if you’re ready to buy, how to save a healthy down payment and how to take advantage of the homebuyer’s plan (HBP). Once you have your down payment saved up and you know where exactly the money is coming from you are just about ready for the fun part (bring on the house hunting), but there’s one last step you want to take to ensure everything goes smoothing….getting pre-approved for a mortgage. Why exactly do you need to get pre-approval? Lock-in your interest rate, so you won’t get stuck if rates go up (Usually, the quoted rate is good for at least 120 days and if rates end up going down your lender will meet the new lower rate.) Set your spending cap (Keep in mind that banks will often lend you more…

If you’re a frequent jet-setter you likely already have a credit card that pays you back in travel rewards, that’s fairly common knowledge in this day and age. What you might not know however is that many of those very same travel rewards cards also give you insurance coverage for lots of the not so great things that can happen when you’re on vacation. You know when you’re booking a trip and you have to click through the part about accepting or rejecting medical insurance, trip cancellation insurance, car rental insurance, etc. All those things can cost you a pretty penny each time but skipping them might leave you with in a bad situation. For that reason, it’s worth checking to see what coverage you currently have through your credit card and maybe even switching cards if you travel quite a bit. First, we’re going to look at a few…

Save, spend or pay off debt? Where do you start when you’re finances are a bit of a mess, and you are determined to get back on track? It can be completely overwhelming trying to get started, and I think that’s why so many people delay taking that first step or fall back on bad habits after a setback. What you should know though, is that it really doesn’t need to be complicated. Yes, turning around your financial health will be tough and you’ll have to make some sacrifices, but the actual system is straightforward. There are a lot of parts when it comes to personal finance but don’t get distracted (or overwhelmed) by all the different types of investments or styles of investing. When you’re just getting started you want to focus on the basics…paying off debt and having a solid base of savings. Everything else will fall into…