All Posts by Randall Orser

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President/CEO Number Crunchers® Accounting Inc. Learn how to just say stuff it to this bookkeeping thing with our 'Just Say: "Stuff It" To Bookkeeping program.

What is the Gig Economy?

By Randall Orser | Small Business

The gig economy has been defined as “A way of working that is based on people having temporary jobs or doing separate pieces of work, each paid separately.” 

Essentially the gig economy involves working in a free market system as a freelancer, temporary contractor or doing standalone one-off jobs (or gigs) as opposed to having traditional full-time employment. It can also be a way for anyone to make extra cash in addition to their regular job.  In 2018 the Bureau of Labor Statistics in the U.S. reported that 55 million people were gig workers more than 35% of the U.S. workforce and this number is expected to rise to 43% by 2020.  According to Statistics Canada 2.18 million people were temporary workers in September 2017, including freelancers and contract workers.  One of Canada’s biggest temp agencies reported that 20-30% of their workforce were temporary workers and 1 in 4 were freelancers.

Who Works in the Gig Economy?

Millennials like to work in the gig economy because it promises a greater work-life balance.  For boomers and retirees are it brings in extra income without a major time commitment.  Freelancers are often connected to work by websites and apps such as Handy, Linkedin and Task Rabbit.  

The gig workforce includes highly skilled specialists and consultants from every industry but there are other jobs that will enable workers to make money fast without having specific skills.  These include tutoring and teaching, ridesharing (Uber), delivery (Skip the Dishes) and renting out assets that you own (Airbnb).

Benefits of the Gig Economy

  • Employers benefit from the gig economy by cost savings.  They can access a rich pool of talent and only have to hire people to do one specific task or when they are needed, instead of hiring full time employees that they have to train and provide with benefits.  
  • Workers can choose their own hours and projects and can earn income from multiple sources.  In a BMO survey 60% said that they voluntarily became self-employed, 49% said that they wanted a new challenge or change, 31% said that they wanted a way to supplement their regular income, and 13% said that they had been downsized by their employer.   

Challenges of the Gig Economy

  • The financial downside is the biggest challenge as workers have no benefits and don't get paid when they are sick.  Many in the BMO survey reported that they did not earn enough.  Boomers were more concerned about not having benefits while millennials were concerned about accumulating debt.
  • Canadian Employment Law has not caught up to this new way of working so gig workers have a precarious status and are generally excluded from the protections and benefits that come with traditional work such as CPP and EI.  Workers can enrol in these programs but they have to pay both the employer and employee portions.  As they do not have a traditional paycheck their CPP is calculated when they file their income tax which can mean a hefty bill.

Criticisms of the Gig Economy

  • It can make it harder for workers to find full-time employment and develop their careers.
  • For some the flexibility of work can be detrimental to their work-life balance, sleep patterns and daily activities as they always have to be ready to work when gigs arise.
  • As the security of a full-time lifelong job becomes a thing of the past workers rather than employers are taking on the risks of market ups and downs and changing trends.
  • Traditional business relationships between employer-employee, vendors and clients are eroded along with the benefits of trust and familiarity.  There is no investment in a relationship which will only last the life of a gig.

The Top Mistakes New Freelancers Make

By Randall Orser | Small Business

Once you have made the decision to leave the rat race and set yourself up as a freelancer, there are some things that you must consider before you begin, if you want to be successful. Although there is nothing wrong with giving it up and going back to your office cubicle and 9-5 routine, if you make these mistakes then you might be going back sooner than you think.

  1. Not Having Enough in Your Savings Account  - Experts say that you should have between three and six months of expenses saved as well as your start-up costs.  This can seem like a lot of money.  There are ways that you can raise money, but two things you should not do is withdraw from your RRSP or put everything on your credit card.  If money is tight you should start freelancing while keeping your full-time job.
  2. Not Defining your Goals – Once you decide to go out on your own you need to set your goals.  The first one is to decide what you want to get out of going freelance.  Is it about having a flexible schedule, and the ability to decide on the clients that you want to work with?  Is it about just making enough money to pay your bills or do you want to make more than you did as an employee? Once you set your goals you need to check them at regular intervals to make sure you are achieving them or to revise them.  
  3. Not Having a Business Plan- You need a business plan to use as a guideline for your future.  Your plan needs to include basic information about your business such as the contact information, what you do and what you are hoping to achieve. In the future. You need to describe the products or services you are offering including pricing. Information as how you will market your business is important as is an estimate of your operating expenses and what you will need for future growth.
  4. Jumping in too Soon – It is a good idea to start your freelancing career while still working full time.  You will be able to try out a different jobs and clients and see who you are happiest working with.  It enables you to make mistakes and still have an income and also to build your savings so that you are ready when the time comes to jump.  It also allows you the time to set up your office to suit yourself and have the equipment that you will need to do the work.
  5. Not Having a Contract – Having a verbal contract can be enough but a written one is usually better.  A contract will not always help you to get paid, but it will define expectations on both sides and make sure that there are no surprises when the job is finished.
  6. Not Having a System to Organize your Paperwork and Money– You don’t always need to hire a bookkeeper or accountant, but as your business grows this might be a good idea.  You can use an app such as Quickbooks to make tracking your income, expenses and taxes much easier.
  7. Taking on the Wrong Clients – Good clients are those who give you regular jobs that you can and want to do, and work with you to get the best results.  They are also easy to communicate with and pay your invoices on time. Inevitably you will end up with a client who does not meet those criteria and you spend more time than you should on them for less money.  You need to be able to decide when you have had enough and that they are no longer worth it, as well as how to recognize the signs to avoid this type of client in the future.
  8. Not Setting Realistic Rates for your Work  – There is no fixed formula for setting rates for your freelancing work.  Prices depend on the industry, geographic area, your skillset and expertise and the work you are doing.  You need to decide if you are going to bill hourly or by the project, which can change with each job.  You also need to decide what is your rock bottom dollar amount and keep this in mind when charging clients.  You may start out at a lower price as you are building your clientele and experience, but you must know how low is too low so that you don’t take jobs that don’t pay enough leaving you financially overextended and stressed.  As you gain more experience you should look at your rates and revise them if necessary. 
  9. Not Having the Required Self Discipline– You might start freelancing assuming that the best thing about it will be the flexibility of your work hours.  In reality, you will need to available for your clients during regular office hours which can be difficult if you prefer to sleep late.  Even though clients cannot demand that you are available specific hours they still need you to be available to answer their questions or they will move on to someone more accommodating.  On the other hand, you need to establish what hours you will be available to your clients, such as 8am to 6pm.  Make it clear that unless you say so, calls from them at 10pm or on weekends and holidays will not be welcome. 

Starting out as a freelancer can be difficult but you should not get discouraged if you make a mistake.  You will soon discover whether working freelance is a fit for you. 

Five Ways That you can Work from Home

By Randall Orser | Small Business

A survey by Benefits Canada concluded that in 2017 47% of Canadians worked remotely or at home for at least part of the work week.  39% of these surveyed said that they mostly worked from home and 11% said they worked exclusively from home.  These numbers are bound to rise as more and more people want to avoid the daily commute and find ways to work at home.

There are many ways that you can work either fully or partly from home – here are five examples that offer the chance to avoid the commute, but they all have some pros and cons.

Telecommuting 

This is a home-based job where you work for an employer rather than in your own business. The advantages include receiving employee benefits and not having to worry about irregular income and little to no start-up costs.  The disadvantages can include lack of flexibility in hours of work, possible lower pay compared to on-site jobs. 

To get a work-at-home job you still have to demonstrate in your resume that you have the necessary skills and experience to do the job.  Your present employer may be open to telecommuting if you give them a good work-at-home proposal otherwise look for companies who are hiring work-from-home workers.  Jobs suitable for telecommuting include bookkeeping, writing and virtual office support.

Contract Work

Contract and freelance work are pretty much the same thing with only a few slight differences. Many of the jobs you see advertised hire workers as contractors instead of employees.  Contract jobs can be full or part-time, with regular hours and a steady income the same as a regular job.  However, contractors are considered to be independent from the company and are responsible for paying their own taxes.   

Pros of contract work include being able to negotiate fees, greater flexibility in hours and location of work.  The cons include the hours of work may be less than you would like, companies can easily let you go, you have to pay your own taxes, you rarely get benefits.

Freelancing

Freelancing is similar to contact work in that you are hired by a company to provide a service.  However, when you work freelance you normally have more control of the work that you take, how you do it, and how much you are paid.  Freelances often work under their own company name as a sole proprietor but they can become a limited liability company if they wish to. Freelancers market their services on social media, by networking, or on job sites.  Common freelance jobs include writing, marketing, accounting, web design and graphic design.  

Pros of freelancing include greater flexibility in your schedule, greater control over the work that you do, and the ability to set your own fees and rates.  The cons are the irregularity of work and the difficulties of finding clients, paying your own taxes and no employee benefits.

Starting your own Business

Many people are scared off of starting their own business believing it to be difficult and complicated, but with the right help and advice, it can be easier than you think.  Businesses are usually product based where you sell a tangible product, or service based such as home cleaning or graphic design.   

The pros of starting your own business include the flexibility in your working hours and pricing, the ability to turn something that you love into a business, and for service-based businesses easy and affordable to start.  The cons may be that your income is irregular as it takes time to get started, you may have start-up costs, you may have to work longer hours during your start-up, and you will have to pay for your own benefits.

Buying a Home Business

You can buy an existing business from an owner, buy a franchise, or buy a direct sales business.  The pros of buying an existing business or a franchise are that you are not starting from scratch, the business already has clients or people are familiar with the franchise, so it is easier to get customers.  For direct sales you need to pick a product that you believe in so that prospective customers are influenced by your enthusiasm.  In all cases marketing plans and materials are usually provided for you. 

The cons of buying a home based business are that it can be expensive to start out, there might be limitations on how and where you can market to build your business and it can be difficult to build a successful reputation when competing against competition in the same industry.

Five Skills You Need to Learn Before Starting Your Own Business

By Randall Orser | Small Business

Starting a new business is always difficult, especially if it is your first business. In order to give your business the best chance of success, there are several skills that you need to learn. Fortunately, all of the skills needed to run a business can be learned. Here are 5 skills you need to learn before staring your own business.

Time Management Skills 

Time management skills are essential for any business owner, as you will need to ensure that all business tasks can be completed within a set amount of time. One of the best ways to improve your time management skills is to keep a daily log of your business activities.  You can then analyze your log at the end of the week to see where you could be managing your time more effectively. Look at the amount of time you spend on common tasks to see where you could shave off a few minutes.

Self-Motivational Skills 

In order to succeed in business, you need to be able to motivate yourself, as you will have to make your own rules and decisions. Nobody else will tell you when to start and finish working, when to take or break or when to seek help from other people. You will need to use self-motivational skills on a daily basis. In addition, if you intend to employ other people, you will need to be able to motivate yourself in order to motivate your employees. Create a mental vision of where you want your business to be in one, two or five years, as this will help to keep you motivated and focused on your goals.

Organizational Skills

Organizational skills are essential for keeping your business running smoothly. Organizing ideas, tasks and paperwork effectively gives you a strong foundation for your business. Using detailed task lists is one of the best ways to organize your working day, as it gives you clear goals to achieve each day.  It is also important to keep detailed records of all business activities, outgoings and income for future reference and legal purposes.

Research Skills 

Research is one of the most important aspects of setting up a successful business. You need to research the industry in which your business will work, as well as the products and services you wish to sell. You also need to research the competition and your potential customer base. In addition, you will need to conduct research on an ongoing basis to see how your business is performing in relation to your competition. Learning how and where to gain information for your research is one of the first skills you should learn.

 Analytical Skills 

Once you have conducted your research, you need to be able to analyze the results and develop ways to use the findings to your advantage. Analyzing data and public opinion helps you to make decisions that can improve your business and increase public approval. Develop the habit of evaluating your business activities to see where improvements can be made. Listening to your customers is also important for improving your analytical skills, as it gives you a different perspective on the situation. 

Setting up a new business can be a challenging time, especially if it is your first business. You can increase your chances of success by learning the skills needed to run a successful business. Practicing these skills before setting up your own business gives you chance to develop effective ways of working.

Tried and True Ways to get your Small Business Organized

By Randall Orser | Small Business

Summer vacation is over, kids are back at school, isn’t this a good time to reorganize your office?  Reorganizing your office doesn’t just mean tidying up your clutter and dusting your filing cabinets, it involves creating new systems and procedures for your small business which can make you more productive and profitable.

Taking Control of Papers and Documents

Is that pile of paperwork getting out of hand? Then it is time to set up a filing system and/or a digital archiving system. Start by going through the papers that you have laying around.  Make a keep pile and a discard pile.  Shred or recycle all the items in the discard pile.  Here is a guide from Susan Ward to help you create and organize your paperwork process.                https://www.thebalancesmb.com/creating-a-document-management-system-2948084

Thinking about going paperless? Here are some of the pros and cons. https://www.thebalancesmb.com/should-your-small-business-go-paperless-2951764 

You can scan all your receipts and documents into your computer, use on-line invoicing and payment services and use the cloud for data backup and archiving.  

Using the Right Productivity Tools

We all use apps and tools, but some are more useful than others.  It’s a good idea to at least once a year decide if these apps and tools are still meeting your needs.  Productivity tools can be useful to your small business.  Productivity is a personal process so you should take time to decide what your needs actually are before incorporating a new tool into your process.   Here are the main areas where you might consider using productivity tools.   

  • Contact Management – keeping track of customers and remembering useful contacts is crucial to your business.  There are various customer relationship management (CRM) systems available, or just make sure your existing Contacts list is up to date.
  • Accounting and Bookkeeping - Organize and streamline the way you invoice, take payments and manage your cash flow with tools like Quickbooks Online.
  • Travel and expense tracking – use apps like Expedia and TripAdvisor to make your travel plans easier and while travelling an app like Expensify to track your expenses and do reporting when you return.
  • Email management – if you use Gmail or Outlook you have access to a number of extensions to organize your inbox.
  • Project Management – A good project management app will help you track tasks, share files and collaborate with your team all in one place and can be one of the best tools that you can have to organize your work.

Getting Your Computer Organized

If you do the bulk of your work on your computer you will know that it does not take long for your desktop to become cluttered with icons, your downloads folder to be full of files that you do not recognize and you have a hard time finding anything.  This is both bad for your productivity but also will slow down the performance of your computer.  So, what can you do to clean things up?

  • Clean up your desktop, get rid of the icons that you no longer use.
  • Set up a digital filing system – create a system that makes sense to you and where you can find your documents when you need them.
  • Makes sure your computer is set up to automatically install updates, or if you have to do it manually make sure do it at least twice a month, as updates can include security patches.
  • Review your current versions of the software that you are using to see if you need to update.
  • Scan your computer for viruses and performance issues to keep it running smoothly.
  • Verify the integrity of your data back-up, if you are not backing up you should be.  You can use a cloud-based back up service or use an external hard drive but either way you should set it to conduct continuous automatic backups so that you don’t have to worry about doing anything manually.
  • Getting on top of your email – although it is an efficient communication tool, your inbox can quickly get out of control causing you stress if you don’t take steps to streamline it.   Here is an article that will help you to do that.                                          https://www.thebalancesmb.com/email-management-tips-2951532.   
  •  From an article by Alyssa Gregory  

It’s Almost Back to School Time – Have you Thought About a RESP for your Child?

By Randall Orser | Small Business

Back to school is upon us, and if you haven’t already thought about a Registered Education Savings Plan for your child, then this could be a good time to find out more about them. 

A RESP is a powerful way to save for your child’s education.  It’s an investment account similar to your RRSP that allows your deposits to grow tax free.  Though you will not receive a tax refund on your contributions as with your RRSP, you will pay no tax on capital gains, or income tax on interest and dividend payments. The biggest benefit is that you get a boost of up to $7200 per child from as the government pays you to invest.

The sponsor of the plan (a parent or guardian) can start saving as early as they want to after a child is born.  As they contribute to the plan the government kicks in 20% up to a maximum contribution of $2500 per year, (that’s up to $500 per year in free money!). This contribution is known as the Canadian Education Savings Grant, it goes to the beneficiary’s account and the sponsor can invest it anyway they wish.  Investing is usually done similar to a RRSP or TFSA in cash, stocks, bonds, GIC’s, mutual funds and foreign investments.

Families with an income less than $45,916 get an additional 20% on the first $500 contributed, a total grant of 40%.  Families with incomes more than $45,916 but less than $91,831 get an extra 10%, a total grant of 30%.  If you can’t contribute the $2500 needed to get the full grant, unused grant room can be carried forward and used in future years, but $1000 is the maximum that can be claimed in any one year.

So, it makes sense to open a RESP rather than saving in your own TFSA where you will not get the government grants.  When your child does go on to higher education, they can start to withdraw the money and as they will probably have a low income, they will pay either little or no income tax.  RESP’s can remain open for 36 years so there is lots of time for kids to make a decision about their education.

It’s easy to open a RESP, you can either do it through your bank or financial planner as a self-directed RESP, or you can use a RESP provider.  However, a self-directed RESP is the lowest cost and simplest option.  To get the maximum government grant you need to contribute $208.33 per month, but even an amount of $25 per month will add up over the years.

If you have more than one child, you can start a RESP family plan which works like an individual account with the same contribution limit ($50,000 per child). You need to take this limit into account should grandparents also start a plan for your child, otherwise you will be penalized by the government with a tax of 1% per month on the excess money.

To get the government grant your RESP provider will apply for it on your behalf, sometimes once a month or once or twice a year.  You should ask your provider how often you will receive the grant.   

If you child decides not to go on to further education, your original investment can be withdrawn tax free, but all interest, capital gains and income from dividends will be taxed in the year that you receive it and is subject to an additional 20% penalty.  All grants received must be returned to the government.  To avoid this tax hit you can transfer an amount up to $50,000 to your RRSP, as long as your child is over 21 and the RESP has been open for at least 10 years, and if you have the room to do so. If you don’t have the room, you can delay the transfer until it becomes available.  

For more information on RESP's check out the Government of Canada website at: 
https://www.canada.ca/en/services/benefits/education/education-savings/resp.html

How to Avoid Hidden Costs When Travelling Part 2, Travel Prep, Accommodation, Touring and Eating

By Randall Orser | Small Business

Travelling is an adventure, but it can become a financial nightmare if you do not stick to your budget and make sure that you careful to avoid the hidden costs especially at hotels and restaurants.

When making your travel budget, don’t forget expenses that you will have to cover before you leave, such as travel visas, taking care of your pet and cell phone roaming.

Travel Visa - Check if you need a visa to enter countries that you are planning to visit. You may be able to get your visa when you arrive at your destination, but sometimes it can be cheaper to get it ahead of time.  A travel visa service might be more convenient to use but will usually be more expensive. 

Pet Care - Kennels and professional pet sitters are expensive, and you don’t always want to burden friends and relatives with your pets.  Think about “house sitting” where someone will stay in your house for free in exchange for looking after your pets.  You also might be able to stay at their house, giving both parties the experience of living like a local without paying for accommodation.

Cell Phone Roaming - A big mistake that people make when travelling is to use their cell phone.  This often results in a huge unexpected charge on their bill when they return home. The best way around this is to either check with your provider to see if they offer a fixed price package to use while in another country or alternatively, if you can unlock your phone you can get a local SIM card (often available at the airport when you arrive) or purchase an unlocked phone and use it just for travel.  

ACCOMMODATION

Hotels can be expensive so research alternative places to stay such as Airbnb’s, hostels, house exchanges or renting an apartment .  If you have to stay in a hotel here are some of the hidden fees that you need to be aware of so that you don’t rack up a bigger than expected bill.

Minibar – These are always hugely overpriced so always avoid them, use the vending machine in the lobby or a local store for your drinks.  If drinks and treats are left in your room, check to see if they are complimentary, if not they will be as expensive as the minibar.

Hotel Parking – It might be cheaper to use a parking lot close by.

WiFi – Hotel lobby WiFi is usually free. Some hotels include free in-room WiFi in their room rate.  Check if this is the case (if you are a member of the hotel’s loyalty program it usually is) before you use it, and if not, use the WiFi in the lobby.  

Currency Exchange – Don’t use a hotel desk to exchange money, you will always be overcharged.

Phone Calls - Unless the hotel offers free local calls, don’t use the room phone for local calls, and definitely don’t use it for long distance calls!  Buy a local prepaid phone card and use a pay phone. 

Hotel Laundry – Look for a local coin-operated laundry and to save money buy detergent from the local store or bring some from home.  

Room Service – Always a luxury, very overpriced with mediocre food.  Eat at the hotel restaurant for better choices and prices. Ask the concierge for local restaurant recommendations which are usually better priced and have more authentic local food.

TOURING AND EATING

Travel is always an adventure and you should have wonderful experiences.  However, some experiences can be more expensive than others so here are some ways that you can save money.

Guided Tours - Do research into tours in the area, sometimes it is cheaper to book and pay when you arrive rather than booking on-line.  Consider free walking tours where guides donate their time just for tips.

Restaurants - It is always best to avoid restaurants in tourist areas as they are usually overpriced.  Lunch is usually cheaper than dinner and mostly has the same menu.  Be aware that tipping can be offensive in some countries, so make sure you are aware of local customs and tipping expectations.  Often tips are not expected, servers are paid a proper wage and tips are considered a bonus.  You should also check if a gratuity has already been added to your bill so that you don’t tip twice.

Snacks and Water - Concession stands in tourist areas are also expensive, bring your own food for the day or buy at a local store.  Instead of buying water in plastic bottles, as the cost can really add up, and it’s not good for the environment, bring your own reusable water bottle and bring a “Steripen” to use if you are worried about local water quality.

Taxis - To avoid overpaying for taxis check with hotel staff to see how much a taxi to your destination should be and confirm the rate with the driver. Alternatively take public transit or use ride sharing.

Buying Souvenirs – Everyone loves a reminder of a fabulous trip but take care when buying those “locally made” items.  Check out a number of stores and if you see the same item everywhere, it is probably cheaply made somewhere else.  Don’t forget to haggle, in many countries it is expected.  Learn a few local phrases to help you when haggling.  It is polite to do so, and the vendor might be more likely to give you a good deal!   

From an article by the Professional Hobo

How to Save Money While Travelling, Airlines, Airports and Car Rentals

By Randall Orser | Personal Finances , Scams

When we are travelling, most of us figure that if we have to pay for it we are probably being ripped off or paying too much and that will often be true.  We constantly get stuck paying annoying and usually hidden fees to part us with more of our money.  However there are ways to avoid paying pesky extra charges especially with airlines, at the airport and when renting a car.

AIRLINES AND AIRPORTS

Ticket Prices:  Airline prices are constantly changing, and it is hard to know if you are actually getting a good deal.  Using a price alert app will help you to get the best price for your flight.  If you want to really save money on that flight use your frequent flyer miles, but don’t forget that you still have to pay taxes.  When checking the price of your flight make sure that it includes taxes and surcharges so that you don’t get any nasty surprises!

Cancellation Fees:  It can be expensive to change a flight reservation so if you think that you might have to change your flight make sure that you buy a more flexible airfare that allows changes.  Even if you have to pay more it will usually be worth it.  

Booking on the Phone: If you prefer to speak to a real person when booking your flight, you will usually have to pay for this, but you can book online for free.  If you are really not keen on booking online then consider using a travel agent to do the work for you.

Travel Insurance:  Make sure that you get reliable advice when buying travel insurance to make sure that you are fully covered.  Your travel agent can usually advise you.  If you are booking on line be aware that many airlines will include travel insurance in the cost of the flight, and you have to deselect the insurance optionso that you do not pay for something that you are buying elsewhere. 

Airport Parking:  Using a Park and Fly is usually your best choice if you have to park at the airport.  However, pay attention to the dates that you reserve, and read the fine print.  Make sure that you are paying for the correct amount of time that you will be away. Ahead of time watch out for online deals and coupons.

Once you are at the airport you are essentially a hostage and anything you buy will be overpriced.  Avoid buying food at the airport by packing sealed non liquid snacks and an empty water bottle that you can fill once you have passed through security. 

Baggage Fees:  Pay attention when you book your flight to see how many (if any) are included in the price as well as the maximum weight allowance, so that you know what you will have to pay when you check in.  To avoid luggage charges if possible, travel with only a carry-on bag, but watch out because these also have restrictions now.

In-flight Meals and Drinks:  On many airlines especially budget ones, you have to pay for drinks, meals and snacks.  To avoid overpaying for what is usually a poor meal bring your own snacks and a water bottle.  Other things that you might be charged for during your flight are entertainment devices, headsets, blankets and pillows.  Also, if your destination requires payment of a departure tax (such as Cuba) make sure you are aware of this and keep back some currency to pay for it).

CAR RENTALS

Decide if you really need to rent a car at all? There might be a cheaper alternative. If you just need the car to get around town, consider using a car sharing service.  If you are only going from one place to another, consider using public transit or ride sharing.  

If your travel plans allow look into camper van and car relocations.  Rental companies often have a glut of vehicles in the wrong place for their upcoming reservations and if it fits your plans it is a good option to save money on car rentals.  You will be given a number of days to relocate a vehicle. You are charged around $5 per day then usual rental rates for extra days.  Though you don’t usually get free mileage you get an allowance to get to your destination plus a bonus amount.  You will also get a fuel allowance. 

If you really do have to rent a car watch for advertised specials (such as fly-drive deals).  You should take out insurance but before you buy the rental company insurance check if you are covered for car rentals under your own or your credit card insurance.   Be aware that adding additional drivers to the rental agreement will mean extra fees which are never worked into the fees.  If you are under 25 you will probably have to pay a surcharge for car rental.  

Lastly, if you bring the car back empty, the rental agency will charge you way more to fill up on gas than if you brought it back full.  Make sure you fill up the car at a gas station close to your drop off point.  

Money Tips for Travelling Abroad

By Randall Orser | Personal Finances , Scams

Accessing and converting money while travelling abroad will always cost you but there are some ways of doing this that will cost you less.  Converting your money can comes with some horrendous fees which are often invisible to you, to help you here are some of the most common high fee currency exchanges to avoid.  

Converting Currency – Having some of the local currency in your pocket when you arrive in a foreign country may make you feel more comfortable, getting your cash before you leave Canada is a good idea.  Check online for the best exchange rates at local banks and currency exchanges.  Once you arrive at your destination do not exchange cash at an airport currency exchange counter, their fees are hugely overpriced sometimes as much as 15% more than at a bank.  While you are away use local bank branches or currency exchanges in town to convert your cash.

Watch out for money converting scams such as being short changed, check that the amount you are quoted is what you actually receive. 

Credit Card Conversion – most credit cards companies will add on a foreign exchange fee of around 2.5% when you use your card abroad.  To avoid these fees, get a travel credit card with free foreign exchange.  These often come with other travel perks, but you will also pay an annual fee.  Beware of vendors offering to sell to you in your home currency they are not doing you any favours, the deal will come with bigger and mostly invisible charges.

Debit and ATM Conversion – Banks also get a slice of the pie from currency conversion fees.  Hidden fees on ATM withdrawals and debit card charges are taken as a percentage of your transaction.  Although this is a fee, it is usually at the lowest conversion rate that you will find except for special exchange free credit cards.  If you are using an ATM machine abroad, make sure that it is bank affiliated as private machines will add an extra fee on top of the currency conversion fee.

Credit Card Cash Advances – If the ATM will not accept your debit card you may have no option but to use your credit card for a cash advance. Whether at home or abroad this type of transaction is expensive.  You will be charged a credit card advance fee as well as compounding interest from the day that you make the withdrawal on your entire credit card balance.  To avoid excess charges, go online as soon as you can and pay off your card in full (including the withdrawal service charge), preferably before withdrawing cash.

Traveler’s Cheques – Traveler’s cheques used to be the cheapest way to access cash while abroad but now fewer places are accepting them and they are harder to cash.  You will also pay commissions and fees on traveler’s cheques, and vendors may charge you a fee to cover the cost of cashing them. 

Buying an Airline Ticket Online? Look Out For These Scams

By Randall Orser | Personal Finances , Scams

We all get excited when we think we have scored a deal especially when it comes to cheap airline tickets.  However, it pays to be cautious when buying online as airline ticket scams are fairly common and those thinking they have got a great deal can soon find out that they have been conned.  When you find a deal, research the company offering it.  Check out review sites and online forums to look for complaints and warnings about scams. 

The best way to protect yourself is to make friends with a travel agent and let them advise you when there are air travel deals to be had.  Buying tickets through a licensed travel agent is always the safest way to go so that you are covered under the Consumer Protection rules and regulations in effect in your province.

If you are buying tickets online, as well as booking on a registered travel agency website here are some tips to follow to avoid scams.

1.  Make sure that you are fully informed before you press submit:  Read the fine print to make sure that you know exactly what you are getting.  Double check dates, times, connections, seat allocation and luggage allowances.  

2.  Watch out for Phishing Scams: It is easy to be lured in by sites offering lower prices for the same flights offered on other sites.  Once you click accept to make a purchase, they collect all your credit card data then tell you that your payment was declined.  They may then ask you to wire payment which results in your money being stolen and your credit card being compromised.

3.  Be Sure that the Airline or Hotel has a Record of Your Booking:  Before you set out on your trip make sure that you check with the airline and the hotel directly to make sure that you have a legitimate booking.

4.  Watch out for the airline ticket credit scam:  Airline tickets are bought with stolen credit cards by scam artists who then cancel the tickets and get a credit and confirmation number.  They then offer the ticket credit for sale online at a discounted price saying that they are unable to take the flight.  You will be asked to wire money to pay for the flight and when you try to use the credit with the airline you will not be allowed to as it was bought with a stolen credit card.  

5.  Make sure you read the refund or exchange policy on your airline tickets:  Make sure that your ticket allows for you to make changes or to cancel your trip, otherwise you will be paying fees to make changes.

6.  Make sure that you are aware of flight time changes:  Sometimes on-line booking sites save money by putting passengers on cheaper flights without warning them beforehand of the time changes.  These changes can affect the remainder of your journey causing missed connections. Make sure that you check directly with the airline for any flight or time changes or cancellations at least 24 hours before departure and ask them to notify you of any changes to your booking.

7.  Make sure that you know what currency is being used on the website:  It is easy for Canadians to think that they are paying in Canadian dollars when they are actually paying in US dollars which is a big price difference.   Make sure that you know if you can be charged more if the exchange rate changes.  Try and get a fixed price that is not affected by changes in the exchange rate.

From an article by The Travel Industry Council of Ontario

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