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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.

Six Ways to Celebrate the Season During the Pandemic

By Randall Orser | holiday season , Personal Finances

After the year that we have had in 2020 many of us would love to travel to visit friends and relatives or just have a getaway, but unfortunately we still cannot do that.  However if you are still looking to add some sparkle to the season here are a few ideas for you.

1. Visit your local mountains to ski and snowboard.  At the time of writing we are still allowed to visit our local ski hills as long as we stay within our bubble.  The Canadian Ski industry has a set of guidelines called  Ski Well Be Well.  All skiers and snowboarders are expected to wear a mask at all times indoors and outdoors unless eating or drinking.  All skiers should go online before leaving home to book tickets check parking restrictions.

2. Take a walk or ski in the park.  We are very lucky to have a number of parks and lakes in the Greater Vancouver area where we can go for the day to hike and get lots of fresh air.  Pack a lunch and have a picnic in the great outdoors.

3. Stay and Play at home, find activities that you can enjoy without leaving your own backyard.  For example cycle enthusiasts can take up indoor cycling by either setting up their regular bike on a trainer or investing in a smart bike designed for indoor use.   If you have a backyard, think about having a fire pit and get the family together to roast marshmallows.  If you prefer to stay inside there are lots of board games the family can play together, and of course you can always binge on Netflix and other streaming services and rediscover all those Christmas movies.  

4. Many people have discovered their inner chef or baker and the enjoyment to be found in a home cooked meal with all the family together.  Get your kids away from the tv and video games and have a family baking session.  Many kids love learning to make things such as cookies and cake pops and eat them later.  

5.  Make trimming the tree a special occasion.  Involve all the family in setting up inside and outside lights, decorating the house and trimming the tree.  Finish the day with hot chocolate and other Christmas treats.  You could also take a walk around your neighbourhood and enjoy all the  festive lights.   

6. Think about how you can help those less fortunate during the holiday season.  Look online for volunteer opportunities in your area and encourage your kids to participate. 

Whatever you decide to do you are sure to have fun, and who knows maybe you will start some new family traditions.

From an article by Margaret Craig-Bourdin

Surviving the Pink Slip During the Pandemic

By Randall Orser | Covid-19 , Employees , Personal Finances

The Covid-19 pandemic has devastated the Canadian labour market. According to Statistics Canada more than three million jobs were lost in March and April alone due to the economic shutdown. For those affected by job loss the impact goes beyond the statistics, and with all the uncertainty around us being out of work can be very scary.  The usual recommendations for when you have lost your job are no longer totally relevant today but here are some tips that will help you to deal with a sudden job loss during the pandemic.

1.  Understand the emotional toll that job loss is taking on you.  When you lose your job you lose your personal work relationships, daily structures and your self of self-purpose causing you to feel the same stresses which come with other forms of loss.  Asking "why me" does not have an answer any more because we have no control over a global pandemic.  You can expect to have feelings of anger, sadness and denial but it is important to try to cope and live with your new circumstances.   Look up free online programs and counselling that can help you deal with these mental health issues.  It is important to find some benefit out of your loss, so think about reinventing yourself maybe by taking some business classes on-line to help you in your job search.

2.  Review your finances and spending, not having enough cash to pay the bills is a major stress for everyone.  Financial experts recommend having an emergency fund with three to six months of expenses in it but for many people this is not possible. What you can do is track your spending to see where your money is going.  If you need money to buy groceries make sure that you are aware of all the financial and economic support available from the government.  You may also need to withdraw from your RRSP or TFSA to tide you over.  For those with no savings it is important to work on restructuring your debts contact your credit card provider or mortgage lender for assistance and think about using an unused line of credit with a lower interest rate to pay off credit cards with a much higher rate of interest.  

3.  Look for future employment, it is important to boost your LinkedIn profile, update your resume and network as much as you can. Being adaptable to change might be your best asset at this time.  Think about expanding your skills into areas that are in demand or are going to be in demand in the future.  For older workers experience is their best asset so think about offering your assistance to smaller companies that need help but can't afford a full time employee.

From an article by Ethan Rotberg

The Rise of the Virtual Restaurant

By Randall Orser | Employees , marketing strategy , Small Business

The pandemic has forced millions of people across Canada to stay home no longer eating out, giving rise to "the virtual restaurant". Virtual restaurants are also known as dark, cloud or ghost kitchens and they exist just to take orders from food-delivery apps.  They don't have dining areas or servers and often do not even have a storefront.  The only physical part of them is the kitchen where delivery drivers pick up. 

The first ghost kitchen started in New York in 2013 and the concept has grown from there as have the delivery apps that work with them.  Online food delivery is big business, the global market is currently US$84.6 billion and is projected to nearly double to US$164.5 billion by 2024.  In Canada a third of the $3.3 billion food delivery market goes through third party apps like Skip the Dishes and DoorDash.

There are many incentives for restaurant owners to have a ghost kitchen.  Labour costs account for a third of a restaurant's revenue and ghost kitchens cut these costs as front-of-house staff are eliminated.  Owners are able to offer a variety of food styles all from the same kitchen which can be set up anywhere such as rented spaces inside commissary kitchens, converted warehouses and even parked trailers.  

In 2019 a well known large restaurant conglomerate in BC launched 100 virtual restaurants in repurposed kitchen spaces.  In 2019 a Restaurants Canada survey of 9424 food service establishments found that only 4% of those responding operated ghost kitchens but 17% were planning on launching one in the next two years.  Sixty-two per cent of Canadian quick service restaurants already use a third party delivery service so especially due to Covid-19 it makes sense to create a ghost kitchen to further use these services.

Regulations for virtual restaurants depend on the province but they are generally treated the same as a brick and mortar restaurant.  They are inspected prior to opening and have regular and random inspections.  

From an article by Ali Amad

Big Grocer is Watching you!

By Randall Orser | Business , marketing strategy , Retail

Did you know that grocers are using artificial intelligence to make shopping faster, easier and far more trackable?  The new technology that they are using will one day, (and that is not too far away) allow you to put your shopping in your cart, and go straight to your car, load up and head home with no human contact and without having to wait in the checkout line or tap your debit or credit card. Sound unbelievable? well it is already in place and depending on how you look at what is really happening here you might see it as a good thing or a bad thing.

The new smart carts being rolled out have their own scanner so that customers can scan the items with barcodes before putting them into the cart.  If items do not have a barcode the cart's sensors will weigh them.  In the future we can expect the carts to have cameras, artificial intelligence and machine learning to recognize items placed into them without the use of a barcode. This invisible checkout system has been used in Asia for several years and it is now getting more and more available in North America.  The Amazon Go Grocery outlet opened in Seattle this year and at some Walmart urban super centre locations where customers can use the My Walmart app to scan products as they shop, bypassing checkout lines.  They pay via smartphone using a credit card already registered with the store and then exit through Fast Lane checkouts. 

For the consumer this is an ideal way to shop, they have control over the time they spend shopping and can choose their own produce, still impulse buy, monitor their grocery purchases to stay within their budget, avoid line-ups, and avoid having to pay (at least until their credit card statement arrives).

Behind the scenes the advantages for the grocer is that they can gather data about shoppers and their habits.  They are already doing this when you use your "Save on More" or equivalent card they can see what you buy and tailor their advertising emails to you to suggest discounts on items that you normally buy.   Grocery stores generate around $7 billion a month in sales and this is still growing.  

It is hoped that this automation will not mean that many people will lose their jobs, but instead will be moved to the sales floor to interact more with customers and answer questions about products, however some job losses will be inevitable.

From an article by Charlene Rooke

Do Businesses Need Better Access to Rent Subsidies?

By Randall Orser | Business , Retail

Though the emergency wage subsidies that the Government of Canada put in place have been reasonably successful according to Laura Jones the executive vice-president and chief strategic officer of the Canadian Federation of Independent Business the Canada Emergency Commercial Rent Assistance Program has been a failure.

When tens of thousands of businesses were forced to shut down at the start of the pandemic many of these were immediately unable to pay their rent.  Though most financial experts recommend having at least a three month rainy day fund most businesses did not have that luxury before the crisis and and definitely do not now after an extended period of lost revenue and reduced operating hours.  Now so far into the pandemic even the most established businesses have drained their rainy day funds.  Back in June a survey showed that 50% of business owners could not make their rent without government help and 22% feared eviction.

Financial experts do not see an improvement in the situation going into 2021 so government relief programs will be of the highest important to support small businesses.   The Canada Emergency Commercial Rent Assistance (CECRA) program has been a failure even though on paper it looked like a good idea.  Tenants would get a 75% break on their rent with provincial and federal governments kicking in 50% that is paid to the landlord with the landlord agreeing to take a 25% reduction in the total rent, in this way the burden would be shared.

There were two problems with this program, firstly the landlord has to agree to participate but many landlords want full rent so have not signed up.  Secondly only businesses who have suffered a 70% loss of revenue are eligible, this high amount means that many businesses are not eligible.  From this information it is not surprising that the finance department only spent less than 10% of it's committed funding on the CECRA program.  

Now that the CECRA has ended it is hoped that the a new commercial rent relief program will be rolled out that will allow tenants to access the 50% of government provided rent relief with or without the participation of their landlord and reducing the 70% loss of monthly revenue eligibility to something more reasonable.  As we are now in the second wave of the pandemic these changes are needed for the present and the foreseeable future.

From an article by Ali Amad

Will Wage Subsidies Help Retail Businesses?

By Randall Orser | Budget , Covid-19 , Employees , Retail , Small Business

Though the lockdown of last Spring was the right thing to do to keep people safe and flatten the curve, but it did a huge amount of damage to the economy.  Canadian retailers saw a 26% fall in sales during quarantine and 40% of retailers had to close their doors.  

Stores offering non-essential products and services such as clothing stores were the hardest hit, along with gas stations as people were no longer travelling.  However those selling essential goods found themselves thriving and even experiencing surging sales such as in groceries, home renovations, alcohol and cannabis.

Canadian retailers have been slow to transition to on-line sales but the pandemic has forced them to adopt e-commerce techologies to try and keep themselves in business and as a result e-commerce sales have more than doubled year over year.  Although it means that Canadian retailers face competition from others worldwide it also gives them the opportunity to expand their market share at home, especially if they sell niche products.  

In 2021 it is likely that retail business will still suffer a bumpy ride.  As we are seeing now there will probably be sporadic shut downs due to minor outbreaks but these are likely to be more regional.  During this time retailers can expect sales to fall and they will have to deal with high labour costs and the costs of having to comply with health regulations but it is hoped that on-line sales will be a stop-gap solution to keep them in business.

The federal government is continuing to support businesses by extending the Canada Emergency Wage Subsidy program into 2021, coving 75% of employees wages for those that are eligible.  This will help retailers to avoid bankruptcy and will give employees more disposable income to spend.  

Even with these new ways of doing business and federal help it is unlikely that many in the retail sector will survive another major lockdown.  However localized shutdowns will allow the majority of retailers to stay open and keep some revenue coming in until a vaccine arrives.

From an article by Ali Amad

Need Money? Should you Withdraw from your RRSP?

By Randall Orser | Budget , Personal Finances , Personal Income Tax , Retirement

Most of us do not think about withdrawing from our RRSP until we retire, but in some instances it might make sense to cash in a portion of your savings early to help finance your studies, buy a home or help you get through financial difficulties during the present pandemic.  Here are some examples of times you might want to access your RRSP funds.

  • If you want to become a homeowner but you are finding it difficult to save up enough for a down payment, through the Home Buyers' Plan (HBP) you may be able to get the financial boost that you need.  Under this plan you can withdraw up to $35,000 from your RRSP to buy or build a home provided that you are a first time buyer (defined as not having owned a home in the four year period preceding a home purchase).  The amount that you take out is repayable over 15 years.  Repayments are made as a RRSP contribution designated as a repayment on your tax return.  If you don't make a repayment the amount required will be included as income on your tax return.  Contributions must be in the RRSP for 90 days before they can be withdrawn under the HBP.
  • If you want to further your education by learning new skills or training for a new career you can enrol in the Lifelong Learning Plan (LLP) that allows you to withdraw funds from your RRSP to fund your tuition and help with other costs.  The plan allows you to withdraw up to $10,000 in a calendar year up to a total of $20,000.  The funds have to be repaid over a period of ten years avoid it being included as income.  
  • If you have income volatility an early withdrawal might make sense. Only the HBP and the LLP allow you to withdraw funds from your RRSP tax free if you have no other income in the withdrawal year your tax rate may be low.  Alternatively you could move the money from to a TFSA without paying much tax.  In both your RRSP and TFSA you need to make sure when you are making withdrawals and paying back that you do not go over your contribution limit in a year.    
  • If you expect to have a clawback on your OAS and you decide to retire at 60.  In that instance your income will probably drop until you reach age 65 when you will start to receive your company pension, CPP, OAS and money from your RRSP.  As your total income at age 65 may exceed the OAS clawback limit ($79,054 in 2020) your OAS will be subject to a clawback and 15% tax.  It would make sense to withdraw money from your RRSP over these five years probably saving you a lot of tax.  If you don't need the money it might make sense to use your RRSP for income until you reach age 70 as each year you defer claiming your government benefits means that they will increase.

However you decide to use your RRSP you need to do it with caution bearing in mind that the intent of a RRSP is to contribute regularly to a fund and let the money grow over the years until you retire.  Don't forget that any withdrawals are taxable.

From an article by Margaret Craig-Bourdin

Think Carefully Before Lending Money to Relatives or Friends

By Randall Orser | Budget , Personal Finances , Retirement

In this time of Covid-19 it is important to consider all the implications of loaning money to friends or relatives. The pandemic has resulted in many Canadians having financial problems due to losing their job and they inevitably turn to friends and relatives to help them out.  Before you make the decision to loan them money you need to consider the following:

  •  It is important to put yourself first, especially now,  you need to ask yourself if you can really afford to lend money.  Everyone wants to help their friends and family but extending a loan should not cause you to be in financial straits.  It would be better for the loved one to consider applying for the various government programs available especially those for small businesses. You need to keep all the cash that you need and be prepared for the worst case scenario in your own circumstances.   You should not sacrifice your retirement plans to help your kids out even though you want to and you need to be realistic about the risk of not getting your money back.
  • Be prepared to never see your money again, the loan that you make may become a gift as even with their best intentions their circumstances may mean that they are unable to pay you back.  You could ask for collateral against the loan, but that depends on how far you are prepared to go to collect and also protect your relationship with that person. A parent who lends money to a child should also consider other family members and and view the loan not as a debt but as an advance on their inheritance.
  • Ask why they need the money, if you are advancing a loan then you should know why the money is needed so ask questions.  If you are loaning someone money to help maintain a lifestyle that they cannot really maybe it would be better to ask questions to understand their circumstances and advise them as to how they can reduce their spending.  You may be able to help in other ways rather than loaning money such as buying groceries.  
  • Set the terms, establish terms for the loan, specify the amount, the date the loan should be repaid or a repayment schedule and whether or not you will be charging interest. To secure the loan you could register an asset such as a debt free vehicle or the borrower could name you as an irrevocable beneficiary in a life insurance policy.  This makes it possible to protect the loan amount up front from other creditors for example in the event of bankruptcy.
  • Think twice about guaranteeing a loan, as this can be risky, you may end up on hook for not only the debt but the accrued interest.  A lender may not feel that they are involved in the loan if they do not provide the funds but in fact they are taking on a new debt obligation if the borrower defaults.  Be aware that your children may have their eyes on your assets and what they may inherit and may use emotional blackmail to get the money they want.  It can be difficult to say no to them if you have loaned them money before.  Even if you do help out especially to keep a business afloat, it may be a short term solution and the business may not improve its financial situation under the current circumstances and closing down may be inevitable.

If you seriously considering extending a loan to a friend or relative, it might be prudent to get some guidance from a professional beforehand.

From an article by Mathieu de Lajartre

Financial Literacy Lessons Should Begin Early in Life

By Randall Orser | Budget , Investments , Personal Finances , Personal Income Tax

For most of us money management was not a subject taught in our schools.  Today it is recognized that financial literacy should start at an early age and should be taught in schools.  The Ontario government recently announced that this would be a subject that would be included in the 2020 curriculum which would be a win-win situation for both children and their parents enabling children to achieve a more stable financial future.  Other provinces across the country are now also making financial literacy a priority in schools. 

According to Doretta Thompson CPA Canada's financial literacy leader, "financial wellness is a continuum from knowledge, to competency to confidence in making sound financial decisions". "Kids who learn the basics of budgeting, saving, credit and wants versus needs are better prepared to make good financial decisions through post secondary education and beyond." In BC a new provincial curriculum was introduced in 2019 after it was shown that a number of students were graduating with a lack of financial skills.

Experts believe that talking about money and financial management goes beyond dollars and cents, it is also about making choices and being aware of the trade-offs those choices require.  The classroom setting gives children the opportunity to ask questions about money such as creating a budget to allow them to save up for a toy.  It is important that teachers are comfortable teaching financial literacy especially if they are struggling in their own financial situation.

Teaching money management in school is a good foundation for kids to learn but it is important that parents engage with their children about what they are learning.  Other strategies for parents including giving kids an allowance and teach kids about spending and saving, involving them in family financial decisions where appropriate for their age and reviewing the kid's first pay stub to make sure that they understand about deductions and taxes.

Although it can be difficult for parents to discuss money with their kids it is a good idea to use every day examples to teach about money in a way that make it relevant to them.  Examples can pop up all the time such as when grocery shopping or getting gas. 

From an article by Ethan Rotberg

Suffering from Pandemic Induced Burnout?

By Randall Orser | Business , Employees , Home Based Business , Small Business

Covid-19 related stress and the blurring of your work life as a result of working from home may have you feeling out of balance. This is the same for the millions of Canadians who have transitioned to working remotely. While most enjoy not having to make the commute to the office many fill the saved time with more work which along with household chores, caregiving and navigating this covid-19 world can easily lead to burnout.  If this is you, here are some strategies that you might like to consider to help you gain greater ease in your life.

1. Work Smarter - it is important to have a schedule and stick to it.  Start work at a set time, check in regularly with work colleagues and team members and have a firm end of work day time.

2. Develop a Resting Strategy - make sure you plan to take quality rest time, whether it is daily, weekly or longer-term this will help you to retain the energy to have a successful work day.

3. Use the Pomodoro Technique - this involves breaking work down into intervals separated by short breaks, traditionally intervals are 25 minutes but they can be adjusted as necessary.  Do some work then take a break, go for a walk or do some other activity to allow your brain to rest then restart.

4. Watch what you eat and make sure to stay active - eating a balanced diet is important to stay healthy and prevent burn out, the better the fuel that you give your body the better you will feel and exercising is a must.  Think about taking an early morning walk before starting work it will set you up for the day.

5. Practice Mindfulness - Use small activities such as brushing your teeth or washing your hands to focus on your breathing and centring your body and self connecting. Be aware of how you are feeling, are you hungry or thirsty?

6. Name it to Tame it -  If you become upset or anxious about something ask yourself whether your feelings are anger, concern or exhaustion.  Naming aids help you to be self aware and manage your feelings.

7. Be Grateful - Take the time a few times a week to write down three things that you are grateful for, this will have a positive effect on your happiness and help with burnout, work-life balance and depression.

8. Practice Diaphragmatic Breathing - This involves inhaling deeply by expanding the lungs downward rather than inhaling using the abdomen or rib cage alone.  This technique has been shown to reduce stress and anxiety.

9. Release the Pressure - The pandemic has added more pressure and demands to our lives from personal and work responsibilities. Instead of adding more pressure by thinking that you should be doing things "better" or "faster" be kinder to yourself by recognizing when you are doing your best. 

10. Trust your Inner Resilience - Most of us want certainty in life so the uncertainty associated with Covid-19 is difficult to deal with.  It is important to realize that you are more adaptable than you think and what we are going through will not last forever.

11. Focus on the Here and Now - Instead of thinking that you cannot deal with the pandemic for another year focus on today and what you can do to make your life better.  We have to be positive that our businesses will come out of the pandemic stronger.

12. Make the Most out of Working Remotely - Make a new work schedule that allows you time for more rest and relaxation.  Learn how to keep your boundaries with others.  Learn new skills such as remote tools like Zoom.  Learn how to work effectively with your team while you are all apart.

From an article by Margaret Craig-Bourdin