Category Archives for "Personal Finances"

Does the Canada Revenue Agency Have Your Current Information?

By Randall Orser | Personal Finances , Personal Income Tax

Yes, it’s only January but the end of April comes quickly so now is a good time to think about tax-related issues. One of those is, does the Canada Revenue Agency (CRA), have your current information. That could be a new address, marital status, and more. What has happened in your life this year, that the CRA may need to know about.

Moved? - If you’ve moved in the year, then you should’ve informed CRA as soon as you were at your new address. Even if you signed up for online mail, you should let them know about your new address; you can do this through My Account where you get your online mail.

Why is this important? Keeping your information up to date will ensure that you keep receiving benefit payments to which you may be entitled and important correspondence from the CRA. Otherwise, your payments may stop or you may not receive important correspondence, such as your notice of assessment.

CRA will not forward your new information to other government departments, except Elections Canada if you authorized such on your tax return. Contact other departments or organizations directly to give them your new address.

Marital Status?  During the year you may have gotten married, or lived with someone for 12 consecutive months during some point in the year. In either case, you need to inform CRA as soon as your marital status changes.

This also goes for getting divorced. If your marital status changes during the year and you are entitled to any Canada child benefit (CCTB) payments, GST/HST credit, or working income tax benefit (WITB) advance payments, you must let CRA know by the end of the month after the month of your divorce. In the case of separation, do not tell CRA until you have been separated for more than 90 consecutive days.

If you changed your name, let CRA know as soon as possible. Call them at 1-800-959-8281 to update our records. CRA does not accept changes of name by email or over the Internet.

Birth of a Child?

You’ve had a big event this year having a child, and you may be eligible for some tax credits from the government. The first one being the Child Tax Benefit (CTB).

To be eligible for the CCB, you have to meet all of the following conditions:

  • You must live with the child, and the child must be under 18 years of age.
  • You must be primarily responsible for the care and upbringing of the child.
  • You must be a resident of Canada for tax purposes.
  • You or your spouse or common-law partner must be:
    • a Canadian citizen
    • a permanent resident
    • a protected person
    • a temporary resident who has lived in Canada for the previous 18 months, and who has a valid permit in the 19th month
    • an Indian within the meaning of the Indian Act, if you are not a Canadian citizen

The Automated Benefits Application is a partnership between the Canada Revenue Agency (CRA) and the Vital Statistics Agency of the participating province. The CRA will use the information from the child's birth registration to determine your eligibility for benefits and credits.

You can use the Automated Benefits Application if all of these situations apply:

  • you are the birth mother of a newborn
  • your child is born in a participating province
  • you did not already apply using My Account or Form RC66, Canada Child Benefits Application

What you need to do 

After your baby is born:

  1. Complete your child’s provincial birth registration form.
  2. Give your consent to the Vital Statistics Agency to securely share the information from your birth registration form with the CRA.
  3. Provide your social insurance number (SIN) to avoid delays.
  4. Submit your form.

We recommend that you sign up for direct deposit before your baby is born to get your payments faster.

If you use the Automated Benefits Application, do not apply any other way.

Disability

If during the year you’ve become disabled, there are tax credits you can apply for to reduce your tax burden.

Disability Tax Credit

What is the disability tax credit?

The disability tax credit (DTC) is a non-refundable tax credit that helps persons with disabilities or their supporting persons reduce the amount of income tax they may have to pay. An individual may claim the disability amount once they are eligible for the DTC. This amount includes a supplement for persons under 18 years of age at the end of the year.

The purpose of the DTC is to provide for greater tax equity by allowing some relief for disability costs, since these are unavoidable additional expenses that other taxpayers don’t have to face.

Being eligible for the DTC can open the door to other federal, provincial, or territorial programs such as the registered disability savings plan, the working income tax benefit, and the child disability benefit.

Who is eligible for the DTC?

You are eligible for the DTC only if we approve Form T2201. A medical practitioner has to fill out and certify that you have a severe and prolonged impairment and must describe its effects. Answer a few questions to find out if the person with the disability may be eligible.

If we have already told you that you are eligible, do not send another form unless the previous period of approval has ended or if we tell you that we need one. You must tell us immediately if your medical condition improves.

Disability supports deduction

Individuals who have an impairment in physical or mental functions and have paid for certain medical expenses can claim the disability supports deduction under certain conditions.

Who is eligible?

If you have an impairment in physical or mental functions, you can claim a disability supports deduction if you paid expenses that no one has claimed as medical expenses. You must have paid them so you could:

  • be employed or carry on a business (either alone or as an active partner)
  • do research or similar work for which you received a grant
  • attend a designated educational institution or a secondary school where you were enrolled in an educational program

Only the person with the impairment in physical or mental functions can claim expenses for this deduction.

Home Accessibility Expenses

If you became disabled and had to make adjustments to your home for your mobility and use of the home, you may be entitled to claim expenses for doing so. What renovations or expenses are eligible and ineligible?

A qualifying renovation is a renovation or alteration that is of an enduring nature and is integral to the eligible dwelling (including the land that forms part of the eligible dwelling). The renovation must:

  • allow the qualifying individual to gain access to, or to be mobile or functional within, the dwelling; or
  • reduce the risk of harm to the qualifying individual within the dwelling or in gaining access to the dwelling.

An item you buy that will not become a permanent part of your dwelling is generally not eligible.

Eligible Expenses

These expenses are outlays or expenses made or incurred during the year that are directly attributable to a qualifying renovation of an eligible dwelling. The expenses must be for work performed and/or goods acquired in the tax year.

Work performed by yourself

If you do the work yourself, the eligible expenses include expenses for :

  • building materials;
  • fixtures;
  • equipment rentals;
  • building plans; and
  • permits.

However, the value of your own labour or tools cannot be claimed as eligible expenses. This includes someone who is related to you, unless they have a contracting business and are registered to GST/HST.

If you have had any changes in relation to the above, it’s best to inform the CRA as soon as possible. If you don’t and later changes are made to any credits you were receiving, then CRA will claw back any overpayments, and charge penalties and interest.  At the same time we always appreciate knowing about any changes so that we can keep your file up to date.

Personal Finance New Year’s Resolutions

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

The start of a new year is the perfect time to take stock of your financial situation and see how you can make changes to improve it.   You need to make firm resolutions to help you get closer to your financial goals whether it be saving for retirement, a down payment for a house or starting a business.  Here are some considerations that you might want to add to your resolutions list. 

RESOLVE TO DO BETTER IN 2020 – Identify the financial mistakes that you made in 2019 and how you could have avoided them so that you are armed with that knowledge to help you avoid making the same mistakes in 2020.

Prioritize Your Debts – Make a list of all your debts and organize them according to the annual interest rate.  Plan to pay off those with the highest interest rate first, these will probably be your credit cards.  It makes no sense to save money in an account with a low interest rate when you are paying high rates of interest on your credit cards. You might want to also think about selling any assets that you might have such as matured savings bonds and using the money to pay off high interest debts. 

Open a Registered Retirement Savings Plan – It’s never too late to start saving for retirement.  Meet with a financial planner and let them advise you about the right plan for you.  Even if you only contribute $50 a month it soon starts to add up and any contributions will help to lower to your income tax bill. 

Rebalance Your Investment Portfolio -  Meet with your financial advisor to ensure that your investments are still working for you, and that once attractive investments are still that way or no longer appropriate.  If your financial goals have changed then you may need to rebalance your investment portfolio.  

Set up an Automated Savings Plan – If your willpower to save money is not too great then consider setting up an automated savings plan with your bank.  “Paying Yourself First” is one of the most effective ways to save money.  With an ASP a specific amount of money will automatically be transferred to your savings account at regular intervals before you have the chance to get your hands on it.  With regular deposits like this earning compound interest your savings will grow faster.

Collect Your Change – You may think that this is not a great way to save money, but you could be surprised!  Whenever you pay with cash save the change or take the money that you get back from recycling bottles and cans at the store and put it into a jar. At the end of the year take the change you have accumulated and use it to pay down debt.  

Commit to No Spend Days – Plan on taking regular no spend days or weekends, eat at home, find free entertainment and skip shopping.  This is probably best done during cold and rainy weather that makes you want to stay indoors.  Maintain the habit throughout the year to get the best financial benefit.

Get Healthy Without Joining a Gym – Save money on expensive gym memberships by doing free exercise videos on-line, working out at the park or taking winter hikes.  There are a number of free apps such as Fitbit Coach and Nike Training Club that you can use to do workouts at home.

Cut Back on Your Bad Money Habits – these usually include eating out too much and buying too many clothes. Identify what makes you want to indulge in your bad habits and try a different activity to replace it.  If you eat out too much try prepping your meals for the week on Sunday and ask friends and family to help you. 

Start Using Personal Finance Software -  This will enable you to keep track of where your money goes.  If you don’t know how much you spend on coffee, haircuts, movie tickets or eating out how can you start to cut your spending?

Read a Financial Book Regularly -  Some books recommended for Canadians are:

Personal Finance for Canadians for Dummies (2018) Eric Tyson

Millionaire Teacher (2nd ed 2017) by Andrew Hallam

Wealthing Like Rabbits by Robert R Brown

Worry Free Money (2017) by Shannon Lee Simmons

Happy Go Money (2019) by Melissa Leong

The Value of Simple (2018) – John A Robertson

The Latte Factor (2019) David Bach

Retirement Income for Life (2018) Frederick Vettes

How Stores Get You to Spend More Money During the Holiday Season

By Randall Orser | holiday season , Personal Finances , Retail

The Christmas Holidays are the most expensive time of the year for most of us.  After buying gifts for family, friends, clients, Secret Santa exchanges and others, we are left with huge credit card bills or empty bank accounts.  Although this is the season of buying retailers make it even harder on our wallets by employing a number of tricks and techniques to get us to part with even more of our money.

 1.   Deceptive Pricing and Clearance Pricing - Our minds are focused on saving money so if we see an item priced at $19.99 but reads was $39.99, it seems like a great deal and we are more likely to buy it because our brains are wired to feel that we are getting something for nothing.   An identical item priced at $19.99 will not sell as well because it is not seen as a deal.  In 2016 some American stores were sued over the deceptive practice of marking up the price of merchandise just to mark it down again so don’t always believe what you see, there is a good chance that the item is $19.99 all year.

2.   Designing the Store Layout to Maximize Profit - Retailers spend a lot of money researching and planning the best layouts for their stores to encourage you to put the most profitable items in your shopping cart.  Items placed at eye level are most likely to earn the most profit margin for the store as opposed to those on the bottom shelf.

As most people are right-handed and will reach for an item with their right hand so stores will put eye catching displays to the right of the entrance to their store.  These will either be high margin items or items that they want to move quickly.  A good shopping strategy is to veer left when you go into a store and check out the top and bottom shelves where you might find better deals.

3.   Ending Almost Every Price with a 9 - This is a psychological trick that most of us fall for.  $199.99 is a lot more attractive price than $200 even though there is only a cent difference.  People focus on the first digit in the price, 1 being less than 2.  Once the price jumps to $200 it is seen as being between $200 and $300 even though again it is only a cent difference.  We need to train ourselves to see $199.99 as over $200 as that is what it will be once taxes are added.  

4.   Helping Customers get into the Mood to Spend - You may already have Christmas overload with all the smells, sights and sounds that get you into the festive spirit.  Retailers want to make sure that you stay in the mood to give gifts and set up their stores with bright red and green, cheerful colours and lights, holiday music and even offer mulled wine.   When restaurants are busy, they want you to leave quickly, so one trick is to switch up the festive music for something more aggressive and increase the volume.  Tip – ignore the sensory overload, make a list and keep to it, get in and get out!

5.   Specially Packaged Gift Sets and Bundles can Cost More - Stores love to put together gift packs and sets which makes it easier for shoppers.  Beware! you are not always getting the best value for your money.  The cost of these bundles can be greater than buying the items individually, so make sure you are getting a deal before buying a gift set.

6.   Placing Lower-Priced items Next to Expensive Items – this will get you to compare items that appear similar but are different.  By putting a less expensive item next to an expensive one it looks like a steal, but the store could actually be charging more than their competitors.

7.   Offering Double-up Deals that You Don’t Need but Find Hard to Resist – “Buy One Get One Free” is something that is difficult to resist but sometimes taking that deal is false economy.  You may think that you are getting something for nothing, but you need to be aware of the price of the item in other stores.  You may not have to take the deal to get a good price on the item that you originally wanted.

8.   Providing Easy Credit Options -  Retailers know that customers cannot always pay for big ticket items so they offer you credit so that you can spread the payment over time without interest, but you can be sure that their profit margin is built into this.  Customers need to be sure that they are able to pay within the interest free period because the debt will eventually become due and all the interest accrued will be added.

9.   Making Clearance Items Harder to Find – Most stores have an aisle or “end cap” for their sale and clearance items.  In December these clearance items become harder to find meaning that customers have to search for them.  Retailers know that in the frantic rush to get gifts most people will be willing to pay full price.

10.  Offering Customer Incentives – Many stores offer free gifts with purchase you will see many of these at the cosmetic counter.  If you spend a certain amount of money you will get a free gift which encourages those who would not normally buy to put their money down.  Other incentives include coupons and discounts.

Despite using these techniques to encourage you to part ways with your money, stores are not trying to be dishonest.   They are just trying to get you to spend more, thereby increasing sales and keeping their staff employed.   Just be aware of these tricks and you will be able to do your holiday shopping without spending too much.

Tips to Avoid Holiday Spending Mistakes

By Randall Orser | Budget , holiday season , Personal Finances

It is very difficult not to overspend when buying Christmas gifts, we all do it!  This year Canadians will spend an average of about $1593.00 up slightly from $1563 in 2018.   Although 41% of this is spent while shopping on-line, the remainder 59% is spent in brick and mortar stores.  As overspending at Christmas can adversely affect our finances going into the New Year it is important to make and stick to a budget when buying gifts.  Here are five ways you can save money on Christmas Gifts.

1.   Make a Holiday Budget and Stick to it

  • Allocate money out of your monthly budget to a gift fund
  • Make it a creative challenge to give carefully thought out gifts which have more meaning than expensive ones, think about giving something home-made.
  • Consider expectations set by family and social situations when making up your budget.  Your family might decide to only give gifts to the children but if not ask them to consider a lower spending limit especially if you have a large family.
  • Start shopping early, shop sales and purchase items throughout the year, this will make holiday gift buying less stressful.
  • Don’t forget to include travel, Christmas Cards, Wrapping, Decorations in your budget.

2.  Don’t Use Credit – if you charge everything to your credit card you will be paying for Christmas well into the New Year or even for years afterwards.  When people are shopping at Christmas, they tend to use their credit card instead of cash.  Use your debit card instead of your credit card, if you have planned carefully all year you will have the extra money in your bank account to do just that.

3. Plan Your Christmas List Well in Advance - This will help you to buy gifts throughout the year at sales such as Black Friday, Cyber Monday and if you are really organized even Boxing Day.  Make sure you keep a list of who you have bought gifts for to make sure that you do not buy for a person more than once or miss anyone out. 

  • Keep a running list of things to buy and watch out for the best price.
  • Planning ahead takes the worry out of finding the perfect gift and the last-minute gift buying panic.

4. Don’t forget to shop around – To save money take time to comparison shop. You should check prices on-line at two or three stores before you go shopping to make sure that you are getting the best price.

5.   Don’t leave gift buying to the last minute – Panic buying will more than likely mean that you will spend more as your choices will be more limited.   Plan to get all your shopping done before the holiday season begins.

6.    Buy one or two Extra Gifts – You may be invited to last minute parties and need to take a gift which can throw off your budget.  Buy a couple of generic gifts during the year so that you have them on hand if you need them.  A bottle of wine is always a good choice to take to a Christmas get together.  

  • Think about buying gifts that you would enjoy in case you do not use it.
  • Remember you can always return unused gifts.

7.   Encourage Christmas Gift Exchanges – Secret Santa gifts or draws are a great way to save money.  

  • You will only have to shop for one person instead of many which works very well in a work or large family situation.  
  • You may also be able to purchase a nicer gift for the one person than you would buy for several people. 
  • People love Secret Santa as it makes their shopping simpler.

8.   Give a Christmas Gift to Someone in Need - Instead of giving gifts to family and friends who do not really need anything, consider donating to a charity in their name.  You can also purchase an extra gift while out shopping and drop it off right away.  Doing good by giving gifts to those in need instead of family members will help to get you into the holiday spirit and it can also save you money.  

Cyber Monday or Green Monday – Will you be Shopping On-line?

By Randall Orser | Budget , holiday season , marketing strategy , Personal Finances , Retail

Most of us have heard about Cyber Monday, the first Monday after American Thanksgiving when retailers offer many deals for us to buy on-line, but what is Green Monday?  

Green Monday falls on the second Monday in December, the name is thought to originate from the green colour of the American dollar.  The term was originally coined by Ebay in 2007 to describe the best sales day on their website in December.  Green Monday marks the 10-day shipping period before Christmas and is so successful because people realize that their time is running out to buy and ship gifts to arrive for Christmas.

As other retailers also adopted this day to offer their own seasonal deals (some call it Cyber Monday 2) Green Monday became the third largest shopping day of the season with sales in the U.S. of over $1.6 billion in 2016.  The retailers that usually participate in Green Monday are Walmart, Amazon and Best Buy and though popular in the U.S. the day is not as important on the calendar of Canadian shoppers, but it will probably grow in popularity in the future. 

The first Monday after American Thanksgiving was named Cyber Monday by Shop.org in 2005, although at that time as not many people had high speed internet connections they did not participate.  However, as connections speeds have increased so has the spending on Cyber Monday.  It was the biggest shopping day of the year both in 2017 and 2018 surpassing Black Friday.  Nearly a third of shoppers in the U.S. begin on the day before Cyber Monday and top stores such as Amazon and Walmart start cyber week sales on Thanksgiving Day.

Why Cyber Monday is so Popular

  • According to Adobe Digital Insights 40% of shoppers like the 24-hour shopping convenience.
  • The same number of shoppers wanted to avoid the Black Friday crowds.
  • 30% of shoppers enjoyed the ability to easily compare prices on-line.
  • Almost 90% of retailers offer Cyber Monday sales with 45% offering coupons or a percentage discount.
  • Over a third of retailers offered free shipping and 36% of shoppers said they would increase their on-line shopping if shipping was free.

A few on-line shoppers surveyed said that they would not buy on-line due to expensive shipping charges, or they didn’t like that they could not see or handle their purchase, or thirdly did not like to wait for their items to be delivered.

Mobile Technology and Social Media

Over a third of shoppers said that they would go to social media to get information about Cyber Monday deals usually on a company’s Facebook page and two thirds check out reviews on the company website before making a purchase.   More than half of on-line retailers make sure that they promote their sales on social media and that their websites are optimized for mobile devices.  

Impact on Brick and Mortar Stores

On-line retailing is growing by almost 10% annually and in 2020 is expected to reach $523 billion(USD).  In 2017 over 60% of people in 16 countries said that their everyday transactions were on-line rather than in-store.    This growth in on-line sales is having an impact on brick and mortar stores with more and more declaring bankruptcy every year.  It has been predicted that 75% of shopping malls will close in the U.S. in the next five years and those that do survive will cater only to high income consumers.  We can see from the number of closed stores in our malls that the same pattern is being repeated in Canada.

Pros and Cons of Reverse Mortgages

By Randall Orser | Budget , Personal Finances , Retirement

The number of seniors taking out a reverse mortgage is increasing year by year as retirees are finding that they do not have enough money to fund their retirement.  If you are thinking about taking out a reverse mortgage, as with any other big decision it is important to make sure that you know exactly how such a loan works and whether it is a good decision for you.  

Pros:

  • You continue to retain the title and live in your home.  You still have to pay your property taxes, insurance and maintenance.
  • You receive the proceeds of the loan as tax-free cash and you can use it however you wish such as pay off debts or travel.
  • You do not make any monthly mortgage payments until you decide to move or sell then the full loan becomes due.  You have the option to pay off the full amount of the principle and interest at any time though you may be charged a fee to pay off your loan early.
  • A reverse mortgage is a non-recourse loan.  You and your heirs are not responsible for any amount of the mortgage that exceeds the value of your home as long as you have paid all the property taxes and insurance.
  • You can usually decide how you want to receive the funds, all at once or to advances over time.

Cons:

  • Interest rates are higher than other secured lending options as there are no monthly payments required.  
  • The balance of the loan increases over time as does the interest on the loan.
  • If you default on the reverse mortgage you will have to pay back the entire amount due on the loan.  Lenders may have their own definitions of defaulting on your loan but in general ways you can default include: 
    • Using the money from the reverse mortgage for something illegal
    • Being dishonest in your mortgage application
    • Letting your house fall into a state of disrepair thereby lowering its value
    • Not following the conditions that you agreed to when you took out the mortgage.
  • When you die, your estate will have to pay back the full amount of the loan.  If both you and your spouse own your home together the loan will have to be repaid when the last one of you dies or sells your home.
  • The amount of time that you or your estate will have to pay off a reverse mortgage will vary.  If you die then usually your estate will have 180 days to pay off the loan, but I if you move into long-term care then you could have one year to pay it back.  This is important information that you need to get from the lender before taking out the loan.

Costs involved in taking out a reverse mortgage vary depending on the lender but usually include:

  • A higher interest rate than for a traditional mortgage.
  • A home appraisal fee
  • A setup fee
  • A prepayment penalty if you pay off your reverse mortgage early
  • Legal fees for closing costs or independent legal advice

Costs may be added to the balance of your loan or you may have to pay them upfront.

Taking out a reverse mortgage greatly affects the equity that you will have left in your home when you sell or die, and how much will be left for your heirs.  It is usually a good idea to speak to your family, a financial advisor and even your lawyer to make sure that you are fully understand how a reverse mortgage works and whether or not it is the best decision for you.

Your financial advisor may suggest alternatives to a reverse mortgage such as:

  • Taking out a different kind of loan such as a personal loan, line of credit or credit card
  • Selling your home and moving buying a smaller one 
  • Selling your home and renting another home or apartment
  • Moving into assisted living or other alternative housing.

Thinking About Taking out a Reverse Mortgage? Have you Done Your Homework?

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

If you are retired or close to retirement and finding yourself short of money then a reverse mortgage might be the answer, but make sure you do your homework before you take out this type of loan.

What is a Reverse Mortgage?

A reverse mortgage is a loan secured against the value of your home.  In Canada you have to be a homeowner’s aged 55 or over to take out a reverse mortgage.  You can convert up to 55% of your home’s value into tax free cash to use as you wish.  With a reverse mortgage you retain ownership of your home and there are no monthly payments required.  The loan is only repaid when your home is sold when you either move out or the last borrower dies.   

Reverse Mortgages are surging in Canada at about 25% per year as older people are finding themselves without the income that they need for their retirement and this is a source of additional income for them.  Outstanding balances on reverse mortgages have more than doubled in the four years up to 2019 and now stand at $3.12billion, although this is less than 1% of the residential mortgages that have been issued, they are growing at a much faster pace.  

At present the big banks do not offer reverse mortgages they can only be taken out with two lenders –  the leading provider is Canadian Home Income Plan (CHIP) from HomeEquity Bank which has offered reverse mortgages since 1986, the second is the PATH Home Plan from  Equitable Bank available in BC, Alberta and Ontario.  Some Credit Unions in BC and Ontario also offer reverse mortgages. 

In order to qualify for a Reverse Mortgage in Canada, these factors are taken into consideration:

  • Both you and your spouse must be at least 55 years old.
  • The home that you are using to secure a reverse mortgage must be your primary residence, and you live there at least six months of the year.
  • The location of your home.
  • The type of home – detached, condo, townhouse etc.
  • The appraised value of your home – it must be at least $150,000.
  • The condition of your home.
  • The equity that you have in your home.
  • If you have a mortgage, loans or a line of credit secured on the home, you must pay it off before taking out a reverse mortgage.  
  • The older you are and the more equity that you have in the home the more money you could get but the amount is also impacted by current market trends. 

How to access the money

You can usually take out the money from your loan either as a one-time lump sum or by taking some up front and the remainder over time.  You need to ask your lender what options are open to you and if there are restrictions or fees.  

A reverse mortgage may sound like a great idea but is it the best option for you?

How Much do you Plan to Spend Celebrating Halloween?

By Randall Orser | Budget , Personal Finances

Did you know that according to retail statistics Halloween is growing in popularity as is the amount of money that people spend celebrating?  Halloween has become a bonanza for retailers because it has become a universal celebration and consumers are spending increasing amounts of money on costumes and all the things that go with Halloween.  

Surprisingly Canadians spend more per capita on costumes, candy and décor than their counterparts in the US.  In 2015 when Halloween fell on a Saturday according to the RetailMeNot.inc survey Canadians spent an average of $169 per person hosting a Halloween party and on the following:

  • Attending a Halloween party $77
  • Alcohol $55
  • Costumes $52
  • Entertainment (performers, music, bar cover, etc.) $48
  • Decorations $43
  • Candy $42

Value Village says that Halloween sales have increased more than 35% over the past five years and at Canadian Tire Halloween sales are the third most important seasonal category behind Christmas and summer backyard living.

Trick or treating for children is still a mainstay at Halloween but adults are spending the money on celebrating (letting their inner child out for a night of partying).  Large parties with elaborate costumes have become very popular.   Out of the adult numbers who are celebrating 70% are 18 to 24 years old, but people aged 25 to 34 accounted for 65% and 35 to 44 years old accounted for 60%.  According to the National Retail Federation adult celebrations involved many of the following activities:

  • 48% wore a costume
  • 16% dressed up their pets
  • 35% threw or attended a party
  • 71% handed out candy
  • 46% carved a pumpkin
  • 23% visited a haunted house
  • 49% decorated their home or yard

This increased spending on Halloween opens up many business opportunities for those who want to cash in by providing a service.  It also provides many seasonal work opportunities for those who are looking to temporarily increase their income.

What to do When you Can’t Pay Your Bills

By Randall Orser | Budget , Personal Finances

Not having enough money to cover your monthly bills is a scary situation.  There are many ways that this can happen, overextending yourself with too much debt, having an irregular income or losing your job.  There are many signs that tell you that you need to cut back on your expenses or earn more money but not being able to pay your bills is a huge red flag that you immediately need to take steps to deal with your financial situation. 

  1. Reduce Your Expenses:  You need to find ways to reduce your monthly expenses and you can usually do this in more than one area.  Find a roommate or a cheaper place to live, carpool to work, cut back on your food budget, shop around for a cheaper cell phone.  You can also cut out things that are not necessities such as clothes, eating out or vacations.  Most important is that you stop using your credit cards right away as more spending on them will make your situation worse.
  2. Find Additional Income:  Next you need to find an additional source of income or a new job.  You may be able to pick up an additional part-time job or sell off some things that you no longer need or use.  A second job should only be temporary, so if you find that you continually need the extra income from it you should consider getting a better paying full-time job.
  3. Find a Long-Term Solution:  Looking for a long-term solution may mean making a career change or going back to school for more training to enable you to get a job where you earn a good salary.  You should also get more serious about budgeting your money so that you can see where you are overspending and where you can cut your expenses.
  4. Remember your Priorities:  Back to budgeting, make sure that you are covering your basic needs before paying your creditors.  Your basic needs include housing, food, medical needs, and utilities.  Once you have covered all these necessities you can start to pay your creditors.  
  • Working with your Creditors:  See if you qualify for a reduced payment or if they can temporarily reduce your interest rate, though they may want you to stop using it.  Lowering your monthly payments will always help your financial situation even though your credit rating may be damaged.  You should document all calls with your creditors and debt collectors and send all letters regarding payments by certified mail to prove that you sent them. 

From an article by Miriam Caldwell

The Worst Financial Mistakes that you can Make

By Randall Orser | Budget , Investments , Personal Finances , Retirement

When people are working on their budget or long-term financial plan, they are making changes to their spending. There are some common mistakes that people make when handling their finances that can come back to bite them in the future, but there are steps that can be taken to fix these mistakes.

  1. Thinking that things will work out ok in the end – putting your head in the sand and thinking that things will magically work out means that nothing is going to change.  You have to create a solid plan to save and to follow a budget which will determine how and when you will spend your money.  It is important to know that budget and financial plan are not bad words! 
  2. Relying on your credit cards to get by -  if you do this a few times it might not be too difficult to get out of debt, but if you make it a habit then you are liable to rack up a lot of debt in a short period of time.  Emergencies can and do come up unexpectedly, so you need to be prepared by starting an emergency savings fund.   If you have that you will not need to use your credit card for emergencies.   You need to make a goal to pay off your credit card and to not use it for the next year.  If you do use it make sure to pay it off each month.  
  3. Failing to plan for retirement – you should be making regular contributions to your retirement plan even if you are in your twenties.  The earlier you start the longer you will have for your fund to grow and benefit you in the long run.  Contributing to  a Registered Retirement Savings Plan is also a good way to save on your tax bill.
  4. Giving in to pressure to take the next big step – milestones in your life will affect your financial situation, such as getting married, a career change, buying a house or starting a family.  Only you can decide when you are ready to take these big steps so do not let friends and family rush you into something that you are not ready for otherwise you might resent the step that you took.  

From an article by Miriam Caldwell

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