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Four Ways Parents can Help Their Children become Financially Stable

It is a parent’s responsibility and obligation to provide financial stability to their child throughout their upbringing and ensure they can become financially independent. However, a parent must know when it is time to stop the bankroll. Here are four tips to help set them up financially: Setting Up a TFSA Account One of the best things a parent can do for their child is to set up a TFSA account. Parents can encourage their children to fund the TFSA by making a matching contribution. So, if a child contributes $100 to the fund, the parents will also contribute $100. This process can quickly generate growth within the account once diligently supplemented. Don’t Purchase “Extras” Of course, the generosity of parents should stop at world cruises, luxury cars and the most recent tech gadgets – these are things the children should be purchasing themselves. They need to understand debt just as much as they do wealth. Teach Them about Credit Cards Parents should teach their children about credit cards. Instead of dealing with the compounding interest on an outstanding balance, they need to impress upon them the importance of paying the card off before the balance is due, so as to not rack up unnecessary interest charges. Educate them on RESP’s One of the first steps parents should take when having a child is to set up a Registered Education Savings Plan. This can be an effective way of alleviating the financial burden of sending a child through their education and a great way of protecting the parents’ retirement nest egg.  Ensuring the RESP is consistently supplemented by the...

5 Simple Ways To Buy a Home Stress-Free

Preparing ahead financially can ease the cumbersome aspects of purchasing a home later on. Doing your research beforehand will allow you to go into the housing market with a clear head, side-stepping many common problems home buyers face. There are five key things to remember in order to buy your home responsibly: Create a Budget Figure out what your monthly expenses are, and then your annual expenses. Now compare that to your monthly income. The money left over can be used to determine the house price. While you’re doing this, use a mortgage calculator to figure out what the acceptable monthly amount is for the home. If you have no money left at the end of the month, ask yourself if this is the time for you to buy a home. Pay Debt Off If you have debt – credit card, student loan, auto loan, etc. – make sure you start paying it off or reduce it. Lenders won’t give people mortgages who can’t effectively manage their debt. You don’t need to be debt-free, but you do need to owe less than what you actually earn. Lenders will use a debt ratio to determine your monthly debt payments to the gross monthly income. Save Money Most lenders will want you to put some money down before they give you a loan – usually 10 to 20 percent. Saving money through an RRSP can stimulate your finances. You can reduce your monthly expenses, putting the extra money into a savings account. If you can handle it, work a second job for the extra money. Know and Increase Your Credit Score...

4 Strategies To Help You Pay Off Debt

Are you feeling the financial pinch? Do you feel bogged down by your debt? If so, then perhaps it’s time for a change. When it comes to your finances and successfully getting out of debt, it’s important to devise a plan that will help you to succeed. It doesn’t matter if you have a small amount of debt or a lot of debt, here are four key ways to help you become debt free. Create Goals If you want to pay down your debt, you need to create some goals to make it happen. Whether your goal is to relieve yourself of a particular debt or save money for a long overdue vacation, having structured goals in place is an excellent way to keep yourself on track and stay motivated. Keep an Eye On Your Money If you want to get out of debt, you need to know where your money is going. Track how you’re spending your money by using an app or a simple budget. Having a budget in place or using an app to track your inflows and outflows allows you to visualize where your money is going, and identify and adjust for any frivolous spending habits. Use the Snowball Method Once you know where your money is going and you’ve adjusted your spending to be within your budget, it’s time to pay off your debts. Write down all of your outstanding debts – from smallest to largest –and start paying off the smallest amount first. Once you’re done paying that amount off, apply what you’ve been paying to the second-largest amount. Fully paying your small...

Five Ways To Better Manage Your Holiday Spending

With the holiday season quickly approaching, it’s tempting to fall into the trap of overspending on gifts for family and friends. A gift is a great way to show thanks and appreciation to the people in your life that you hold dear, however it’s quite easy to overspend on gifts during the holidays. If you’re worried about how this extra spending could negatively impact your bank balance and debt levels, now is a good time to start planning on how to better manage your spending during this festive season. Here are five tips that can turn your holiday spending into a spending holiday: Give Yourself a Budget We find that one of the most important things is to create a holiday budget and stick to it. That way you can forecast the amount of spending you’re planning to do, while still staying within your financial means. To ensure that you’re checking off everyone on your list while still keeping things affordable, create a mini-budget for the season that includes the people you’re buying for, and the amount you’re willing to spend on them. With this budget in place, you’ll find that it’s much easier to avoid overspending this season. Make a List, Check it Twice It’s time to take Santa’s advice and make a list (maybe check it twice). It’s tempting to buy gifts for everyone in your life, but sadly for most people it’s not a feasible option. If your shopping list includes an excessive amount of family and friends, your list may need a little pruning. Make a list of everyone you’d like to buy gifts for, and...

3 Tips For Renewing Your Mortgage

Before you go jump the gun and re-sign with your current mortgage lender, it’s always important to consider shopping around to see if you can get a better deal. The biggest monthly expense for most people is their mortgage payment, yet a shocking amount of households just automatically renew their mortgages when the term is up. Shopping around is always a good idea, because you may be able to negotiate a better deal. Here are three tips to help you lower your mortgage payments come renewal time:   1. Get a head start What you definitely don’t want to do it wait until the last minute (i.e., when your mortgage is actually up for renewal) to start shopping around for new terms. Give yourself a little time and start shopping around for a better rate a couple months before your mortgage is up for renewal. This way, you’ll have plenty of time to search for and compare different renewal options.   2. It’s not all about interest rates Please don’t just fixate on interest rates – there are plenty of other factors that determine a good mortgage rate. Remember to factor in the amortization period, rate types (fixed rate or variable rate) and the flexibility of the payment schedule. These are all crucial factors in lowering the cost of your mortgage payments.   3. Shop around Before trying to negotiate a lower rate from your bank, find out what other banks and lenders are offering. There are quite a few websites that post current mortgage rates from banks, which can vary...

4 Steps to Comfortable Estate Planning

It might be uncomfortable to think of the day when your sun sets, but uncomfortable or not, it’s greatly encouraged to be prepared for that moment as much as possible. We all have a say in when, where and how our hard-earned assets are distributed. With that in mind, take a look at these four steps to comfortable estate planning.   1. Pay All Your Bills Including Debts and Taxes The beneficiaries of your estate will not see a dime until all your bills have been paid, this can’t be stressed enough. Take care of all your accounts so you take care of your loved ones. If you are deep in debt, chances are there will be little left of your estate for the people you intended to benefit once you pass.   2. Write a Will While it’s obvious, it’s amazing how many people omit writing a will all together. Your estate and how it is distributed is and should be your call. Sadly many estates are left in the hands of lawyers and judges. A good written will guides how your estate is distributed and to whom specifically. To put it bluntly, you get to determine how your estate is used even in death.   3. Establish an Executor You Can Really Trust Take careful consideration when deciding who is best for the task of executor. The trusted person should have the time, knowledge, skill and responsible attitude to carry out your wishes honestly. It’s often assumed the eldest child should handle this task, but it’s certainly not a concrete condition.   4. Properly File Important Documents...

4 Decisions That Can Lead to Stronger Financial Independence

Little decisions in the day-to-day can go a long way. We choose things by impulse, emotion and sometimes by ignorance. But some of these choices can be very costly. To help keep an honest perspective, here are four decisions that can lead to stronger financial independence.   1. Marry the Right Person You could lose half of your assets in just a few hours. That’s the worse-case scenario in a tenuous marriage. People often don’t think of financial compatibility when considering marriage, but the truth is it’s just as important as any other factor. Money mind-set can be a big predictor of relationship success. Many marriages have torn apart as a result of conflicting financial beliefs and habits.   2. Watch Your Costs Fixed costs are very easy to lose track of. From a gym membership, to a cell phone plan, to a subscription of your favourite magazine – it all adds up. The key is to stay ahead of all these and find those unnecessary expenses. When is the last time you have been to the gym? Do you really use four gigs of data? And, who really reads magazines these days? The point is there are always areas to trim and all it takes is a little attention and awareness.   3. Tune Out the Noise Given the volatility in the market there is a reason every day to pull out. But more often than not, these knee-jerk reactions usually prove to be very costly. Try to turn out the noise and think long-term. Also think about low-cost index funds as the investment of choice.   4....

4 Ways to Tap into Your Home For ​an Extra Source of Retirement Income​

Research has shown that more than half of Canadians aged 50 and older have collided with unexpected events that have impacted their finances and/or retirement plans. Whether you’re planning on selling your home or staying, here are four ways to tap into your home for added security during retirement.   1. Sell and Rent An easy way to get money out of your home is to sell it and put the cash into an investment that will boost your yearly income. But before you do so, factor in expenses (real estate agent fees, lawyer fees, moving costs, etc.). It’s also important to decide on the volume of risk you’re willing to take in investing. 2. Sell and Downsize Another effective way to boost your retirement security is to sell and downsize — it’s easy logic. However keep in mind that your needs might change as you age. For example, you might decide it’s absolutely necessary to avoid homes with a steep set of stairs. It’s imperative that you think strategically about your next destination. 3. Become a Landlord Ever thought of converting a portion of your home into an apartment? Well, doing so can increase your monthly income substantially. However you need to decide you’re cut out to be a landlord – that means being available all hours of the day and being able to find the right tenant. 4. Get a Reverse Mortgage This is a mortgage that is given to people who own property at 55 years or older. The borrower doesn’t pay back the loan until he or she sells the home.The loan is tax free...

4 Ways to Extend the Life Your Retirement Income

Medical science is thriving and life expectancy is higher than ever. As such, it’s important for all of us to be prepared for rich, long lives – no matter how far or close our senior years are. Before you settle on a retirement game plan, consider these four ways to the extend the life of your retirement income.     1. Prepare for Rising Health Costs The longer you live, the bigger the impact of potential health costs. Retirement home living is heavy on the wallet (can go up to $5000 each month) and medication is also expensive if it’s not covered by insurance. Stay ahead and find out probable costs by doing a little research on local health facilities. Decision-making and budgeting are much less stressful when you have cost estimates on hand to consider 2. Consider Inflation For those on fixed incomes, inflation can really become a thorn in one’s side. One way to offset the blow is to delay collecting certain streams of income. Both CPP and OAS are indexed to inflation, thus creating an opportunity to have a higher level of inflation indexing — if one chooses to delay collection. This will in turn also offer a higher level of benefits. 3. Work Part-Time Although it might sound like a burden, working part-time before full retirement is an effective way recharge your mind and your wallet. Earning a couple thousand dollars a month extra can greatly reduce the draw-down on your portfolio. 4. Estimate Your Life Expectancy Finally – estimate your life expectancy. While it can sometimes be a difficult thing to think about, having...

3 Tips to Help You Achieve Financial Independence

Wealth Management is a carefully designed strategy to help you meet your financial needs and goals, one of them being financial independence. The ability to live your life as you choose with a secure financial backing for you and your family is considered, by many, the ultimate success. 1. Financial Literacy Research has shown that people who are financially literate end up with more wealth than those who are not. There is a strong monetary incentive for becoming financially sophisticated. Taking the time and effort to become knowledgeable in the areas of personal finance and investing will pay off throughout your life. Make use of the knowledge your financial advisor provides. Financial learning and financial independence are lifelong endeavors. 2. Think Long Term The level of your wealth should be measured by the length of time you could maintain your standard of living without an additional pay check. In other words, if you had to stop working right now, how long could you maintain your current lifestyle needs? The principles of gaining financial independence seem simple, although we all know it is in the application that we occasionally stumble. Spend less than you earn. Keep investing. It is important to take a long-view focus as you work towards your financial goals. It takes more than a few weeks to achieve financial independence. 3. Good Debt vs. Bad Debt Consumer debt is the bane of financial independence. Borrowed money should only be used for investing, not to finance lifestyle needs. ‘Bad debt’ is used to finance consumables and other lifestyle preferences. ‘Good debt’ could be termed as strategic loans used...

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