A Money Coach in Canada

Follow & Subscribe

Our guest post today is from Pierre, who states, “Keeping up with Jones’ is for suckers!) Pierre and I work (me, part-time) at Canada’s best-kept-banking-secret, a virtual bank called http://www.citizensbank.ca, that puts ethics on the table, right on par with profits. Its parent company is Vancity Credit Union. Pierre is the bank’s IT guru.

First of all I’d like to thank Nancy for her warm invitation to post on her blog.

Nancy and I work and the same great company and I have come to really appreciate and relate to Nancy’s love of technology (I’m a techie myself!) but also for the important work she is doing with her website and blog educating people about the basics of money management.

Some of the case studies I’ve read on Nancy’s blog sound like typical stories, everyday folks trying to get by as best they can but needing a little help to get out and over the trap of living paycheck to paycheck.

Unless you are lucky enough to have learned certain fundamentals from your parents or a course in school (I didn’t have one when I was growing up however did you?) basic money management is still a mystery to most.

With the cost of housing here in Vancouver nearly doubling in the span of 5 short years and the average downtown condo going for 300K+ I can imagine that this can be incredibly daunting to most new young people graduating from college with school debt hanging over them.

I am by no means an expert but for what its worth here are some of my thoughts on the subject:

1. Keeping up with the Jones’ is for suckers. The people who have accumulated the most wealth didn’t do so by being extravagant and showy. Many ‘rich’ people I know drive 10 year old cars and live in very nicely decorated but simple homes (not mansions) even though they can probably ‘afford’ much more. This takes a bit of a heart to heart with yourself: What is the most important thing to you and how do you intend to achieve it?

Many people think that more money, bigger houses, fancier cars is the way but more often than not it leads them down a path which feels more like a trap as they find themselves slaves to the monthly payments, a job they hate and often not having time to enjoy these things they’ve been working so hard for in the end. A lot of people would say more freedom and choice is a good thing to have but most won’t see this until they retire given the current path they are on and then maybe only if they are lucky.

Everyone I’m sure would agree that there are enough things to cause yourself stress so why add money to the equation? Instead of spending time worrying about money all the time why not free yourself up to allow for more time with your family, creative pursuits or (you fill in the blank). I can’t reiterate how important this one is but also the most difficult.

Many people get caught in the rat race trap thinking they have to ‘be’ in a certain place at a certain age taking on huge mortgages and debt and living in absolute terror of how they will manage should their situation change? What if they lost their job, what if the interest rate changes? What if?! If you do your best to lower your monthly obligations to a low as possible you will start to feel that freedom.

2. So how do you start to lower your monthly obligations? I don’t even know where all the money goes each month you say! Simple. To start, do up a monthly cash flow budget! [editor’s note: if you’d like a free, easy-to-use cash flow spreadsheet, contact me, nancy, via my business website – link is just below – and I’m happy to e-mail it to you]. Most of the people I talk to that are stressed out about money have no idea where it all goes every month. You need to get a handle on your month cash flow to understand your spending habits. There are some simple techniques (Nancy has suggested some great ones at www.yourmoneybyyourdesign.com).

One of the simplest and most brilliant ideas was one I read about on Nancy’s blog here, was the separate sub-account. Once you’ve calculated your personal budget at every paycheck transfer your ‘spending money’ – in my case this is money for groceries, gas and entertainment – to a sub account and only spend money on those things from there. It will help you stick to your budget and help to prevent dipping into your savings by having two separate accounts. Certain costs are fixed and others are luxuries which add up quickly (Starbucks, eating out etc…). Once you see where the money is going you can allocate self imposed limits.

3. The harder part is trying to reduce some of your fixed costs like the mortgage. Ok, so I’ve got a hold of my monthly spending. Now what? How do I lower my monthly living costs? Stay or move, settle or co-mingle? Considering the cost of housing in Vancouver has doubled in the past 5 years (although salaries haven’t!) I think many people have thought of alternatives. I believe people will be making some tough choices.

More and more people will either resign to raising a family in a condo or you will see a more occurrences of multigenerational living arrangements where parents and children live together, the parents perhaps passing the family home to their children and the the children looking after their parents in their old age. It is also a real help to growing families who now have some help around the house and certainly makes it easier for the any young family considering children if the parents are there and willing to help with babysitting etc.

The latter is not as typical in our culture so my money is on the first scenario, but we’ll see! If neither of these choices sits well with you and you absolutely want the white picket fence dream then moving to a less expensive city or suburb should be a consideration. Locating by public transit can also reduce the need for a vehicle (this is more realistic for single people or couples living downtown who don’t have kids who need to go to piano, hockey ballet etc!!) but can also help couples potentially reduce the need for a second vehicle if communing by transit during the week in as option.
I would love to hear your comments and I also would be curious to hear what you think a bank could do (say in an online capacity) to provide basic helpful advice to help people reach their financial goals.

Eleanor has an income in the low 70K range from her work as an engineer. She is about 15 years away from retirement, and while she has little debt, she has no assets either. She does have a pension, but no rrsps of her own, no savings, no property. She is utterly baffled where the money goes. She does rent an $1,800/month apt in Kits (Vancouver) which she shares with her college-age son.

While successful professionally and working very long hours, Eleanor is chronically and seriously disorganized. Brilliant, yes. Competent yes. But require or suggest structure and she runs for the nearest exit.

What would you suggest to help Eleanor take control of her money so she can start building the assets she could have, with her income level?

Disclaimer: as usual, these case studies are based on real-life people and/or issues I’ve encountered, but details are altered to thoroughly disguise the identity of the individual.

I found a really interesting question posed on a fellow Canadian finance blog. She writes,

I just went to Quizno’s for lunch (I printed off a free coupon off their site!) and ordered a yummy sandwich. I paid via VISA (I’m only allowed 10 debit transactions for free a month) and promptly left. On the walk back to my office I realized that I never signed the Credit Card slip.

Now I know my VISA can be charged directly to my debit account, however, I didn’t enter a PIN, so I know that didn’t happen. The receipt I got shows that it was a VISA and the charge went through, but I don’t know if they can put the payment through if I didn’t sign the slip.

I’ll have to wait and see if it shows up on the ‘net.

This got me thinking – when it comes to company mistakes, how far will you go?

Wow. What a thoughtful question. I recall in my 20s, making a 15 minute trip back to a hardware store to give back a couple bucks for an item they’d neglected. I’d noticed at the time, hadn’t spoken up, but was troubled the whole way home.

I think my de facto m.o. is now: weigh out the cost to the business, plus my inconvenience to correct the mistake, plus estimating whether I’d want the customer to correct the mistake if I were in their shoes. (the answer isn’t always yes.)

How ’bout you?

Contributed by MJ Ankermann, Urbanista, a vancouver realtor.

After watching Live Earth and thoroughly enjoying it, I started thinking about the changes I have been seeing in the condo market in Vancouver in the past year. While condo dwelling in itself is green living, as we take less of a footprint on the land, it has been hard to participate as far as function and design.

That has been changing as we are seeing condo developments being built with ‘green” concepts. To name a few there is: The Donavan in Yaletown that is being built with a geothermal heat pump system that is considered by Natural Resources Canada, to be the most energy efficient, environmentally clean and cost-effective space conditioning system available.

There is also the huge Southeast False Creek Sustainability Community Plan, which includes private developers such as Polygon with The Foundry, building according to LEED Green Building Standards. These standards include green roofs and the implementation of car sharing programs, something which The Capitol in downtown Vancouver is also doing.

sam-sullivan.jpgThere is also the extensive Eco-density Plan put forth by The City of Vancouver and spearheaded by our mayor Sam Sullivan. These are policies and designs that are going to shape our future and help us keep the pledges from yesterday’s world concert.

The guest post today is from Lana Gilbertson, Trustee in Bankruptcy for Price Waterhouse Coopers.

“As a Trustee in Bankruptcy, I am often asked what are the most common reasons that people find themselves in financial difficulty and, ultimately, filing for bankruptcy. While there are often many reasons for financial difficulty, here is my “top three” list, speaking from my own professional experience:1. Loss of income stemming from job-loss or illness2. Separation, divorce and/or breakdown of significant relationship3. Business failureWith some exceptions, I believe that overspending or spending beyond one’s means is the underlying cause of bankruptcy; however a triggering event, such as job-loss or a divorce, becomes “the straw that breaks the camel’s back.”Bankruptcy is one option available for individuals who have amassed extensive debt obligations that they are unable to repay because of insufficient income and/or a lack of other resources. Bankruptcy isn’t just for the poor, the uneducated, or the sick – people from all walks of life, all professions, and all income levels go bankrupt.If you are like most Canadians, you are currently servicing some form or amount of consumer debt. Ask yourself if you would be able to continue to service the debt if something unexpected were to happen in your life.”

Page 10 of 11« First...«7891011»