Hub Blogs

Hub Blogs contains fresh contributions written by Financial Independence Hub staff or contributors that have not appeared elsewhere first, or have been modified or customized for the Hub by the original blogger. In contrast, Top Blogs shows links to the best external financial blogs around the world.

House shopping for Millennials

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By Barney Whistance

Special to the Financial Independence Hub

In the wake of a new generation now growing up and planning to settle down, one of the biggest concerns for them is finding a place to live. Finding a house for you and your spouse to live in is one of the most important decisions that you will have to take. Therefore, it should not be taken lightly. There are a lot of factors for you to consider when you set out to purchase or get a house on mortgage.  You have to be certain about your choice as you will be the one living with it for a major part of your life.

Your financial situation is the biggest aspect you have to consider when making a decision like that. Once you know your financial point and how much you can afford, you must decide on where you want to live.  Planning everything step by step always gets the work done more smoothly and also makes your choice easier.

Finances

Talk about your finances with your partner, so in order to set a budget, you already know how much you both have. Once you have done the initial financial scrutiny, you can decide which plan you should be applying for. Continue Reading…

How an RESP offsets the cost of post-secondary Education

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By Jo-Anne Wong

Special to the Financial Independence Hub

Post-secondary education is a necessity to get ahead in the new economy, but for many Canadians, attending university is out of reach due to rising tuition costs.

This why it’s now more important than ever for parents to start saving for their child’s education. Thankfully the Government of Canada offers one of the best ways to save for your child’s future through a Registered Education Savings Plan (RESP).

Rising Tuition Costs

According to Statistics Canada, tuition costs have increased by 40 per cent in the last ten years, and between 2014-2015 and 2015-2016 school years it rose by almost three per cent. The news is worse for parents in Ontario where the average cost of tuition is $8,114: the highest in Canada. If your child chooses to study out-of-province or overseas, fees will be significantly higher. Knowledge First Financial’s Guide to Education Costs in Canada projected that tuition could climb to over $14,000 by 2034. These figures do not account for living expenses. For example, four years of tuition, room and board could add up to $90,000 at the University of British Columbia.

The cost of tuition has been rising steadily over the last ten years and continues to outpace inflation. Compared to last year, students paid on average 3.2% more in tuition compared with the previous year, while the Consumer Price Index was 1.3%. According to Statistics Canada, the national average for university costs in 2015/2016 was approximately $19,500 for students in residence, and $10,000 for Guide to Education Costs in Canada projects that first year tuition could climb to over $14,000 by 2034. These figures do not account for living expenses, students who lived at home or did not have to pay for residence and meals. Students in Ontario have the greatest challenge, where tuition is the highest in the country.

These high costs have resulted in a record-high number of students applying for loans, which is putting them in debt. According to the 2015 survey of 18,000+ graduating university students conducted by the Canadian University Survey Consortium, the average student owed $26,819. Costs are not limited to university degrees, with 37 per cent of Canadians with student loan debt being non-degree students, attending vocational schools or other certificate programs, says Stats Canada.

 

RESP from Ottawa

Continue Reading…

Baby sitting & RRSPs: a 9-year old’s rules for when to TFSA

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9-year old Carlie Weinreb lectures financial bloggers on when to use TFSA or RRSP

By Carlie Weinreb

Special to the Financial Independence Hub

I lectured about RRSPs and TFSAs this November 3rd at the CPA Mastering for Money Conference for 45 minutes. I was a bit nervous because I knew that Former Prime Minister Paul Martin was also speaking. My example was very detailed with lots of Excel spreadsheets.

I then had a sleepover at my friends house the next weekend after dance class. My friend’s parents heard I lectured to over 400 Chartered Professional Accountants about RRSPs and TFSAs. They asked “OK what’s better?” I said “Well, it depends on your income and a couple of other things.” I knew they were not satisfied. I could tell they wanted like a 15 second answer.

The following week I was lecturing at the Canadian Personal Finance Conference presenting on RRSP and TFSAs again but they gave me only 20 minutes. And most recently, I presented on RRSPs versus TFSAs at Microsoft. They only gave me ten minutes.

3 quick rules

Continue Reading…

Mental health & credit-card debt during the holidays

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By Eva Wong

Special to the Financial Independence Hub

It’s the most wonderful time of the year and many of us celebrate by making purchases for our loved ones. Sometimes lots of purchases.

We at Borrowell paused to consider how this time of year might make Canadians in debt feel.

Earlier this year, a survey we commissioned found that 58% of Canadians have carried or are currently carrying a balance on their credit card. That doesn’t include other forms of debt, like student loans, lines of credit, car loans or mortgages. When you factor in that the average consumer owes just over $22,000 in debt in 2015, not including mortgages, we wondered why no one was addressing how Canadians juggle the expectations of holiday shopping with the realities of their debt.

Dr. Oren Amitay, a noted Toronto psychologist, told us the holiday shopping season is a time of year that can cause emotional and psychological distress for people who are in the red.

Financial pressure takes its toll

“A lot of people try to ignore their debt by doing things like not opening their bills,” explains Dr. Amitay. “But you can’t run from it at holiday time. Continue Reading…

15 tax saving tips to end 2016

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By David Rotfleisch

Special to the Financial Independence Hub

Want to pay less tax? The year-end brings with it your last chance for legitimate, allowable opportunities for tax planning that can lower your taxes payable to the Canada Revenue Agency (CRA) for 2016.

1.) Timing of Expenses

Taxpayers in business should accelerate expenses to make purchases that can be deducted this year rather than waiting for 2017. Employees can claim tax depreciation (CCA) on cars, planes, and musical instruments. Tradespersons and apprentices are permitted to deduct the cost of their tools up to a limit. Individuals planning on purchases should do so now to enjoy the benefit of depreciation claims this year.

Plan to purchase any capital property before the tax year-end to be able to claim CCA (at 50% of full rate) this year.

2.) RRSPs

RRSPs are a key tool for tax planning and allow Canadians to receive a deduction for the amount contributed, while also allowing the capital to accumulate tax-free until retirement.

Even though the deadline is March 1st, 2017, taxpayers should contribute to their RRSPs as soon as possible for compounded growth.

3.) Open TFSAs

While deposits to a Tax-free Savings Account (TFSA) are not tax deductible like RRSPs, accrued profits in the account are not subject to tax when earned or when withdrawn. Consider lending funds to a spouse or children to allow them to make their own TFSA contributions. Continue Reading…