Category Archives: Personal Finance

Canadians are carrying mortgage debt into their 70s

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According to a recent RBC poll, a disturbing mortgage trend was revealed, that one third of Canadian mortgage owners will carry that debt into their 70s. Specifically, 33% of these Canadians aged 55 and older still have 16+ years left on their mortgage term! This marks a contrast with the 72% of Canadians that say they hope to be mortgage-free by the time they reach the retirement age of 65. Somewhere along the line, Canadians aren’t planning their retirement smart enough or aren’t taking advantage of the necessary steps to reduce mortgage debt.

Canadian Mortgage Debt

With regard to Canadians aged 18-34, more than a quarter project themselves to be mortgage-free by the of age 45. That’s two full decades before the retirement age of 65. Even more shocking is that one in ten predict to be mortgage-free by 35! Is this a product of a younger generation that is financially smarter and better at forecasting and planning? Or is it a symptom of naïve dreaming and unrealistic expectations? We’ll have to check back with RBC after a few years to confirm the results as time reveals all things.

On the positive side, 41% of Canadian homeowners are mortgage-free, representing the highest level it has been in 5 years. This is in part with the majority of baby boomers that have been at or near the end of their mortgages over the past year.

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How to recover some of your wedding spending for a down payment

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Are you newly married and wondering how you’re ever going to save enough to cover the 5% minimum down payment (approximately $18K on the average home in Canada), especially with wedding bills piling up?

We chatted with our friends at SmartBrideBoutique.com, a premium wedding classifieds website where brides can buy, sell and save on everything wedding, from new and used wedding dresses and bridesmaid dresses to wedding décor and accessories.  Their number one piece of advice is to consider selling your wedding dress (and other wedding items) online to recover some money from your recent wedding.

Used Vera Wang WV351011 Wedding Dress→ Vera Wang VW351011 wedding dress available for purchase at SmartBride Boutique

The average cost of a wedding dress in Canada is about $1150, with many brides spending upwards of $2000 +.   If you decide to sell your wedding dress after the wedding, you can recover about 50% of your cost.  Depending on how much you paid for your dress, this could go a long way in providing a nice little nest egg for your first home purchase.

Beyond that, selling your wedding dress, plus other wedding accessories (veils, jewelry) and wedding décor (vases, table runners) online, lets you:

  • Clear up space to make room for shared closets
  • Love the Earth! Recycling wedding items reduces carbon emissions from shipping
  • Get karma points by helping another bride save on her wedding

Sound like something you’d be interested in?  Here are 7 tips to help you sell your wedding dress:

1.  There’s no time like the present!

Post your dress for sale as soon after your wedding as possible. You’re not going to wear it again, so why leave it hanging in your closet?  Used dresses continue to hold their resale value for roughly 2 – 3 years after they’re purchased and worn (depending on the style) but generally sell for the most money within the first year when they are most current.

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Should you buy your kids their first home?

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With the new university year underway, parents and kids alike are facing overwhelming rent costs.  Not many students have the option of living at home and housing accommodation doesn’t come cheap these days.

Consider this option:  Parents play ‘landlord’ to their children.

According to TD Canada Trust, one in every ten Canadians is considering this possibility; this number is up from 5% of Canadians just a year ago[i].

However, there can be severe tax and estate-planning repercussions with this route[ii] .

  1. If you purchase a second property in your own name and then rent it out to your child, this second home won’t meet the requirements of the tax-free capital gain because it won’t qualify as a primary residence.
  2. An alternative is to present the cash as a gift to your child. Then they can buy the property in their own name.
  3. You can lend your child the money by setting up an interest – free mortgage.

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Comment on our Experts’ Guide to Home Hunting and WIN AIR MILES!

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 House HuntMost experts will agree that you should decide what you want in a home before you start your search. The second thing experts will agree on is that your wants will trade off between three important, and often conflicting, factors: location, style and cost.

For example, you may decide you want a detached family home in an urban neighbourhood for $300,000. However, you may have to settle for two out of three and look to the suburbs for the style of house you require within your price range.

Location, location, location

Of course, you want to ensure you can access amenities that serve your current lifestyle, but trusted Toronto condo realtor and host of Inside Toronto Real Estate Brian Persaud warns “Location is an investment too.” Neighbourhoods evolve and you should investigate an area’s urban progression as well as zoning by-laws.

The types of things you want to evaluate in your current and future location are:

●      Transportation

●      Work

●      Doctor/dentist

●      Places of worship

●      Shopping

●      Police department

●      Hospital

●      Schools

●      Fire department

●      Recreation

Eugene Mezini, a Toronto realtor, also says Walkscore, an application that rates an address’s ‘walkability’ is something he lists with every property as many of his customers value this.

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Top 10 Money Saving Apps for your Smartphone

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Purchasing a Smartphone can leave a dent in your monthly budget. But, consider it an investment. Coupled with new apps that are being developed, your Smartphone may actually help you plan and budget for savings goals in future. The term “App” is short for application, which is a software tool that can be downloaded from the internet right onto your handheld device.

Here at RateHub we like saving money, so we did some research to find the top 10 money-saving apps.  

1.       Mint  

Money Saving AppsMoney Saving Apps

This app claims to be the “can`t-live-without-it” tool to keep track of your personal finances. It has been listed on TIME Magazine`s “50 Best iPhone Apps of 2011” and been named “Best Finance App” at the 1st Annual App Awards. Apart from having impressive accolades, this app genuinely does seem to be the package deal.

The app is a budgeting tool that allows you to access your updated account information and budgets, rendering it easier to make those crucial “where should I eat tonight?” decisions. Is it hot dogs or lobster?

An added advantage is that you can enter deposits or transactions when they occur and see immediately your available funds and credit balances. For those of you who like to visualize your finances, Mint provides graphs that make it easier to spot trends.

Mint allows you to track your investments, monitor your goals, find savings and receive reminder alerts. Also, the app is password protected.  This app covers all the bases.

Available for: iPhone, Android

Cost: Free

2.    Coupone Sherpa

Money Saving AppsThis is a great app for coupon-clipping junkies. The Coupon Sherpa is “the most trusted authority for coupons online”.

The app makes locating and using coupons convenient and accessible. You can search over 5,000 available coupons by store name, category or location. You can also email coupons to friends and family.

Although some stores are finicky and might not accept coupons from a phone, Coupon Sherpa has an easy print feature so that you can have a hard copy as well.

With Coupon Sherpa, you can flag businesses as favorites, so if you shop at certain places often, those specific coupons make themselves available to you immediately. It’s nice when people and apps – remember what you like.

Available for: iPhone

Cost: Free

3.   GroceryIQ

Everybody needs to shop for groceries. So, what better idea than an app that helps you shop, by making sure you stick to your budget. It’s essentially a shopping list but with features that take the grocery shopping experience to a new level.  Help avoid unnecessary impulse buys with this app.

Time-saving features include:

  • The barcode scanner: Simply scan the barcodes of products that that you want to add to your list.
  • List sharing: Sync shared lists between family members or with roommates.
  • This app also allows you to organize your grocery list per aisle and record your favorite products for future shopping reference.

Available for: All iOS devices (iPhone, iPod, iPad), Android

Cost: Free

4.    Gas Buddy  

The Gas Buddy app provides drivers with an easy tool to locate the nearest and cheapest gas. Sounds simple, but considering the rising cost of gas, this could translate into significant savings. It offers directions, distance and estimated time to reach every location allowing you to make the most convenient trip.

In some cities gas prices can vary by as much as 15-20%, so it is an app worth investing in. Another snazzy feature is that you can set your vehicle’s tank size, your consumption (miles per gallon) and the fuel type.

The data is user generated so the app is especially useful in large cities. In cities with more users, you’ll realize that the price information is frequently updated. As more people make use of this app, the money savings potential increases proportionally.

Available for: iPhone, Blackberry, Android, Windows phone

Cost: $2.99

5.    Pocketmoney

Pocketmoney offers a comprehensive way to manage your finances. However, its strength lies in the fact that it’s developed for those who are new to finance apps. The first time you use it, a pop-up appears with each new screen describing what this screen is for and how to use it.  It’s not the most powerful money-saving tool out there, but it’s still a good buy especially if you’re new to Smartphone apps.

Features include category reports that help with taxes, photo receipts, displays of current, future and cleared balances and an unlimited number of accounts and transactions.

Available for: iPhone

Cost: $4.99

6.    Pageonce

Money Saving AppsThis personal finance tool is yet another great example of how you can use an app to keep your accounts updated. A calendar view informs you of all your upcoming bills and alerts prevent you from making any late payments – great for your credit score. Payments, investments, credit cards and cash- all in one convenient location.

Available for: iPhone, iPad, Blackberry, Android, Windows phone

Cost: Free

7.    BillMinder

This is a useful way to stay on top of your bills from the convenience of your iPhone. The app allows you to set up push reminders that alert you before your bill due dates, making sure that you never miss a bill payment.

You can also set up recurring bill reminders – for cell phone bills, internet bills, mortgage payments or student loans. Several similar apps don’t have this feature.

BillMinder also allows you to export your bills to Microsoft Excel or Numbers, back up your data and export to your email.

Available for: iPhone, iPad

Cost: $1.99  

8.    Grocery Gadget Shopping List

Money Saving Apps

This app is another grocery aid for smart shoppers. In addition to allowing users to manage their shopping lists, it integrates frugal options such as coupons and price comparisons.  The app also allows users to upload and share lists. While you shop, Grocery Gadget remembers the order in which you check off the items on your list then re-organizes the next time you shop for optimal time savings.

Available for: iPhone, Blackberry

Cost: $4.99 and a free Lite version

9.       iXpenseIt

This app allows you to record expenses on the move and makes it easier to keep track of your spending habits.

It’s got a battery-style representation of your current budget which is visually appealing and you can create customized reports to locate where all your cash is going. A nifty feature is using the iPhone’s camera to store receipts.

Available for: iPhone

Cost: $4.99 and a free Lite version is available

10.   Free App List

Ok, so this last one technically isn’t in the same category as the others, but it’s an app to all the free apps out there! What a great way to save some cash.

Available for: iPhone

Cost: Free (It had better be!)

Finding the best mortgage rate isn’t the only way to save money. If you’ve got a Smartphone then it’s definitely worth your while checking out these terrific money-saving apps.

Sources

https://www.mint.com/how-it-works/anywhere/iphone/

http://www.couponsherpa.com/

http://www.groceryiq.com/

http://blog.gasbuddy.com/posts/GasBuddy-s-own-iPhone-app-now-available/1715-429439-461.aspx

http://www.pageonce.com/

http://www.grocerygadgets.com/how-grocery-gadgets-work.aspx

Best Money Saving Tips

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Recently Ratehub.ca held a “Money Saving” contest on Facebook, where fans had the chance to win prizes by sharing their best money saving tip. The contest was a success with three runner-up winners taking home $15 iTunes gift cards and the grand prize winner walking away with a Sony Blu-Ray player! Now that the dust has settled, we’ve had time to look at the entries and analyze the data. The contest was fairly open-ended so we received all kinds of great advice from people.  However, we discovered most of the data fell under eight categories. They are as follows:

RE-USE

This included using the Freecycle network, buying used, shopping in thrift stores, garage sales, and utilizing your local library.

“Dryer Sheets! Cut them in half, do `em all at once, bit of a nuisance but worth it because they last TWICE as long, ie: you aren`t having to buy another box anywhere near as quickly. You will not notice any difference by having a 1/2 sheet in the dryer load as opposed to a full sheet ;-) ” – Debra Anderson

“Use the library. The latest books, DVDs and CDs are all available.” – Nancy J. Montgomery

BARGAIN HUNTING/SHOPPING AROUND

Most comments were centered around haggling, shopping in more than one location, and delaying “want” purchases.

“Don`t be afraid to ask for a discount – the worst that can happen is that you`ll get refused.” – Francine Fogel

SAVINGS

These tips involved utilizing smart withdrawals and rewarding savings accounts

“Have savings come out the same day you get paid – that way it`s like you never had the money to begin with!”- Tonya Wagenaar

SELF-CONTROL/BUDGET

This type of comment was the most popular.

“Write a list of savings goals you want to achieve, and then create a plan to get you there. Putting it down on paper will make it more real, and will increase the chances of you succeeding.” Give Me My Five Bucks Back

COUPONS

This is pretty self-explanatory.

“Extreme couponing !!!!! aww yea” – Kate Thomson

DIY/COOK YOUR OWN MEALS

“Making large batches of main dishes and desserts and freezing then in meal-size containers saves time, energy and money. And we`re not tempted to eat out when we`re too tired or busy when we know there`s a quick meal in the freezer.” – Rose Robinson Hately

GIVE UP SOMETHING

This piece of advice only represented 2% of comments.

“J`ai sauvé 100$/semaine en arrêtant de fumer” – Denise Trepanier [I saved $100/week once I quit smoking]

OTHER

These comments varied from humorous to completely off-base, but we still loved them.

“Try pre-drinking more, sneaking mickey`s into the bar, splitting rent with 7 other people, stealing your roommate`s food, etc. Turns out college kids are money saving geniuses.” – Andrew Macdonald

“Don`t get married or have children! Could have saved myself tens of thousands of dollars. Live in sin, change partners every 5 months or so and have other people`s children visit when you have the urge, or better still go visit them with the money you`ve saved and when you leave, don`t take their kids with” –Surfcat Jim

Best Money Saving Tips 

*all data was pulled from our Facebook page

Our contest revealed that a quarter of the people who submitted their tip believe the key to saving money is through self-control and smart budgeting. Following this category, are bargain-hunting and the extensive use of coupons, second and third respectively. This makes sense considering the recent rise in popularity of prominent ‘deal’ sites such as Groupon, Dealfind, and Teambuy. Tied for fourth are two categories that not only benefit our wallets, but our peace of mind too. Making your own food can provide a sense of accomplishment while re-using conserves our resources. With consumerism more prevalent today than at any other time in history, it’s not surprising that only two per cent of the suggestions called for the forfeit of a money-draining habit.

What was a little disappointing was the lack of ‘savings’ advice. Most people today aren’t properly using their savings options, which can come in handy, especially for those looking to purchase a home in the future. This becomes even more apparent for first time homebuyers since they are allowed to withdraw from their RRSPs without penalty using the Home Buyer’s Plan. Also, the more money you allocate to your savings for a down payment, the less CMHC insurance you are subjected to.

Suze Money Saving TipMoney is a sensitive subject in 2011, with most countries still trying to cope with the financial crisis. This reality is echoed in the media when we see TV personalities such as Gail Vaz-Oxlade and Suze Orman emerge as celebrities. We’re all looking for help to better our situation. Because of the economic climate, companies like Groupon are allowed to shine. We as consumers are constantly seeking new ways to stretch their dollar.

One question we do ask is: What percentage of the people who submitted a money-saving tip actually follow their own advice? This Ratehub author suggested making your own food, which I do follow at select times of the week. The other times of the week? Not so much. However, another Ratehub member can proudly boast that she has every category checked off. Maybe there is hope after all.