Savers versus spenders – the great divide

Five tips to help couples bridge the gap on their financial attitudes

We’re all different when it comes to our perspectives on spending. Some people have no problem saving all their extra pennies, and some people spend what they have without thinking about the future. While differences make the world go round, conflicting thoughts on money matters can lead to tension in relationships. If you and your partner find yourselves at opposite ends of the saving versus spending spectrum, these tips can help you meet in the middle.

1. Understand each other’s differences

You’re buying a new car together. The spender wants all the upgrades, while the saver is just fine with the base model. When emotions run high, it can be difficult to see where your partner is coming from. The truth is, our Budgeting with Partnerattitudes about money are deeply rooted. Perhaps you or your partner is stingier with spending because there was less to go around growing up. Perhaps the person who is free with money gets an emotional reward from spending. Try to take a step back and discuss the reasoning behind your behaviour. It’s always easier to negotiate when you try to validate each other’s feelings, instead of assigning blame.

2. Set goals you can agree on

As a saver, it can seem irritating if your partner is constantly making purchases you deem frivolous. Creating a spending plan as a couple – with shared goals in mind – can help bring you together around common values. For example, say you agree that taking a trip overseas or buying a home is your biggest priority. You may want to consider how much you’ll need for that expense and factor how long it will take you to save that amount. With that savings goal in mind, it will probably be a whole lot easier to pass up unnecessary indulgences.

It is possible for partners with different spending styles to find a middle ground.

3. Establish a system for bill payment

When your bills roll in each month, avoid the last-minute scramble by setting parameters on who will pay each bill if you manage your finances using separate accounts. Perhaps you each cover half of your mortgage or rent, one of you pays the auto insurance and the other covers hydro. Since these expenses are generally fixed, setting up a system for handling bills up-front gives you one less thing to worry (fight) about.

4. Set a threshold for joint purchases

Every couple has a different way of structuring their finances, and sometimes, it takes a bit of trial and error. Some people keep separate accounts and split everything down the middle, while others pool all their resources. Other couples have four accounts between them: one joint for savings, one joint for everyday expenses and two individual accounts for whatever’s left (fun money). Whichever system you decide is best for you, you may want to consider setting a limit on the amount you can spend on a joint purchase without consulting each other. Discussing big-ticket purchases with your partner before you take the plunge is an easy way to avoid a disagreement.

5. Call for backup

Sometimes, reaching out to an impartial third party is the best way to solve financial disputes. I can help by talking to you about your goals and determining the best way to structure your finances to suit your needs. With a customized financial plan in tow, you’ll have a solid foundation for the decisions you make about your money.

With a common vision for your future and the right financial action plan, it’s possible for partners with different spending styles to find a middle ground.

Four things to consider before accepting your first job

As a new graduate, navigating the job market can be a challenge. After the often lengthy search and application process, you might feel accepting your first offer is the only choice. While taking the first position you’re offered may be the right option for you, there are several factors worth considering when evaluating a job offer.

Workload and work-life balance

Throughout the interview process, it’s important to ask questions that will help you evaluate the day-to-day responsibilities of the position. You’ll also want to determine the company’s policies on work-life balance.

Four things to consider before accepting your first job

Four things to consider before accepting your first job

Is this a position that requires you to be connected 24/7 and available at a moment’s notice? Will the stress-level and hours of work be compatible will your lifestyle and personal commitments? What’s the company’s position on flexible working hours? While there may be an element of ‘paying your dues’ associated with your first job, make sure the workload and corporate philosophy on work-life balance is right for you.

Culture and fit

Workplace culture is a key consideration for many millennials who want to feel their work is meaningful and not just a nine-to-five destination. If you fit that profile, it’s a good idea to inquire about things like teamwork, philanthropy and social events.

Does the organization encourage collaboration or will you be working on your own? Does the company participate in charitable giving or give back to the community in other ways? Will there be organized events to socialize with your colleagues to encourage engagement? Remember that determining the right fit is a two-way street. If you don’t gel with your prospective boss or team members, it might be worth continuing your job search.

Establishing good financial habits early in your professional career can help you stay on track for years to come.

Development and progression

While it’s generally accepted that millenials will change jobs more often than previous generations, considering progression opportunities within an organization is an important factor that can impact your future success. You’ll likely also want to consider the organization’s stance on personal and professional development.

It shows initiative to ask about your potential growth trajectory within the company during the interview process. If you see yourself in a leadership role in the future, for example, ask about the potential for in-house leadership workshops, mentorship opportunities or tuition reimbursement to help you get there.

Compensation and benefits

While salary and benefits are top of mind for most job seekers, there may be a gap in reality vs. expectations for recent graduates. In most cases, entry-level salaries aren’t very negotiable and reflect limited experience. If you know you can provide some advanced level of expertise, you may want to consider negotiating for a better offer.

If you feel you’re in a position to negotiate, make sure you can present a strong case as to what you’ll bring to the company. Non-financial compensation including vacation, benefits or bonuses are other elements that can, in some cases, be more flexible than salary. In any negotiation, make your genuine interest in the job known when asking for an increase in salary or benefits. If the offer is firm, consider asking about the frequency of performance appraisals and salary reviews.

Entering the workforce after graduation can be challenging and exciting, both emotionally and financially. When beginning your first professional job, it’s a great time to develop a financial plan that can adapt as your needs change. It’s important to consider how you’ll afford your everyday expenses while setting enough aside for the future. I can help you plan for your financial future and offer you valuable tips about topics like budgeting, saving, investing and the power of compound interest. Establishing good financial habits early in your professional career can help you stay on track for years to come.

Golf tips to line you up for financial success

With golf season upon us, you may be looking for ways to enhance your game for the year ahead. In many ways, golf strategy is a lot like the principles of investing. If you have a love for the links, then you’ve already got a head start on how to manage your investments effectively.

Your golf game and investment portfolio require continued tune ups to help bring you positive results. Here are some tips to set you up for success – both on the course and in the market.

Hire a great coach

Golf is a game of precision. Your clubs, stance and swing all play a part in reaching the green. With so many elements to consider, it’s beneficial to consult a pro to make sure you have a strong foundation. Even seasoned golfers can benefit from lessons now and then for tips and tweaks to improve their performance.

Similarly, when building a financial security plan, there are multiple factors to assess to make sure it works for you. I can give you aGolf Tips and Investing primer in all the investment options available to help you achieve your financial goals. It’s always a good idea to touch base with me a few times each year to keep up to date on your financial progress.

Make a game plan

Consider the course layout, terrain, roughs and other hazards you may encounter. Do you have the right club to make the shot? How much risk are you willing to take given the environment and your competition? Should you play it safe, or can you afford to take some risk? These are all important questions to answer before teeing off.

Just as you select the right club for each shot, you should ensure you pick the right types of investments to reach your goals. Once I have helped you cover the basics, you can work together to create your financial plan. It’s also important to consider other key factors like your tolerance for market fluctuations, debt management and your time frame for investing.

In both golf and investing, there will always be an element of unpredictability. Developing a strong foundation of the basics – and revisiting them regularly – can help you master the game.

Don’t psych yourself out

In the game of golf, you can’t be ruled by your emotions. Maybe the front nine was great, but the conditions changed on the back. Even the best laid plans can go awry when ground or weather conditions change. You may be tempted to make a bold move to compensate, but there’s no guarantee it will pay off. Don’t let one bad hole affect the next or make you change your strategy.

Like a stroke of bad luck on the golf course, changing market conditions can cause investors to make irrational decisions. Emotional investors often panic when markets fluctuate and can be tempted to make hasty decisions. A financial plan that is well diversified and suited to your personal investment style can help you manage the ups and downs of the market. I can help you review your plan so you can focus less on changes in financial markets and keep your eyes on the long game.

Reassess your strategy

What are your goals for this season? Are you looking to master a new shot or try out some more challenging courses? Perhaps you’re slicing the ball too often and you need to meet with your coach to revisit the basics. Even if you’ve been happy with your performance, you can’t always base future success on the past. People who take their golf game seriously understand the importance of continual development.

While a solid financial plan can put you on the right path, it’s important to fine-tune your strategy over time. You may need to adapt your plan as your goals and time horizon change. Maybe you had more disposable income when you started your portfolio, but now you’re starting a family. Perhaps you’re preparing for retirement and are starting to consider your options for creating guaranteed income. Whatever your needs, I can help steer you in the right direction towards your financial goals.

In both golf and investing, there will always be an element of unpredictability. Developing a strong foundation of the basics – and revisiting them regularly – can help you master the game.

Five important money matters to discuss with your partner

When it comes to choosing a partner, everyone has a list of qualities they just can’t live without. A recent poll, revealed that having a financially responsible partner is a priority for both millennial (88 per cent) and Discuss Finances with Partnerbaby boomer (92 per cent) survey participants.

Despite the desire for financial compatibility in relationships, money can be a source of friction for both new and established couples. While it’s best to understand your partner’s financial picture before joining accounts, engaging in regular conversation about your finances is always beneficial.

Open communication and setting clear goals for your future can help you avoid conflict on the topic, but it can be overwhelming to start the conversation if you’re not sure where to begin. Here are five fundamental money matters you may want to address with your partner.

A recent poll, revealed that having a financially responsible partner is a priority for both millennial (88 per cent) and baby boomer (92 per cent) survey participants.

1. Discuss your assets

Having a grasp on your total combined assets (including salary, savings, investments, insurance and property) is important to making financial decisions as a couple. This simple discussion is an essential starting point in making a realistic plan for savings, spending and future goals.

2. Understand your debts

Managing debt effectively is a key aspect of wealth building. It’s important to know the total amount of your partner’s debt (such as credit card, line of credit, mortgage and student loan debt), discuss whether the debt will become a joint responsibility, and determine how it will affect your budget. It’s also a good idea to discuss your partner’s credit score, as it will affect your ability to get credit as a couple.

3. Set a spending plan

Creating a joint spending plan may shine a light on any differences between spending styles – perhaps you’re a saver, but your partner opens their wallet a bit more freely. Taking account of your individual and combined monthly expenses can start a realistic discussion about how to allocate any surplus – even if it involves some compromise.

4. Strategize your savings

Defining your individual and joint savings priorities is another essential part of building your budget, and ensuring that you’re well positioned to meet your goals. It’s also important to discuss which type of savings vehicle will best suit your needs; consider factors such as your tolerance for fluctuations in the value of your investments, and the amount of time you have to invest.

5. Plan for your future

Is travel a priority for you and your partner? Perhaps you’re dreaming of buying that cottage you always wanted, or you just want to make sure you can retire comfortably. If you don’t discuss your goals for the future then it’s hard to make them happen. While your dreams may differ, starting a dialogue can help you compromise so you can set your plans in motion.

Get a second opinion

As you consider these factors with your partner, I can provide a professional opinion on the best approach to help you achieve your financial goals. I can provide a holistic assessment of your joint financial picture, and offer a variety of planning services including cash-flow planning and investment analysis.

Five Financial Steps for New Parents

While personal finances may not be on your mind (likely getting enough sleep is), here are five important steps for new parents to consider when bringing your bundle of joy home for the first time.

1. A social insurance number (SIN)

To claim children as dependants or set up savings accounts in their name, they must have a social insurance number. Most provinces offer a Newborn Registration Service that allows you to apply for a SIN. In British Columbia and Ontario, you can apply for their birth certificate at the same time.

New Parents Financial Planning

2. Baby comes first – but don’t forget about your other financial goals

Children can be costly: food, childcare and education costs are just some of the expenses you will need to add to your budget. New parents often prioritize those costs over their own financial goals, such as saving for a home, vehicle or vacation. Remember to pay yourself first and benefit from the power of compounding interest (making interest on your already-earned interest) to increase your savings.

  • Congratulations! Becoming a parent is filled with new joys, new challenges, and yes, new financial goals.

3. Start saving for post-secondary education

With the average full-time Canadian undergraduate student paying annual tuition fees of nearly $6,000+, post-secondary education can be an overwhelming expense. A registered education savings plan (RESP) can help get you closer to that goal. Not only does the money grow tax-free within the plan, but the government chips in with substantial grants.

4. Plan to protect your family’s financial security if the unexpected happens

It’s not easy to think about. But you need to help ensure your family will be taken care of financially if you or your partner died unexpectedly. Once you’ve calculated how much you’ll need to pay off your mortgage, help put your child through post-secondary school, and replace your lost income, you can approximate how much life insurance you may need.

Also, consider these basic estate planning steps for new parents:

  • Create an inventory of assets and debts and store it in a safe place that only a trusted person can access.
  • Review your insurance policies and update beneficiaries if any changes are needed.
  • Prepare a will and identify the person you would request to be the child’s guardian.

5. Budgeting for baby

When infants first come home, the financial resources you require to take care of their needs may be basic. But as they grow, previously unconsidered expenses – such as increased health insurance premiums – can surprise parents. That’s why it’s important to start your budget now. Setting up a category just for your child and logging all childcare expenses under it makes it easy to see how much you’re spending.

Getting your finances in order is a great way to manage the challenges of being a new parent. And hey, as they grow up, your child may even pick up a few tips!

Five Common Money Mistakes Students Make

With the cost of post-secondary education rising, many students are feeling the pressure to maintain good grades and a part-time job. With students facing such busy schedules, they may lose sight of the importance of financial security planning.

Here are five common money mistakes many students make:

1. Overusing credit cards

They’re a familiar sight at college and university orientation events across the country – representatives from major credit card companies offering free event tickets or merchandise if you sign up with them. While young people are often excited to get their first credit card, credit card companies know many students won’t be able to make their payments on time.

Prove them wrong by paying off your balance each month before it accrues interest. This can also help build a good credit rating, which will come in handy when it’s time to borrow money for a car or a home later on. Also, keep an eye out for a credit card that offers a low interest rate. Many student cards do.

Common Student Money Mistakes

2. Abusing student loans

Remember that, while student loans offer low interest rates and interest-free terms, they’re designed to help pay for your education, not shopping sprees. If you dip into your student loan too often, you may need to get a part-time job, which could distract you from your studies.

  • Our 20s is a tumultuous time.

3. Not thinking about career plans

Sometimes taking a degree, diploma or certification in what you love means you’ll struggle to find a job once you’re finished school. Unfortunately, an education alone may not be enough to guarantee you a job after graduation.

Talk to people who’ve graduated with the same education. How long did it take them to find a job? What did they wish they’d done differently? LinkedIn was built for this, so use it to your advantage. Boost your resume now by signing up for supplemental courses, internships, a club, or volunteer opportunities. It’s important to recognize that, while all employers will look at your education, they’re also interested in your interpersonal and leadership skills.

4. Giving out financial information

Nearly one-third of all identity thefts happen to people between the ages of 18 and 29. Only use secure networks when sharing personal or financial information. Look for “https” at the beginning of the web address to ensure it’s a secure site.

It’s also important to avoid sharing credit cards and co-signing loans with friends. They may be a friend now but they could be a financial foe tomorrow, potentially leaving you with their debt.

5. Forgoing a spending or financial security plan

Many students spend first and ask questions later – a formula for landing in financial hot water. Budgeting is an invaluable tool for helping you stay on top of your finances. It’s important to cover your fixed expenses (rent, tuition, groceries) before you allocate your variable expenses (going to the movies, dining out, etc.). Budgeting websites can really help with this by categorizing your money automatically, meaning you have one less thing to worry about. These sites can even send weekly updates on your financial situation, keeping you in the loop.

Even at this stage in your life it’s important to identify your financial goals. With my help, you can create a plan that includes saving for all the things you want to do once you graduate.

Going into debt in your 20s isn’t the end of the world; sometimes, it’s a necessity. Although financial security planning is rarely taught in school, if you have the foresight to stay on top of your finances, you’ll have a leg up on many of your peers.

Monthly Savings vs Paying the Bills

Have you ever noticed that your wallet manages to empty out no matter how much you put in there? Sometimes it feels like $80 lasts no longer than $40.

It may explain why that emergency $20 is hidden in one of your shoes. You just can’t trust your wallet.

Okay, you’re the one actually emptying your wallet, but the point remains: we tend to spend whatever is in our pockets. This offers an important lesson for the way we handle all of our finances.

Perhaps the most well-known mantra in financial security planning is “paying yourself first.” It endures because it usually works. Another well-known guiding principle is that paying down debt trumps all. But this one isn’t quite so indisputable.

Monthly Savings

The value of creating a clear spending plan

People living paycheque to paycheque are bound to feel shackled by their financial responsibilities. Even some people making a decent living think they’ll never get ahead. They need a formal process that will slow things down and allow them to put money away.

Creating a simple budget or spending plan is the first step. Make sure to pay your bills on time – especially those that keep the lights on and the water running. Preauthorized payments are a great solution. You also need to pay the rent, buy groceries, get to work and cover other day-to-day expenses.

If you have debt, you’ll need to devise a realistic schedule to repay it. But make sure you leave money aside for savings, even if it takes longer to repay your debts.

  • Putting money aside every month establishes a useful routine for efficiently managing your money.

The importance of creating sensible spending habits

Putting money aside every month establishes a useful routine for efficiently managing your money. First, it creates an emergency fund for a rainy day. Second, treating your savings as a priority allows you to start a financial security plan, the key to getting money to work for you.

Carrying non-mortgage debt is not a good thing. But even more alarming is holding that debt while not having any savings. The debt may cost you more in interest charges than your savings account is generating, but that cash gives you much-needed options.

Why setting money aside is a no-brainer

Setting aside a share of your monthly income needs to become routine. The best way to achieve this is by setting up automatic transfers to build monthly savings. If your pay is deposited into a bank account, arrange to have a set amount transferred right away to a separate place – perhaps a high-interest savings account. Once you have an ample emergency reserve, transfer some to a longer-term investment.

Your workplace may also offer a seamless way to save. Some employers will put a fixed percentage of your gross pay into a group registered retirement savings plan (RRSP). You can also tell them to deduct a certain amount of your pay. These programs may even provide a bonus amount if your contributions hit a certain threshold.

Growing your savings with automatic transfers

When your net pay increases, automatically boost the amount you transfer into savings. If you’re prudent, you may hit a point where your earnings allow you to increase your overall savings rate. The sooner you reach it, the faster your wealth can grow.

Flying under the radar

Building savings isn’t easy – after all, there are plenty of fun things to spend your money on. But watching your savings grow can be motivating. And as long as the process is automatic, your wallet won’t notice the money is missing.

Pay Yourself First

You know it’s important to set money aside to reach your investment goals. However, with so many spending opportunities vying for your attention, it can be tough to fit savings into your financial security plan.

  • Paying yourself first means saving a set amount first and only spending what’s left over – rather than the other way around.

“ Pay yourself first ” means saving a set amount first and only spending what’s left over – rather than the other way around. It means making your financial goals a priority by treating saving like any other bill or re-occurring payment.

That’s where a pre-authorized contribution (PAC) plan can help. It allows you to transfer funds automatically from your bank account to your plan.

Pay Yourself First

Instead of saving to invest in one lump sum, PACs spread your saving over regular intervals, helping you balance the effects of up and down market cycles.

Making small, regular contributions can go a long way to helping you achieve your financial goals. For example, if you invest $100 a week for your retirement, you’ll have accumulated $197,000 after 20 years – assuming a fixed interest rate of six per cent.1

Pre-authorized contribution plans make it easier to save for your future. I can work with you to determine which PAC options and schedules work best for you.