Category Archives: Blogosphere

Nov 20: Best from the blogosphere

I finally found time to clean out the 700+ emails in my in box and here are some of the gems from both the mainstream media and the blogosphere I found hiding there.

The federal government has announced expanded parental leave and new caregiver benefits that will come into effect December 3rd. Eligible new parents will be able to spread 12 months of employment insurance benefits over 18 months after the birth of a child. However, the government will not increase the actual value of employment insurance benefits for anyone who takes the extended parental leave.

The change in leave rules will automatically give the option of more time off for federally regulated workplaces, which include banks, transport companies, the public service and telecoms, and is likely to spur calls for changes to provincial labour laws to allow the other 92% of Canadian workers outside of Quebec access to similar leave. Anyone on the 35 weeks of parental leave before the new measures officially come into effect won’t be able to switch and take off the extra time.

How do you know when it’s the right time to retire? Retire Happy’s Jim Yih advises boomers considering retirement to have a plan that includes both lifestyle issues and money issues.  He says, “Too often the retirement plan focuses only on the financial issues. You can have all the money in the world but if you don’t know how to spend it or have good people around you or you don’t have your health, what good is the money?”

In the Globe and Mail, Morneau Sobeco actuary Fred Vettese says Few Canadians are destined to hit their retirement income ‘sweet spot’. What is an adequate income level to retire? According to Vettese for most people, it means having enough income to maintain their pre-retirement standard of living for the rest of their lives. “Put another way, spendable income in retirement would be 100% of what it was during one’s working years,” he says. “We’re unlikely to hit the 100% target every time, so let’s consider anything between 85% and 115% to be in the “sweet spot.”

If you sometimes get discouraged reading about “wunderkind” who save millions and retire super early, FIREcracker, writing on Millenial Revolution says Don’t Let Comparisons Derail Your FIRE (financial independence, retire early) Journey. “Don’t compare your beginning with someone’s middle or end. Instead of comparing yourself to other people, look back at your own journey and see how far you’ve come, she says. “And remember, even though there are hordes of people in front of you, there are also hordes behind you. They would switch places with you in an instant.”

And finally, make sure your retirement savings plan includes adequate amounts for health care. Health spending in Canada will likely hit $242 billion in 2017, says a report from the Canadian Institute of Health Information (CIHI). CIHI calculates that health spending in Canada is expected to reach $6,604 per capita this year – or about $200 more per person compared to last year. The report also says total health spending per person is expected to vary across the country, from $7,378 in Newfoundland and Labrador and $7,329 in Alberta to $6,367 in Ontario and $6,321 in British Columbia. The public private split remains fairly constant with 30% covered by private out of pocket payment or private insurance and 70% by the public purse.

Do you follow blogs with terrific ideas for saving money that haven’t been mentioned in our weekly “Best from the blogosphere?” Share the information on http://wp.me/P1YR2T-JR and your name will be entered in a quarterly draw for a gift card.

Written by Sheryl Smolkin
Sheryl Smolkin LLB., LLM is a retired pension lawyer and President of Sheryl Smolkin & Associates Ltd. For over a decade, she has enjoyed a successful encore career as a freelance writer specializing in retirement, employee benefits and workplace issues. Sheryl and her husband Joel are empty-nesters, residing in Toronto with their cockapoo Rufus.

Nov 13: Best from the blogosphere

It’s personal finance video time again! This week we present timely videos about extended warranties, the Equifax security breach, the new mortgage stress test and more.

In the wake of the pending demise of Sears, Jacqueline Hansen from CBC Business News reports on what it means for customers with extended warranties.

Rob Carrick outlines the steps Canadian should take to deal with the Equifax security breach which exposed the personal information of tens of thousands of people

In Episode 125 of her podcast series, Jessica Moorehouse interviews Chris Guillebeau author of the new book “Side Hustle from Idea to Income in 27 Days.”

Do you think you should be earning more at your job? Bridget Casey from Money After graduation has some hints about how to ask for a raise in her video “How to Negotiate Your Salary | ASK FOR $5,000+ MORE.”

This video from The National explores how the new mortgage stress test for borrowers with uninsured loans is designed to ensure they can withstand higher mortgage rates.


Do you follow blogs with terrific ideas for saving money that haven’t been mentioned in our weekly “Best from the blogosphere?” Share the information on http://wp.me/P1YR2T-JR and your name will be entered in a quarterly draw for a gift card.

Written by Sheryl Smolkin
Sheryl Smolkin LLB., LLM is a retired pension lawyer and President of Sheryl Smolkin & Associates Ltd. For over a decade, she has enjoyed a successful encore career as a freelance writer specializing in retirement, employee benefits and workplace issues. Sheryl and her husband Joel are empty-nesters, residing in Toronto with their cockapoo Rufus.

Nov 6: Best from the blogosphere

We are again going to sample recent material from a series of bloggers who participated in The Canadian Financial Summit in September.

This week headlines across the country blared that CRA has changed their position on allowing diabetics to claim lucrative disability tax credits in certain cases.

On Your Money, Your Life, accountant Evelyn Jacks discusses why these changes are being made and how audit-proofing strategies must be implemented by tax professionals and their diabetic clients.

Andrew Daniels writes at Family Money Plan about how he paid off his mortgage in 6 years. Five of the 28 things he and his wife gave up to quickly pay down his mortgage are noted below:

  • Eating out, largely due to food sensitivities and allergies with the added bonus that they saved big bucks.
  • For the first five years of the pay down period they gave up travel.
  • They went without cell phones for four of the six years of paying off their mortgage
  • They opted to repair their old cars as required rather than buying new ones.

Jonathan Chevreau, CEO of the Financial Independence Hub notes in the Financial Post that Only a quarter of Canadians have a rainy day fund, but more than half worry about rising rates.

This is based on a survey of 1,350 voting-age adults by Forum Research Inc. conducted after the Bank of Canada raised its benchmark overnight rate from 0.75% to 1% on Sept. 6, the second increase in three months. That said, 17% believe rate hikes will have some positive aspects: Not surprisingly, debt-free seniors welcome higher returns on GICs and fixed-income investments. Another 38% don’t think it will have an effect either way.

Do you know how long it will take to double the money you have invested? MapleMoney blogger Tom Drake explains the rule of 72 which take into account the impact of compound interest and  allows you to get a quick idea of what you can achieve with your money.

For example, if you were expecting a rate of return of 7% you would divide 72 by 7, which tells you it would take about 10.3 years to double your money at that rate. If you want $50,000, you would need to invest $25,000 today at 7% and let it sit for 10.3 years.

Kyle Prevost explores 5 stupid reasons for not getting life insurance on lowestrates.ca. If your rationale is that you are healthy and never get sick, Prevost says, “Glass half-full thinking is a positive thing, but pretending that your full glass is indestructible is a recipe for disaster.”

And if you have avoided buying life insurance because you have so many other bills you can’t afford it, he says, “You seriously need to ask yourself what sort of situation you’d leave behind if tragedy struck. Those bills that look daunting right now would look downright insurmountable.”

Do you follow blogs with terrific ideas for saving money that haven’t been mentioned in our weekly “Best from the blogosphere?” Share the information on http://wp.me/P1YR2T-JR and your name will be entered in a quarterly draw for a gift card.

Written by Sheryl Smolkin
Sheryl Smolkin LLB., LLM is a retired pension lawyer and President of Sheryl Smolkin & Associates Ltd. For over a decade, she has enjoyed a successful encore career as a freelance writer specializing in retirement, employee benefits and workplace issues. Sheryl and her husband Joel are empty-nesters, residing in Toronto with their cockapoo Rufus.

Oct 31: Best from the blogosphere

If you buy a house or re-finance your existing home beginning in 2018, you may need a higher income to qualify for a mortgage.  Borrowers who are renewing mortgages will not have to meet the new stress-test standard as long as they stay with the same bank. However, renewals done with another lender will have to qualify under the revised standards because they require new underwriting.

As Sean Cooper explains in What OSFI’s (Office of the Superintendent of Financial Institutions) Tightened Rules on Uninsured Mortgages Means for Homebuyers on RateSupermarket.ca, under these new rules, buyers with a 20% down payment or more will have to undergo a more rigorous stress test, and qualify based on the highest posted five-year fixed rate – 4.64%, roughly 200 basis points higher than actual mortgage rates.

“Last year, in an effort to cool down hot real estate markets in cities like Toronto and Vancouver, Ottawa introduced new mortgage rules on only insured mortgages – meaning those who put less than 20% down.” Cooper notes. “But since then, the uninsured mortgage market has grown. So, to help reign in this segment of the market, OSFI is now proposing extending the stress test to uninsured mortgages.”

Lowestrates.ca blogger Alexandra Bosanac further clarifies in This is how OSFI’s new mortgage rules will affect Canadian homebuyers that the new OSFI rules will apply to buyers who apply for uninsured mortgages including those with a 20% down payment or more and those buying homes worth $1 million or more. “They will be stress tested to show they can afford a mortgage, either at the five-year average posted rate, or two percentage points higher than the rate their bank or broker offers them (whichever one is higher),” she says.

Bosanac offers an interesting example of how the new rule changes will impact homebuyers. A couple buying a home for $500,000 with a $125,000 down payment would be paying $1,743 a month at the the current lowest variable five-year mortgage rate in mid-October available in Ontario of 1.99%. However, under the new rules, that same couple will be stress tested prior to qualifying to ensure they can pay the mortgage at two percentage points higher — 3.99%. That means they will have to be able to show they can afford to pay a mortgage of $2,165 a month. That’s a difference of $422 a month, or $5,064 a year.

Globe and Mail mortgage columnist Robert McLister offers 10 ways the new mortgage rules will shake up the lending market. He suggests  that unless provincial regulators follow OSFI’s lead (which if history is a guide they won’t), it will be a bonanza for some credit unions because many credit unions will still let you get a mortgage based on your actual (contract) rate, instead of the much higher stress-test rate. He expects to see a rush of buying before the end of the year from people who fear they won’t qualify after January 1.

Furthermore, critics say new mortgage rules will push borrowers to unregulated lenders according to Globe and Mail reporters Janet McFarland and James Bradshaw. They spoke with OSFI superintendent Jeremy Rudin who acknowledged that OSFI is offloading risk to the unregulated lending sector, which doesn’t come under federal control, “That would not be an intended consequence, nor would it be a completely unanticipated consequence,” he told reporters.

Former MP Garth Turner blogging at The Greater Fool anticipates that real estate values will decline across the country as a result of the changes, which means home purchases could be a potential wealth trap, particularly for first time buyers who cannot afford losses.

In After Mom, he notes that in order to avoid paying mortgage insurance, many young buyers borrowed from parents to get over the 20% line so they would not have to pay mortgage insurance. As a result CMHC-insured loans plunged more than 40% at the same time real estate activity rose, the number of borrowers increased and overall mortgage debt swelled.

He concludes, “The average down payment gift from parents to kids in households making $100,000 or more is now over $40,000. Let’s hope Mom has a bunch more money to bail junior out when prices fall, rates rise and that first loan renewal comes round. Stress, baby.”

Do you follow blogs with terrific ideas for saving money that haven’t been mentioned in our weekly “Best from the blogosphere?” Share the information on http://wp.me/P1YR2T-JR and your name will be entered in a quarterly draw for a gift card.

Written by Sheryl Smolkin
Sheryl Smolkin LLB., LLM is a retired pension lawyer and President of Sheryl Smolkin & Associates Ltd. For over a decade, she has enjoyed a successful encore career as a freelance writer specializing in retirement, employee benefits and workplace issues. Sheryl and her husband Joel are empty-nesters, residing in Toronto with their cockapoo Rufus.

Oct 23: Best from the blogosphere

Sustaining a blog for months and years is a remarkable achievement. This week we go back to basics and check in on what some of our favourite veteran bloggers are writing about.

If you haven’t heard, Tim Stobbs from Canadian Dream Free at 45 has exceeded his objectives and retired at age 37. You can read about his accomplishment in the Globe and Mail and discover how he spent the first week of financial independence here.

Boomer & Echo’s Robb Engen writes about why he doesn’t have bonds in his portfolio but you probably should. He acknowledges that bonds smooth out investment returns and make it easier for investors to stomach the stock market when it decides to go into roller coaster mode. But he explains that he already has several fixed income streams from a steady public sector job, a successful side business and a defined benefit pension plan so he can afford to take the risk and invest only in equities.

On My Own Advisor, Mark Seed discusses The Equifax Breach – And What You Can do About It. In September, Equifax announced a cybersecurity breach September 7, 2017 that affected about 143 million American consumers and approximately 100,000 Canadians. The information that may have been breached includes name, address, Social Insurance Number and, in limited cases, credit card numbers. To protect yourself going forward, check out Seed’s important list of “Dos” and Don’ts” in response to these events.

Industry veteran Jim Yih recently wrote a piece titled Is there such a thing as estate and inheritance tax in Canada? He clarifies that in Canada, there is no inheritance tax. If you are the beneficiary of money or assets through an estate, the good news is the estate pays all the tax before you inherit the money.

However, when someone passes away, the executor must file a final tax return as of the date of death.  The tax return would include any income the deceased received since the beginning of the calendar year.  Some examples of income include Canada Pension Plan (CPP), Old Age Security (OAS), retirement pensions, employment income, dividend income, RRSP and RRIF income received.

When the Canadian Personal Finance Blog’s Alan Whitton (aka Big Cajun Man) started investing, he was given a few simple rules that he says still ring true today. These Three Investment Credo from the Past are:

  • Don’t invest it if you can’t lose it.
  • Invest for the long term.
  • If you want safety, buy GICs.

Do you follow blogs with terrific ideas for saving money that haven’t been mentioned in our weekly “Best from the blogosphere?” Share the information on http://wp.me/P1YR2T-JR and your name will be entered in a quarterly draw for a gift card.

Written by Sheryl Smolkin
Sheryl Smolkin LLB., LLM is a retired pension lawyer and President of Sheryl Smolkin & Associates Ltd. For over a decade, she has enjoyed a successful encore career as a freelance writer specializing in retirement, employee benefits and workplace issues. Sheryl and her husband Joel are empty-nesters, residing in Toronto with their cockapoo Rufus.

Oct 16: Best from the blogosphere

There is nothing like curling up on the couch to watch a good movie on a chilly, autumn evening. Before you move on to Netflix, here are some great new personal finance videos that will educate and entertain you.

In Money Left on the Table, Kerry Taylor, aka financial writer and blogger Squawkfox is interviewed on the CBC News Network about eligibility for Registered Disability Savings Plans and how to navigate the application process. She says, “There is really limited uptake for this program geared to people with serious, ongoing physical or mental impairment because applying for it is very complicated.”

This video from the Khan Academy clarifies what buying company stock means and clearly identifies the difference between stocks and bonds. The commentator explains, “In the general sense when you buy shares or stock you are essentially becoming a partial or part owner in the company. In contrast, bonds mean you become a lender to the business.”

Accountant and certified financial planner Ed Rempel discusses the meaning of financial independence, the huge difference it makes in your life and what it takes to get there. By helping almost 1000 families put together a financial plan he has gained insights that form the basis of his 6 Steps to Become Financially Independent.

Sean Cooper, blogger and author is interviewed on the Global Morning show about how homeowners will be affected by higher interest rates. Because Cooper paid off his mortgage by age 30 he does not have to worry about the personal impact of these changes. However, he says, “If you are in a variable rate mortgage and rising interest rates are keeping you up at night, it may make sense to lock in right now.”

Planning a vacation? Preet Bannerjee explains the meaning of dynamic currency conversion and why you should always pay in local currency when travelling. When a merchant gives you the option to pay in your home currency and you choose to do so, the process is known as dynamic currency conversion or DCC. You may think you will come out ahead and avoid the 2.5% conversion fee charged by the credit company. But in fact his examples show that credit card companies typically offer a better exchange rate than if the merchant applied DCC and charged customers in their home currency. And some credit cards charge 2.5% on every transaction anyway.


Do you follow blogs with terrific ideas for saving money that haven’t been mentioned in our weekly “Best from the blogosphere?” Share the information on http://wp.me/P1YR2T-JR and your name will be entered in a quarterly draw for a gift card.

Written by Sheryl Smolkin
Sheryl Smolkin LLB., LLM is a retired pension lawyer and President of Sheryl Smolkin & Associates Ltd. For over a decade, she has enjoyed a successful encore career as a freelance writer specializing in retirement, employee benefits and workplace issues. Sheryl and her husband Joel are empty-nesters, residing in Toronto with their cockapoo Rufus.

Oct 2: Best from the blogosphere

Recently Kyle Prevost (Young and Thrifty) hosted the online Canadian Financial Summit which included video presentations and interviews with 25 Canadian personal finance experts. While the presentations were free from September 13-16, you can still buy a pass to view these presentations.

Blogs by many of these people are regularly featured in SPP’s Best from the Blogosphere, but there were some interesting people on the agenda who are new to me. Today I introduce you to some of their recent work.

Alyssa Fischer is the writer behind one of Canada’s top up and coming blogs MixedUpMoney.com. In How My Accountability Buddy Became My Secret Financial Weapon she writes that grocery shopping with her husband is important because they help each other stick to their budget. She says, “If I let myself spend money in a frivolous fashion each time I needed a pick me up, I would be right back where I was 3 years ago. In debt, maxed out, and over my limit.”

Martin Dasko on Studenomics graduated from college debt-free and the purpose of his blog is to help readers get to financial freedom by age 30 (no debt, money saved, and the ability to do whatever they want). In Why You Should Save $10k in The Next Six Months (and how to start) he explains that personal finance is often about habits and choices. “You may decide to find new ways to make more money or spend less.  Having money in the bank will make your life better because you will have options and you can plan your next move,” Dasko notes.

Chris Enns is an opera-singing-financial-planning-farmboy and the man behind Ragstoreasonable.com. He wonders whether he can be an artist and be profitable. He also questions the following core beliefs  so many carry in the creative industry.

  • That breaking even is enough.
  • That paying the bills is enough.
  • That building a profitable creative business is next to impossible.

He recognizes that wanting just “enough” to live his life is holding him back in a huge way. Instead he says shifting his thinking to “making a profit” is more likely to pave the way to building his savings and planning for the future.

Janine Rogan is the talented writer and CPA behind JanineRogan.com.  Rogan suggests that if your bank balance is too high you are more likely to spend too much. For example, even though you have $15,000 sitting in your chequing account, some (or all) of that money may be spoken for.

But you may feel you can splurge because you have extra cash on hand. Therefore she suggests that you should set guidelines for a maximum bank balance in your chequing account and once you hit that threshold excess cash should be moved to a savings or investment account.

Rogan says, “Shifting the expectation to living on less because you only have a set amount of cash in your bank account means that you will function in more of a frugal mind set.”

Half-banked.com is Desirae Odjick’s personal finance blog for millennials who want to manage their money and still have a life. She offers Five ways to learn about money for free (without leaving the house). They include:

  • Taking out a stack of books from your local library.
  • Watching money videos on YouTube.
  • Reading a whole pile of financial blogs.
  • Tracking your spending.
  • Visiting the Canadian Financial Summit .


Do you follow blogs with terrific ideas for saving money that haven’t been mentioned in our weekly “Best from the blogosphere?” Share the information on http://wp.me/P1YR2T-JR and your name will be entered in a quarterly draw for a gift card.

Written by Sheryl Smolkin
Sheryl Smolkin LLB., LLM is a retired pension lawyer and President of Sheryl Smolkin & Associates Ltd. For over a decade, she has enjoyed a successful encore career as a freelance writer specializing in retirement, employee benefits and workplace issues. Sheryl and her husband Joel are empty-nesters, residing in Toronto with their cockapoo Rufus.

Sept 25: Best from the blogosphere

If you haven’t been following the financial media closely through the lazy, hazy days of summer, you may be unclear what income tax changes have been proposed and how they might impact you, particularly if you have an incorporated small business.*

As committed in the Federal Budget 2017, on July 18, 2017 the Department of Finance issued a discussion paper providing details about tax planning strategies involving the use of private corporations and setting out “proposed policy responses to close loopholes and bring greater fairness to the tax system.” Interested parties have been invited to submit comments to fin.consultation.fin@canada.ca by October 1st.

This paper focuses on three issues:

  1. Sprinkling income using private corporations which essentially means income splitting by paying out dividends or capital gains to other family members who may not actually be working for the corporation to reduce total taxes. The Government is seeking input on proposed rules to distinguish income sprinkling from reasonable compensation for family members.
  2. Holding a passive investment portfolio inside a private corporation, which means retaining and investing money in the corporation instead of paying it out annually because corporate income tax rates are much lower than personal rates.
  3. Converting a private corporation’s regular income into capital gains which can reduce income taxes by taking advantage of the lower tax rates on capital gains. Income is normally paid out of a private corporation in the form of salary or dividends to the principals, who are taxed at the recipient’s personal income tax rate (subject to a tax credit for dividends reflecting the corporate tax presumed to have been paid). In contrast, only one-half of capital gains are included in income, resulting in a significantly lower tax rate on income that is converted from dividends to capital gains.

Also read:  Tax Planning Using Private Corporations – The New Liberal Proposals (Blunt Bean Counter)

This has resulted in a huge outcry from groups as diverse as the Canadian Federation of Independent Business, the Canadian Chamber of Commerce and the Canadian Medical Association.

In a BNN video interview, Scott Johnston, a partner at CBM lawyers in B.C. says the Liberal plan would punish small business owners, not “fat cats.” He counsels more than 800 small businesses in the Vancouver area.

“You are comparing employees with entrepreneurs who may make nothing for years and have no guarantee their business will succeed,” he says. “They are the ones who are taking risk and putting their homes on the line. They don’t have fat government pensions and they don’t receive medical, dental or parental benefits.”

Canadian farmers are also worried about federal tax changes, but the proposals are the last thing they have had time to think about during the busy harvest season. The Western Producer says “the impact of the tax changes could be humongous,” including:

  • Rules to make it more difficult and risky for full-time farmers to share farm income with spouses and children.
  • Regulations that could make it dangerous to use farm earnings to help pay for children’s post-secondary education.
  • Rules that discourage farms from renting out their land or saving cash within a farm company.
  • Changes that could make it risky to divide ownership of a family farm’s land base among a number of children, while allowing the land block to remain intact.
  • Rules that encourage farmers to sell their land to neighbours or strangers rather than their own children.

In contrast, the Canadian Nurses Association representing primarily salaried nurses issued a statement on September 5th supporting the proposed changes. In her statement, Canadian Nurses Association (CNA) president Barb Shellian said:

“CNA commends Minister Morneau’s aim to achieve federal tax policy that treats all sources of income similarly and equitably, based on the principles of social justice. Accordingly, CNA supports the proposed changes to the federal tax code that reasonably strengthen the rules on increasingly popular but potentially unfair tax advantages for incorporated high-income earners. CNA further recommends a more comprehensive review of the Canadian tax system with an eye to simplification and ensuring all hard-working Canadians are treated fairly and equitably.”

Also read: Dissenting doctors write open letter in support of federal tax reforms

While both Finance Minister Bill Morneau and Prime Minister Justin Trudeau have said they are fully committed to the proposed tax changes, as in all cases “the devil is in the details.” It remains to be seen if any significant modifications to the proposals will be made prior to passage and the planned January 1, 2018 implementation date. We will update you when more information becomes available.

Also read: The good, bad and the ugly of Ottawa’s proposed corporate tax changes

*In the spirit of full disclosure, the tax status of my company Sheryl Smolkin + Associates Ltd. will be impacted by the proposed changes


Do you follow blogs with terrific ideas for saving money that haven’t been mentioned in our weekly “Best from the blogosphere?” Share the information on http://wp.me/P1YR2T-JR and your name will be entered in a quarterly draw for a gift card.

Written by Sheryl Smolkin
Sheryl Smolkin LLB., LLM is a retired pension lawyer and President of Sheryl Smolkin & Associates Ltd. For over a decade, she has enjoyed a successful encore career as a freelance writer specializing in retirement, employee benefits and workplace issues. Sheryl and her husband Joel are empty-nesters, residing in Toronto with their cockapoo Rufus.

Sept 18: Best from the blogosphere

In early September the Bank of Canada raised its key interest rate by another .25% up to one percent from .75%. This decision followed the first hike in July and could be just the second in a string of increases, some economists have predicted in light of the announcement.

In this issue of Best from the Blogosphere, we sample several interesting media articles and blogs that will help you understand how rising interest rates will impact your both ability to manage debt and carry a mortgage.

Robert McLister, mortgage columnist at the Globe and Mail offers 10 things to ponder now that the Bank of Canada has put every mortgage lender on alert. He says adjustable-rate borrowers (whose mortgage payments float with prime rate) will see their payments jump about $12 a month for every $100,000 of mortgage balance.

He also notes that variable rates can still make sense for strong borrowers with a financial cushion or those who might need to break their mortgage early (since variable-rate penalties are usually lower).

But to justify the risk of a variable mortgage, McLister suggests that you look for a rate that’s at least two-thirds of a percentage point less than your best five-year fixed option. That buys you insurance against three more rate hikes.

Kerry K. Taylor aka Squawkfox discusses 6 ways an interest rate hike affects your finances. For example, variable-rate mortgages, or adjustable-rate mortgages, will see an increase as financial institutions increase their lending rates. Home equity lines of credit (HELOCs) and lines of credit will cost more. Student loan interest rates can be either fixed or variable (floating). As with mortgages, Taylor says those repaying a variable-rate student loan will see their interest rate go up immediately, while those on fixed rates won’t see a jump until it is time for renewal.

In MoneySense, Martin MacMahon and Denise Wong consider What the latest rate hike means for you. Economist Bryan Yu with Central 1 Credit Union told the authors that people carrying a lot of debt on their credit card will probably start to notice higher interest charges. “They’re going to be facing the quarter-point increase on terms of that debt for their servicing… That’s a quarter point on an annual basis. So, it is going to be a bit of a pinch going forward, ” he says. “In these circumstances people should be looking at paring back some of that debt over time.”

The Globe and Mail’s David Berman explores why even though interest rates are rising, your savings account isn’t growing. Many financial institutions have already passed along this week’s central bank quarter-percentage-point hike to borrowers, raising their prime lending rates to 3.2% on Thursday – but you may need a powerful microscope to see any increase in your savings rates. “Why? The simple reason is because lenders can get away with it,” Berman says.

James Laird, co-founder of Ratehub.ca and president of CanWise Financial mortgage brokerage believes at some point, as rates in Canada continue to rise, there will be an adjustment to all deposit and savings products.  “But it just seems to be that [financial institutions] just don’t look at it as closely as they do on their lending side,” he concludes.

The bank’s decision to raise its key lending rate to one per cent on September 6th, from 0.75 per cent, apparently surprised the markets, which sent the loonie soaring. The Canadian dollar, which had been trading around 80.5 cents U.S. in the morning, spiked by more than a cent to around the 82-cent mark immediately after the Bank of Canada’s announcement. It’s the highest level the currency has seen since June 2015.

So If you have invested in U.S. stocks or have American dollars socked away in a bank account for your next vacation south of the border, the spike in the value of the loonie as a result of the interest hike is bad news. But the soaring loonie as a result of the Bank of Canada’s interest rate announcement is great news if you are planning a U.S. vacation that is priced in American dollars. However, a higher loonie could also slow Canada’s economic momentum, as it will make exports more expensive.


Do you follow blogs with terrific ideas for saving money that haven’t been mentioned in our weekly “Best from the blogosphere?” Share the information on http://wp.me/P1YR2T-JR and your name will be entered in a quarterly draw for a gift card.

Written by Sheryl Smolkin
Sheryl Smolkin LLB., LLM is a retired pension lawyer and President of Sheryl Smolkin & Associates Ltd. For over a decade, she has enjoyed a successful encore career as a freelance writer specializing in retirement, employee benefits and workplace issues. Sheryl and her husband Joel are empty-nesters, residing in Toronto with their cockapoo Rufus.

Sept 11: Best from the blogosphere

As the leaves change colours and we gear up for the busy fall and winter season, it’s time to check in on what some of our favourite personal finance writers have been discussing this summer.

With the announcement that CIBC has gobbled up PC Financial which will be rebranded as CIBC Simplii Financial on November 1st, Stephen Weyman says on Howtosavemoney.ca that it will be banking as usual in the short term but you can expect CIBC to sneak in a few fees here and there to make sure they’re profitable and try to cut costs where they can.

On Boomer & Echo, Marie Engen offers 25 money saving tips. A couple of my favourites are:

  • Turn off the “heat dry” on your dishwasher. Open the door when the cycle is done and let the dishes air dry.
  • Learn some sewing basics so you can make minor repairs and alterations to your clothing – hem your pants and skirts, sew on a button, sew up a torn seam, put in a new zipper.
  • Buy some time. Set aside the purchase you are considering for a few hours (or a day or two) before you decide whether to buy it. Often you may decide you can easily live without it.

Bridget Casey (Money After Graduation) has recently welcomed a new daughter and she is already thinking about saving for her college education. She writes about the importance of setting up your child’s Registered Educational Savings Plan as a trust so it will be covered by the Canada Deposit Insurance Corporation in the event of financial institution failure up to $100,000 per account.

Retire Happy’s Jim Yih writes a thoughtful piece on Minimizing Your Old Age Security Clawback. The maximum monthly OAS benefit in 2017 is $578.53 ($6,942.36 annually). If you earn between $74,788 and $121,070/year the OAS benefit will be clawed back. He explains that with pension splitting, spouses can give up to 50% of their pension income to their spouse for tax splitting purposes. This is a very effective way to reduce income if you are close to the OAS clawback threshold.

When Sean Cooper, author of Burn Your Mortgage paid off his mortgage, he promised himself he’d stop putting off travel. His first major trip was to San Francisco this summer. Nevertheless, he still travelled frugally booking his $700 roundtrip flight through PC Travel. He also got from the airport to downtown on Bay area rapid transit for less than $10. In San Diego, he opted for a four-bed mixed dorm room at USA Hostels for less than $60 a night as opposed to $200/night in a hotel.


Do you follow blogs with terrific ideas for saving money that haven’t been mentioned in our weekly “Best from the blogosphere?” Share the information on http://wp.me/P1YR2T-JR and your name will be entered in a quarterly draw for a gift card.

Written by Sheryl Smolkin
Sheryl Smolkin LLB., LLM is a retired pension lawyer and President of Sheryl Smolkin & Associates Ltd. For over a decade, she has enjoyed a successful encore career as a freelance writer specializing in retirement, employee benefits and workplace issues. Sheryl and her husband Joel are empty-nesters, residing in Toronto with their cockapoo Rufus.