Category Archives: Money saving tips

6 things my Mom taught me about money

By Sheryl Smolkin

MY MOM AND HER GREAT GRANDDAUGHTER

My Mom will be 90 this year and we recently moved her to a private retirement home that specializes in Alzheimer’s and dementia care. In her prime, she was a feisty, fashionable businesswoman. In fact she sold registered educational savings plans well past when most people retire and her employer finally made a retirement dinner in her honour when she was over 80.

As we sorted through her condo to get it ready for sale, I realized that my mother taught me many essential lessons about money, both before and after I left home. Here are six important things I learned from her over the years — in many cases, by osmosis.

  1. Avoid debt at all cost: When we were growing up, the golden rule was, if you can’t afford it, you can’t buy it. Credit cards were not as pervasive as they are now and we were encouraged to save a portion of our allowance until we had enough to purchase the desired item. Other than a mortgage, my parents paid off their bills every month.
  2. Never pay retail: As an inveterate shopper on a limited budget my mother knew how to stretch a dollar. Her view was and still is that a sale starts at 50% off. She also seized every opportunity to buy clothes for the family wholesale direct from factories in Montreal she was able to visit as a result of family contacts. Internet shopping came a little too late for her, but if she was a few years younger, I bet that she would have loved searching for bargains online.
  3. Get an education: My grandparents emigrated from Europe. Neither of my parents graduated from high school. My brother, sister and I were the first generation on both sides of the family to attend university. For as long as I can remember my Mom viewed education as the key to a golden door that would unlock future opportunities.
  4. Invest in your children: While my Mom taught us the value of a dollar and we had summer jobs to defray the costs of going away to university, she scrimped and saved to make sure all three of us could graduate from a first degree, debt free. In her 40s she became a successful real estate salesperson and then a broker, in part, to help generate money for our education. We have done the same for our children.
  5. Buy and pay off a home: Mom firmly believed that a paid off home is the best retirement savings plan. It turns out that she was right. When she moved to Thornhill in 1980 she bought a semi-detached house for under $100,000 with a down payment of $30,000 realized from the sale of her home in Cornwall. Since then she moved to a condo which is expected to sell for over six times the value of her first Toronto area property.
  6. Save for a rainy day: Once she started making her own money selling real estate and then RESPs, Mom made maximum contributions to her RRSP every year. While initially her savings meant she could afford extras like travel in retirement, in the last few years we have used her money to hire caregivers so she could stay in her apartment as long as possible. And I am grateful that balance of her savings and the proceeds of sale of her apartment will now be available to pay for excellent care as long as she needs it.

But as we gather to celebrate our Mom on Mother’s Day, I realize the most important lesson she taught me is the power of love and family through good times and bad. My daughter’s family lives in Ottawa so she only sees her great granddaughter every few months. She may not remember her name or how she is related but she knows she is someone important and her hugs and kisses are more valuable than anything money can buy.

 

10 Top Productivity Tips for Telecommuters

By Sheryl Smolkin

In recent years technology has made working remote for all or part of the week a practical option for a broad spectrum of employees ranging from customer service representatives to travel agents to professionals such as lawyers and accountants.

CBC News reported last year that more than 1.7 million paid employees — those not self-employed — worked from home in 2008 at least once a week, up almost 23% from the 1.4 million in 2000, according to the latest Statistics Canada figures released in 2010.

While the ability to more easily juggle work and family responsibilities may make telecommuting attractive for many people, the fact is that individuals who work from home must have the right tools and be able to minimize distractions in order to effectively do their job.

Here are 10 tips for to help you be more efficient working from home.

  1. Keep regular working hours
    The advantage of working from home may be that you can set your own hours. But even if you have to work “the night shift” after your kids are in bed, you will accomplish more if you establish a regular routine and stick with it.
  2. Dress for success
    Don’t get me wrong. I’m not suggesting heels and a business suit. But get out of your pajamas, shower, shave and brush your teeth. When you sit down to work you will feel more wide awake and focused.
  3. Remind people you are working
    Tell friends and neighbours you are working from home and not available for coffee klatches and other social get-togethers during your work day. Also, if you have young children, arrange full or part-time childcare to ensure you have the uninterrupted time you need to do your job.
  4. Optimize your work space
    Not everyone has the luxury of a dedicated home office. However working at the kitchen table or sitting on the couch with your lap top and papers spread out around you are not in the long run conducive to good posture or good work habits. If at all possible set up a dedicated desk or table in a corner of your bedroom or another available nook.
  5. Have the right tools
    A cell phone, a lap top and the internet are all most people need to work anywhere these days. But there are lots of other tech tools and apps can make your life easier. For example, I couldn’t possibly function without a headset. Dropbox allows me to both store files in the cloud and share them with work colleagues and external clients. Google drive is a free resource I use to create documents and spreadsheets that I can give clients and associates permission to access and edit.
  6. Stay in touch
    Depending on the nature of your job, stay in touch and communicate frequently with colleagues and clients. Always Skype or call in for important meetings. Inform co-workers and supervisors of your core working hours and availability. Make sure you understand what your manager expects and consistently deliver on those expectations.
  7. Make a list
    I am a huge fan of “To Do” lists both at home and at work. If you are working offsite it is particularly important to keep a revolving list so you can prioritize and track multiple requests from co-workers who are also working remote or in the office. By keeping your lists (paper or digital) even after you have checked things off, you have a record of what you have actually accomplished each day.
  8. Take a break
    I have found that often I work harder and longer at home because there are fewer interruptions. Get up every hour. Move around. Take time to go to the gym or participate in a yoga class. While pjs may not be acceptable work-at-home wear, a track suit and running shoes are fine, particularly if they facilitate fitting a workout into your day.
  9. Human contact
    Working alone at home without any other adult contact day in and day out can be detrimental to your mental health. Telephone people instead of always sending emails. For a change of scenery take your lap top to a local coffee shop or library. If you are self-employed you might benefit from a co-working space which will provide you with shared resources like meeting rooms and networking events.
  10. Manage food intake
    Access to a fully-stocked kitchen can be both a pro and a con for telecommuters. If you shop wisely and prepare yourself a healthy lunch each day, then working from home can improve both your health and your bank account. But if you are constantly raiding the refrigerator or the pantry, you may discover the great outfit you bought on sale at the end of last season no longer fits.

Retirees age 55-64 face greatest barriers to filling prescriptions

By Sheryl Smolkin

If you haven’t seriously thought about the possible impact of health care costs on your retirement budget and lifestyle, you may find recent research from the University of British Columbia as disturbing as I did.

The study reveals that one in 12 Canadians age 55 and older skipped prescriptions due to cost in 2014, the second-highest rate among comparable countries. The ten years before provincial drug plans kick in for most seniors at age 65 is the period of time when the highest percentage of older people can’t afford the drugs they need to stay healthy.

In order to “stretch” their drugs some people skip doses, while others may split pills or try to manage their conditions without drugs. “When patients stop filling their prescriptions, their conditions get worse and they often end up in hospital requiring more care which in the long run costs us more money,” says Steve Morgan, senior author of the study and professor in UBC’s school of population and public health.

The research draws on the 2014 Commonwealth Fund International Health Policy Survey of Older Adults (persons aged 55 years or older) in 11 high-income countries: Australia, Canada, France, Germany, the Netherlands, New Zealand, Norway, Sweden, Switzerland, the United Kingdom, and the United States. Among countries with publicly-funded health-care systems, Canada is the only one without coverage for prescription medications.

In an analysis of survey responses from all 11 countries, the researchers found that Canada had the second-highest prevalence of skipped prescriptions due to cost, at
8.3%.  Access was worse only in the United States, where 16.8% of respondents reported such financial barriers to filling prescriptions. In contrast, fewer than 4% of the populations in most other comparable countries reported skipping prescriptions due to cost.

In a separate analysis of the Canadian survey responses, researchers found that Canadians aged 55 to 64 face the greatest barriers to filling their prescriptions. One in eight Canadians aged 55 to 64 reported that they did not fill prescriptions because of cost in 2014, in comparison to one in 20 Canadians aged 65 and older – who, by way of age, qualify for comprehensive public drug coverage in many provinces.

Morgan points to gaps in drug coverage available to Canadians as a problem. Unlike other countries with universal public health care, public drug plans in Canada generally only cover select groups, such as social assistance recipients and people over age 65. Other Canadians may receive drug coverage from private insurance through their workplaces or none at all.

The survey found that Canadians who did not have insurance were twice as likely to report not filling prescriptions because of cost. It also showed that low-income Canadians were three times more likely to report financial barriers to filling prescription medicines than high-income respondents.

Morgan said the 2014 findings were consistent with studies that date back a decade, indicating affordability of prescription drugs is still a public health issue in Canada.

“Our problem hasn’t gone away. Financial barriers to prescription drugs are still high, both in absolute terms and relative to our peer countries.”

The research was described in two studies published in BMJ Open and CMAJ Open.

10 things you need to know about SPP

By Sheryl Smolkin

I have been writing about the Saskatchewan Pension Plan for six years and a member of the plan for just as long. I thought I knew everything there was to know about the plan, but every time I review the website I learn something new.

Here are 10 things about SPP that you may find interesting.

  1. The 30 year old plan is the 25th largest defined contribution plan in Canada (Benefits Canada 2016).
  2. The plan is funded by member contributions and investment earnings. As of December 31, 2016 there was $479.5 million in assets under management administered by a Board of Trustees, some of whom are also plan members.
  3. If you are between age 18 and 71 and have available Registered Retirement Savings Plan room you are eligible to join the 33,000 other members who are saving for their future, whether or not you live or work in Saskatchewan.
  4. With an annual maximum contribution of $2,500, the plan has several payment options designed to suit your budget.
  5. You can also transfer up to $10,000 per calendar year into your SPP account from your existing RRSP or Registered Retirement income Fund (RRIF).
  6. You have two investment options for your funds. The default fund is the Balanced Fund (BF) which is a low to moderate risk/return investment option. Approximately 55% of the fund is invested in equities, 35% in fixed income investments and 10% in a real estate pooled fund.
  7. The Short-term Fund (STF) is a low risk/low return investment option. Its primary purpose is to preserve capital. It is suitable for members who are near retirement and have reached their retirement savings goal, or members who wish to have a cash equivalent component in their investment portfolio.
  8. You may retire from SPP between the ages of 55 and 71 regardless of your employment status. You must apply for SPP retirement benefits; the package to make this application is available by calling SPP.
  9. If you name your spouse as beneficiary of your account, Canada Revenue Agency allows death benefits to be transferred, tax-deferred, directly to his or her SPP account or to an RRSP, RRIF, or guaranteed Life Annuity Contract (LAC).
  10. In addition to spousal rollover of SPP death benefits, rollovers to an RRSP or Registered Disability Savings Plan for a financially dependent infirm child or grandchild are permitted.

For more information about SPP see the website or call the office at 1-800-667-7153.

Romancing your sweetie on a budget

By Sheryl Smolkin

You are still paying off the credit card bills from Christmas. Your SPP and RRSP contributions have to be in before the end of February. You don’t have time to go to the mall and even if you did, you don’t have any idea what to buy.

Four years ago I posted Thrifty ways to romance your valentine. Since then I’ve had lots more ideas. So even if you were planning to stick with the traditional flowers and chocolates, consider some of these ideas as an add-on.

  1.  Sign up for a class he/she has suggested that both of you to take together. It could be for anything from cake decorating to ballroom dancing to couples’ yoga.
  2. Volunteer together at a local homeless shelter, food bank or even the SPCA. Doing something for others will help deepen your own relationship.
  3. Pack a lunch with all kinds of goodies including a beautiful cupcake for dessert. Add a personal, humorous, handwritten note.
  4. Load phone apps that will make life easier and teach your partner how to use them. Also add a romantic picture of the two of you as the wallpaper on his/her phone.
  5. Rerun romantic movies that one of you may never have seen or that you saw together at a special time. Classic examples are: When Harry Met Sally, Sleepless in Seattle, Love Actually and You’ve Got Mail.
  6. Binge watch on Netflix a season or two of a romantic show on a cold winter weekend and plan snacks that fit the theme. Tea and scones with clotted cream and strawberry jam would be a perfect fit for Downton Abbey.
  7. Clean the house, make the beds and do the laundry, all without having to be asked. Give your lover coupons that can be redeemed at a negotiated time for future cleaning services.
  8. Pick a pet together and bring the puppy or kitten home on Valentine’s Day. This assumes you both want a pet and it was just a matter of time until you added one to your family. A red collar and leash would be in keeping with the day.
  9. Plan an active adventure. Take a hike; go skating on an outdoor rink and drink hot chocolate. Snowshoe through the park or toboggan down a hill. Winter is much more bearable when you embrace it instead of constantly trying to avoid it.
  10. Arrange an unexpected visit with a loved one, i.e. a housebound senior, a new grandbaby or your youngest child who is away at college for the first time. Helping to bring lonely people together on or around Valentine’s Day will create unforgettable memories.

Top 10 year-end tax tips

By Sheryl Smolkin

If you earn income in Canada, you pay taxes. My father-in-law always said, “If you make money, pay what you owe, but not any more than you have to.” So to help you manage your 2016 tax bill, here are 10 top end-of-year tax tips he definitely would have approved of:

  1. Defer income: If you think you may earn less in 2017 than you have earned in 2016 and therefore be taxed at a lower rate, defer income where possible. This is less likely if you are employed and receive a regular wage or salary. However, your employer may agree to pay out a year-end bonus in January.  Also, if you are a consultant or freelancer consider wait until the beginning of 2017 to invoice certain clients.
  2. Contribute to SPP: SPP plan members with RRSP contribution room can contribute a maximum of $2,500/year. Contributions made until the end of February 2017 can be reported on your 2016 tax return, but the sooner you make your contribution the better.
  3. Max RRSP contributions: Your 2016 RRSP contribution limit is 18% of earned income you reported on your tax return in the previous year, up to a maximum of $25,370 minus any contributions to a company pension plan. However, unused RRSP contributions can be carried forward. Therefore if you have not maxed out your contributions every year, you may have thousands of dollars of contribution room. By using up this room you will trigger significant tax deductions when you file your 2016 tax return.
  4. Spousal RRSP: Where only one spouse is employed, opening a spousal RRSP will allow income splitting at retirement. Your permissible contributions to a spousal RRSP will depend on your available RRSP contribution room and you will get the tax deduction. Also, if your spouse withdraws funds within three calendar years of your contribution, it will be attributed to you.
  5. Max TFSA Contributions: As of this year, cumulative total TFSA contribution room is $46,500. Contributions are not tax-deductible, but investments accumulate tax-free and there are no tax consequences when money is withdrawn. Contribution room is also restored in the year following withdrawal. If you are holding cash or investments in an unregistered account and you have TFSA contribution room, consider moving as much as you can into your TFSA. However, keep in mind this will trigger a deemed disposition as of the date of transfer and you may have to pay any capital gains tax in the year of disposition
  6. Disability tax credit: Taxpayers who meet the criteria can apply for a non-refundable disability tax credit (DTC) of $8,001 in 2016. Where the disability has been in existence for some time, you can file retroactively for up to 10 years. However, the DTC requires Canada Revenue Agency (CRA) approval. Your doctor needs to complete a T2201 Disability Tax Credit Certificate for the CRA to review and approve, and you can only proceed once you have this approval.
  7. Get rid of losers: If you have an unregistered investment account, sell off investments with accrued losses at year end to offset capital gains realized in your portfolio.
  8. Charitable donations: You have until December 31st to make charitable donations that will generate a non-refundable tax credit on your 2016 tax return. You can typically claim eligible amounts of gifts to a limit of 75% of your net income. You can also claim any unclaimed donations made in the previous five years by you or your spouse or common law partner. You can find charitable donation tax credit rates for 2016 here. First-time donors who qualify can get an extra federal tax credit of 25%. For more information, see First-time donor’s super credit.
  9. Donate stock: There are plenty of ways to give to charity, but the donation of shares, whether publicly-traded or private company shares, can give rise to significant tax relief. Not only will you get a charitable donation tax credit but you will not have to pay capital gains tax on any appreciation in value since you purchased the shares.
  10. Medical/dental receipts: Make sure you have receipts for eligible medical expenses for you, your spouse or common-law partner, and dependent children under 18 that have not been otherwise reimbursed. They can be claimed on line 330 of the federal tax return. Only expenses in excess of the lesser of $2,237 for 2016 or 3% of net income can be claimed for the federal tax credit. Generally, you can claim all amounts paid, even if they were not paid in Canada.

Two steps to fund travel in your retirement

plan-ahead

Dream of travelling? ­Retirement can be the time of your life – if you’ve planned ahead. Jamie Milton, partner of Uniglobe Carefree Travel of Saskatoon, meets many retirees making the most of these years.

“Travel is extremely popular among seniors. Those can be the years to see and do things you might otherwise not have had the time or money to experience earlier in life,” said Milton.

Two simple steps can get you that much closer to funding your retirement travel plans.

  1. Become a member of a pension plan, such as the Saskatchewan Pension Plan. It is open to Canadians between the ages of 18 and 71 with available room to make RRSP contributions. The SPP is a good choice for those two-thirds of Canadians who do not have a workplace pension plan such as those self-employed or working for small businesses.
  2. Contribute regularly as a member. Take advantage of time and compounding returns. For example, contributing $100 a month with annual investment earnings of eight per cent can grow to $150,030 in 30 years.

Find out how to become a member of the Saskatchewan Pension Plan and make your regular contributions by visiting our website.

Also See

Martin Firestone: What Snowbirds Need to Know About Travel Insurance
8 ways seniors can travel on a budget
Safe travel tips for Snowbirds
Snowbird? How to winterize your house

Picture travelling during retirement

picture-your-retirement

Picture the lifestyle you desire during retirement.

Does it include relaxing under an umbrella on a sandy beach? Swinging the clubs on a lush golf course? Marvelling at natural wonders while on a hike? Or feeling the breeze on the deck of a cruise ship sailing the world?

Travel is a popular choice of retirees. Funding that dream can be made possible through a pension plan. But for it to work you need to act during your working years.

Join a pension plan. The Saskatchewan Pension Plan is a great option for those two-thirds of Canadians who don’t have a workplace pension plan.

By contributing regularly to a pension plan such as the Saskatchewan Pension Plan, you can take advantage of time and compounding returns.

Get started now. Learn more about funding your retirement dreams by visiting our website.

Also See

Martin Firestone: What Snowbirds Need to Know About Travel Insurance
8 ways seniors can travel on a budget
Safe travel tips for Snowbirds
Snowbird? How to winterize your house

Black Friday Shopping: Ready, Set, Go

By Sheryl Smolkin

Traditionally in the U.S., the Friday after Thanksgiving (the fourth Friday in November) is the kick off for the Christmas shopping season. However, over the last several years many Canadian retailers have jumped on the bandwagon, offering competitive deals.

In fact, data from Consolidated Credit and Moneris based on the 2014 Black Friday/Cyber Monday weekend show that shoppers in Saskatchewan spent the most, with the average credit or debit transaction ringing in at $140.81. Alberta was a close second, charging an average of $126.41 to plastic.

According to a 2015 survey by Accenture, Canadian consumers perceive Black Friday to be the day with the best deals (37%), followed by Boxing Day (25%) and Cyber Monday (11 per cent). However, more shoppers say they plan to shop on Boxing Day (64%) than Black Friday (60%). Cyber Monday still hasn’t fully caught on with Canadian shoppers, with only 31% saying they plan to shop on the first Monday after U.S. Thanksgiving.

Twenty-seven percent said they would travel to the U.S. to shop, compared to 24% in 2014. Thirty-one percent of shoppers cited the weak Canadian dollar as their reason for staying put to shop this year.

Whether you plan to shop online or in person, here are some hints to get the best Black Friday deals:

  1. Make a list: Just like you make a grocery list before you go shopping, think about what you are really looking for before you sit down in front of your computer or get up at the crack of dawn to stand in line at the nearest big box store. 
  2. Pre-shop: A deal is only a deal if you really need the item and the price is actually lower than any other day of the week. Price clothing, small electronics and other products in advance so you know whether or not specials offered actually represent good value.
  3. Free shipping: If you are shopping online, check out how much the shipping charges are before you press the button to buy the items in your shopping cart. In Who’s offering free shipping this Black Friday? the website Shopbot predicts which bricks and mortar stores will likely offer free shipping based on whether or not they did last year.
  4. Keep your receipts: The pair of shoes or winter coat you bought after standing in line may not be such a great fit once you get them home. Make sure you understand the return policy and keep your receipts in case items have to go back.
  5. Timing: Online Black Friday sales often start at midnight on Thursday EST. If you are in Saskatchewan, that’s an hour earlier. Grab your cup of coffee and stay up late to be first in line to get the loss leader deals.
  6. Create an account: If there is a site you know you will want to buy from, create an account earlier in the week. That way you won’t waste precious time filling out forms and lose coveted items that are in limited supply. 
  7. Cross-border shopping: If you plan to brave the lines and head south to do your Black Friday or Cyber Monday shopping, don’t forget to use the calculator or currency exchange app on your phone. When you take the soft Canadian dollar into consideration, what looks like a great deal may not be.

Also see:

Who’s offering free shipping this Black Friday?