Tag Archives: Sean Cooper

April 17: Best from the blogosphere

By Sheryl Smolkin

In a guest post for the Financial Independence Hub, Certified Financial Planner Gennaro De Luca writes that based on his experience, men and women approach taxes and investing differently. For example, he says nine times out of 10 it is the woman who takes the bull by the horns to get the family’s taxes done. Women tend to be more involved and are much more apt to ask questions of their accountant or tax preparer about tax credits and government benefits the family may be eligible for.

Robb Engen on Boomer & Echo discusses which accounts to tap first in retirement with Jason Heath,  a fee-only financial planner. Heath says it may make sense for people who retire early to withdraw funds from their RRSPs first and defer CPP and OAS until age 70.

Retire Happy veteran blogger Jim Yih outlines the top 5 new retirement trends and how they will affect your retirement. For example: retirement is not about stopping work; many people are “phasing into retirement.” Furthermore, long term care is an essential component in a retirement plan.

10 simple ways to save money at the gas pump was recently posted by Tom Drake on the Canadian Finance Blog. Who knew that avoiding unnecessary weight in your car; using cruise control on highways and driving under 100 km/hour could save you money?

And Sean Cooper recounts the story of his unexpected $1,300 furnace repair bill in the depths of a Canadian winter. Luckily, he is mortgage-free, so he had the necessary money sitting in his savings account. But his experience shines a spotlight on the importance of saving up an emergency fund in advance.


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.

Mar 20: Best from the blogosphere

By Sheryl Smolkin

This issue of Best from the Blogosphere draws on the work of several of the over 60 personal finance bloggers/experts who belong to the Canadian Money Bloggers Facebook Group. While many are old friends, today we introduce you to several bloggers who are new to us that we have recently started reading.

Alyssa Davies on Mixed up Money writes about Why She Still Avoids the Mall 1 Year After Becoming Debt Free. In order to pay off $10,000 in debt arising out of a shopping addiction she had to quit cold turkey. Even going to the mall was too much temptation. She rewarded herself with a new $80 wallet when she paid off her debt, but since then she prefers to shop for clothing online as a form of damage control.

11 Ways to Lower Your Power & Utility Bills by Dan on HowToSaveMoney.ca is a very topical piece for any season. Dan suggests that to conserve water you use low flow toilets and make sure you have no leaky taps. Energy efficient blinds and window upgrades can help keep the cold out and the heat in. And weatherstripping, adding solar panels and smart thermostats are other options for better managing utility bills.

We’ve read a lot lately about Sean Cooper’s book Burn Your Mortgage. In fact I recently posted a podcast interview with him on this site. But FIRECracker chats with Cooper for the Millenial Revolution about what it actually takes to publish a book. Instead of finally relaxing after paying off his mortgage, he spent 3-5 months writing the book; 4 months editing and re-writing it; plus 6-8 months working with a publicist and literary agent on marketing. In addition, he put $20,000 of his own money into the project.

The blogger and founder of Family Money Plan Andrew Daniels says part of his plan to become financially free involves making more money. Taking surveys is one side hustle that is helping him reach this objective. There are a lot of different survey companies out there and each of them compensates differently. But if he is waiting for an oil change or for his kids’ activities to wrap up, he pulls out his smartphone and earns while he would otherwise be just killing time.

CPA Robin Taub frequently blogs for Tangerine Bank’s website Forward Thinking. In How someone stole my identity to commit fraud and what I did about it she tells a compelling story about Janice who was the victim of identity theft and fraud like 20,611 other people in 2014. It took her months to get her credit rating cleared so she could be approved for a mortgage and purchase a home. “To this day, I’m still not sure how my Social Insurance Number was compromised since I didn’t physically misplace or lose the card. But I’m much more vigilant now about protecting myself,” Janice told Taub.


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.

Burn your mortgage: An interview with author Sean Cooper

By Sheryl Smolkin

Click here to listen
Click here to listen

If you think you can’t possibly afford to buy a home or that paying off your mortgage is a pipe dream, Burn Your Mortgage is the must-read book of the year. Today I’m pleased to be interviewing author Sean Cooper for savewithspp.com.

By day, Sean is a mild-mannered senior pension analyst at a global consulting firm. By night he is a prolific personal finance journalist, who has been featured in major publications, including the Toronto Star, the Globe and Mail and MoneySense. He has also appeared on Global News, CBC, CP24 and CTV News Network.

Thanks for agreeing to chat with us today Sean.

My pleasure, Sheryl.

Q: As a 20 something, why did you decide to buy a house?
A: Well I guess a lot of people strive for home ownership. My parents were my biggest influence. We always owned a home growing up, so I thought that owning a home was kind of the path to financial freedom.

Q: How much did your home cost, and how much was your down payment?
A: I purchased my home in August 2012 for $425,000 dollars. My down payment was $170,000, leaving me with a mortgage of $255,000. I didn’t go out and spend the massive amount the bank approved me for. I could have spent over $500,000 dollars but I found a house with everything that I needed for $425,000 and because of that I was able to pay off my mortgage in three years.

Q: How on earth did you save a down payment of $170,000 dollars? How long did it take you to save it, and how many hours a week did you have to work to do so?
A: Yes, it was definitely a sizable down payment for one person. I pretty much started saving my down payment while I was in university. I was able to graduate debt free from university and while I was there, I was working as a financial journalist. I was also working at the MBA office, and employed part-time at a supermarket. When I got my full-time job I was saving probably 75%-80% of my paycheck. I wasn’t living at home rent free. I was actually paying my mother rent.

Q: Kudos for your determination and stamina. Do you think working three jobs is actually a practical option for most people, particularly if they have young families?
A: No. As I emphasize in the book, that’s how I paid off my mortgage as a financial journalist on top of working at my full time job. While for somebody like me who is single it makes sense, it’s probably not realistic if you have a spouse and children. But there are plenty of things you can do to save money.

Q: Many people again think they would never, never be able to save up enough for a down payment. Can you give a couple of hints or tips that you give readers in your book that will help them escalate their savings?
A:
Definitely. First of all, you absolutely have to be realistic with your home buying expectations. You can’t expect to be able to buy the exact same house that you grew up in with three or four bedrooms and two stories. But you can at least get your foot in the door of the real estate market by perhaps buying a condo, or a town house, and building up equity, and hopefully moving up one day. Think about creative living arrangements. Rent a cheaper place than a downtown condo. Find a roommate.

Q: How can prospective home buyers use registered plans like their RRSP or TFSA to beef up their savings and get tax breaks?
A: If you are a first time home buyer, I definitely encourage you to use the home buyers plan. The government allows you to withdraw $25,000 dollars from your RRSP tax-free (it has to be repaid within 15 years). If you are buying with your spouse, that’s $50 000 dollars you can take out together. That’s a great way to get into the housing market. The caution I can offer is when you withdraw the money, make sure that you fill in the correct forms so you are not taxed on the withdrawal. If you’re not a first time home buyer, then I would definitely encourage you to use a Tax Free Savings Account, because it’s very flexible, and although you don’t get a tax refund, the balance in the plan accumulates tax-free.

Q: After shelter, which means mortgage and rent, food is a pretty expensive cost. How can people manage their food costs while still eating a healthy, varied diet?
A: I offer a few tips in my book. First of all, try to buy items like cereal and rice in bulk and on sale. Another tip I offer is to buy in season. I probably wouldn’t buy cherries during the winter  because they would cost me a small fortune. Try to buy apples instead, and during the summer if you enjoy watermelon, definitely buy it then. Try to be smart with your spending, and that way you can cut back on your grocery bill considerably.

Q: I enjoyed the section in your book about love, money, and relationships. Can you share some hints about how couples can manage dating and wedding costs, to free up more money for their house?
A: People like to spend a fair amount on their weddings these days, and there’s nothing wrong with that, but you just have to consider your financial future, and how that’s going to affect it. Also, when it comes to dating, make sure that you and your potential partner are financially compatible and have similar financial goals. For example, one might be a saver while the other is a spender. Sit down and make sure both of you are on the same page financially, and then find common financial goals, and work towards them.

Q: How can prospective home buyers determine how much they can actually afford?
A: If you are ready to start house hunting, I would definitely encourage you to get pre- approved for a mortgage. Basically, the bank will tell you how much money you can afford on a home. That way you don’t waste time looking at houses out of your price range. However, just because the bank says you can spend $800,000 doesn’t necessarily mean you have to spend that much.

Also don’t forget you will have to pay for utilities, property taxes, and home insurance plus repairs and maintenance. Come up with a mock budget ahead of time, and see how that will affect your current lifestyle. I would say if over 50% of your month income is going towards housing, that’s too much.

Try to kind of balance home ownership with your other financial goals, whether they are saving towards retirement, or even going on a vacation. That way all of your money won’t be going towards your house, and you will actually be able to afford to have fun and save towards other goals as well.

Q: You’re living in the basement and you rented the first floor. Why did you decide to do that, instead of vice versa?
A: Well I’m just one person living on my own, and upstairs there are three bedrooms and two bathrooms. I wouldn’t know what to do with all the space, so it made sense to live in the basement, because to be honest I lived in basement apartments for several years before that, so it wasn’t really much of an adjustment. I mean, personally I’d rather rent out the main floor than get a second or third job. It’s all about kind of maximizing all of the space that you have, and looking for extra ways to earn income.

Q: We rented the basement in our first house. Why did you decide to write the book?
A:
When I paid off my mortgage, a lot of people reached out to me for home buying advice. In the media, there seems to be a lot of, I guess, negativity surrounding real estate and big cities.

I always hear that the average house costs over a million dollars in Toronto and Vancouver. It seems like for millennials home ownership is really out of reach. I wanted to write a book to really inspire them and show them that home ownership is still a realistic dream, and it is still achievable if you are willing to be smart about your finances.

Q: Congratulations Sean. It’s a great book. I’m sure people reading and listening to this podcast will want to run out and buy it. Where can they get a copy?
A: They can order a copy on Amazon. It will also be available in Chapters and other major book stores across Canada.

Well that’s very exciting. Good luck.

Thanks so much.

 

 

 

 

 

You can purchase Burn Your Mortgage by Sean Cooper on Amazon.

This is an edited transcript of a podcast interview conducted in February 2017.

Feb 06: Best from the blogosphere

By Sheryl Smolkin

One issue on our radar this week of concern to many Canadians is the possible change to the deductibility of health and dental care insurance premiums for tax purposes in the upcoming 2017 budget. Currently these premiums are not a taxable benefit if they are paid for by your employer and they are a deductible medical expense for individuals purchasing private plans to supplement provincial medicare benefits.

On December 2, 2016 a National Post article noted that the Federal Liberals are eyeing a tax on private health and dental plans, a move that would take in about $2.9B. Journalist John Ivison reported that proponents of eliminating the credit argue that those with lower incomes but without private health plans are subsidizing those with employee-sponsored coverage. On the other hand, he said there is a strong economic case for encouraging employers to provide health coverage for employees.

Later in the same month, a coalition of health care service providers warned of the potential negative implications of taxing the premiums paid on employer-provided health and dental benefits. Ondina Love, CEO of the Canadian Dental Hygienists Association said, “When benefits were subject to provincial income tax in Quebec in 1993, almost 20% of employers dropped their coverage, including up to 50% of small employers. This loss of coverage can significantly impact the lowest-paid employees who will have trouble paying for drugs, dental and needed health care out of pocket.”

And now a Conference Board of Canada report commissioned by the Canadian Dental Association calculates that millions of Canadians will each pay at least $1,000 more if Ottawa taxes health and dental plans . And according to the National Post, the potential exists for a massive political backlash. The Canadian Dental Association reports that 50,000 protest emails have already been sent to local MPs and Bill Morneau, the finance minister, through its donttaxmyhealthbenefits.ca online petition.

Let’s hope that Prime Minister Trudeau’s comments on February 2nd suggesting that his government doesn’t plan to tax employee health and dental plans as reported in Benefits Canada will put this issue to bed once and for all for the benefit of all Canadians.

In another health-care related story this week, Marie Engen at Boomer and Echo makes The Case For A Universal Canadian Drug Program. She correctly says that prescription drug coverage in Canada varies widely depending on where you live, your health status, your income, and your age. Right now, each province has its own pharmacare program and there is no consistency. A universal prescription drug plan could not only reduce total spending. It would also cover everyone at an affordable price.

Finally, in a post on Retire Happy, Sean Cooper tackles the question  Should You Take a Deferred Pension or the Commuted Value? He says many people go to their investment advisors to seek assistance on deciding what to do with their pension. But there is a clear conflict of interest.  “Your advisor can be a good source of information for deciding which funds to invest the commuted value in should you decide to take it, but at the end of the day the decision should be yours and yours alone,” he concludes.


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.

Personal finance writers share 2017 New Year’s resolutions

By Sheryl Smolkin

Several years ago Globe & Mail columnist Tim Cestnick listed what he considers to be the top five opportunities for anyone looking to get their financial house in order:

  • Create a pension
  • Own a home
  • Pay down debt
  • Start a business
  • Stay married

So I decided to ask 10 money writers to share their top personal finance New Year’s resolution with me, in the hope that it will encourage readers to establish and meet their own lofty goals in 2017.

Here, in alphabetical order, is what they told me:

  1. Jordann Brown: My Alternate Life
    I’m still in the process of ironing out my New Year’s resolutions but here is one I’m definitely going to stick to. I plan to save $10,000 towards replacing my vehicle. It’s always been a dream of mine to buy a car with cash and as my car ages it has become apparent that I need to start focusing on this goal. I never want to have a car payment again, and that means I need to start saving today!
  2. Sean Cooper: Sean Cooper Writer
    I  paid off my mortgage in just three years by age 30. My top personal finance New Year’s resolution is to ensure that my upcoming book, Burn Your Mortgage, reaches best-seller status. A lot of millennials feel like home ownership is out of reach. After reading my book, I want to them to believe buying a home is still achievable.
  3. Jonathan Chevreau Financial Independence Hub
    My top New Year’s Resolution, financially speaking, is to make a 2017 contribution to our family’s Tax-free Savings Accounts (TFSAs). This can be done January 1st, even if you have little cash.  Assuming you do have some non-registered investments that are roughly close to their book value, these can be transferred “in kind”, effectively transforming taxable investments into tax-free investments.
  4. Tom Drake Canadian Finance Blog
    My New Year’s resolution for 2017 is to increase my income through my home business. But this can be done rather easily by anyone through side-gigs and part-time jobs. While saving money by cutting expenses can be helpful, you’ll hit limits on how much you can cut. However, if you aim to find new sources of income in 2017, the possible earnings are limitless!
  5. Jessica Moorhouse Jessica Moorhouse.com
    My personal finance New Year’s resolution is to track my spending, collecting every receipt and noting every transaction down, for at least 3 months. Doing this really helps me stay on track financially, but for me it’s definitely something that’s easier said than done!
  6. Sandi Martin Spring Personal Finance
    I don’t expect much to change in our financial lives over the next year. I hope to avoid the temptation to build a new system because the boring old things we’re already doing aren’t dramatic enough. I’m prone to thinking that “doing something” is the same as “achieving something”, and I’m going to keep fighting that tendency as 2017 rolls by.
  7. Ellen Roseman Toronto Star Consumer Columnist
    My personal finance resolution for 2017 is to organize my paperwork, shred what I don’t need and file the rest. I also want to list the financial service suppliers I deal with, so that someone else can step into my shoes if I’m not around. It’s something I want to do every year, but now I finally have the time and motivation to tackle it.
  8. Mark Seed My Own Advisor
    I actually have three New Year’s resolutions to share:

    • Eat healthier.  We know our health is our most important asset.
    • Continue to save at least 20% of our net income. We know a high savings rate is our key to financial health.
    • After paying ourselves first, simply enjoy the money that is leftover. Life is for the living.
  9. Stephen Weyman HowToSaveMoney.ca
    For 2017 I’m looking to really “settle down” and put down roots in a community. I believe this will have all kinds of family, health, and financial benefits. The time savings alone from being able to better develop daily routines will allow me to free up time to focus more on saving money, growing my business, and better preparing for a sound financial future.
  10. Allen Whitton Canadian Personal Finance Blog
    I resolve to keep a much closer tab on my investments and my expenses, while planning to retire in four years. I have a pension, I have RRSPs, but I still have too large a debt load. Not sure this is possible, but I will try!”

Dec 19: Best from the blogosphere

By Sheryl Smolkin

I have just returned from a three week odyssey to Australia and New Zealand, so there is a significant backlog of stories from both old favourites and newer bloggers to share with you.

Sean Cooper is anxiously awaiting the release of his first book Burn Your Mortgage. He made headlines around the world when he paid off his mortgage at 30 on a house he bought just three years before. In a recent blog he says that in spite of inflated home prices particularly in Toronto and Vancouver, the home ownership dream is still alive and well. However it is taking twice as long to save for a house because we are buying bigger houses.

Toronto Star Consumer Columnist Ellen Roseman has had lots to smile about since her media articles, petition and blog were a catalyst for the Ontario Protecting Rewards Points Act effective December 5, 2016 which provides that loyalty rewards points can’t expire. Roseman found out about the changes when she was being interviewed on CBC Marketplace. However, to date similar legislation has not been tabled in Saskatchewan.

If you are planning a winter vacation this year, chances are one or more people will approach you about buying a timeshare week or two in paradise before you fly home. Tom Drake believes the purchase of a timeshare is usually a poor choice, since they can be hard to unload, and they depreciate in value so quickly. However if you can get a timeshare on the cheap on ebay or some other online site, it may be a better deal. But you might be required to pay the current year’s maintenance fee at purchase time, or you could possibly be on the hook for closing costs and transfer fees. Be sure to read the documentation carefully to ensure that you understand the terms and requirements.

In Episode 77 of her podcast series, Jessica Moorhouse interviews Steve Cousins from Arkansas who retired as a millionaire by working a regular 9 to 5 job for the same company for 40 years. She learned that he made sure to get a university degree in a field that has a high demand for skilled workers. Cousins also says you need to understand when it makes sense to stick with the same company or if you should move on. And finally, you need to live frugally, invest wisely and have a plan how to continue earning money during retirement. For example, he has become a serial entrepreneur with four different jobs now that he is retired.

And finally, Steve Weyman on HowToSaveMoney.ca describes how he ALWAYS does extreme price comparison to make she he gets the lowest price. Take a look at his 10-step process.

  • Choose your product
  • Start with a light google search
  • Track the lowest prices
  • Check ALL  flyers using Flipp.com
  • Use price comparison sites to compare prices fast
  • Do a manual search of well-known stores
  • Find the lowest past selling price
  • Price match to save more money
  • Tack on a coupon if you can

I guess I’m not up to Weyman’s standard because I don’t have the time or energy for extreme price comparison. But you’ve got to admire his persistence!


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.

Oct 31: Best from the blogosphere

By Sheryl Smolkin

Last week we included links to blogs and articles discussing the implications of the new mortgage rules announced by Finance Minister Bill Morneau in early October. But the ultimate impact of these changes on individuals and the housing market are still emerging. Here is some additional insight you may be interested in.

RateSpy.com’s mortgage expert Robert McLister writes that the Feds Nuked the Mortgage Market. He calls it “a stealth rate hike” by federal policy-makers that is an end run around Bank of Canada Governor Stephen Poloz  who has opted not to drive up Canadian interest rates.

Even Liberal MPs are concerned new rules will shut out first-time homebuyers  and they are wondering why Morneau didn’t consult the national Liberal caucus or the House Finance Committee prior to making the announcement intended to cool down the overheated housing market in major urban centres.

But Boomer & Echo’s Robb Engen says Cool It. The Feds Aren’t Killing The Housing Market. He acknowledges that home builders are upset with the feds for introducing new rules, but says maybe this time the feds got it right. Commenting on this blog, Michael James from Michael James on Money says, “Maybe new rules will save some from the biggest financial mistake of their lives.”

If you or someone you know has been saving for a down payment, Canada’s New Mortgage Rules: This Is How Much You Can Afford in the Huffington Post includes a great chart that will help prospective buyers to determine how much house they can afford with 20% down based on a benchmark qualifying interest rate of 4.64%.

And finally, Sean Cooper says in spite of the new mortgage rules, First-Time Homebuyers Shouldn’t Throw in the Towel. He says, “While I’m not a fan of parents gifting their adult children their entire down payment, there’s even more reason now for parents to top up their child’sdown payment to reach 20% and avoid the stricter qualifying rate.” He also believes first-time homeowners should avoid buying “too much house.”


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.

Sept 19: Best from the Blogosphere

By Sheryl Smolkin

The discussion about whether or not to buy a home and if home ownership is a good investment rages on, particularly among younger people living in expensive urban areas who may be contemplating the purchase of their first property.

While purchasing property is definitely a huge financial commitment, there is also a strong emotional component in every decision to make an offer for real estate. Even if the house turns into a “money pit,” it’s YOUR money pit and no one can kick you out unless you default on the mortgage.

Sean Cooper, who bought a house at age 27 and paid off his mortgage three years later, believes the home ownership dream is still alive and well. He says, “By being laser-focused on paying down your mortgage quickly, you can reach financial freedom years sooner…..A paid off home gives you choices: you can quit the rat race, travel around the world, start your own business or take a job you truly enjoy.”

On Millennial Revolution, FIRECracker does the math to see if she and her partner The Wanderer would be richer if they bought a house in 2012, instead of investing their $500,000 down payment and renting. Based on Toronto Real Estate Board figures for the period, she estimates she would have made a respectable 7.8% if she sold in 2016. However, expenses like real estate commission, lawyers’ fees, maintenance, utilities and additional furniture would have reduced their profit. so by investing instead of buying, their gains were 2.61 times the gains from the house.

On their very first outing with a real estate agent, Jessica Moorhouse and her husband bought their first place, officially becoming homeowners. They ended up buying a two-story stacked townhouse in Toronto’s west end. “We knew that if we found a place that ticked off all of our boxes and was within our budget, we needed to act fast,” she says. “Places like the one we got do not come around often, and I am seriously so thrilled we’re living in this place!”

Those of you who already live in your own home and want to move up face the classic homeowner’s conundrum: Should you buy first or sell first? The choice depends on the people, the house and the city, realtors say, though there are some constants that hold true for most situations. “If it’s a seller’s market, then you need to be buying first. If it’s a buyer’s market, then you need to be selling first,” Ara Mamourian, broker and owner of Spring Realty in Toronto says.

And once you do own a home (or at least the bank does) the next question you will likely face is Should You Save Money or Pay Extra On Your Mortgage? Bridget Eastgaard’s spreadsheet shows that after 25 years, homeowners who opted to put $5,000 extra into a their TFSA instead of towards their mortgage, would come out $80,000 dollars richer than the person who thought it was worthwhile to put the cash towards his mortgage, just to become debt-free five years faster. Nevertheless, she acknowledges it really only works this way because mortgage rates are so low in Canada.

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.

Jun 20: Best from the Blogosphere

By Sheryl Smolkin

After several weeks of “theme” issues it’s time to check in with some of our favourite bloggers to find out what’s on their mind.

On Boomer and Echo, Marie Engen asks the perennial question RRIF Or Annuity? Which One Is Right For You?  She suggests combining both so an annuity covers your basic retirement expenses together with with your CPP, OAS, and any other pension income you may be receiving to give you a guaranteed income stream for life. This allows your RRIF to provide you with investment growth opportunities and easier access to your money for your more enjoyable lifestyle expenses.

Tax Freedom Day 2016 happened June 7th this year. Retire Happy’s Jim Yih says it’s another reason to celebrate summer. He explains where all of your taxes go because once you realize the severity of tax on your lifestyle, it is your job to investigate legitimate ways to reduce your tax bill. “I’ve often said that good tax planning is the foundation to any financial, investment or estate decision,” Yih concludes.

Bridget Eastgaard lives in Calgary where due to the drop in oil prices the rental market is very soft. On her blog Money After Graduation she shares One Simple Shortcut To Put More Money In Your Budget. Her research revealed a similar unit renting for $250 less in her building plus a half-dozen comparable apartments renting nearby for less. She succeeded in lowering her rent by 20%, saving hundreds of dollar a month that will be redirected to accumulating a down payment on a house.

Sean Cooper thinks Millennials Should Save Their Down Payment and Not Rely on the Bank of Mom and Dad. He says by showing your millennial child tough love, you’re teaching your kids a valuable lesson: not everything in life will be handed to them on a silver platter. Just like you did, he says they should to work for it.You won’t be there to help them forever.

And the Big Cajun Man Alan Whitten reminds readers to keep an eye on their bank account to make sure automatic withdrawals are being processed properly on an ongoing basis. When he checked on his son’s RESP recently, he found that TD Bank mysteriously stopped depositing in November of 2015. There has been a problem ticket opened on this issue, and someone will be getting back to him.

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.

 

May 2: Best from the blogosphere

By Sheryl Smolkin

My husband and I helped our daughter buy her first house and a few years ago we bought my son a car. We also partially paid for their education so they were able to graduate debt free. I consider these gifts as an excellent investment because we could afford it and it was our pleasure to share our good fortune with them when they needed it most.

So when I came across Sean Cooper’s blog Why Millennials Should Save Their Down Payment and Not Rely on the Bank of Mom and Dad, I figured I’d better find out what he has to say. Sean believes that parents who cough up all or part of the down payment for a house are generally hurting their offspring instead of helping them. “By showing your millennial child tough love, you’re teaching your kids a valuable lesson: not everything in life is handed to you in a silver platter,” he says.

In an excerpt from his book The Bank of Mom and Dad: Money, Parents, and Grown Children published in the Globe and Mail last year, Derrick Penner says the first question the family should explore is whether the timing is right. For young adults just setting out on a new career, it might be more logical to rent (assuming they’ll also be able to save some money) and kick-start an investment plan that would lead to home ownership later than to buy real estate before they’re really ready.

But if you do decide to give cash to your kids for a down payment, How to help your kids buy a home by Michele Lerner on Bankrate.com has some great tips. First and foremost, she says make sure your own retirement needs are adequately funded before you part with a large lump sum. Also, if you co-sign on a mortgage or loan, understand that you will be liable if your child defaults, so make sure in a worst case scenario you can also afford to make the mortgage payments.

Help your child buy his/her first home, a post on GetSmarterAboutMoney.ca says if you do decide to go ahead, there are three common options: loan your child the money; co-sign your child’s mortgage; or pay some or all of the costs as a gift. Make sure you understand the pros and cons of each option, and how your tax situation and financial plan could be affected.

And finally, an article last year by Adam Mayers in the Toronto Star correctly notes that Emotions can run high when helping the kids buy a house. He says that if family-financing is in the home-buying cards for the younger generation, some issues to consider are: securing any loan via promissory note or against title; the pros and cons of joint ownership; and, how to get your money back. In a mini-poll in the article 68% of those who voted said they would be willing help their kids with a down payment for a home.

*****

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 with us on http://wp.me/P1YR2T-JR and your name will be entered in a quarterly draw for a gift card.