Free resources for business start-ups

By Sheryl Smolkin

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In September 2012 CIBC Economics reported that as of the previous June, more than half a million Canadians were in the process of starting their own business. Regionally British Columbia has the greatest start-up activity followed closely by Alberta and Saskatchewan.

If you are thinking about starting a small business or already doing so, saving money is a big priority. You may be surprised to learn how many free or low cost software tools are available to help you deliver a professional product with little additional overhead. Typically, enhanced versions of these products with more features are available for a monthly fee.

Here are some of the free resources I have used or become aware of since I started a retirement career as a freelance consultant and journalist three years ago. There are many other products with similar functionality available online so I encourage you to look for alternatives best suited to your business needs.

  1. Blogging software: A blog is a great way to promote your new business. You can be up and running for free in no time using programs such as WordPress or Blogspot. Depending on your budget and technical abilities, a blog can be incorporated into a more comprehensive website. For example, Savewithspp.com is an easy to update and maintain WordPress blog.
  2. Long distance calls: Using Skype on your computer or telephone for long distance audio or video calls will save you a fortune in long distance calls. Many recruiters now routinely use Skype for interviewing candidates worldwide. It has become an industry standard in many other businesses of all sizes.
  3. Google drive: Google Drive has a whole suite of free tools that gives you access to your work from anywhere on virtually any device. The feature I have found most useful is the ability to create shared spreadsheets with several clients to track publication schedules, release dates and billing. I haven’t tried it yet, but Google Hangouts which allows you to start or join an HD video meeting with up to 15 participants from wherever you are looks really interesting. 
  4. Google doodle: If you think trying to schedule a meeting with a group of people is akin to herding cats then this tool is for you. It’s called Doodle and it allows you to create an event and invite people to fill in the dates and times they are available. Then you can go to the website and see how they all match up to select a common meeting time, or create an event that only allows them to select one time slot.
  5. Dropbox: Dropbox is another multi-faceted cloud-based solution. I use it for storing and sharing files with clients. It is particularly useful if you need to move large video or audio files which cannot be easily sent by email.
  6. Webinars: A WebEx basic account will allow you to set up meetings online with shared slides and audio for up to 100 people. A premium “for pay” account offers more features and can accommodate a larger group.
  7. Conference calls: Using this site you can set up free conference calls with a dial-in number. The only hitch is that the free product does not include toll-free (800) dial-in numbers Therefore, call participants out of the calling area will pay long distance charges. For pay services also offered on the site will set you up with a toll-free line and other features. 
  8. Audio editing: I frequently do podcast audio interviews using an Olympus digital recorder plugged into my landline (yes, I still have one). Recently I turned my recorder on too soon and there were several seconds at the beginning that had to be edited out. Free audio editor for Windows saved the day!
  9. Newsletters: Paperlii is an intriguing free tool that allows you to pick a series of online sources and search terms which automatically run every day and generate an online newspaper which is delivered electronically to your client’s inbox.

There are lots of other free tools for small businesses including accounting, project management and sales management tools. We invite you to share information about free software tools available on the web that help you to run a small business with low overhead.

And remember, money saved is money earned!

The Saskatchewan Pension Plan is an easy way to save for retirement. There are many ways to contribute including via your credit card or automatic withdrawal from your bank account. Furthermore, as your company grows, Saskatchewan Business Plans are ideal retirement savings vehicles for small employers. Click here for more information.

Do you have any ideas for saving money? Share your money saving tips with us at http://wp.me/P1YR2T-JR and your name will be entered in a quarterly draw for a gift card. And remember to put a dollar in the retirement savings jar every time you use one of our money-saving ideas.

May 26: Best from the blogosphere

By Sheryl Smolkin

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Although it’s been a cold, wet spring the temperature is finally starting to inch up across the country. And with the end of the school year coming up fast, family vacations are top of mind for many people.

That’s why I thought readers might be interested in Tom Drake’s recent Canadian Finance Blog titled 10 Ways to Save Money on Your Vacation. Saving for your vacation in advance is great advice. Comparison shopping, a CAA membership and finding coupons online for local entertainment are other good suggestions.

Kristen Sarah from Hopscotch the Globe advises on How to Avoid Getting Sick During Your Travelling. She says avoid drinking the water and select restaurants that local people frequent. But if you want to enjoy your vacation, don’t be too paranoid!

In the Globe and Mail, Preet Bannerjee says before you hit the beach, it’s time to do a financial spring cleaning. Just like changing the winter tires, getting the flower beds in order, and scrubbing behind the appliances, it’s about getting your whole house in order. It may not be fun, but it needs to be done.

If your spring plans include a major home renovation, both your bank account and your marriage are in for a stressful time. On yummymummyclub Kat Inokai offers hints on How to Survive Months of Construction with Your Marriage Intact. This is one year when a stay-cation is probably not a good idea. If you can afford it, she says plan to get away from the mess for at least a few days.

And finally, after several months of trying the job as a manager on for size, Tim Stobbs realized he didn’t enjoy it. So he killed his career in management and he’s happy about it.  “It feels good to know for sure that I would be a round peg forced into a square hole.  I could do it but it would significantly uncomfortable,” he says.

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.

May 19: Best from the blogosphere

By Sheryl Smolkin

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In our eternal quest to link you to the best in personal finance blogging, once again this week we combed the web looking for great stories that will incent you to watch your nickels and save more for retirement.

On Boomer & Echo, Robb Engen discusses his experience  Breaking Subconscious Money Habits. Something as simple as eating weekend breakfasts at home instead of at Tim Hortons saved his family over $500/year.

Sarah Milton writes on Retire Happy about how Impulsive spending can derail your finances. While it may be tempting to buy something on sale because it’s a bargain, it’s only a bargain if you need the item and will use it within a reasonable period of time.

Automated arrangements where money comes out of your account to pay bills or amounts are regularly charged to your credit card are a great idea until something goes wrong and you don’t catch the error. That’s why Mr. CBB on Canadian Budget Binder says it is essential to review automated bill payments every month. That way you can discover and rectify inadvertent overbilling, duplicate bills or amounts incorrectly charged to your account.

If you really want to decrease the amount of income tax you have to pay, Big Cajun Man, Alan Whitton tries the idea Work Less and Pay Less Tax on for size. He says he’d rather take an extra 10 weeks of vacation off than go down to a four or three day work week, because he probably would have to do the same amount of work in a shorter period of time. Nevertheless, rather than working less, he would be more inclined to try to earn more money, so the tax hike didn’t hurt as much

And finally, Dan on Our Big Fat Wallet discussed what everyone loves to hate – bank fees. In I Hate Bank Fees, So I Bought the Banks he admits being frustrated by all of the bank charges he pays each month. So he decided to buy bank stock. The big 5 Canadian banks have had stellar capital gains and paid great dividends over the last five years.

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.

Splitting your pension on marriage breakdown

By Sheryl Smolkin

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When a family splits up, pensions accrued by one or both spouses (including the Canada Pension Plan) and the family home may be the most valuable family assets. This blog discusses the Saskatchewan rules for pension credit-splitting of non-government pensions.

If both partners live in Saskatchewan their pensions (including the balance in their Saskatchewan Pension Plan) form part of family property. The Family Property Act establishes as a general rule that each legally married spouse, common-law spouse and same-sex spouse is entitled to an equal share of their family property, subject to various exceptions, exemptions and equitable considerations set out in the legislation. For example, property acquired before the commencement of the relationship is exempt from distribution.

The court may divide the family property or may order that one spouse pay the other spouse enough money to equalize their shares. Alternatively, the spouses may make an agreement about how to divide their property. The agreement will be binding if it is in writing and each spouse has received independent legal advice.  If a member has named the soon to be former spouse as a beneficiary, that person will continue to be the beneficiary unless the member files a change with the plan.

Under the Saskatchewan Pension Benefits Act, pensions can be divided in a number of ways:1

  • If the member of a defined benefit (DB) pension plan is not yet receiving a pension and is not eligible for an unreduced benefit, the other spouse can have a lump sum transferred from the plan to a locked-in retirement vehicle like a locked-in registered retirement savings plan or another registered pension plan. The lump sum is calculated by assuming the member terminates membership in the pension plan. This calculation typically results in a very low value for the pension (ignoring possible early retirement benefits, future increases, etc.).2
  • If the member of a DB pension plan is not yet receiving a pension and is eligible for an unreduced benefit, the non-member spouse can either take an immediate lump sum transfer (see 1 above) or he/she can defer the division and the non-member can also receive a pension when the member retires.
  • If the plan member spouse is receiving benefits from a DB plan or an annuity from the SPP, the non-member spouse will receive his/her portion of the pension payment directly from the administrator. By default this pension is only paid in accordance with the form of pension elected by the member at retirement (i.e. life only, joint and survivor benefit) and therefore may not continue after the member’s death. However, the plan has the option of converting the spouse’s share to a pension payable on his/her life (not all plans offer this option). In addition, the plan may offer the non-member spouse the option to take his/her portion as a lump sum.
  • RRSPs (both locked-in and not locked-in) and defined contribution (DC) pension plans (including the Saskatchewan Pension Plan) do not need to be valued on marriage breakdown.

This is because, unlike with a DB plan, RRSPs and DC pensions are simply tax-deferred investment accounts and so the value at any point in time is equal to the account balance. For this reason, a valuation is not necessary to determine the pre-tax value for these assets.

However, in many cases, a proper income tax adjustment should be calculated. For more details on the reason for the income tax adjustment, see the question ‘Does the value of a pension have to be adjusted to reflect income tax?’ pension valuation frequently asked questions on the BCH Actuarial Services Inc. website.

Locked-in DC plan balances are subject to the same transfer restrictions as lump sum transfers from a DB plan described in 1 and 2 above.

During separation or divorce, either you or your spouse can transfer existing RRSPs to the other, without being subject to tax, provided that:

  • You are living apart when property and assets are settled; and
  • You have a written separation agreement or a court order.

Note that federally regulated pension plans (i.e. banks, airlines, rail) may not divide the pension in the same manner as mentioned above and may only allow the division options available under the federal Pension Benefits Standards Act.

Under the federal Pension Benefits Standards Act, up to 100% of the benefits earned during the relationship can be assigned to the spouse. If a portion of the member’s pension benefits are assigned to the spouse, the non-member spouse is deemed to have been a member of the pension plan and have terminated their membership in the plan.

Most federal pension plans have established administrative policies as to how the non-member spouse can receive their share of the pension, however, typically they will have the choice of an immediate lump sum transfer or a deferred pension in the plan if the member is not retired and they will receive a pension from the plan if the member is retired  (the plan may offer a lump sum option and they may convert the spouse’s pension to one payable for their lifetime). For more information, click here.

Federal government pensions are divided in accordance with Pension Benefits Division Act which only allows an immediate lump sum transfer from the pension plan to the non-member spouse. For more information, click here.

1. This blog is based in part on information provided on the website of BCH Actuarial Services Inc. and the material is reprinted with permission. In all cases of marriage breakdown you should consult with a family lawyer and/or an independent actuary who will advise you regarding the laws and actuarial valuations that apply to your situation.

2. A division of a pension on marriage breakdown must not reduce the member’s commuted value to less than 50% of the member’s commuted value prior to the division.

May 12: Best from the blogosphere

By Sheryl Smolkin

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This week there were several interesting blogs about life insurance I’d like to share with you.

On Brighter Life, Kevin Press discusses Understanding life insurance. First of all he gives basic information regarding term, permanent and universal health insurance. But for Kevin, the question was never “term or permanent.” It was, “How much term and how much permanent?”

Robb Engen from Boomer & Echo outlines The 4 Best Strategies for Successful Life Insurance Applications including preliminary inquiries, multiple applications, a covering letter and an insurance broker who is knowledgeable and up to date.

In a Toronto Star column I wrote about Eight red flags when you apply for life insurance. If your application reveals you have or had a serious or life-threatening illness the insurer may charge you higher premiums or postpone coverage for specific conditions until you can show the condition has stabilized. Or, the insurer may refuse to cover you. However, you still may be a good candidate for a “simplified issue” policy.

In an archived article Retire Happy blogger Jim Yih tackles the question, Do you need life insurance in retirement? Several of the situations where he says life insurance makes sense for retirees are to:

  • Pay off debt
  • Cover taxes at death
  • Cover final expenses like funeral expenses
  • Provide income for dependants
  • Leave a larger estate
  • Equalize your estate
  • Business continuation
  • Provide for charities

And finally this week, thanks go to Dan on Our Big Fat Wallet who introduced his readers to The Secret Pension Plan: Saskatchewan Pension Plan. He gives a great summary of the main features of the program.

He says the Saskatchewan Pension Plan is great for anyone looking to invest but not quite comfortable with DIY investing. It’s also useful for the self-employed who have no desire to handle their own investments. The costs of the plan are low and they offer lots of flexibility. You can also get potentially-lucrative cash back rewards for all contributions if you make them on your credit card.

Many employers also offer this easy-to-administer pension plans as an employee benefit. You can get more information on the Saskatchewan Pension Plan here.

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.

Book Review: FAMILY, KIDS, MONEY

By Sheryl Smolkin

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Kevin O’Leary is one of North America’s most successful entrepreneurs, as well as a star of CBC’s Dragon’s Den and ABC’s Shark Tank (where he will appear exclusively next season). He has co-founded, funded and sold numerous companies in a wide range of industries. Kevin is currently the Chairman of O’Leary Funds, a billion dollar mutual fund and O’Leary Mortgages. He also co-hosts CBC’s The Lang and O’Leary exchange.

In his most recent book “Cold Hard Truth on Family, Kids and Money,” O’Leary takes a life cycle approach to decisions creating a financial family dynasty. Unlike most of the books we have reviewed in this space, the focus is less on the precise details of budgeting or saving money and more how to choose a mate, build a long-lasting marriage and pass on good financial skills to your children.

He starts by describing his mother’s second marriage which lasted 46 years because it was based not just on love, but on shared personal and financial values. He says, “Marriage is like a pizza pie, where love is only one slice.” Therefore, he firmly believes couples should date for at least three years to really get to know each other before marriage.

He also recommends that couples complete individual “financial due diligence” work sheets before sealing the deal. This comprehensive questionnaire covers educational background, employment history, personal debt and any criminal history.

O’Leary acknowledges that this may not seem very romantic. However he says there is nothing that will kill the romance faster than finding out after the wedding when you apply for a mortgage that your partner is deeply in debt and has a terrible credit history.

Not surprisingly, he also believes the reason many arranged marriages work out is because before setting up a first date a good matchmaker will consider the couple’s temperament, education, personal values and attitudes towards money.

When it comes to the kids, O’Leary says the most important thing you can give them is your time. But an early MBA (money and banking awareness) comes a close second. Every financial interaction with your child is an opportunity to teach by example whether you are buying groceries or visiting your investment advisor.

Because financially illiterate children turn into financially illiterate adults, he encourages parents to teach them the basics at home from a very early age. “There’s no need to make lessons too complex for kids. Don’t spend too much. Mostly save. Always invest. These are the building blocks,” he says.

Always an entrepreneur, O’Leary is a big fan of the wealth that family businesses can create. But he uses anecdotal examples to illustrate the money mistakes you can make in a family business and the fixes. For example, he says don’t be in a rush. It’s better to do your research first and produce a quality product. And if the business doesn’t make money in three years, he advises you to cut your losses and move on. It’s a hobby not a business.

Finally, he confronts head on some tough issues like the financial implications of a divorce and the high cost of retirement homes and long-term care. He is an unabashed advocate for the purchase of long-term care insurance.

The book covers a lot of territory and in some sections it feels like a series of individual essays rather than a cohesive whole. Even if you do not fully agree with every aspect of O’Leary’s business-like approach to love and money, you are bound to find some good ideas to apply to your own family and finances in this 262-page book.

You can buy Cold Hard Truth on Family, Kids and Money online from Indigo. The paperback costs $11.47 and the Kobo version sells for $12.99.

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May 5: Best from the blogosphere

By Sheryl Smolkin

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A couple of travel-related stories caught my eye this week.

If you have a spring or summer wedding on the horizon, find out Why a marriage contract may be right for you. It may not sound romantic, but drawing up a pre-nuptial agreement with your future spouse could save you a lot of grief later on, particularly if both of you are bringing significant assets into a second marriage.

In Retirement do’s and don’ts on the Canadian Personal Finance Blog, Big Cajun Man says make sure you have enough money to retire on, because if you don’t, you aren’t retired, you are destitute. To avoid that undesirable outcome, he recommends taking care of your health, not supporting your adult children and clearing your debts before you retire.

And finally, Krystal Lee has introduced us to her brand of frugality on Give me back my five bucks. But when it comes to fitness, she finally shelled out $100 for the Fitbit Flex and posted a review of the fitness tracking device. She likes the iPhone app, the sleep tracker and the silent alarm. She also says it is easy to use and set up. But she finds the step count to be inaccurate at times and says the calorie counter is a bit annoying.

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.

How spring cleaning can save you money

By Sheryl Smolkin

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Cleaning closets and taking out the garage are not my idea of a good time. In fact some years I realize it’s July and our collection of snow boots is still sitting in the front hall.

But this year the clutter really started to get to me. And the fact that my son is moving from Vancouver to Toronto and will be living with us for several months was added incentive for finding ways to free up storage space.

If you need a good reason for overcoming inertia and getting your spring cleaning done, think about how many ways you can save money by doing a complete purge.

  1. Time is money: How much time have you spent lately looking for your favourite pair of black pants or the warranty on the TV that suddenly stopped working? Going through drawers and cupboards and reorganizing them will jog your memory and save you hours looking for things when time is at a premium.
  2. Space: Filing space in my office is limited. I thought about getting another filing cabinet but that could cost me over $100 and I’d have to get rid of the comfy couch to make room. By cleaning out my work files I was able to free up enough space for another year.
  3. Find stuff: This winter has been interminable. At the end of February my black purse clearly needed to be replaced. When I was rooting through my bedroom closet I found that at the same time I bought the black Sportsac that is in tatters, I also bought a silver grey one. Therefore I didn’t need to spend time and money shopping for a new bag.
  4. Preserve what you have: Winter coats and boots that sit in the closet from one season to the next without being cleaned may look so shabby by the next fall that the only option is to go shopping for new stuff. By washing or dry cleaning winter gear and polishing winter boots before storing them, you will extend their wear and avoid having to replace them as often.
  5. Charitable donations: You hire people to shovel snow or cut the grass because you are too busy or you are no longer physically able to do these chores. Yet you have a snow blower and a lawn mower taking up space in your garage. Some organizations will issue an official tax receipt for the fair market value of a non-cash “gift in kind.”
  6. Sell stuff: One person’s trash is another person’s treasure. You can sell everything from children’s toys to gently worn clothes to the yogurt maker you never use at a garage sale or online. Few of us will unearth a Van Gogh and make millions but every little bit helps.
  7. Anticipate costly repairs: A minor crack inthe foundation this year could result in a flooded basement next year. Dead batteries in smoke or carbon monoxide detectors could put your family’s health and safety at risk. A good spring cleaning can uncover inexpensive fixes you can do now to save big bucks down the road.
  8. Increase house value: If you are trying to sell your home you have the ultimate incentive to de-clutter and do repairs. Everyone knows someone who had their house “staged” and sold it in a few days for more than the asking price. Your house will sell faster and prospective buyers will pay more if it appears to be spacious, well-kept and move-in ready.

Do you have any ideas for saving money? Share your money saving tips with us at http://wp.me/P1YR2T-JR and your name will be entered in a quarterly draw for a gift card. And remember to put a dollar in the retirement savings jar every time you use one of our money-saving ideas.