By Sheryl Smolkin

I can never get too excited about the make and model of the car I drive. All I expect it to do is to reliably get me from A to B and cost as little as possible to run. But there has been a lot of press about the pros and cons of electric cars lately, including the latest luxury Tesla.

If owning a Tesla is on your bucket list, you may be interested in a blog from the self-proclaimed tightwad Mr. Money Mustache describing his 1400 miles of non-driving in a Tesla with a friend who recently acquired one for over $75,000 USD. He says the autopilot actually works, and the company has lined U.S. interstates and major cities with high-speed electric charging stations fueled with free solar electricity available 24 hours a day.

However for the rest of us, the more realistic option when we are looking for a family car is to purchase or lease a new or used vehicle from a car dealer in our community. Automobiles – Buying and Selling, an interesting post from Saskatchewan’s Public Legal Association discusses the pros and cons of these alternatives and your legal rights and responsibilities in each situation to help you make the decision that is best for you.

If a used car is in your future, take a look at What You Need to Know Before Buying a Used Car. When it comes to inspecting a car you are interested in, TrueCar.Advisor says be a “DIY detective.” For example, he suggests bringing along a little fridge magnet and placing it all over the car (lower door, front fender, etc). If there is any plastic body filler present, the magnet won’t stay in place, indicating the vehicle has been in an accident. If you want a more in-depth list of possible DIY Detective skills, visit the DMV guide.

Andrew Wendler acknowledges on caranddriver.com that vehicle listings on Craigslist are always free of oversight and may include half-truths and incomplete vehicle histories. However, this classified advertisements website can be a highly effective tool for locating the car of your dreams, so he provides 10 Tips for a Successful Car-Buying Experience on Craigslist that should help you separate fact from fiction and make a satisfactory purchase.

And finally, in a guest post on the Canadian Finance Blog, Retire Happy’s Jim Yih warns readers Don’t Fall for This Amazon Payments Car Scam. Unfortunately there are phishing scams out there that make you think you’re paying through services like Amazon Payments or PayPal, but you’re really sending your funds to a fake site and are unlikely to ever see that money again. He recounts how he almost got taken in by an Amazon Payments scam when he was looking for a used car a few years ago and includes screen shots, illustrating how you can identify signs of a bogus offer

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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.

By Sheryl Smolkin

A press release I read recently titled “What will you do with your 2,000 hours a year when you retire?” made me stop and think about how my husband and I have spent our time since I left my corporate job 11 years ago and he fully retired in mid-2015. 

An RBC survey of 1,500 working Canadians age 50 and older found almost three-quarters (73%) are unsure what they’ll do with that extra time. While the study found nearly two-thirds (64%) have done some planning for how they will finance retirement, less than half have planned for retirement lifestyle decisions, such as where they will live, where they will travel (44% each) and what activities they will do (46%). 

I was 54 when I retired from a benefits consulting firm with a reduced pension and post-retirement medical benefits. I never intended to stop working and had a job lined up as editor of an employee benefits magazine working from home. That eventually morphed into a freelance writing business. 

My husband had no pension other than government benefits when he retired from his position as a software engineer with a major telecommunications company at age 65. However, over the years he made maximum allowable contributions to individual and Group RRSPs. After a couple of months’ break he contacted his former employer about contract work, but no opportunities have materialized.

We moved to a new “infill” house in Toronto near the subway in 2001 and since then, the value of our two-story plus basement home has doubled in value. We’d love to renovate a large bungalow and stay in the area, but the prices of even much smaller homes have increased so much that we would end up with significantly less house for the same amount of money. 

Based on a previous mobility issue, I‘d like to be living on one floor sooner rather than later, but for now we are staying put. We go to the gym regularly and climbing stairs helps us stay fit. When we were both working we paid for regular housecleaning, snow removal and grass-cutting. We now employ outside help less frequently but we are prepared to ramp it up again if one or both of us has health problems. 

Vacations are a high priority for us and our favourite mode of travel is cruising. We want to see and do as much as we can as long as we are healthy and able to purchase comprehensive travel health insurance. At least once a year, we try to bring our daughter’s family living in Ottawa on holidays with us so we can spend more quality time with them. 

Paying for expensive travel is one explanation for why I continue taking on freelance writing jobs. But the other reason is that I thrive on deadlines and I really love to get paid for something I enjoy doing. My hobbies include reading, working out and singing in a community choir but interviewing and writing provides me with both structure and a creative outlet. I work about 30 hours a week so I have loads of flexibility to fit in personal appointments, travel and family time. 

In contrast, my husband has found a whole new creative outlet since he retired. He finished off a coffee table that he has been working on for years and there is a matching end table on the drawing board. He has also designed and a produced a series of beautiful cheese boards, bread boards and cutting boards (see above) that friends and family have received as welcome gifts. While in future he may consider selling a few of his pieces there is no pressure for him to do so. 

I can’t say we exactly planned in advance how we would fill up our days when we left the world of work, but once our finances were in order, we had the latitude to make it up as we went along. We know that retirement in our 50s and 60s (the go-go phase) is likely to be different than in our 70s and 80s (the slow-go phase) or even 90s (the no-go phase) but I think we’re on the right track. I’ll know when it is time to send out the last invoice and together we will decide when it is the right time to sell our house and downsize. 

Have you thought about how you will spend your time once you leave the office for the last time? Tell us how you are spending your 2,000 hours by sending an email to so*********@sa*********.com.  We’d love share your story.

By Sheryl Smolkin

We’re back and there is more than ever to share with you! We took a two-month break, but our favourite bloggers were still hard at work. So we have lots of great stories to tell you about in the weeks to come.

The Liberal government’s first Federal Budget was tabled last month. It eliminated some measures enacted by the Conservatives and others will be phased out over time. On the Financial Independence Hub, Paul Phillips from Financial Wealth Builders gives a financial planner’s perspective on Budget 2016. One surprise he notes is the elimination of the tax deferral on fund switches within a mutual fund corporation.

The significance of not having a great credit rating may not hit until you apply for a credit card or mortgage and are either turned down or not approved for the amount you need. Blogging on Money after Graduation, Bridget Eastgaard discusses five easy steps to build good credit. Because 18% of credit reports contain errors, she regularly checks her credit report to ensure her student loan payments have been properly recorded, no credit cards were opened under her name through identity theft, and that companies have complied with her requests to close credit accounts.

Robb Engen is a well know blogger at Boomer & Echo and over the years he has shared lots of ideas about how to more effectively earn and save money. While he does not encourage calls from his office on evenings and weekends, he says it is a fair trade off because his employer covers his cell phone bill. In fact, he estimates that he has saved more than $9,500 over the last 12 years (144 months x $66 per month) because in a series of jobs over that period he has never spent a dime out of his own pocket on a cell phone plan.

As the balance in your RRSP grows over time, it can be hard to resist the temptation to tap into your nest egg in an emergency or just because you “need” something that is above and beyond your current budget. Retire Happy’s Sarah Milton gives three good reasons why withdrawing money from your RRSP before retirement is not a great idea.

And finally, personal finance maven Gail Vaz-Oxlade recently announced she has written her last blog. While we know from personal experience that blogging week in and week out can be challenging, her fans (myself included) will miss her consistently great advice. Fortunately, most of the archived blogs are timeless.

So for those of you who are considering buying a home this spring, we are linking to one of her better articles. She makes a great argument for spending a little time saving for a down payment rather than locking yourself into a mortgage payment that strangles your cash flow while you pay exorbitant amounts in interest and insurance premiums.

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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.

By Sheryl Smolkin

There has always been a friendly rivalry between Canada and the United States in sports like hockey, baseball and skating. But a recent study from Franklin Templeton Investments reveals that that in the retirement savings arena Canadians are winning, because more of us are stashing money away to support ourselves in our later years. Nevertheless, the majority of Canadians are still concerned that they will not have enough money to retire.

According to FTI’s 2016 Retirement Income Strategies and Expectations (RISE) survey, 70% of Canadian pre-retirees have started saving for retirement, a steady increase from 2015 (63%) and 2014 (60%). In contrast, just 59% of US pre-retirees are saving for retirement, continuing a slide from 61% in 2015 and 65% in 2014.

“One possible driver of the rising retirement savings rate among Canadians could be the increasing use of workplace savings opportunities. Our survey results show that 26% of Canadians (up from 20% in 2014) are saving for retirement through workplace salary deduction programs,” said Duane Green, managing director, Canada at Franklin Templeton Investments Corp. “However, despite this positive savings trend in Canada, we tend to see some recurring anxieties about retirement, both from our annual survey and anecdotally in our ongoing retirement discussions with individual Canadians.”

The annual survey revealed that 82% of Canadians are worried about paying their expenses in retirement, with anxiety about retirement expenses peaking well before actual retirement.

“As retirement appears on the horizon, people increasingly start worrying about the financial aspects of it. Our survey reveals that an astonishing 92% of Canadians who plan on retiring in the next 11 to 15 years have some concerns about paying expenses in retirement,” said Matthew Williams, head of Defined Contribution and Retirement at Franklin Templeton Investments Corp.

According to the survey, pre-retirees’ perceptions and the actual spending habits of those in retirement are also at odds. Williams highlights survey data indicating that 69% of pre-retirees anticipate spending less in retirement, but only 32% of retirees say their expenses have actually decreased. So, there is a disconnect between what pre- retirees foresee and the actual experience of retired Canadians.

Williams notes, “The older we get, the greater the probability of unforeseen health issues – whether mental or physical – as well as rising prescription drug expenses or needing long-term care. We continue to notice an awareness of health care-related concerns, which are likely to increase as people age.”

While those younger than 55 expect that running out of money (33%) will be a bigger concern in retirement than health or medical issues (23%), the trend reverses significantly as age increases. Over a third (36%) of those aged 55 to 64 expect health and medical issues to be their top concern during retirement, whereas 19% anticipate their primary concern will be running out of money.

Individual retirement planning is particularly critical given that 63% of Canadians do not have a workplace pension plan, according to the survey. The lack of pensions, according to 2015 Statistics Canada data is particularly acute in the private sector, where just 22% of employees have a workplace pension plan — a sharp contrast to the 60% coverage rate for private sector employees in the US.

Among those who do have a workplace pension plan, complacency can be an issue: Almost half (48%) of Canadians with a workplace pension plan do not know what their personal contribution rate is, and just 12% (vs. 18% in 2015) worked with their investment advisor when selecting investment choices in their workplace pension plan.

Other key survey findings:

• Regionally, on the high end, 81% of those not yet retired in the Prairie Provinces have started saving for retirement, but only 58% of Quebec pre-retirees have started. Nationally, 70% of Canadian pre-retirees are saving for retirement.

• Over half (53%) of those in Atlantic Canada are very or somewhat concerned about outliving their assets or having to make major sacrifices to their retirement strategy vs. only 27% in Quebec. Nationally, 44% of Canadians are concerned about outliving their assets or having to make major sacrifices to their retirement strategy.

• 43% of Canadian retirees say their expenses have increased since they retired, up sharply since 2015 (33%). In contrast, the same survey response data in the US indicated very little difference between 2016 (38%) and 2015 (37%).

By Sheryl Smolkin

Today I am interviewing Tim Cestnick, Managing Director of Advanced Wealth Planning at Scotia Wealth Management for savewithspp.com. Tim also writes a personal finance column called, “Tax Matters” that has appeared every Thursday for almost twenty years in Canada’s national newspaper, The Globe & Mail. We’re going to talk about some of the things you need to know to complete and file your income tax return.

Welcome Tim and thanks for joining me today.

Q: What are some of the tax credits or deductions that many people aren’t aware of or that they may miss?
A: There are so many kinds of tax credits now. It’s important to really check to make sure you’re not missing something that you haven’t claimed in the past that is now available. Some of the things we see people missing are for example, interest deductions. Interest is deductible where you borrow the money for the purpose of earning income from a business or from an investment.

Also, I think fitness tax credits and tax credits for children are another area that people sometimes overlook. Don’t forget if you’ve paid for any kind of sports activities for your kids or even artistic classes like music or piano lessons, you can claim a tax credit for these amounts.

The amounts have actually been increased for fitness tax credits. You can claim up to a thousand dollars of eligible activities. It would get you pretty decent tax relief, probably two hundred and fifty dollars in tax relief federally plus maybe in total about four hundred dollars in tax relief from local and federal governments together, so it’s worth claiming those credits.

People also sometimes forget about the education and textbooks tax credits. But based on the March 2016 budget this will be the last year for many of these tax credits. 

Q: Are receipts required in all cases?
A: Yes, you do need receipts. You don’t have to turn them in with your tax return when you file electronically, but you have to keep them on file.

Q: Why should tax returns be filed for children, even if they don’t have any taxable income?
A: There are a couple of reasons why it might make sense to file a return for a child, even a minor child. Some people don’t even realize you can do this. If your child has earned any type of income at all from babysitting, or cutting grass, or delivering papers, report that income on a tax return because they’re not going to pay tax anyway if their total income is under $11,400 for 2015. However, they will create RRSP contribution room for later when they graduate and are working full-time.

Also, once your child reaches age 19 there’s good reason to file even if they have no income because they will be entitled a GST or HST credit which results in cash back to them of almost $300. 

Q: If taxpayers own stock in an unregistered portfolio, what are the advantages of making a charitable donation using stock instead of selling the shares and donating cash?
A: You’ll be better off donating securities that have appreciated in value than donating cash. You get a full donation tax credit for the value of the shares you are donating and on top of that, the government eliminates the capital gains tax on the securities. 

Q: What is the advantage to taxpayers of filing electronically instead of submitting paper forms?
A: There are a couple of reasons why you might want to do this. First of all, if you’re expecting a refund, you will get it faster by filing your return electronically. They can process it sooner and you will get your money much faster.

Also, it’s just simple to not have to send in all the paperwork. Some tax returns would be two inches thick if taxpayers had to send in all their receipts and what not. It’s just easier and quicker. 

Q: Do slips and receipts always have to be sent in with a paper filing?
A: Yes, you do have to send a number of slips and receipts. However, there are things you don’t necessarily have to provide. For example, if you’re an employee and you are claiming a certain employment expenses like use of your car, you don’t have to file a Form T2200 signed by your employer to say you had to pay for those costs. But you have to keep it handy. 

Q: Why is it getting a big tax return not necessarily a good thing?
A: A tax refund is not necessarily a good thing because what it really means is that you’ve been lending money to the government over the course of the year and they’re only now going to give it back to you. The perfect scenario is that you file a return and you owe nothing and you receive nothing back. The reality is most people actually owe or get a refund of some kind. You just want to make sure the refund is not too big. 

Q: If an individual is reporting self-employment income and wants to deduct expenses, what are a couple of things that they should do to ensure that the expenses are allowed if CRA comes knocking?
A: The first thing is to make sure amounts you’re claiming are allowed. That includes any kind of expenses you have incurred for the purpose of earning income from your business but expenses also have to be reasonable in amount. In most cases, as long as you’re paying a third party for some of these expenses that shouldn’t be an issue.

You also have to make sure that you do keep any receipts or invoices that you paid as part of your expenses just in case CRA asks for them. There was a court decision that was handed down a number of years ago which established that if you don’t have a receipt for something it may still be deductible if you can demonstrate you paid that amount and the cost is reasonable. But it’s just easier if you keep all of your receipts. 

Q: What are the penalties if Canadians file their tax returns late?
A: If you don’t owe taxes then there’s no penalty for filing late. Of course you won’t get your refund as soon as you should so it’s nice to file on time. If you owe money and don’t file your return on time, there is a five percent penalty on the tax owing the day after the due date. The key is to make sure you file your tax return on time even if you don’t have the money to pay your taxes immediately. By doing that you’ll avoid any penalties.

Q: If you do file on time and you owe money, when do you have to pay it?
A: The money is owing  as of the due date of your tax return. Typically, for most people that would be April 30^th. If it’s not paid by that time, you will end up paying some interest on the outstanding tax balance — not a penalty, just interest. 

Q: If CRA sends a notice requesting quarterly tax installments is it ever safe to ignore it?
A: You should never exactly ignore it. The reason they send you the statement is because they expect that you probably owe installments for the coming year. What you need to do is to evaluate whether or not the amount  they’re asking for is correct.

If you’re receiving a lot of investment income or you are a senior and don’t have employment income, you may end up  owing taxes when you file your return. Your best bet is to take a look at your income for the coming year, assess whether or not you think your taxes will be less or more than they were in the past year and actually do the math on your installments. When CRA sends you a statement you don’t have to abide by it, but don’t ignore it because you may actually owe  quarterly payments.

Q: So if you think your earnings will be lower, you do not necessarily have to remit the whole amount?
A: There have been situations where people have been asked to pay installments because they had a certain amount of income that was a one-time event. In that case, you may not have to make installments next year at all. You have to know really what your income is going to look like in this coming year compared to where it was last year to be able to make a decision about whether you can ignore a request for installments or pay a smaller amount.

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This is an edited transcript of a podcast interview with Tim Cestnick recorded in March 2016.

 

With the RRSP deadline a mere three weeks away, we thought providing you with an FYI blog would make this time of year easier for everyone.

Monday, February 29, 2016 is the final day to contribute to your RRSP for the 2015 tax year. SPP contributions must be received at the office in Kindersley on or before that day.

There’s several fast convenient ways to make your SPP contribution in order to meet the deadline.

• Use your credit card via;
  • yours online banking service;
  • call our office (1-800-667-7153) during regular business hours or;
  • you can use our website.
• Cheques can be mailed into our office, please make sure you mail them no later than mid February.
• If you are in the Kindersley area come visit our office and make your contribution in person.

In case you missed it, the SPP balanced fund returned 6.25% in 2015.  The short-term fund return was 0.45% in 2015. You are can see your full returns here.

A couple of weeks ago we posted an SPP quiz in this blog. If you haven’t already taken the quiz, check it out at http://wp.me/p1YR2T-1dI. There is a chance to win prizes!

Finally, watch the snail mail for tax receipt and member statements coming your way over the next month.

You can reach us at in**@sa*********.com or check out our website:  saskpension.com.  We have an enhanced wealth calculator that can help you determine how long your money will last in retirement.

Thanks for your continuing support of SPP.

By Sheryl Smolkin

A pair of surveys recently released by Tangerine Bank and TD Bank show that many millennials started saving for retirement in their early 20s, but they do not have a clear understanding of how much to save or how their RRSP savings can be used in future.

A new survey by Tangerine found that the younger generation of Canadians is getting the message to start saving early and build a nest egg for retirement. Despite being in the early stages of their career or still in school, the survey revealed that 62% of millennials (those 18-34) have started saving for retirement and almost half (46%) said they started before the age of 25.

These results are even more impressive when compared to data collected from the 81% of older working Canadians aged 35-65 who are currently saving for retirement. When asked when they began saving, only 18% reported to have started before the age of 25.

Of those 38% of millennials not yet saving for retirement, many (62%) say it’s because of their low salary or not having enough money, and another 23% said it’s because they are saving for a big ticket item like a house, a wedding, or travel.

Nevertheless across the different age groups, the survey’s findings were uniform when it comes to financial literacy. Fifty eight percent of both millennials and older working Canadians felt they did not learn enough about saving for retirement before they started.

This is consistent with the findings of a late 2015 Environics poll conducted for TD bank which found that many millennials are unaware that RRSP funds cannot be used for other items such as making a charitable donation (64%), paying childcare expenses (60%), financing a car (52%), making a personal loan (51%), renting an apartment or purchasing a second home (50%).

Half (50%) of all millennials surveyed by TD correctly identified that RRSP funds can be used for first time home purchase, although just 28% were aware they can be used to fund full-time education as a mature student.

“Saving enough money for a down payment on a home can be difficult for many younger Canadians, so the ability to withdraw up to $25,000 from an RRSP, or up to $50,000 for a couple, can help make it easier,” said Linda MacKay, Senior Vice President, Personal Savings and Investing at TD Canada Trust. “Building up an RRSP from the earliest possible moment not only helps you save on income tax now, but could also help get you into your first home more quickly and lower your monthly mortgage payments down the road.”

But Lee Bennett, Senior Vice President, TD Wealth Financial Planning says there are pros and cons and long-term implications of using RRSP funds to buy a home or pursue further education, including giving up the potential growth of RRSP savings until that money is repaid into the plan. As with any significant investment decision, she recommends investors consult with a financial planner who can help explain what’s best for each individual.

MacKay agrees, adding that it’s important to have a bit of know-how and understand clearly what an RRSP can – and cannot – be used for in order to avoid incurring tax penalties for improper withdrawals and to be able to maximize the amount of money that can be saved. She says this applies particularly to millennials who, as the TD survey shows, have many misconceptions about how an RRSP fund can be used.

You can find basic information on How RRSPs work and Making RRSP withdrawals before you retire on the Ontario Securities Commission’s web site GetSmarterAboutMoney.ca and a more comprehensive discussion from the Canada Revenue Agency at RRSPs and related plans.

By Sheryl Smolkin

In this space we typically provide links to interesting work by our favourite personal finance writers about topics ranging from money-saving tips to retirement savings to retirement lifestyle. But many of these prolific bloggers have also posted great videos on YouTube with helpful tips and tricks for people looking for ways to better manage their money.

So keeping in mind the old adage that “a picture can be worth a thousand words,” this week we identify a series of videos featuring pundits you already know well. While some of these videos are not new, they have stood the test of time.

Take a minute to watch at least a few of them, and let us know whether you would like to see more video content on savewithspp.com.

Sean Cooper is a pension administrator by day and a hard-working personal finance writer by night. Watch him burn the mortgage he paid off in 3 years and reveal his super saver secrets.

One of a kind blogs like How to get married for $239 by Kerry K. Taylor, aka Squawkfox have have been read by thousands of eager fans. In this video she discusses with the Globe and Mail’s Rob Carrick, How to stop wasting money.

In Life After Financial Independence as part of his Tea At Taxevity series, actuary Promod Sharma interviews author and former MoneySense editor Jonathan Chevreau about his post-retirement projects, including the Financial Independence Hub.

TV personality and personal finance guru Gail Vaz-Oxlade is interviewed on Toronto Speaks: Personal Finance about spending beyond your budget.

Studies suggest that 6 out of 10 Canadians do not have a retirement plan. Why is that number so high? Retire Happy’s Jim Yih shares a couple of theories about why it’s hard to plan for retirement.

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.

By Sheryl Smolkin

An interesting new study* by a University of Toronto team led by psychology professor Alison Chasteen reveals that how you feel about getting old can affect your sensory and cognitive functions.

The study published in the December issue of the American Psychological Association Journal was based on testing of 301 participants between ages 56 and 96. Researchers considered the interview subjects’ views on aging, how much they believe they can hear and remember plus their actual performance in both areas.

Standard hearing and recall tests were administered. For example, study participants saw a list of 15 words on a computer screen and heard a series of different words through headphones. Subsequently they were asked to write down as many words as they could remember. In addition, they completed a third test by listening to five words they were asked to recall after a five minute delay.

They were also asked to answer questions and react to phrases describing how they viewed their own ability to hear and remember. For example, participants were asked to agree or disagree with sentences like, “I am good at remembering names” or “I can easily have a conversation on the telephone.”

In addition they were asked to envisage 15 situations and rank how worried they are about each based on age. One example was to imagine they were involved in a car accident where it was unclear who was at fault and specify how concerned they were that they would be held responsible because they were elderly.

“Those who held negative views about getting older and believed they had challenges with their abilities to hear and remember things, also did poorly on the hearing and memory tests,” Chasteen said.

“That’s not to say all older adults who demonstrate poor capacities for hearing and memory have negative views of aging,” she continued. “It’s not that negative views on aging cause poor performance in some functions, but there is simply a strong correlation between the two when a negative view impacts an individual’s confidence in the ability to function.”

She noted that the perceptions older people have about their abilities to function and how they feel about aging must be considered when determining their cognitive and sensory health. She recommends educating older people about ways in which they can influence their aging experience, including providing them with training exercises to enhance their cognitive and physical performance, and dispelling stereotypes about aging.

“Knowing that changing how older adults feel about themselves could improve their abilities to hear and remember will enable the development of interventions to improve their quality of life,” she concludes.

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*This blog is based on materials provided by the University of Toronto.

By Sheryl Smolkin

Even on a vacation cruise in South America for the last several weeks it was difficult to avoid media reports about the plunging stock markets in both the U.S. and Canada and the drop in value of the Canadian dollar.

On the Financial Independence Hub, Ermos Erotocritou, a Regional Director with investors Group Financial Services Inc. reminds readers that it’s reasonable to monitor day-to-day events, but it’s imperative to keep in mind that daily, weekly, monthly, even quarterly market movements are often little more than noise for an investment portfolio that likely has a time horizon of many years. That’s why it’s so important to practice patience and discipline by remaining in the market, as opposed to abandoning it or believing that is the best way to preserve wealth.

Dan from Our Big Fat Wallet shares Lessons from a Financial Downturn from the perspective of an Alberta resident. First of all, he says “cash is king” because the more cash you have, the more flexibility it gives you. He also notes that with stock prices and housing prices falling in some areas, the emergency fund has suddenly taken on more importance. And finally, he acknowledges that investing is emotional but suggests that investors who are able to separate their emotions from investing have the potential to make impressive returns in a downturn.

In the Toronto Star, Gordon Pape also agrees that “cash is king” in times like these. He says it’s fine to be all-in when markets are positive, even if the growth isn’t robust. But in times of great uncertainty and high volatility such as we are currently experiencing, he likes to have some cash in reserve to cushion any stock losses and to deploy as buying opportunities appear.

It’s an economic downturn — not the Apocalypse, Alan Freeman reminds readers of iPolitics. He says, “This isn’t 2008, when we were facing the very real threat of the global financial system collapsing entirely. This is just an old-fashioned economic downturn — even if it will be quite painful for some in the short term.” Freeman comments that because Canadians depend on resources for a big chunk of our economic activity, we shouldn’t be surprised that we’re at the mercy of commodity prices. “Oil and metal prices that soar to unsustainable levels inevitably crash; they’ll recover this time around, as they have in the past, though perhaps not for a few years,” he concludes.

And finally, many people who do not have investments may be less worried about the stock market slide than the plummeting value of the Canadian dollar. In a Canadian Press article published in the National Post, Aleksandra Sagan reports that for every U.S. cent the dollar drops, food like fruits and vegetables that are imported will likely increase one percent or more in cost. While the increased costs have dealt a blow to everyone’s wallet, they have had a more pronounced effect on Canadians living on a tight budget or in remote regions, where fresh fruit and vegetables are more expensive than in more urban areas.

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.