By Sheryl Smolkin

Summer weather has finally arrived in my part of the world, so fingers crossed that it lasts longer than a weekend! It’s certainly more tempting to head outside than comb the internet for interesting personal finance advice, but I have still managed to pull together some good reads for you when you finally get tired of reading lighter fare poolside.

In We Who Are About To Die, Etc, ex-banker Sandi Martin reminds us that in every relationship there is one spouse who handles the finances and one who does not. Therefore it is important to have a disaster plan plus a comprehensive list of passwords, bank account details and other important financial information easily available to both partners in the event that the unthinkable happens.

Mark Goodfield, the Blunt Bean Counter warns that just because you read personal finance blogs and have become a Do It Yourself (DIY) investor doesn’t mean you should also be Do It Yourself Accountants and Lawyers. He highlights some tax and legal mistakes DIYs often make because they have read general articles that just skim the surface of complex issues.

Tim Stobbs turned 36 this month so on Canadian Retirement: Free at 45 he shares 36 Lessons on 36 Years. My top 10 favourites are:

1. Spend less than you earn.
2. When in doubt, start saving. You can figure out the rest while you go.
3. Keep your regular monthly expenses low and spend money instead on one off items.
4. Savings shouldn’t stop you from having a life, It should help you have one.
5. Don’t worry what others think, be yourself and you will be happier.
6. Even when you fail, you still learn something.
7. Live in the now when you can.  Embrace the moment.
8. Remember to tell others you love them.
9. You need 10,000 hour of practice to be great at something.  So start now.
10. You always need to like one part of your job, if not find a new one.

The frugal trader on Million Dollar Journey once again tackles the million dollar question: How Much Do You Need to Retire in Canada? He says figuring out how much you need is pretty much a four step process:

1. Work out a budget of expected expenses during retirement.
2. Calculate how much the government will provide you during your retirement years. You can use the Canadian government calculator here.
3. The difference between 1 and 2 is how much income from savings (and/or company pension) that you will need.
4. Take the number calculated in step 3, and multiply by 25.  That is the amount you will need to have saved.  If you have other sources of income, like from company pensions or rental properties, then reduce step 3 by the other income amounts, then multiply by 25.

And finally, Gail Vaz-Oxlade discusses setting ground rules for boomerang kids. She says they should make a financial contribution to the household if they have a job even if you eventually give them the amount back to by a house. Otherwise they will get used to having a disposable income they can never hope to have again. The exception is if they are putting every extra payment into re-paying their student loans.

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

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.

By Sheryl Smolkin

This week the country mourned the untimely death of Jim Flaherty, the former federal finance minister. In Goodbye Jim, Canadian Dream Free at 45 blogger Tim Stobbs says the most important lesson he learned from Flaherty is “life is short, so don’t spend all your time working.” 

With the deadline for filing 2013 income tax returns extended to May 5^th because of temporary system shutdowns due to the Heartbleed software bug, procrastinators have several more days this week to delay the inevitable.

However, there are some cases where it may be a good idea to defer taking tax deductions you are entitled to this year to a later year. In the blog Taxes: When it Pays to Procrastinate or Defer on Young and Thrifty we learn that you will get more “bang for your buck” on your RRSP deduction if you contribute this year but do not take the deduction until a later year when you are in a highrt income bracket. The same goes for your educational tax credits.

Financial Procrastination can also result in making bad financial decisions, says Dave on Canadian Dream Free at 45. For example, he recently accepted the first house and car insurance package offered to him, instead of making the time to shop around (a serious personal finance no-no).

For many people, the reason to scrimp and save during their working life is to leave a legacy for their children. But on Boomer & Echo, Marie Engen says if you have sufficient money to Leave A Legacy Before The Will Is Read, consider giving your children a financial boost when you are still alive to see them enjoy it. Helping with a down payment on a house, funding RESPs for your grandchildren and family vacations can be very gratifying.

Finally, Squawkfox questions Repair or replace: When does it make sense to mend the threads you’ve got? She says it depends whether the item is busted or just worn out. It costs $50 to repair the heel and sole her eight year old blue Fluevog boots instead of $350 to replace them so she opts for the repair. But she regretfully acknowledges that even good quality items won’t last forever.

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

Do you have a spring or summer wedding coming up? Squawkfox aka Kerry K. Taylor discovered H+M now has a Grecian style wedding gown on sale for USD$99. This happily married lady says if she were looking today she would say yes to this dress! The 38 comments (the last time I checked) are even more interesting with lots of great ideas on how to save money on a beautiful dress you may only wear once.

Whether or not to tip the people who provide you with services and how much is a perennial dilemma. On When Life Gives You Lemons Add Vodka, Sarah Greesonbach discusses how much it costs to get a massage and why your tips may be an important part of your massage therapist’s compenstation. Money saving idea: If you need a massage for therapeutic reasons, make sure you see a registered massage therapist in case you can claim all or part of the cost on your employee benefit plan.

In a recent Globe & Mail column Preet Banerjee had some great information on discounts for seniors and you don’t always have to be over 65! For example, by signing up for a membership with the Canadian Association of Retired Persons (CARP), you can get an annual gym membership to GoodLife for $400 per year (plus tax) as long as you are 45 years or older. The cheapest CARP membership is $14.95 per year.

Tim Stobbs writes an interesting blog on Canadian Dream: Free at 45 about adjusting to having a higher self-worth as your savings grow. He says the first most obvious change is that you gain the ability to self-insure for more minor events. For example, you don’t have buy the extended warranty on your appliances because if something stops working you can just buy a new one.  Later on when you have even more saved, you can raise your home insurance deductible since you can comfortably handle greater risks.

There has been considerable press recently about the number of illegal, unpaid interns in both Canada and the U.S. However Cait, a Blonde on a Budget says that an unpaid internship, writing her own blog and writing posts for other blogs she is really passionate about have led to her current full-time job with RateHub.ca.

“My boss saw that I could manage numerous projects with multiple deadlines, I obviously want to learn new things, and she loved that she never found any spelling mistakes in my posts.” Of course, Cait had been trying to build up her writing portfolio, but until that job offer came along she wasn’t conscious of the fact that her blog was a portfolio in itself.

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

This week we have a number of interesting blogs on a variety of topics relating to how you save and spend your money.

On Boomer & Echo Marie Engen asks How Safe Are Your Bank Deposits? Canada is widely considered to have one of the safest banking systems in the world.  But several large financial institutions have failed in the past, so it is  important to understand Canada Deposit Insurance Corporation limits for banks ($100,000/account) and provincial plans covering Credit Unions and Caisses Populaires.

Jim Yih discusses a hypothetical financial counselling session with Jack and Jill and how they decide to save their extra cash flow of $500/month. They choose to contribute $200 extra to their RRSPs for the long term as long as their incomes were higher than the 32% marginal tax rate.

Their tax saving will be used to pay down the mortgage unless they believe he markets will produce future returns of 7% or more. They will also allocate the remaining $300 per month to their TFSAs. This will give them flexibility to use savings in this account to pay a lump sum on their mortgage, top up their RRSPs or open RESPs in the future.

On Canadian Dream: Free at 45, Dave shares how he and his wife are living a (relatively) stress-free life. They live on one salary so if either of them loses his/her job they can still manage financially. The fact that they don’t have children or other dependants helps to make this a practical alternative.

If you have just opened a trading account with a new discount broker or you have accounts in different places and want to consolidate, you’ll need to transfer your holdings between brokers. The Canadian Capitalist has put together a detailed checklist on what you have to do to make this process as painless as possible.

And on Sustainable Personal Finance, Miranda questions whether there are times you should put your ideals ahead of your pocketbook. That could mean giving just a little bit extra to causes that are near and dear to your heart, or making a commitment to socially-responsible investing.

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

With this post, we are kicking off a 2014 series of interviews with personal finance bloggers. Many of the people we will be talking to are known to you already because we’ve linked to their blogs on our weekly edition of “Best from The Blogosphere.”

Our first guest is Tim Stobbs, a thirty-five-year old chemical engineer and father of two who lives in Regina and works for SaskPower. He was also a Regina School Trustee until the end of 2012.

Since 2006 Tim has blogged on Canadian Dream: Free at 45. He has also authored a book called Free at 45: How to Retire Early and Happy. In addition, in his spare time, he wrote a series of articles for the Toronto Star and has been interviewed by virtually every media outlet in the country.

Thanks for joining me today, Tim.

Thanks for inviting me Sheryl.

Q. You’re one busy guy. When do you find time to sleep?

A. I’m almost embarrassed to admit that I regularly get about eight hours of sleep. My young children go to bed early so I still have a couple hours every night to work on personal projects.

Q. So how old were you when you decided to aim for early, early retirement at 45?

A. I first came across the idea of early retirement back in my early 20s about 2001. But I really didn’t do much of anything with it until several years later in about 2005 when I did a series of online calculations and realized that I might actually be able to retired at 45. So I took that idea and started to blog with it.

Q. What response have you had to the blog? How many hits do you get?

A. Each blog post gets maybe about 600 or 700 hits. It works out to about 20,000 page views per month or so, give or take. It’s been an odd experience because I’ve had a lot of interest from various media outlets. I did a bunch of radio interviews.

The Toronto Star contacted me and asked me to write a series for them. One opportunity that was really out-of-this world was when CBC, The National, contacted me for a story on early retirement.

Q. I can understand that would be quite cool. So what blogs have resulted in the highest number of clicks or the greatest interest?

A:  I think the highest amount of interest I’ve seen on my blog has been in regards to the early retirement calculation series. About every couple years or so, I’ll dust it off and re-do the calculations just to keep them updated. People question my assumptions and share the basis of their own calculations with me.

Q. So that’s your own calculations, as your projections evolve towards your own retirement?

A. Yes. Realistically everyone can make assumptions, but inevitably life happens and things kind of veer off a little bit. So you’ve got to go back and correct them periodically.

Q. So how much do you and your wife figure you need to pay your bills after taxes?

A. Well, we kind of did an odd thing with our retirement planning. We actually aimed for a very barebones kind of basic spending level of $27,000 a year and then we figured we’d probably, for incidental income and other things,  that we would pull in another $5,000  for more fun stuff.

Q. What lump sum savings do you think it will take to support your lifestyle once you retire?

A. A grand total of about 1.1 million net worth, but the majority of that is going to be investments. So about $700,000 in investments, I figured would probably pull that off.

Q. Is the rest the value in your house?

A. Yes, the rest would be the equity in the house.

Q.I see that your mortgage is paid off and you figure you’ll be able to retire at age 42 now. The numbers dropped again?

A. Yes.

Q. How did you do it? What did you give up in order to meet this objective?

A. Everyone is always asking that but I’ve never actually sacrificed anything. I could have decided to spend more money or do other things. But instead, I kind of ended up doing a little exercise and went through my life and my spending and went, “What things do I really not care about?”

Like, my power bill, I really, really don’t get excited paying off my power bill every month. So what I decided to do was to see, “How low can I make that?” So I looked at ways to save energy around the house and dropped that bill down and repeated that across all of my various bills.

As a result, what I managed to do was really customize my spending to be heavily tailored toward my particular interests. So I’ll spend money on books or DVDs that I like, but I don’t spend a lot of money on gas or power bills.

Q. I presume your wife is on board with the program?

A. She is, but in a different context than me. I’m more driven by the freedom to do what I’m interested in. She’s more about the whole concept of security. For example, we had a car accident last week and she knows without any doubt that we’ll have the money for the deductible for the car. So, she just loves that as a result of our financial plan that we are financially secure.

Q. Do you still go on vacations, go out to restaurants and upgrade your phone every now and then?

A. Oh yes, we still do all that stuff. Like, for example, this summer, my sister-in-law moved out to Newfoundland. We decided to go out there for a visit. So we took a month long vacation and spent over seven and a half thousand dollars. We drove all the way out and back. Seven provinces with two little boys in the back seat, but we survived.

Q. So what does retirement mean to you? How do you plan to spend your time once you don’t have to go to work?

A. Well, as I talked about earlier, we aimed for bare bones because I really think I’m retiring too early to stop working entirely. It’s just nice to be able to work on what interests me rather than what pays me most. Right now, I’m doing engineering because, well, it’s my degree and I’m quite good at it. As an engineer I also make quite a bit of money. However I enjoy writing a lot. But unfortunately, unless you’re really good at writing, it’s pretty hard to earn as much as I do as an engineer.

Q. Are you saying that might at some stage leave your engineering job and take a chance at working on something else?

A. Yes. I’ll probably switch over to just writing novels or non-fiction projects, stuff where I don’t have to worry about a profit margin, as long as I do it because I’m interested in it.

Q. Your wife currently operates a home daycare. I understand she has some ideas about what she’d like to do when you are more financially secure.

A.  She kind of has her hobbies she enjoys and is looking forward to expending those a little bit or even maybe going back to school and learning a bit more about a few other topics that interest her rather than having to go get a degree because it’s something economically viable to do.

Q. If you had one piece of advice for readers who want to manage their finances so they can retire early, what would it be?

A. I think the biggest piece of advice I’d offer people is don’t worry about what everyone else is doing about spending. Look at your own spending habits and kind of customize your budget . It’s really possible to live on a lot less than people think if you’re not so caught up in doing what everyone else is doing.

So if you don’t really care about the newest phone, don’t drop the money every three years to get it. It’s sort of as simple as that in some regards. By minimizing your spending on stuff you don’t care about, you’ll have more spending money for future things like retirement or even just things that interest you more.

—-

You can follow Tim’s progress on his blog and also read interesting posts from several regular guest bloggers.

This is an edited transcript of an interview conducted on November 25^th.

By Sheryl Smolkin

As the year draws to a close, I am pleased to join brighterlife.ca in celebrating some of the best Canadian retirement writers in 2013. I thank them for including me on the list.

Week after week we link to these and other fine bloggers who freely share their time and considerable insight with us. To get to know some of these people a little better in 2014 savewithspp.com will present a series of podcast interviews with prominent personal finance bloggers.

Retire Happy. Follow financial expert, author and speaker Jim Yih on Twitter: @jimyih

MoneySense. Follow MoneySense Magazine editor Jonathan Chevreau: @JonChevreau

Boomer and Echo. Follow mother-and-son financial writers Marie and Robb Engen: @BoomerandEcho

Sheryl Smolkin. Follow this lawyer and financial journalist: @SherylSmolkin

Unretired Life. Follow coach, consultant, speaker and author Eileen Chadnick: @unretiredlife

I’m a sonic boomer… not a senior. Royce Shook writes about issues important to Boomers, grandparents and others, who are changing what retirement looks like.

Canadian Dream Free at 45. Follow engineer and financial writer Tim Stobbs on his journey to early retirement: @canadiandream

Everything Zoomer. Follow executive editor and travel writer Vivian Vassos (@vivianvassos) and associate editor and arts and culture writer Mike Crisolago (@MikeCrisolago)

Grey Routes and Tips. Follow travel-for-grownups writer Jane Canapini: @janecanapini

Best from the Blogosphere will be taking a three week break, but I look forward to bringing you more great retirement and money saving ideas beginning again in mid-January.

Have a happy, healthy holiday season with friends and family.

By Sheryl Smolkin

Within the last few weeks the push to expand the Canada Pension Plan has been gathering steam in Ontario and PEI. Here are some articles from the mainstream media that will bring you up to speed on the arguments pro and con.

Push to expand Canada Pension Plan gaining steam

Grow the CPP – A better way to save | Canadian Labour Congress

CPP expansion would be too late for poor retired Boomers: study …

Time to put Flaherty on the spot | Toronto Star

CFIB: Canada can’t afford CPP expansion | Financial Post

But I really like Tim Stobbs’ take on the argument that we can’t expand CPP because higher payroll taxes will kill jobs. On Canadian Dream: Free at 45, he says, “Raising a tax won’t kill jobs…it will likely shift some around, but not remove them from the total.  So don’t hide behind that as an excuse to avoid changing a program that will help the majority of people save for retirement.”

But even if CPP is expanded, it will take a generation or more for Canadians to realize the full benefits of an enhanced program. That’s why you need to save and invest on your own. Find out how to maximize your savings for retirement and other objectives in 5 Financial Principles from a 34 Year Old Millionaire Investor.

If you have a workplace pension and are wondering about whether or not you should also contribute to an RRSP, take a look at this archived blog from Gail Vaz-Oxlade.

And as the year comes to an end, many of us will be faced with the dreaded performance review. On Brighter Life, Gerald McGroarty offers 10 tips to help make your year-end appraisal an occasion for celebration, not frustration.

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 is lots of good reading this week from some of our favourite bloggers.

On retirehappy.ca, Scott Wallace reminds us why RRSPs should not be viewed as short-term savings accounts. Saving for retirement is hard. It requires sacrifice, long term vision and discipline. Short term gratification can be the ‘Achilles Heel’ for anyone’s RRSP portfolio.

If you have a defined benefit pension plan, you may think you don’t have to worry about additional retirement saving. But on boomer & echo, Robb Engen says he is saving outside his DB plan because there is no guarantee he will work for the same employer for the next 20 years. Furthermore, in the current economy, layoffs are always a possibility, even at educational institutions.

Another reason to accumulate additional retirement savings is to have a nest egg to spend on healthcare later in life. Canadians are proud of their healthcare system, but on Brighterlife.ca Kevin Press reports on the results of the 2013 Sun Life Canadian Health Index^TM. The study reveals that among Canadians who have received a serious health diagnosis, or who have had a bad accident, 40% said the experience caused them some degree of “financial hardship.”

For some people, saving for retirement is only the first hurdle to overcome. Then they have to figure out when to actually cut their ties with the world of work and take a leap into the world beyond. Tim Stubbs says on Canadian Dream: Free at 45 that fear of the unknown is natural, but you can do a little fear testing by playing the game: what’s the worst that can happen?

And finally, getsmarteraboutmoney.ca blogger Alison Griffiths says youth financial literacy is all the rage but the focus has been on debt, credit, budgeting and the like. This is important stuff; but families need to include investing with the lessons their children should learn before they leave 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.

By Sheryl Smolkin

In this week’s roundup we feature series of blogs about the pros and cons of home ownership plus blogs from some of our other favourites that are great reads. 

In How To Figure Out If A Home Is A Good Investment, She Thinks I’m Cheap teaches you how to do the math to find out whether you can afford a home. He also explores whether or not it makes sense to buy the largest home your bank or mortgage broker says you can afford.

Since the end of July, Gail Vaz-Oxlade has published excerpts from Chapter 4 of her book Money Rules. This very readable five part narrative tell the story of Jason (divorced with two children) and the issues he encounters when purchasing a home.

Chapter 4: A Home of My Own (Part 1)

Chapter 4: A Home of My Own (Part 2)

Chapter 4: A Home of My Own (Part 3)

Chapter 4: A Home of My Own (Part 4)

Chapter 4: A Home of My Own (Part 5)

Whether you are saving for a new home or saving for retirement, you may think you have cut out all of the fat and you can’t allocate another dollar a month from your budget to savings. That’s when Canadian Dream: Free at 45 blogger Tim Stobbs  Avoids Saving Boredom by taking risks and trying out new money-saving ideas even if many don’t work.

A continuing theme in all of the blogs we write or refer you to is that saving money is not rocket science. You just have to spend less than you make. On Retire Happy blogger Jim Yih reiterates the basic principles of saving while readily acknowledging that Building Wealth is Simple, Not Easy

And finally, Kerry K. Taylor aka Squawkfox learns that The crazy cost of daycare in Toronto is about 1/3 more than she paid in B.C. and calculates how much she has to earn in order to afford it.

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.