Tag Archives: Women’s Financial Learning Centre

RRSP vs RESP: How to Make the Right Choice?

By Bruce Q. Thompson, B.Admin, CFP®

Family in kitchen with laptop smiling

From the moment our children are born we want the best for their future. Success is never guaranteed, but we hope to be able to offer them opportunities. And what better opportunity is there than education? So it seems like a straight forward assumption that we would contribute to a Registered Education Savings Plan (RESP).

But what about our own future? What about contributing to a Registered Retirement Savings Plan (RRSP)? Canadians are living longer, and the cost of living is always on the rise. If we don’t have a solid retirement plan, are we at risk of living in our well educated child’s basement? OK, that may be a tongue-in-cheek option, but the question of where to place our investment dollars is valid. What’s a parent to do?

The Fundamentals: What You Need to Know

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End Financial Avoidance and Reclaim Your Power Today

By Sheila Walkington, co-founder and CFO Money Coaches Canada and the Women’s Financial Learning Centre

Action Changes Things edited blue

 

Most people procrastinate from time to time, it’s human nature to put off tasks we believe to be unpleasant or time consuming. But the habitual putting off of our responsibilities, especially our financial responsibilities, transforms procrastination into avoidance. Avoidance —Stage 2 of the 7 Stages of Financial Well-BeingTM —is one of the most potentially damaging stages on the path to financial fulfillment.

Are you in Avoidance?

It’s essential to understand that financial well-being comes with a deeper understanding of where you stand with money, emotionally and financially, developing concise and attainable goals, getting organized and implementing a manageable plan to move forward. The 7 Stages of Financial Well-BeingTM is a framework that will help you better understand where you are, and what actions to take, as you move towards Financial Fulfillment. Continue reading →

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How to Take Charge and Say Goodbye to Financial Chaos

By Sheila Walkington, co-founder and CFO Money Coaches Canada and the Women’s Financial Learning Centre

Names and identifying details have been changed for privacy. Story used with permission.

Do you remember the children’s game Chutes and Ladders? Players are moving forward and climbing the ladders when suddenly a roll of the die lands them on a chute that sends them tumbling backwards. When we meet clients in Stage 1 of the 7 Stages of Financial Well-BeingTM – Chaos, it is almost always because a major life event (illness, death of a spouse, job loss, transition to self-employment or divorce), has sent them sliding down a chute into Chaos.

7 Stages of Financial Well-Being ChaosThe base of the 7 Stages of Financial Well-BeingTM pyramid represents those furthest removed from feeling in control and empowered financially. For many, Chaos represents their starting point on their journey to Financial Fulfillment.

It’s essential to understand that financial well-being comes with a deeper understanding of where you stand with money, emotionally and financially, developing concise and attainable goals, getting organized and implementing a manageable plan to move forward. The 7 Stages of Financial Well-BeingTM is a framework that will help you better understand where you are, and what actions to take, as you move towards Financial Fulfillment. Continue reading →

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6 things to consider before investing in a rental property

By Karin Mizgala, co-founder and CEO Money Coaches Canada and the Women’s Financial Learning Centre

Holding house keys on house shaped keychain in front of a new home

The average Canadian house price hit $508,567 in March however that number is skewed by the incredibly hot real estate markets in Vancouver and Toronto. If you remove those markets from the equation the average home cost drops to $366,950. But even that lower number represents an increase of 15% in the average sales price over the last year, and coupled with low interest rates, real estate has certainly been a financially attractive investment recently.

However, there are things to consider when contemplating investing in a rental property, as I explained in a recent Globe and Mail Q&A article. Continue reading →

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Money Coach Spotlight: Melanie Buffel

“We can’t solve problems by using the same kind of thinking we used when we created them.” –Albert Einstein
Melanie Buffel Money Coach in Vancouver BC

Melanie Buffel, BA Psych, MBA Candidate

Melanie Buffel changes the way her clients think about money.

“When I begin working with clients,” she says, “whether they are individuals, couples or entrepreneurs, they usually present me with foggy numbers: unclear expenses, numbers that are rounded up or imprecise. Then at one point on the journey they begin updating their spreadsheets, rebalancing their plan and speaking with a level of confidence that tells me they’ve had a paradigm shift. It’s wonderful to see them believe in their capacity to make sound financial decisions.”

Understanding what’s important to her clients is the foundation of Melanie’s approach. She recognizes that every person, couple or business owner has different needs and goals, and on an even deeper level; everyone has an emotional relationship with money that has been shaped by their childhood and life experiences.

Conflicting money personalities can cause tension within a relationship, says Melanie. “I help people clarify their priorities, and as an objective third party I can ask the hard questions without judgement.”

Melanie’s objective perspective can also help couples who enable each other with magical thinking solutions to their challenges. Judging or enabling is just two sides of the same coin; nothing changes.

Clients working with Melanie can expect change. “It’s so important that we clear the fog and determine priorities and goals, but that is just the beginning. The end game is integrating workable solutions into the reality of their lives.” Continue reading →

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The Real Secret to Making Smart Investment Decisions

By Tom Feigs, CFP®, CET

As a fee-for-service financial planner it’s not unusual to be approached for a “quick” portfolio review. “Can you just look over my investments?” or “Can you tell me if I’m saving enough?” As much as it’s in my nature to want to help people, it would be unethical and unprofessional to advise someone without a comprehensive look at their finances and a clear understanding of their goals.

The idea that investments are priority one is a by-product of how traditional financial advisors are paid – commission on investment sales. In fact, where and how to allocate your funds are decisions that should only be made after reviewing your personal situation and needs.

Imagine your financial journey. The destination is your retirement. Your personal framework (income, obligations, health, family commitments, risk tolerance, age) represents your vehicle and the road map is your various goals. Your investments and savings are the fuel to get your vehicle to your destination.  You wouldn’t be looking for fuel before having a car and directions.

I work with individuals and couples that earn upwards of $150,000 a year, and because of the possibilities their income allows, they will all have their own set of priorities and cash flow needs for retirement. They also have various personal situations (for example, some people may have family in distant locations, others have no children, others have health concerns and still others have various complexities in their personal and business lives.)  All this information is vital to the financial plan we create together. Continue reading →

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Credit card rewards: perk or pitfall?

By Karen Richardson, FPSC Level 1TM Certificant in Financial Planning

Photograph of a stack of credit cards

Credit cards, when used carefully, can play a positive role in your financial life. Using credit wisely is critical to building a solid credit history. If you need a loan or a mortgage, or you want to renegotiate a loan, a good credit rating is important and will help you negotiate the best terms. But credits cards used carelessly can send your life and finances into a tailspin.

But we all know this, right? So how do smart people with six figure incomes end up with more credit debt than they intended? Often it’s the seductive lure of credit card reward programs.

How many people do you know who put almost everything on their credit card so they can earn reward points? Maybe you do it too. Well let’s take a look at the perks and pitfalls of a rewards plan spending habit.

Perks

1. If you are using a card with rewards that are of value to you, and you are paying off your balance each month, you may be benefitting from the program.

Well that was a short list.

Pitfalls

Unfortunately this list isn’t as short. Continue reading →

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Three reasons to stick with a defined benefit pension plan

Karin M byline photo

By Karin Mizgala, co-founder and CEO Women’s Financial Learning Centre and Money Coaches Canada

Retirement planning can raise a lot of questions and feel overwhelming to many Canadians, so I was very pleased when The Globe and Mail newspaper asked me to be one of the go-to experts for their Retirement Q&A section.

Here is my most recent contribution.

globe and mail

pensionQuestion from Derrick Alstein, Port Elgin, age 60:

I have a number of friends and a relative who are considering cashing in a defined benefit pension plan. I think an article on the pros and cons of a cash out strategy versus taking normal payments would be informative. Many people I know that have cashed out are taking advice from people that want to invest their money, have not done well and have had to go back to work.

Answer:

While the lump sum offered to people who consider cashing out their defined benefit pension can be very tempting, I rarely advise clients to withdraw from their pension and invest the proceeds with a financial adviser. Here’s why:

1. Ease of Management

With a defined benefit pension, your employer hires an investment company to manage the pension assets and is responsible to ensure that employees receive the monthly Feb 3 tweetpayment they are entitled to based on a formula that considers earnings history, years of service and age. You have no direct involvement in the management of the investments and there is no need for you to make any investment decisions before or after retirement. At retirement you receive a regular monthly payment from your employer for life. Simple. Most people who want to weigh the pros and cons of a lump sum withdrawal turn to their financial advisers for advice. Of the almost 100,000 financial advisers in Canada, 99% have a vested interest in directly or indirectly managing your investments. I’m not saying that it’s impossible for advisers to provide unbiased advice on whether to stay with the pension or not, but when the potential investment dollars are significant, let’s face it, it’s not easy to remain impartial. To avoid any potential conflicts of interest, it is best to consult an accountant, actuary or fee-for-service financial planner on pension decisions.

Read points 2 & 3 on the Globe and Mail website

 

 

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5 Tips for Surviving Economic Uncertainty

Karin M byline photo

By Karin Mizgala, co-founder and CEO Women’s Financial Learning Centre and Money Coaches Canada

It has been a tumultuous start to the year for the stock market and for the various governments trying to keep the world’s economies on the straight and narrow.  For the ordinary person it’s confusing and worrying.

calculator-385506_1280But what we have to remember is that markets always have their ups and downs.  Easier said than done I know, but it’s best not to succumb to emotion or panic selling.

It’s now especially important to take a longer view of investments. If you weren’t planning to cash in all your stocks or mutual funds now, it’s no time to panic and change those plans. Markets move in cycles and this is unlikely to be any exception. There are even some investors, quick to see a silver lining, who are snapping up stocks at these lower prices.

There are things that you can do to cope and we’ve compiled our top five tips to reduce stress during economic uncertainty.

1. Focus on the things you can control — like living within your means and paying down debt

Take interest rates for example. There’s little you can do about them except make sure you’re prepared for whatever may come. If you’ve racked up credit card debt, make a workable plan to pay it off and cut up your credit cards or at least put them in deep freeze. Use cash for your discretionary expenses like eating out and entertainment. Figure out what you spend on those and other frills and take that cash out at the beginning of the week. Once it’s gone, it’s gone — no going back to the ATM before next week’s installment of ‘fun money.’ Continue reading →

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Do 6-figure professionals need a budget?

By Sheila Walkington, co-founder and CFO Money Coaches Canada and the Women’s Financial Learning Centre

new-years-eveHappy New Year!

The New Year is a natural time to look forward and set goals, but it is also a good time to reflect on how far you’ve come. Looking back one year life may not be dramatically different, but if you look back 10 or 15 years, so much has probably changed, especially in terms of your career and income.

When you were starting out you probably had a pretty simple financial plan – pay the bills so the lights stay on. Going out to the movies may have meant you’d have a smaller bag of groceries that week, and you may have dreamed of the day when you’d reach a level of success that you’d never need to budget again. But like the child who dreams of eating chocolate all day when (s)he becomes an adult, it isn’t such a good idea when the moment arrives. Now that you have achieved a good measure of success, you probably have a lot more reasons to stay on top of your finances.

So, do 6-figure professionals need a budget? Not if your idea of a budget is restriction and inflexibility. At Money Coaches Canada we’ve created a Spending and Savings Plan, not as a euphemism for the word budget, but as a tool that keeps you engaged with your money. Engagement fosters informed decisions and informed decisions will likely be in your best interest long term.

What happens to many high earners is that they get busy; they work hard, play hard and are often raising families at the same time, and they lose touch with where their money is going. They don’t have to choose between groceries and a movie anymore, so they may stop worrying about day to day spending in general. The catch is, with success comes different reasons to pay attention. Continue reading →

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