Personal finance is a key consideration for many young professionals. From bank accounts to creating a personal budget, we have the resources and important information here for you. With our resources and your work ethic, you can jumpstart your personal finances and set yourself up for the future.
With a new alignment forming amongst developing nations to try to move away from the US dollar, it begs the question of why the US dollar is so important in the first place. Learn more about the US dollar and the larger role that it plays in stabilizing the global economy...
As everyone knows, personal income in Canada is taxed by both the provincial and federal governments. This system of taxation that supports the government structures are based on an incremental basis. This means that as you earn more money, you start to pay different percentages of your income in tax. This type of taxation system is called a progressive tax system and often known as marginal tax rates.
The process and habit of calculating your net worth on an ongoing basis is an excellent way to maintain long term discipline and focus in achieving your money goals. Many people shy away from this topic because they might not like the answer, but this is how you confront the reality of your situation and build a plan to change the narrative!
Two government/industry backed organizations are responsible for backstopping Canadians investments and bank deposits in the event of bank failures like we are seeing the US (First Republic, Silicon Valley, etc.). Learn more about how this all works here...
Sacrifice is a requirement for making progress in life. In order to save for the future, you must sacrifice your consumption now. In order to learn to speak a new language or to play a musical instrument, you must sacrifice time relaxing. In order to be healthy, you must sacrifice the temporary pleasure of eating whatever you want all the time. Essentially, there must be short-term pain for long-term gain...
In Canada, the current prime rate is 7.20%. Understanding the importance of Canada’s prime rate is an essential component in ensuring that you are getting the best possible interest rate on your credit products through your financial institution....
For decades, the stranglehold that De Beers had on the diamond industry was unmatched by any private company operating in any line of business. For a time, De Beers controlled as much as 90% of global diamond production, and they ruthlessly exploited this near-monopoly when dealing with competitors. They encouraged other diamond producers to engage in cartel-like behaviour with them, artificially raising the price of diamonds by constraining supply...
Retirement planning doesn't have to be overly complicated. Pension plans, such as a multi-employer pension plan, are available and accessible tools. If utilized efficiently, pension plans can be a very effective retirement tool...
The US dollar made headlines last week when it reached parity with the euro for the first time in nearly 20 years. Perhaps it’s a sign of broader American exceptionalism that this was viewed so favourably. After all, the US dollar has “strengthened” relative to the euro (and all other major currencies) in 2022, and strength is generally cast in a positive light. But currency strength differs from economic or military strength. Not all American consumers and producers benefit from an appreciating dollar...
Becoming a parent is one of the most exciting things that can happen in your life, but if you’re not prepared for it financially, it can quickly become extremely stressful. With someone relying on you to care for them now and for many years to come, you’ll want to make sure your finances and estate plan are set up properly to support you through parenthood. Here are some items you’ll want to consider prioritizing as new or soon-to-be parents...
Although planning for financial independence forces us to face so much future uncertainty, something we can feel certain about is that unexpected expenses will arise along our journey. We shouldn’t let the unpredictability of the future stop us from chasing our goals and our vision – we should plan for it instead. One of the best ways to ensure our financial plans stay on track is by building an emergency fund...
Although planning for financial independence forces us to face so much future uncertainty, something we can feel certain about is that unexpected expenses will arise along our journey. We shouldn’t let the unpredictability of the future stop us from chasing our goals and our vision – we should plan for it instead. One of the best ways to ensure our financial plans stay on track is by building an emergency fund...
The risk of becoming disabled due to an accident, illness or injury is high, and as a doctor you see this daily. You might be thinking, it won’t be me, but the risk is always there. Not only does it affect you physically, but it takes a significant emotional and financial toll. Having proper income protection is key to the longevity of your practice. Disability insurance will be one of your most important tools in your financial plan....
The way in which gas prices move with crude prices has a name in the industry: rockets and feathers. When oil prices rise, gas shoots up like a rocket. When oil prices fall, gas drops like a feather. Learn why this happens...
Money is a stressful topic. A survey of married couples conducted by the Bank of Montreal in 2014 found that fighting over money would be their top reason for divorce, followed by infidelity1. Those at both ends (and in the middle) of the income spectrum fight about money, so it isn’t just about not having enough. Conflict also arises when partners have different outlooks on household finances that lead to disagreements on how funds should be spent or saved and on how expenses should be split...
Some financial resolutions take considerable time and dedication: upskilling to improve employment prospects, developing a strategy to pay down debt, reducing the fixed costs associated with home and vehicle ownership. But there are also opportunities to improve at the margins with a relatively low degree of effort. Here are a handful of financial New Year’s Resolutions that you can accomplish before the motivation starts to wear off...
For a lot of Canadians, this is the only time of year that much thought is given to RRSPs. RRSPs have traditionally been the primary means of saving for retirement in a tax-advantaged way. Despite this, operational complexity of RRSPs prevents many from taking maximum advantage of these accounts. As more and more pension plans shift from defined benefit to defined contribution, effective use of RRSPs will be crucial for fulfilling retirement goals...
Another revelation that has come to light in recent years for more and more people is that the traditional concept of retirement is inherently flawed. The idea that you work your whole life, while building assets in hopes that when you are older you will be able to enjoy those assets. The problem of course is that you spend the majority of your life not doing the things that make you happy, and instead you wait until you are too old to do the things you want to do and the sad truth is that far too many people pass away in the first few years of their retirement and never get to enjoy what they built as a result of their hard work.
I recently paid $61.81 to fill up my Toyota Corolla. At the onset of the pandemic in March of 2020, I filled my tank for about $30. From trough to peak, prices at the pump increased about 100% in a year and a half. Clearly a worrying sign...
PolicyMe is Canada's leading online life insurance company and is dedicated to helping Canadians protect their families and their futures by simplifying the process of getting life insurance. Learn what you need to know about life insurance, and how PolicyMe can help...
There have been numerous rumours about tax increases coming over the last few years including taxing gains on principal residences, estate taxes, and an increase in the capital gains inclusion rate. Although it remains unclear what increased taxes could look like in the future, I think it’s more likely that we will see an increase in the capital gains inclusion rate as compared to introducing a tax on principal residences...
With the TFSA contribution limit announcement of $6,500 for 2023, the total contribution room available in 2023 for someone who has never contributed and has been eligible for the TFSA since its introduction in 2009 is $88,000.
Beyond being tax-deductible, RRSP contributions are also able to grow tax-free as they aren’t subject to tax on capital gains, dividends, or interest. The goal of an RRSP, as the name implies, is to provide a tax-efficient vehicle to encourage Canadians to save for retirement. However, the CRA eventually wants to be able to collect tax on all the funds that have accumulated in your RRSP, so by age 71 it must be converted to a RRIF (Registered Retirement Income Fund). Think of a RRIF as the butterfly that emerges from the cocoon that is an RRSP.
Human beings, like all living organisms, are vulnerable to a risk that we eventually fall victim to: mortality. This risk is more acute when there are others who depend on you for their livelihood. In the animal kingdom, this takes the form of baby birds relying on their mother for nourishment and protection. Among people, the reliance is generally financial.
KOHO is dedicated to helping Canadians be able to travel more, retire sooner and live more balanced lives. Here's how KOHO can help.
Prioritize the big things in life and let the little things fill in the cracks. If you waste your time on the little things, then the big things don't fit. This is all too true when it comes to the world of personal finance. Focusing on the big ticket items (house, cars, electronics, etc.) is the best way to set yourself up for future financial success...
Individual pension plans are ideal for business owners and incorporated professionals who may not otherwise have access to a pension plan through work...
Inflation is a general upward trend in the price level over time, meaning the same amount of currency buys you less stuff than it used to...
As a young professional, you are faced with a myriad of decisions when it comes to managing your personal finances. Should you buy or rent, tackle your student loan or car loan first, invest or pay off debt, pay cash or finance? While these might sound like relatively straightforward decisions, we occasionally fail to account for the true cost...
The path to a professional career can be incredibly rewarding, but it can also come at a tremendous cost. The ever-increasing cost of a university degree (or multiple!), potentially living away from home, the inability to work due to academic commitments, and the occasional night out can leave a young professional feeling overwhelmed, buried under a mountain of debt before they even earn their first paycheque...
When you think about money, how does it make you feel? What goes through your mind? Do you get anxious? Or are you filled with excitement when you think of your financial possibilities? Maybe at one point you’ve thought “I’m horrible with money”...
Although compounding can apply in many facets of our lives, from health and fitness to personal development, in finance it is often referred to in the context of compounding investment income. Compounding is quite simply, growth paid on growth resulting from investment income whether interest or dividends, and can be paid in frequencies varying from daily to annually...
A Registered Disability Savings Plan (RDSP) is a type of savings plan that is focused on helping persons with disabilities attain long-term financial security. In order to qualify for an RDSP, the individual must be eligible for the Disability Tax Credit (DTC)...
I never have too much to say about the technology underlying cryptocurrencies. People much smarter than I am firmly believe that blockchain technology represents a new frontier for digital ownership rights, and it accomplishes this without a central authority...
Although personal finances are important in your every day life, school doesn’t teach basic finance. You graduate high school and you’re forced to navigate the world of finance on your own – the good, bad and the ugly. So why don’t schools teach basic finance?
Part 3: Why You May Want to Hold Off on Buying Your Home: The Importance of Diversification: You Need More Assets - Diversification means holding a wide variety of assets such as equities, bonds, cash, and yes, real estate. The point of diversification is to enjoy the benefits of investing while protecting yourself from its risks. Investing in many different assets...
Part 2: Why You May Want to Hold Off on Buying Your Home: How to Make Your Mortgage Tax-Deductible - One of the biggest expenses of homeownership is mortgage interest – the cost that your financial institution charges for lending you money to purchase a home. In the United States, this expense can be deducted from your taxable income. In Canada, mortgage interest on a personal residence is...
Part 1: Why You May Want to Hold Off on Buying Your Home - Homeownership costs a lot more than just your mortgage payments. You will also have to pay for property taxes, maintenance, insurance, utilities, and transaction costs such as legal fees and a land transfer tax. If you purchase a condominium, you will have additional monthly fees for that as well. While you may be building equity in your home every month, that investment will likely be quite small compared to your costs...
Equifax and TransUnion are the two major players in the Canadian credit score industry (they are often referred to as the credit bureaus). Both of these companies build/develop, maintain and process information relating to the credit profiles and scores (more on the fundamentals of credit scores...
To improve your credit score, you need to take little steps which eventually amount to big results. A strong credit score will assist you in many ways (borrowing, rental applications, mortgage applications, etc.), so get started on these steps today...
The credit score is a basic and very fundamental part of our banking and financial system. In Canada, your credit score generally ranges between 300-900 and your score depicts your creditworthiness...
Wondering what the 2021 TFSA contribution limit will be? Well, the wait is finally over as it has officially been announced. The 2021 limit is $6,000, matching the amount set in 2019 and 2020...
The Value of Good Advice: Modern Money Interview with Jeffrey Ryall, Associate Portfolio Manager at Cardinal Capital Management, Inc. Q. What is Wealth Management? Like most industries, the investment industry has changed significantly over the last 10-15 years. Today, Wealth Management is commonly used to describe the collaborative process where...
Have you started a business out of your home? Did you know that some of your home office expenses may be eligible as a deduction on your income tax return?
Helpful guidance and insights when determining whether to invest cash or to use it to pay down debt...
Communicating with your partner about most things in life is relatively easy and enjoyable. You may agree on where to take a trip, how to enjoy time off and even the bigger items like buying a new home; however, we don’t always agree on the path of how to get there. Here are a few key tips on how to talk money with your partner to enjoy your wealth build-up journey, while enjoying each other along the way...
I often hear people say something along the lines of, “To think of all the money I’ve wasted on rent over the years”. This view inappropriately frames the argument of renting or buying. After all, a place to live ranks pretty high on the list of basic human needs, so in that sense rent isn’t, by definition, a waste of money. You need to live somewhere, and paying rent allows you to accomplish this goal...
You probably would not be in business for long if you constantly sold your products and services for less than they were worth. Yet, sometimes the decisions we make can short-change our ability to harness the full potential of our human capital. Thinking like a business owner can change the way we approach financial situations and make choices that will add value. Are you up for the challenge?
As a young professional, you have probably spent countless hours and thousands of dollars completing a post-secondary education program and entering the workforce. This is only the starting point for developing your human capital – or the economic value of your skills and abilities...
When it comes time to get a new vehicle, consider the pros and cons of buying and leasing as they relate to your personal situation, but most importantly, make sure that the car you choose fits into your budget. A vehicle is a huge convenience but it is still discretionary. A budget should never be blown on discretionary items...
What is an RRSP? If you don’t know the answer to this question or want to learn more about RRSPs, then this Modern Money slide series edition is for you. This slide series edition breaks down what RRSPs are and how they can be utilized to invest and grow your...
Most young professionals are so highly focused on the aspects of their careers that will produce them income that little thought is given to what would happen to that career if they were unable to work either through accident, sickness or death...
My Account is a secure online portal that allows you to view your personal income tax and benefits information. Once you have My Account set up, you can manage your tax affairs online. The portal allows you to log in with a sign-in partner, which includes a list of Canadian banks and credit unions (always helps to have one less username and password to remember)...
If you are just starting to invest, you likely don’t have a huge pool of financial assets at your disposal. On top of this, given the cap placed on TFSA contributions, you would have to invest small sums of money into numerous individual positions in order to earn the benefit of diversification within a TFSA account. All of these small positions will add to transaction and monitoring costs...
The name "Tax Free Savings Account” sort of gives it away, but in reality, a TFSA is so much more than just a regular savings account. In a regular savings account, you are earning interest at the bank rate provided, whereas with a TFSA you can select a basket of financial instruments to generate growth on the money held in your TFSA. For example, your TFSA can hold stocks, exchange traded funds, bonds, guaranteed investment certificates and cash savings...
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