Melcar Group

Budget Guru

Mother’s Day on a budget

 As Mothers day approaches and you are trying to figure out that perfect gift, it is important to keep your budget in mind. I truly believe that a gift that is picked with meaning and heart is far better than an expensive item that has no true meaning.

Below are some gift ideas that will allow you to spoil your mother while staying within your budget.

“Day” at the Spa:
Instead of sending your mother to the spa for the day, why not have her get one specialized treatment done. For example; just a facial or just a pedicure, something that she really wants. Also, why not support the local start-up spa that will generally have lower prices. It is important to remember the small businesses that are trying to operate within this tough time.
Average cost: $30-50

Surprise get together:
A perfect gift for your mother may be planning a surprise family get together. This is a really nice gesture and will be a memorable gift for the entire family to remember. Sometimes we all lose sight of what is really important in life, and some people believe that material gifts are more accepted. The only expenses for this gift are the food, drinks, and accessories.
Average cost: $ 30-50

Coffee/Movie:
Personally, I am not a huge movie fan however some people really enjoy sitting back and watching a movie. This could be a great opportunity to catch up and share a movie with your mother.
Average cost: $30-40

 

3813l_classic-red-roses-bouquetFlowers with a twist:
Give mom beautiful hand picked flowers from your own garden. Some people may find this really tacky, however it allows you to customize every aspect and pick her favourite flowers and colours.
Average cost:$5

 

 

Homemade gift basket:
Although a really nice gift, gift baskets purchased from a store/online can be really expensive. Why not create your own gift basket and pick items that your mom will love. Some ideas for homemade gift baskets are: books, teas, coffees, flower seedlings, photo albums, knitting material, creams, and beauty products. Anything is possible, and it allows you to customize every aspect from the actual product to the tissue paper used.
Average cost: $30-50

Maid for the Day:
Generally, mothers are constantly cleaning the homes, making sure everything is organized, structured, vacuumed etc. So why not give mom a break and you be the maid for the day.
Average Cost: $0

Other Mothers Day items:
Hand made jewelry
Family Portrait
Scrapbook
Homemade Dinner
Homemade CD with her favourite music
Collection of her favourite recipes

There is no price for a Mother’s love, however it a much nicer gesture to show your Mother she is appreciated than buying a gift that only has financial value.

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May 4, 2009 Posted by | Savings, Social Situations | | Leave a comment

Brilliant Website

I recently came across www.morningstar.com and I must tell you, I am very thankful for this find.

Not only does this website have a vast selection of informational resources, it also allows you to create a personalized account. Within the personalized account, you are able to input all of your financial investments and track them day by day. It really puts your total portfolio into perspective and allows you to view it by numbers and by graphs.

May 1, 2009 Posted by | Financial Resources | | Leave a comment

FREE- McDonald’s Coffee

coffeeMcDonald’s Canada is offering customers a free small coffee during breakfast hours from April 20th lasting 2 weeks.

Take advantage of this deal, and while your at it you might find a new favourite.

April 21, 2009 Posted by | Current Deals | 1 Comment

Investing – The Basics

Sure, having a savings account is a great way to ensure that you have money saved in the bank, however it is not the ultimate. Generally, a savings account should be used for more short term goals (2-5 years) or a specific purchase such as a new car. On the other hand, Investments such as Mutual Funds provide an opportunity for much higher return on investments. Simply put, it allows you to invest a certain amount of money and have that investment grow significantly over a certain time frame (usually longer periods such as 20 years).

Let’s compare Savings vs. Investments

Savings

Investments

Low risk

High return on investment (opportunity to make a lot of money)

Short Term needs

Long term commitment

Low, fixed interest rate

Dependent on economic situations, therefore the investment can decline in value

 

 

 

 

 

A common type of investment is a Mutual Fund, which simply means you invest in group of stocks, bonds or other investments, which are generally picked and managed by a professional. Therefore, with a mutual fund, you do not have to monitor or assess your fund on a daily or hourly basis (unless you want to and have the knowledge) because the professional investor will manage your fund for you.

Mutual funds operate on the basis that many people put money into a large fund, which creates a collection of money that is essentially used to invest. The investment professional (fund manager, personal investor etc) manages all the activity for all of the investors. Another positive aspect about Mutual Funds is the fact that the Fund Manager generally has the authority to buy and/or sell investments for the fund. On the down side, the professional that oversees the activity really does have your money in his/her hands; it really depends on your knowledge and preference on how you want to deal with this situation.  

So how do you make money on the Mutual Fund?

As the value of the investment increases, you will then have the choice to either sell the fund and essentially profit from the difference, or continue to invest into the thriving fund. It is important to do your research and ask questions because like previously stated, investments can decrease in value and if you are not currently financially stable it can create financial stress.

April 21, 2009 Posted by | Investments | | Leave a comment

Zero Dollar Days

Do you ever sit down and analyze which days you spend the most money? What about the days when you spend no money at all? Of course this does not include electricity, phone, cable, internet, water, etc. Zero Dollar days, in my opinion, refers to days where you don’t spend any actual money for goods.

Sometimes we just buy things for the sake of buying “stuff”, or to fill a void. If you pay close attention to your spending habits, you will most likely cut out a lot of your impulse spending. Personally, I try to have at least 8 zero dollar days per month.  Below you will find my zero dollar days for the month of March; you will notice that Saturday is the day when I spend money consistently, compared to Monday’s when I barely spend any money.

march_2009_blank_calendar_thumb

 

Try keeping track of your monthly zero dollar day, it may surprise you!

April 17, 2009 Posted by | Personal Financial Theory's, Savings | Leave a comment

Getting control of your Finances

Too many people live with an unknown certainty of what their financial future will hold, while continuing to purchase items using credit or loans (essentially money they don’t even have). Sometimes it may feel like there is no hope at the end, or that the financial trouble will never be cleared, but having control is the first step to realizing your situation and making a positive change.

Personally, I feel that the very first step to making change (beyond recognizing there is a problem) is determining what your current situation is. Make a list of your current assets (whether it is cash, property, or any other value yielding item) along with your liabilities (debt, loans, car payments, etc). I find that writing this stuff down either on paper or electronically allows you to visually see where you are financially. Also, this will allow you to create a starting point, and to look back within 3-4 months to see where progress has been made. Once that is completed, it is important to create goals, both long term and short term. Short term goals allow you to continuously reach a goal, which provides self satisfaction regularly. Long term goals, motivate you to work towards something and to stay on track to reach that goal. Once you are aware of your situation, and have a goal in mind, you have to create a budget that you can maintain. The budget, in my opinion, is one of the most essential steps and processes that allow you to reach your goals. Be sure to include debt repayments, savings, and emergency funds payments into your budget also keep in mind money for food, transportation, entertainment, and other expenses as well. If your budget is too strict (for example, it does not allow for entertainment expenses) you will slowly begin to fall off track. The main purpose of the budget is to live within your means, and avoiding purchasing items with your credit card.

Once you have created your budget, implement it and keep track of all your purchases. At the end of the budget period (whether your budget is monthly, weekly, biweekly) review it and see if there are any areas which can be improved going forward. Once that is done, your financial path is set up for success.

In my personal experiences, once I created a budget for myself to follow, I realized that I had extra money that I could save and looking back I probably just spent that money on “stuff” previously. It is a great feeling knowing that I created something for myself which I am able to follow and save money at the same time. Another amazing thing about my budget, is the fact that I no longer have to depend on my credit card for any purchases, since I can now purchase everything in cash.

April 13, 2009 Posted by | Budgeting, Savings | Leave a comment

Home Buyers’ Tax Credit

Sure we all know that the housing market is in a slump at the moment, and it’s projected that is will be for a little while longer. However, if you have the money, now is the time to capitalize and make progress in your assets and your portfolio. All federal governments are implementing tax credits and breaks for their population to essentially spend money (if they have it) to stimulate the economy.

So in Canada, what is the Home Buyers Tax Credit? Introduced in 2009, it creates a tax credit, based on an amount of $5,000 for certain home buyers that purchase a home after January 27, 2009.

It is stated in the government brochures that it is only granted to certain home buyers, so who is eligible for the tax credit?

1. Any person who qualifies for a home; and neither person(s) have previously owned and lived in another home in the year of the purchase or any of the four preceding years.
2. If you are a person with a disability, or are buying a home for a related person with a disability, you do not have to be a first time home buyer to qualify.

The HBTC is calculated by taking the lowest personal income tax rate for the year (ex: 15% in 2009) and multiplying that by $5,000. Therefore the tax credit for 2009 will be $750. To claim this tax credit in 2009, a new entry on the personal tax forms will be visible to allow the claim. Also, either you or your spouse/common-law partner can claim or share the credit; however it can not exceed $750.

The good news about the tax credit is the fact that it does not affect the Home Buyer’s plan.

The Home Buyer’s plan is a program that allows you to withdraw funds from your RRSP to purchase a home. Currently the maximum amount that an individual can withdraw in one calendar year from their RRSP is $20,000.

More information regarding the Home buyers’ tax credit and many other federal implemented tax credits can be found at the Government website .

April 10, 2009 Posted by | Federal Credits, Financial News | Leave a comment

Living on one income

Growing up, I thought that living on one income was the norm and that it would continue to be the norm. However, it is becoming much more common to see both parents working full-time career jobs. Why the shift in family patterns? Of course there are many causes, inflation, personal expectations, technology, credit cards, bills, there are so many causes it’s really hard to pinpoint one “thing” to blame.

It is said that approximately 80% of families living in the United States are now dual income earners.

dual

With that being said, is it possible to live comfortable on just one income in today’s society? An example for this situation could be a spouse going on maternity leave, and once the time is over, the spouse decides to stay home to raise their children. In this situation, there are only two choices possible:

1. Increase income
2. Decrease expenses

Increase Income
1. Government allotment: Depending on your geographical location, your government does supply families with a supplemented amount of money, usually a monthly deposit.

2. Promotion/Raise/New Job: The spouse, who is responsible for the income, can try to generate a raise, go for the promotion, or even job search for a better position. However, this option is not always suited for every family; it really comes down to what is best for the family.

3. Work from home: The spouse who is responsible for staying home to raise the children can work from home on a casual basis. In today’s society there are so many casual jobs that allow parents the freedom to make their own hours and the amount they want to work. For example; who would have ever thought there would actually be a job for dog walkers?? I mean, you buy an animal because you love animals and in doing that you have to take the responsibility of providing for your animal (like a child, you have to feed, love, nurture, and care for your animal). However, people today are just too busy (I guess) to walk their own dog. Being a dog walker, you can set your own hours, how many dogs you want to walk, and doing this you get out of the house, exercise, and peace of mind. Another option is home daycare. A few hours after or before school for the kids down the street can really help supplement your family income. The options really are endless, you just have to do your research and look for options that are available to you in your location.

4. Work part time: The spouse, who left their job to stay home, may be able to work part time while raising children. Getting out of the house is really important when you are raising children because it provides an adult outlet for you, while earning money at the same time.

Decrease Expenses
Random Spending: Generally, the more money you have the more you spend. Without knowledge of your financial situation it is easy to assume that you have more money than you really do. It seems odd, but usually dual income families spend more, and save less. One theory could relate this to parents feeling that they work so hard that they deserve whatever they want. Or, they work so long and therefore will buy their children love (this is not to say you can’t provide love when you work full time). Either way, it is important to decrease your expenses when transitioning from two incomes to one. For example; the random pizza night, or the 35$ teddy bear for no reason will have to be eliminated. When I was growing up, I was rewarded with tangible gifts when something was accomplished which really made me appreciate it much more.

Household expenses: Transition your household to a more energy efficient space. This is done in so many different ways from light bulbs to fridges. Also, be aware of the electricity that you are using up. Don’t have all the lights on in the house, or all the televisions on the same station. Recently it was published that even have appliances plugged in, yet turned off, is using an amount of electricity.

Bank fees/Service charges: It is absolutely amazing to me how much people spend (rather waste) on bank service charges. Do you research, shop around for the best account for your needs. I have seen some individuals throw away 15-30$ per month in service fees. Add this up over one year, which is 180-360 dollars wasted.

Credit Card interest: Eliminate all possible credit debt, starting with the highest interest card first. The interest amounts really add up, and logically speaking it is just putting you further in the hole each month.

Overall Monthly expenses: From food, transportation, entertainment, miscellaneous costs, it is essential that you re-evaluate your monthly budget to determine which accounts you can cut costs from. Read my article on grocery shopping tips to find creative ways to save on your grocery bill.

Overall, I personally feel that it may be challenging to comfortably survive on one income alone, however with knowledge, preparation, and structured planning it is very possible and rewarding.

April 6, 2009 Posted by | Savings, Social Situations | | Leave a comment

Theory # 1

Sometimes we all feel that we never have enough money, or whatever we do have it will never be enough.

A while back, I was having a conversation about money with a close family friend who shared with me the following theory that he follows.

Man or women, we all carry either a wallet or a purse. When you open up your wallet and there is no money in your wallet, psychologically you will feel that you really have no money to your name. When you only see credit cards and other plastics, you will subconsciously believe that you are only in debt with no actual cash. However, if you carry a small amount of money, even 5 dollars you will feel that you have money and automatically your conscious will be more positive. The secret is that if you do have the few odd dollars in your wallet, it is not meant to be spent on an impulse item.

It may be a psychology trick; however I will follow any theory that makes me noticeably happier, or more positive.

 

My Wallet…..  

 wal

 

My Wallet with only 5 dollars in it, plus a few coins as well.

 

walmon

April 6, 2009 Posted by | Personal Financial Theory's | | 2 Comments

Tax Free Savings Account

Save Smart with the Tax Free Savings Account

The Canadian population already pays enough tax, and now with the recent news of the harmonized taxes we will be paying even more taxes come July 2010 when it is implemented. Be smart about your savings and begin to reduce your taxes on savings with the new Tax Free Savings Account. The Savings will allow you to put money into this account, watch it grow, and be tax free through the term.

General Outline:

You must be 18 years of age and over, and con only contribute a maximum of $5000 per year into your tax free account. The beauty of this account, aside from the tax free, is the fact that you are able to withdraw funds at any time. Unlike other investments’ or GIC’s, there is usually a renewal date that you have to wait for, or some hidden underlying catch. If you do withdraw an amount from your account, the amount deposited later won’t reduce your contribution limit.

Advantages of a TFSA?

  •  Flexible savings account that is not taxed.
  • If you are unable to contribute the 5000.00 in one year, you will be able to carry forward your contribution limit to the following year(s).
  • Couples can contribute to their spouses TFSA
  • Saving for an emergency is easy with this account. You are able to withdraw large sums of money, re-contribute at a later date, while maintaining the current contribution limit.
  • Senior Citizens will have the opportunity to save their money, and live comfortably.
  • TFSA withdraws will have no impact on any guaranteed income supplement payments.
  • Overall peace of mind knowing that money you earn, and save can be used by you for whatever purpose you want, without being penalized from the government.

 

For more information, please refer to the brochure distributed by the Government of Canada.

April 2, 2009 Posted by | Savings | 4 Comments