Here are some of what I believe to be our best personal financial decisions made so far.
The Number One Best Personal and Financial Decision I Have Ever Made
I married a wonderful man and we have stayed married. I do things every day to try to ensure that we stay happily married and so does my husband.
Best Education Decision
I majored in university in a discipline that would get me a well-paid career even though it wasn’t the subject I was “passionately” interested in. I studied hard enough to earn and maintain a scholarship and worked hard enough to be a desirable candidate for interviews.
Best Investing Decision
We started contributing to our RRSPs as soon as we graduated and started working. (There were no TFSAs then.)
Best Car Ownership Decision
I didn’t buy a Corolla until I had graduated and worked for 4 years and had saved enough to buy it with cash. (My husband had to buy a Tercel to drive to the rural facilities he worked at as soon as he graduated.) Aside from that one first car loan, neither of us has ever paid for a loan or a lease for a car.
Best Borrowing Decision
We have never had a loan for any other reason. Yes, that means we have never carried a balance on a credit card or had a line of credit. We did have a mortgage.
Best Home Ownership Decisions
We didn’t buy a home until we were in our thirties.
We did not buy a unit in a high-rise condominium.
We bought a home we could maintain and afford on one salary.
We paid for 40% of the cost of our home with cash.
We have always saved the entire cost of renovations, including the contingency cost, before starting any work.
Best Budgetting Decision
We always budgeted as if one or even both of us could get laid-off at any time. Given our industry, it was, and is, not an unrealistic scenario. We’ve always kept a large amount in accessible savings; the inevitable over-save has ended up in RRSPs, TFSAs and other investments.
I’m sure that there were other choices that we made that have helped us get to the comfortable place we’ve now reached.
We have also had a lot of luck and many blessings along the way. We give steadily and regularly because we know that anyone can need help at any time. No one is immune to suffering.
Normally when we answer the phone during the supper hour it is
a duct cleaning ad, even though we are on the do not call registry,
one of our children’s schools with an important message like next week is March Break (do any parents really not know this?),
a real estate agent offering to sell our house so they can get a huge commission, even though we are on the do not call registry and they have just guaranteed we will never use their business, or
a newspaper trying to get us to subscribe.
So last night’s call was a new one. An automated voice claimed that my husband’s credit card security had been breached and his card might be used for fraudulent purchases. It directed him to call a 1-866 number immediately. Continue reading →
A question came up recently on RedFlagDeals from someone looking to the future and trying to improve their tax refund in 2016 for their 2015 taxes. The person said that when he and his wife did their tax returns for 2014, they received some of the Family Tax Cut, but not the maximum of $2 000 per family. His wife is working and has unused RRSP room but is in a low tax bracket and therefore they haven’t bothered to have her contribute much to her RRSP. He wanted to know, if his wife contributed to her RRSP in 2015, would it increase their Family Tax Cut to the maximum of $2 000; I wasn’t sure so I ran some test cases to see if he could get the maximum by having his lower income partner put more into her RRSP.
What Is the Family Tax Cut Based On?
If you look at Schedule 1-A you’ll see that the Family Tax Cut is calculated using Continue reading →
Many articles in the newspaper that check families “Retirement Readiness” do not seem to check what would happen if one partner of a couple dies unexpectedly young. The articles always summarize the income of the two people without accounting for whether pensions and various sources of income will stop prematurely if (or when) one of the two dies. Retirement books, however, are quick to point out we should all check not only our retirement plan as a couple, but our retirement plan as a sole survivor. In this series, I’m looking at how different sources of retirement income change or stay the same when one partner of a couple dies. I’m curious whether my husband, or I, will be ok in retirement if one of us dies; Here, I’m checking what would happen to our retirement income from personal savings such as RRSPs, RRIFs, TFSAs and annuities.
What Happens to RRSP and RRIF Income for Your Surviving Partner If You Die?
I’ve read various places that you need to prepare 3 scenarios for retirement income: you and your partner happily living a long time together, you living alone after your partner dies unexpectedly young, and your partner living alone after you die unexpectedly young. Most recently, I saw this advice again in the book “Your Retirement Income Blueprint” by Daryl Diamond. For several weeks, I refused to find the numbers and the details because frankly I thought we might be in trouble if one of us dies “early.” We think we’ll have enough retirement income to maintain the lifestyle we have now but I was not so sure one of us would have enough if the other was gone.
Check the Details of Any Work Pension Plans Very Carefully for What Happens After a Death
One of us works at a company that has gone through several major mergers over the past 30 years. The HR Department staff there have to be very flexible thinkers because there are at least 5 different types of pension plans the employees can be enrolled in depending who they worked for pre-merger. This allows us a glimpse into how different plans work when we receive the benefit update booklets. Continue reading →