The Disadvantage Of Using Your Debit Card

The Disadvantage Of Using Your Debit Card

The main drawback of using a debit card is that it mimics a credit card in 2 ways.

  1. You’re not really aware of how much money you are debiting and how often you are using your debit card.

If your goal is to control spending, debit is not the way to go.

A great way to stay on plan when shopping is to use the envelope method. You place the amount of money you have allocated (e.g. for groceries) in an envelope. This method can and should be used for entertainment cost or pocket money as well. Leave the debit card in your wallet. You shop from the envelope and when the money is gone, or nearly gone, you will know for sure since the envelope will be lighter. That sends a very clear message about your spending, and how much you have left to spend. That’s when you’ll have the ah-ha moment.

  1. Using debit also increases bank fees, and if you do not have a service plan that allows for unlimited transactions, that cost can increase dramatically.

Debit cards are great, but if at the end of the month you cannot account for some of your cash, check your account and see how many times you have used your debit card in that month.

A tip on managing your money successfully.

Tessa-Marie

tessamarieshillingford@gmail.com

It’s Tax Season

Not sure what documents you need in order to file your taxes? Today I’ll share some tips on what you need, and how to make tax time easier for you.

At this time of the year, all your T4s are arriving in the mail. Be careful, these documents are very flimsy and it may look like there’s nothing in the envelope. What should you do once you receive them? Place all documents together in a large envelope or a folder; keep it in a safe place. When it’s time to prepare your taxes you’ll have all supporting documents you need in one spot.

If you have changed employers and changed your home address in the past year, you should contact your previous employer and have them send your documents to your new address. Come tax time, you cannot omit a T4 from a previous employer because of an address change. That’s not a valid excuse. The government will find out and you will be fined, and forced to pay interest on that fine. Remember it’s your, money keep it.

We are allowed to file electronically and it’s a great idea to take full advantage of doing so. While we are given the privilege of doing just that, the government can pull your name in a random audit. If you are randomly chosen, you will be sent a letter that will require you to forward all supporting documents to the government. Therefore, it is imperative you keep all documents even after filing your taxes.

One of my biggest concerns during this time, is with tax preparation companies. You are promised your refund as soon as they file your taxes. Be careful – in most cases, it is advertised that it’s free to get your refund the same day. What is often left unsaid is that your refund will be significantly smaller (they take a portion of it as payment for the quick turnaround). That means, if your refund totals $500.00, you may only take home $450.00. In some cases even less. I know it’s wonderful to get your refund as soon as possible, but if you have paid the company $65.00 to prepare your taxes, why not just wait a few days and get your full refund? Again, it’s your money, keep it!

Another way to save money on doing your taxes is to share the cost of the tax-filing program. You can split it with family and friends, making that $29.95 plus taxes significantly smaller. In fact, this is what I do. I have my family; a few friends and our taxman come over to my house. I prepare a big pot of spaghetti; we take turns sitting with him, while the others enjoy the spaghetti and conversation.

It’s fun, inexpensive, and get’s our taxes done properly.

As always, let me know if you have any questions. I’m here to help.

Tessa-Marie     tessamarieshillingford46@gmail.com

 

SOWINNG FINANCIAL SEEDS

 

Sowinng Financial Seeds

I would like to dig a little deeper into my last blog SETTING UP THOSE SPECIAL SAVINGS ACCOUNTS. There was a flood of questions about setting up multiple saving accounts.

In gardening a seed represents growth, development, and strength. If you don’t tend to that seed and give it attention which it needs, the seed won’t grow. It doesn’t matter how small the seed is, only that you tend to it, water it and encourage it to grow.

When I was setting up my multiple savings accounts, I was planting many tiny seeds and I knew that I needed to invest in them in order to see them grow.

In this blog I will address 2 of the top questions from my previous blog.

  1. Why would I only save between $3.75 & $11.75?
  2. What can that small amount of saving do for me?

In order for me to answer those questions, I have to first give you a background on those five savings accounts.

When I opened those accounts in 1970, we had very little money to spare and our income in those days was not bountiful by any stretch of the imagination. Cost of living was also significantly less expensive than it is now.

After paying our bills, all we had left to save was $18.75 bi-weekly. I had to divide that into the five categories, which I convinced my husband was perfect for our future financial needs. Now my husband was not in favour of five accounts, he too thought that only saving $18.75 was meager and useless. He had no idea how to tame me, so he shrugged his shoulders and left me to my own financial devise.

And so I tended to my financial garden.

Here’s how the funds were divided:

  1. Buying a home   = $3.75
  2. Vacation               = $3.75
  3. Emergency           = $3.75
  4. Starting a family = $3.75
  5. Buying a Car       = $3.75

Total                                         $18.75

The next step was making sure that each raise we received was placed into those accounts. Seven years & several raises and job changes later, we were eventually able to save $82.00 bi-weekly.

At that time, our home buying account had $7,000.00 in it. We purchased our home with $5,000.00 down, paid our legal fees and shopped for used appliances on Queen Street with the rest. We bought a stove with a solid white door but no glass, a fridge, and a washing machine but no dryer. We hung our clothes out to dry in the basement. We bought nails and twine at Honest Ed’s, and used a brick as our hammer to set up our dryer line.

Honest Ed’s was our shop of choice – we were there every two weeks. We also frequently shopped at Knob Hill Farms, Bargain Harold’s and Bi-Way because back then they had the best deals. We kept saving and being cautious with our money.

All that I have financially today comes from that $3.75. Without it I could not be here in my present financial situation.

My small bi-weekly savings didn’t seem like much, but I was sowinng my financial seeds. My small savings were lettuce seeds.

As an avid gardener I can tell you lettuce seeds are tiny, but from that miniscule seed grows this huge head of lettuce.

I’m reaping what I sowed and I am helping thousands of people start their successful financial journey.

We’re all inherently gardeners in some form or another, but ask yourself, are you sowing your financial seeds?

Give it a try: make note of where you are today, date the page in your notebook and write the exact amount of savings you have today. The next step is setting up automatic transfers into a savings account. Calculate whatever amount you’re able to put away bi-weekly for one year. At the end of the year, compare your savings to what you had at the start. I can guarantee a big a-ha moment and a huge smile on your face.

To answer your question “what can a small amount of saving do for me? It can eventually give you financial freedom. Such a simple concept, with monumental results.

Let me know if you are going to take on the challenge. I will be here for you every step of the way.

Send me an email if you want to talk further about growing your financial lettuce.

tessamarieshillingford46@gmail.com

Thanks

Tessa-Marie

 

 

 

 

 

 

 

 

 

 

Goodbye 2016 Hello Plan 2017

Goodbye 2016 Hello Plan 2017

It’s best to set a plan instead of a goal. You can control a plan, but you are always chasing goals trying to catch up with them. Your plans walk with you all the way.

Yes it’s the end of 2016. Are you one of the people who are saying, “I have no idea where the year went?”   Guess what, it went. Never to return. All the plans and hopes you had and all the things you wanted to accomplish left with 2016.   How many things you planned for 2016 that became a reality?

It’s time to create a plan for 2017. I am not talking about a New Years resolution. Remember it is a New Year for one day. With this in mind the resolutions you created that you kept for the first 24 hours of the New Year, is mission accomplished. The 2nd of January is not called the New Year it is January 2nd. The New Year left 24 hours ago.

Now let’s look at the plans you might consider making throughout 2017. You will have to take some time to work on those plans. During that time, you should not spend time looking at how you let those plans slip through your fingers in the lost plan section of 2016. Do not go there, nothing to gain looking back.

If New Years resolutions have not worked for you in the past make a short list. Three items should be tops, making a list with five items is stretching yourself. Setting you up for failure.   Check your record of success in the past before making a long list. How have you done? Remember your previous behavior is indicative of your future behavior. Take this into consideration when making your list.

The best way to target your plans for 2017 is to make a short list of the things that really matter to you. Vague or plans with no thought will treat you the same they will not materialize.   Plans that will work for you must be specific, describe it in as much detail as you can. Measure your progress towards the plan?   What have you done or what are you presently doing to ensure this plan becomes a reality. Is it a pipe dream or is it something you can attain with the resources at your disposal. Have you chosen a plan that is realistic?  Can you attain at this time of your life? Most important of all, when do you want to attain this plan. Give it a date in 2017 a real date, like August 20th 2017.

Now you have your list, place it somewhere where you will read it everyday. You noticed, I said read it everyday, not see it everyday. Reading and seeing are two completely different activities.   You should pause and read your list. Then ask yourself what did you do yesterday toward reaching this plan. What can you do today toward this plan? Ask that question everyday and note your progress and success.

If you follow the above plan you will have a very successful 2017.

It’s no point crying over spilled milk. The best and only choice is to look at the spilled milk, skip over it and walk in 2017. Do not look back.

Tessa-Marie

What is a Tax Free Savings Account?

Recently I have noticed a trend that many Canadian and especially new Canadians are not taking the advantage of owning a Tax Free Saving Account.

With this in mind I have decided to write about a TFSA .

Who Can Open a Tax Free Savings Account?

Any individual who is 18 years of age or older and who has a valid social insurance number is eligible to open a TFSA.

What is a Tax Free Savings Account?

A Tax Free Savings Account is a special account where an individual is able to save money over their lifetime without any tax implications.

The Tax Free savings account started in 2009. The government of Canada created the account to encourage Canadians to save money and no matter what the growth of that account no interest will ever be paid.

This account started in 2009. The limit from 2009 to 2012 is $5000.00

From 2013 – 2014 it increased to $5500.

Then in 2015 the government increased it to $10,000.

The amount was decreased by the new governmentin2016 back to $5500.00

If an individual has not made any contributions and was 18 years or older in 2009 they may make the contributions from 2009 to 2016. You do not lose the contribution if it was not done in the prior years.

The money contributed to a Tax Free Savings account is NOT tax deductible.   The contributed amount cannot be deducted from your taxable income.

Any amount contributed or any investment income made is non-taxable.

You may have more than one TFSA but the amount between the account may not exceed your annual contributions.

Withdrawals

Depending on the type of investment held in your TFSA, you can generally withdraw any amount from the TFSA at any time. Withdrawing any amount from the TFSA does not reduce the total amount of contributions you have already made for the year.

Replacing withdrawals

If you decided to replace, or re-contribute all or a portion of your withdrawals into your TFSA in the same year, you can only do this if you have available TFSA contribution room. If you re-contribute but do not have contribution room you will have over-contributed to your TFSA in the year. You will be subject to a tax equal of l% of the highest excess TFSA amount in the month, for each month that the excess amount remains in your account. Before doing a re-contribution talk with your financial institution about your re-contribution.

After following all the rules a TFSA is a wonderful savings vehicle to assist you in meeting your future financial goals.

Tessa-Marie