The RRSP emails started coming really early this year, so if you’ve already wondering “Should I contribute more to my RRSP?” because you’ve received multiple emails from your financial service providers telling you to contribute, or to (don’t do this) take out a loan to top up your RRSP this year, same here pals.
If you’ve avoided it so far, we’re coming into Peak RRSP Season, because the deadline to contribute to your RRSP and have your deductions count for your 2017 taxes is coming up on March 1st.
That means that over the next week and a bit, you’ll probably get at least one marketing message to contribute to your RRSP.
And hey, I am all for saving for retirement! That is a good thing! And way better than many things that get marketed to us on a daily basis!
But there’s no need to panic-contribute at the tail end of the year to your RRSP, and there are way better and more reasonable ways to do it. However, it’s not easy to resist all the messages that try to convince you that you should put more money into your RRSP, and that it’s in your best interest to do so omg-immediately-right-now.
The biggest one, by far is…
“Save money on your taxes!”
Whether you’re being pitched on contributing more to your RRSP, or borrowing money to put into an RRSP (again, don’t), the big perk everyone’s selling right now is that if you make your contributions on or before March 1st, you’ll get to claim them on your 2017 taxes when you file them (which you can do easily online, FYI).
Which is true! Here’s how that works.
When you contribute to your RRSP from your paycheque, that money has (usually) had tax taken off of it by your employer. But the big benefit of an RRSP is that you contribute with pre-tax dollars—so when you file your return, the government gives you back the taxes you already paid on that money.
If you pay a marginal tax rate of 30%, and you added an extra $1000 to your RRSP, it means you’d get an extra $300 back on your taxes. That’s how contributing saves you money when you file.
What you need to know before you put money into your RRSP
So yes, everything those marketing emails are saying is true, and saving for retirement is a good thing. So is getting money back on your taxes! (Some personal finance nerds will fight me on that, but whatever, tax returns can be a happy thing.)
But your RRSP contributions shouldn’t be taken lightly, and here’s why.
A recent study by BMO found that Canadians are withdrawing money from their RRSPs to cover expenses. A chunk of those are withdrawals done under the Home Buyers’ Plan, or the Lifelong Learning Plan, both of which you can use without a tax penalty. But if you’re withdrawing money to cover a vacation, or your regular bills?
Oh boy will it ever cost you.
When you withdraw money from your RRSP, it counts as income, and will be taxed like income. Remember how you contributed $1000, and got $300 back because your marginal tax rate was 30%? That works the same way in reverse.
If you take out $1000 from your RRSP, and your marginal tax rate is still 30%, you’ll need to pay $300 of that in taxes—so you’ll only end up with $700.
That’s a simplified example, and in reality, the penalties and withholding amounts will depend on a lot of different factors, including how much you’re trying to withdraw.
So if you’re not 100% sure that you can leave the money in your RRSP for the long-term, don’t put it in just to save money on your taxes this year. You’ll have to pay that money right back if you withdraw it next year.
Here’s what you can do instead
Listen, there’s no need to panic. The cool thing about taxes (lol) is that they happen every year (lol)!
In all seriousness though, if you’re realizing that you’d love to get a chunk of money back when you file your taxes, and that you could probably handle saving more for retirement without totally destroying your budget, that is an objectively great thing to realize! It just doesn’t mean you have to do it, or come up with the money, in the next week.
You can contribute to your RRSP all year round. So instead of taking this “RRSP season” as a wakeup call to try to find thousands to save in seven days, think of it as a chance to review your monthly money situation. Figure out how much you’re spending, how much you’re saving, and bump up your monthly savings contributions to your RRSP. (Bonus points if you finally start investing that money!)
By the time this all happens again next year, you’ll be sitting on thousands of dollars you’ve already contributed, and you won’t need to panic-contribute to score some money off your taxes, or to reduce the amount you owe.
PS. If you’re saving for retirement, the TFSA is another great option. You contribute with after-tax dollars, so there’s no tax-season madness, but it’s a legitimately powerful account.
And a quick word about borrowing…
So OK, I’ve snuck in warnings against borrowing to contribute to your RRSP twice so far in this post, but here’s the slightly expanded explanation of why that’s probably not a good idea for most of us.
Borrowing money to invest it (in your RRSP or otherwise) is Finance 501.
It’s an advanced maneuver, and unless you’re a finance pro, or working with one you really trust, you’re better off not messing around with borrowing to top off your RRSP.
If it’s something you mapped out as part of a financial plan? Great.
If it’s something you’re considering because you got an email about it a week or two before the contribution deadline? Nope nope nope. (You can always do it next year after some thought if you’re thoroughly convinced it fits for you… but please be careful, and when in doubt, just don’t, OK?)
If you missed all my tweets over the weekend, I fell headfirst into a binge-watch of Netflix’s reboot of Queer Eye. I’m not ashamed to say I watched the entire season in a single day, and my only regret is that I have no more episodes to watch.
And of course, as someone who writes about money, I had a Lot Of Thoughts—but you might be surprised that they’re literally 100% positive.
If you haven’t seen either iteration of the show, and you don’t have an hour to check out one of the episodes before reading this post (which I accept as long as you promise to watch one sometime today when you have more time) here’s the basic concept. Five gay guys, each an expert in a different area, perform a one-week makeover on a guy whose friends or family nominated him as someone who really, really needs one.
The makeovers were amazing and varied, from a single comedian who lost a ton of weight, to a married firefighter who wanted to step his style game up for his wife and a fundraiser for the firehouse. I guarantee you that this is the most positive, beautiful show you could possibly watch right now—and that you should probably not watch episode 4 without some serious waterproof mascara, or right before you need to look like you haven’t been bawling your eyes out.
And if it doesn’t sound like money is the focus of the show, that’s because it’s not. But there are some really key things that are presented as positive lessons in the show that I think are worth mentioning.
Spending money on yourself isn’t frivolous
There were a lot of reasons the guys being made over gave for not spending money on their clothing or their grooming routines. They’re not confident, they don’t think nice clothes will fit them, they’d prefer to spend the money on their families, you get the idea.
I really get it, because for a long time, spending money on clothing was pretty low on my priorities list, and I didn’t think it was worth investing in. But over the past few months, especially as someone who works from home, I’ve realized that spending a bit of money on clothing that makes me feel like a Real Adult is a huge boost to both my productivity and my confidence.
And while women are far more likely to be shamed for their personal spending, it’s clear that feeling guilty about spending money on yourself isn’t a sex-specific phenomenon. It’s also clear that the benefits, as experienced by the guys on the show, can be pretty massive. Seriously—I won’t spoil any of the endings, but watching the transformation that some solid basics that fit your style and your needs can make (wardrobe, grooming, home, culture, etc.) is amazing.
That’s why you should always, always carve out a fun budget—and shouldn’t feel bad about spending it on things that make you feel great about yourself.
Improving your space doesn’t have to be expensive
The show isn’t just about fashion or grooming, so they also tackle the guy’s living space. You probably won’t be able to do a complete home makeover with new countertops and floors and a full decorating team in under a week, because $$$. But there’s a lot to be said for basic updates, and it can dramatically change how you feel in your space.
One of the best (and biggest) transformations was in a house with six kids, and at the start of the episode, there was stuff everywhere. If you think I am exaggerating, I am not. While sure, they made a lot of big improvements, and invested a lot of money and work to improve the space, the strongest thing they did by far was getting rid of all the stuff that was no longer useful or necessary for the family—and installing easy-to-use storage for everything that they kept.
You can get gorgeous storage bins at IKEA for $12.99. You can get a shelf unit for $80. If that’ll help you come home to a space that feels relaxing, not overwhelming? That’s money well spent.
You don’t need to do a lot to make a big impact
I’m pretty sure in every single episode, Tan (the fashion expert) started with the basics: slim-leg pants, that actually fit the guy.
No, not skinny jeans, but just pants that are actually flattering and fit better than what they were already wearing. They were sourced from high-end stores and Target alike, so this isn’t about price point. If your wardrobe doesn’t fit, or doesn’t feel cohesive, a few key staples can help you feel much better in everything you wear.
This is true for your money, too. While sure, eventually, it’d be great to know all the things, and do every single thing right, there are a few key basics that can make a big difference in your money, and they’re not all that complicated.
The money equivalents of buying pants that fit:
Track your spending, by hand or with an app like Mint or YNAB
Automate your savings, so they get taken out before you even see them in your account
Start investing, which yes, is actually simple with roboadvisors (and this 5-day email course is designed to make it easy as pie for ya)
Two of those are (or can be) app based, and one will take you all of five minutes to set up with your bank. If you do more than that, great! But if not, those basics will serve you and your money so, so, so well.
Accepting or asking for help is a good thing
Are the fab five going to show up at your door tomorrow to give you a makeover? Probably not, especially if you, like me, are a) a woman who b) does not live in Georgia. (Sadness factory.)
That doesn’t mean you can’t get help if you want to step up your home game, or your style game, or your skincare regime.
Do you have a friend who is amazing at any one of those things? Ask them for help, yo! I feel pretty confident in saying that your friend whose apartment looks like a real-life Instagram account would be happy to accompany you to IKEA—and if none of your friends are particularly #goals in the area you want to improve, Google will help you find great places to start.
I’ve never written a lot about privilege here on ye olde financial blog, because to me it feels like writing about air.
“Fun fact: you need it to breathe! It’s all around!”
And while no, you don’t need privilege to breathe, it really is all around. The systems we live in every day offer spoken and unspoken benefits to specific types of people, and if you’re part of some of those groups, things are easier than they would be if you weren’t. I know, because I have buckets of privileges and my life is easier because of it—I’m able-bodied, white-passing (I’m Algonquin, yo), straight, etc.
“The original show was fighting for tolerance. Our fight is for acceptance.” Tan France, Queer Eye
If you can’t imagine a group of Your People, whoever that is for you, going on a show and specifically using it to work towards acceptance for Your People? If that seems bananas? You’ve got at least some privilege. And it means some things, including money, might be easier or more accessible to you than they would to other people.
Go watch Queer Eye already. It’s really, really great.
There’s a lot of things people worry about saying to me because I write about money.
They don’t want to tell me how much they spend at lululemon (I don’t care) or how much they spend on their pets (dude, same here) or how much they spend at restaurants. But those things are so beyond fine by me.
At that point in my career, I couldn’t even conceive that someone in my field could make enough money to do most of the stuff I wanted to do, like have a dog or buy a house. I was the prime candidate for a person who would do things “when they made more money”.
But I did manage to do two things that, looking back on it, were absolutely key to do before my income blew past what I thought was a hard ceiling on what I’d ever earn (which I had pegged at about $5000 more than I was making then).
Set goals (even if you don’t know how you’ll meet them)
When I sat down to start my taxes this year, and added up my income sources for last year, I realized that I had hit some pretty major goals I remember writing down (like actually writing, on a piece of paper, and putting on the wall by my teeny $40 Ikea desk) when I started my career.
One of them was how much I’d earn by the time I was 30, and one of them was how much I’d earn from side projects.
This is how much I knew about how I was going to hit those goals at the time:
I thought I’d have to go back to school for a degree in finance to earn that much money.
My best idea for a side hustle was teaching yoga.
And there’s nothing wrong with those things! But I haven’t done either of them.
If I had never written down those goals, I’d also have breezed through this tax season without ever stopping to celebrate or acknowledge just how far I’ve come in the past five years. (And when I went out to buy myself a treat for hitting those goals, I found a pair of Hunter boots, in the colour I wanted, for half price, and the only pair they had left was in my size. If that’s not a sign I don’t know what is.)
So even if you have no idea how it’ll happen, or when it’ll happen, set goals about what your ideal career and salary are before you’re earning more money. It’ll help you recognize the achievements when you eventually get there, and even if not directly, it might help you convince yourself that it’s even possible.
Because trust me when I say that what I thought was my income ceiling was very, very much not my income ceiling. And I set goals that seemed ridiculous at the time.
Save money (even if it feels like basically nothing)
The other thing that you absolutely, positively have to do before you start to earn more money is to start saving.
When you’re used to saving money, and making it a priority in your budget, that habit doesn’t go away when you get a raise (insert praise-hands-emoji here). When I was just getting started in my career, my savings contributions felt like nothing—I probably saved in two years what I save in two months now.
But when my income went up, the savings habit stuck. If I hadn’t figured out how to manage my money first, I’m sure that it would have been a lot harder to manage the wants that felt possible with my new income.
As it is, my lifestyle inflated a lot. Over a few years, I got a dog and a house and a car! Sure, I don’t rock Louboutins or whatever, but those are not minor lifestyle additions. As I added them to my life, though, I also added savings goals, and increased my retirement contributions, because I was used to thinking of money as not just for spending.
If you build your money habits early, you can trust they’ll be there for you when you want to enjoy some of your new income. Spending is not the enemy, pals—you just need to balance it with saving.
It’s a lot easier to do when you already know how, thanks to those actually-very-important $20 savings contributions you’ve been making.
That might be taking the occasional Uber, it might be lattes, it might be buying the organic apples. Whatever works for you.
But over the past eight months of home ownership (and real, true joint budgeting and joint account-having) the fun budget has slowly but surely become my favourite, and only, budget. It also happens to be the simplest budgeting I’ve ever done: it’s one category, and one number, and that’s all I need to worry about every month.
If you want to make a dead-simple budget:
Plan out your monthly spending
Plan out your savings
Spend the rest
No? Too simple? Don’t worry. Here’s a breakdown of what those actually mean, and how you can tackle it yourself.
I still plan out my monthly spending
This is a little peek into how The Fiance and I are managing our money, but we split all of our “necessities” 50/50, and they come out of a joint account. To figure out how much we each needed to contribute to that account every month to make this work, we mapped out everything we need to pay for, and we update it based on new information when it comes around.
This is everything from annual license plate renewals, to our car loan payments, to the mortgage, to the hydro bills. It’s also our shared fun spending, like lattes and going out to eat with friends.
We know how much we’re going to spend on those things, and we track that spending in a shared spreadsheet (and adjust accordingly as we learn more about our spending patterns). Once we’ve made our contributions to the joint account, we can rest easy knowing that our groceries, lightbulbs, cleaning supplies, and movie nights are handled.
I still plan out my savings
My joint account contributions aren’t the only thing that comes out of my account automatically when I get paid, though.
On top of that, I’ve got automatic contributions to my retirement savings, my emergency fund, my wedding fund, and our house emergency fund. (After last year’s craziness, four savings goals seems like nothing.)
I know how much I need to save for those goals monthly (other than retirement) based on how much I need to have saved, and when I need to save it by. Those amounts come straight out of my account, and are non-negotiable in my monthly money plan.
But my personal “budget” is a single number
Based on all that work, I know that I have a simple budget of about $300 a month (real numbers, because I know you were curious) to spend on whatever the h*ck I want. If I want to go out with friends, or buy a fancy pair of rain boots, or get eyelash extensions a la Mixed Up Money, I can do it.
When I hit that number, I have to stop, which is a good incentive to keep my spending reasonable and not buy a $300-anything on the first of the month. But it’s also a huge relief that I’m not trying to break it out into $40 for “personal care” items like shampoo, and $50 for “fitness” every month.
It’s my spending money, and since everything else I need to handle is accounted for, it doesn’t need to be managed.
This only works if you do the work
The only caveat I can’t stress enough here is that this simple budgeting approach to my personal spending money only works if you’re really, truly prepared.
You need to know for sure your essentials are covered, like your bills, and your food, and your irregular expenses.
You need to know for sure that you’re saving up for retirement, for an emergency fund, and to cover any big upcoming needs and wants.
And you need to know for sure that you have a system in place to stop spending when your money is gone for the month. (If you keep spending after you pass that fun number, you either need better systems, or this approach isn’t a solid one for you or your money.)
That’s why I still track my personal spending, albeit with a single category: “fun.” It helps me keep tabs on how much left I have in terms of wiggle room over the course of the month, and helps me make better decisions about how I want to spend that money to maximize for fun.
Plus, I can always look back on that tracking spreadsheet at the end of the month and see how much fun I really got out of each purchase. Looking back on January, I can say for sure that I am happy about how I spent every dollar of my fun budget (there were a lot of books tbh) and I don’t regret a single purchase.
Specifically, when does it make sense to buy a car? (Trust me, you do not know where this is going.)
I got a really, really great question by email a few weeks ago, asking whether or not I thought it was time for them to buy a car. They were looking at their Uber receipts, you see, and realized they spent a not-insignificant amount Uber-ing around town to avoid the cold and get home from holiday events (which is totally fair and, based on quality of life alone, I’d say a good investment. Ottawa was not warm over the holidays.)
It was enough that they were wondering if it was time to buy a car.
And my answer?
For a bit of context, I do have a car, so this is not some personal-finance-hates-cars rant. But it’s also not a never-take-an-Uber-or-spend-money rant.
Instead, I just want to look at what you’d need to consider to make this decision for yourself, even if you’re staring down what feels like an excessive amount of Ubers or cabs.
Is this a normal spending pattern?
First and foremost, if you’re spending $1000 a month on Ubers, and that is a consistent pattern every month of the year, holy heck just buy the car! You will save money. Unless you are so rich that you can pay $1000 a month for convenience (which FYI is very, very rich) then buying a car is a no-brainer.
But for most people—and specifically, the one who emailed me—this is a seasonal thing. Especially in Canada, where oh boy, do we ever get seasons.
Let’s say that for three months out of the year, the weather is bad enough that you end up taking a disproportionate amount of convenience cars, like Ubers. The rest of the time, you’re happy to spend a bit of extra time waiting for public transportation, or biking, because the air doesn’t hurt your face.
That immediately tells you that what feels like a very high level of spending right now isn’t a forever thing. That information will be helpful as you look at how much it’ll really cost you to own a car full-time (and whether it’ll be any cheaper).
How much does owning a car really cost?
Here’s the thing with owning your own car: you have that car every month, regardless of whether it’s nice enough outside to bike everywhere, or you’re on vacation for two months every year and you leave the country (a girl can dream).
So even if the winter months show a spike in your transportation costs, you need to consider it against the relentless, ongoing costs of car ownership. (Can you tell owning a car is something I do because my lifestyle requires it, not because I’m particularly jazzed about cars?)
Here’s what you’d need to estimate, with some example numbers based on literally no science and just the ranges I have paid or experienced in Ottawa. Be prepared to be horrified if you live in a small town, and jealous if you live in Toronto.
Gas: $100 a month, which is about two tanks of gas. Two and a half? Something like that.
Car Payment: $300 a month, unless you bought your car in cash, which is a feat in and of itself.
Insurance: $100 a month, but maybe less (or more!) I’ve lived through both.
Parking: $100 a month, assuming you live centrally enough that public transit is your regular go-to.
Maintenance: $50 a month, depending on how handy you are. Let’s say that this $600 a year covers getting your winter tires put on, oil changes, small fixes, that kind of thing.
License Plates: $10 a month, but you’d pay it annually (at least in Ontario).
That comes to about $660 a month to own a car, give or take. Your numbers might be way different, depending on your situation, but even in the case of a fully-paid-off car with free parking, you’re looking at about $260.
Over the year, in the cheapest-case scenario, that’s $3,120. If you’re more in line with the first scenario, it’s $7,920.
If you usually get by with public transportation for about $1200 a year for your monthly passes, and you spend a few hundred bucks a month over the winter to Uber away the cold, you’d still come out ahead financially over the course of the year if Uber was a winters-only thing.
Are there other alternatives you could look at?
I think we’re all on the same page that getting from point A to B is a pretty big expense, no matter how you slice it. But there are a few other options you could consider when you’re trying to figure out if buying a car is the right financial move.
This might not be available in your city, but there’s a service called VrtuCar that you should check out if you need a sometimes-car, but would really rather not pay for pesky things like parking, maintenance, and all that boring stuff. It’s basically a network of cars the company maintains, parked around the city, and you book them for a few hours when you need a vehicle. Easy peasy.
If you’re taking a trip, or you know there’s going to be a week or two of heavy car use in your future, why not rent a car? Sure, it’s not the cheapest option out there, but compared to adding a car to your life for good, it’s a pretty great and available alternative. Some companies will even come pick you up to bring you to your rental vehicle.
However, pro tip: know what you’re getting into when it comes to insuring a rental car. Your credit card might already have coverage bundled in, in which case you should use it to save a ton of money. If you aren’t covered, that’s not a place where you want to scrimp and save—get the insurance. You’re just tempting fate if you don’t.
How you choose to get around is partially about money, of course, but it’s also very much about personal preference. Your transportation might be a ton cheaper than mine, because you are a hardcore biker who is happy to put those giant snow tires on your bike and just keep givin’er all winter. Power to you!
Your transportation might also be much more expensive than mine, because you inherently enjoy and value having a nice car, and you’d be depressed as all get-out to drive my eight-year-old used Toyota Yaris. No problem.
Whatever you decide is right for you, you just need to go into it knowing your options, knowing your spending patterns, and knowing how much full-time car ownership really can cost.
After all that, you can comfortably hop into an Uber, knowing it’s an intentional financial choice that you make when it’s -40 and you might literally die because it’s too cold outside.
I have a horrible, terrible, no-good, very-bad confession to share.
I have never in my life had renter’s insurance. Even though I rented for years.
IT IS A MIRACLE I AM STILL HERE.
And if you’re sitting there thinking I’m exaggerating, I am 100% not. Current Me could not be more appalled that Past Me was so hideously careless about literally my entire earthly possessions.
Here’s what happened. When I was still a student, and I moved into my first rental apartment, it was the kind of place where you deal directly with the landlord, and your rent is a whopping $350 a month (so nothing too… formal, let’s say). If anyone told me I needed renter’s insurance (also known as tenant insurance) I straight up didn’t listen. I was 19 and invincible!
Then, after a brief stint living with roommates, I moved back home for the rest of university. I was very lucky that this was an option, and although my mom charged me—cue aggressive air quotes—”rent”, it was basically non-existent. It was like, token rent to teach me that life wasn’t free, not market rate rent. (Thank you, mom!)
So when I moved out for good, into a real-life rental, it just never occurred to me that it was something I needed. I was dealing directly with a landlord again, and the set-up was much too informal to have anything close to a “you need to buy renter’s insurance” clause in my lease.
But it should have. Holy heck it should have. Everyone should have renter’s insurance if they are renting, and here’s why.
(Dear my roommate at that place: did you have renter’s insurance?! Why did we never talk about this?!?! This goes for literally every renter I know. I can’t believe we collectively never talked about this. I hope you all have renter’s insurance, and this is just a me thing.)
When you’re renting, the worst part (in my opinion) is that every time you have to move, you have to pack up all of your earthly possessions and schlep them to a new place. Nothing will make you contemplate minimalism, and paring down a la Cait Flanders, like moving all of your things.
And nothing will make you wish you had renter’s insurance like losing all of your things.
How Much Does Your Stuff Cost?
Here’s a fun horrifying personal finance hypothetical for you. If your apartment burnt to the ground, because that iffy electrical got the better of it, how much would it cost to replace everything that burnt down with it?
Your computer? Your clothes? Your bed? (Mattresses are not cheap.) Your books? (NOT THE BOOKS!) Maybe a couch, or some equipment for your favourite hobbies?
I’m betting it’s a not-insignificant number. Probably more than you can easily pay out of pocket, in the worst case scenario.
But you know what is an insignificant number?
$16.92 a month.
I ran a quote on Sonnet Insurance (my current car and home insurance company) based on the wonderfully cheap apartment I rented when I was just out of school, because it was the only one that fit into my teeny new-grad budget. It would have cost me $16.92 for the mid-range package! Not even the super-cheap one!
Even I could have afforded that on my ~$2000 a month salary. You know what I could not have afforded? Replacing all of my stuff if the place burned down or was robbed.
(Lol no one was robbing that place, let’s be real, what would they have even taken.)
I also could not have afforded getting sued if someone got hurt on my “property”, or replacing my work laptop if it was stolen from my place when I brought it home. Renter’s insurance would have covered those things. My savings? Not so much.
That’s why I want to end this with a totally-not-sponsored, totally-not-affiliate-linked walk-through of how you can buy renter’s insurance online, in about five minutes, without having to call anyone or getting an awkward phone pitch as soon as you confirm your information. It’s called Sonnet Insurance.
(Full disclosure, I’ve worked with Sonnet Insurance in the past, and I hopefully will again. But this is literally just how I would buy renter’s insurance, and how I actually buy my other insurance, too.)
Start that five-minute timer, because your journey starts at Sonnet.ca. You’re going to want to click on “Get a Quote” and you’ll see this window, where you’ll click “Home Insurance.”
It seems weird until you get to the next screen, where you can put in that you’re renting your place, and what kind of place it is.
Once you’ve done that, and put in your address, Sonnet will generate three quotes for you, based on how much coverage you need (in regular person words).
After you choose the one that looks the best to you (the big things to look at are the liability coverage and the personal belongings coverage) you’ll be taken to a screen that explains every part of your potential-new-policy in detail. You can customize it based on what you really need, and the language is clear enough to help you actually know what that is.
Take the personal belongings coverage. It gives you a clear overview of what it covers, and you can choose an amount that makes the most sense for you, based on how much stuff you have, and how valuable it is.
(Shout out to the only conversation about renter’s insurance I think I’ve ever had, when two of my coworkers at lululemon had extra coverage because the retail value of their combined lululemon gear exceeded the standard coverage on their policy. You two are the real personal finance heroes, with your conversations about getting the right amount of renter’s insurance coverage for your needs.)
When you’re ready to rock and roll, all you have to do is click “Buy Now” to buy your insurance online.
It’s actually that easy.
If you do want to shop around, you can compare different rates for your required coverage on Lowestrates.ca, and if you select a quote there, usually you can just connect with one of their agents and buy it on the phone as well.
But whatever you do, do this
GET RENTER’S INSURANCE OMG DO NOT BE ME ON THIS.
Understand and be happy with the amount of coverage you have. If you would need more coverage in the worst case scenario, it is so worth paying the extra $3 a month to get it.
That’s all. That is all I want you to take out of this post. You need renter’s insurance, and it’s so h*ckin’ easy to buy that you officially have no excuse.
Think of how good it will feel to cross such a strong 2018 to-do off your list in under five minutes.
I was going to start this post off as a quick recap of my goals for the new year, and turn it into a bit of a how-to post, but every time I tried to sit down and write it, it didn’t make much sense.
I was trying to shoehorn why these were my goals into like, a paragraph or two, but without the context of the past year, it was kind of jarring.
See, this past year was a big one, which makes sense when you look at my goals last year. I was all about…
Growing Half Banked
Earning more money by freelancing more
Buying a house (see: earning more money, because houses are not cheap)
Those were my main priorities, and because they were my priorities, they got done.
To the point that when we finally moved into our new house, and I took two weeks off of everything to focus on moving in and relaxing a bit, it pretty much broke me.
Behind the scenes of my posts about the home-buying process, I was working with multiple freelance clients, delivering anywhere from six to ten articles a week, managing client calls, keeping track of deadlines, running my own blog (which was doing two posts a week in the lead-up to the move) and more.
All of that was on top of the small tasks of having a full-time job and trying to feed myself and be a functioning adult who still had clean laundry sometimes.
That all felt fine at the time… until I stopped doing it all for two weeks, and realized how truly, deeply unsustainable it was, and how stressed and tired I had been. My typical day was to wake up, walk the dog, go to work for eight or nine hours, come home, scarf down some food, sit back down at my laptop, and crank out another four or so hours of work. I’d close my laptop when I had too bad of a headache to continue, and call it a night.
Now it’s not like I was doing that for months, but for the few weeks before the move, that was my entire life, and my entire focus. It had ramped up slowly to that point, but I somehow missed the turnoff to “sustainable work-life balance” and went straight into “wow, you need to quit everything because you’re so burnt out.”
So that’s kind of what I did.
Luckily, the summer is a slower season in personal finance (everyone is more interested in drinking on patios than budgeting, I get it, that’s fine) so it’s not like I was turning down huge projects or gobs of work or anything. But when things did start to ramp back up in the fall, I was also starting a brand-new job, and was really conscious of not ever wanting to go back to that volume of work. I wanted to be able to rest, so I could bring my A-game when I was at work (and when I was working on the projects I did decide to say yes to.)
So I got more picky, and I’m glad I did, because some truly amazing projects came my way in the fall, and I had the bandwidth to say yes to them. Plus, my priority was always to make sure that I had the time to keep posting here on a regular schedule, because my favourite part of all of this is connecting with you guys—by email, on Twitter, and right here on the blog.
And it’s hard to write about the behind-the-scenes burnout without making this sound like I had a bad year, but I want to clarify that this year was amazing, in case that got lost in translation. It was a year full of things I never thought I would achieve or do at the beginning of the year—it just happened to be a bit too much at one point, and I didn’t figure that out until I was in the middle of it.
Aside from a tweet here or there joking about 2017 being the year of hustle-slash-burnout, I’ve never really shared what was going on with me this year.
Or what wasn’t going on.
Here’s what didn’t happen last year.
Aside from completely burning out, and doing amazing work with fantastic companies, I also fully stopped going to the gym for most of the year. Yes, even after I got better about making intentional choices about my workload.
Let me tell you, it was super fun times when I decided to get back into it by doing what was a “good leg day” for me at peak fitness. Long story short, I couldn’t walk for three days.
In news that will surprise no one, I also ended up at my heaviest weight ever. Whoops.
Was any of this intentional? Of course not. But while I was busy focusing on my priorities—working more, earning more, and buying a house—I had to let other “priorities” drop, hard. Like my health.
What I learned is that if you really focus on a priority, because it really matters to you, you can do a lot in a year. A year is a heckin’ long time, and because I focused so intently on those three things, I was able to exceed basically every goal I set in those areas (except the house, it’s not like I bought three houses instead of one. Three is too many houses.)
But this year, I don’t want to focus on hustling harder, making tons more money, or buying a house.
Partially, I’m just tired. I just need to have a weekend every now and again, and I understand what that will “cost” me in terms of earnings. I’m cool with it. Consider it my two-day early retirement every few weeks or whatever.
But I also want my main focus and priority to be my health.
Luckily, that doesn’t mean I’m going to go off the rails with my money.
I’ve got projects lined up that are reasonable to tackle alongside a full-time job, and I’m learning to say no more and better. My personal money situation is basically on autopilot: I’ve got all my automatic contributions setup to work behind the scenes, my investments are totally hands-off thanks to Wealthsimple, and my tracking-my-spending game is still on point. (Shout-out to everyone participating in the Track Your Spending Challenge right now, who can all say the same!)
Now, when I look at how I’m spending both my time and my money, I have a new true-north: Is this helping me achieve my health goals?
Non-money goals are still money.
And even though they aren’t specifically money goals, I wouldn’t be a personal finance blogger if I wasn’t still aware of how much my health goals are going to impact my personal finances. It’s already shifted what I’d consider buying, and has led to a few key purchases. Specifically…
A new pair of workout shoes
A nutrition course, to learn how to not eat like a teenager (this one, and it’s virtual, so if you’re interested you should totally take it with me!)
A pair of wireless headphones for the gym (these ones, after so much research that I gave up and said “they’re the right colour and cheap enough that I don’t have high expectations”)
Total spending on health stuff so far this year? $332.06. I’ll (obviously) keep tabs on my health spending and update you guys on how it’s going over the course of the year, and it might even work its way into a post or two.
Of course, there are ways you can be hella frugal with your health, and you don’t need any expensive gear or plans to get started—this is just me recognizing that it’s an area I want to invest in, and I’m making purchases based on what I know will keep me happy and motivated to keep moving my body (and feeding it well).
Plus, I’m making them instead of other purchases, and all of it’s either coming out of my general “fun” budget, or is covered by my work benefits. (I’m very lucky to work for a company that gives people flexibility in terms of what kind of benefits they choose to claim, and how they want to use their benefits account. We use League, which is pretty much the coolest platform ever.)
I’m also eating way more vegetables, and I’m doing a modified Dry January, both of which have overall positive impacts on my spending. If you’re interested: I’m not drinking until my birthday (January 26th, you should send me cute dog photos on Twitter, it’s A Thing) and then when the nutrition course kicks off on January 29th, I’m back on the Dry-End-of-January-and-most-of-February train. I’ve always found that Dry January, which I’ve done for four years now, is a good reset to help me be more intentional with alcohol, and I think that this is a great manifestation of that. I’d love to celebrate my birthday with a glass of wine, and it’s no big deal to me to commit to another few weeks without alcohol.
So if 2017 was the year of hustle, 2018 is the year of health.
There are a lot of benefits of budgeting, and tracking your spending—I mean, obviously, which is why I won’t shut up about them.
But one of the biggest, that I don’t talk about as often as I probably should, is that when you know how much you spend, you also know how much you have left over every month. And when you have money left over, you can do fun things like give it to charities you care about.
True confession: this year is the first year I feel like I’ve Gotten It Together with my charitable giving. I knew how much I wanted to give, and I made a point of setting up an automatic monthly contribution to one of my favourite causes (and next year, I’m adding another one to the list).
What prompted me to do it? (You’re about to think I’m more of a nerd than you already do, trust me.)
Filing my taxes.
See, I love filing my taxes, and if you didn’t know this, you actually get a tax credit in Canada for donating money to charity. (This might be true in other countries? I can’t know more than one tax code pals, no one who isn’t a professional tax person should ever have to do that—and if they do, you should pay them a lot of money probably.)
On top of that, if you’re a first-time donor, you get even more tax awesomeness for the cash donations you claim on your returns—and this is, according to the information available, the last year to claim that bonus.
This is the last year to claim the first-time donor super credit on your taxes.
And yes, it is officially called the First-Time Donor’s Super Credit. Anyone else picturing a tax calculator wearing a superhero cape right now? Just me? Cool.
Anyways, here’s how it works.
You claim a cash donation to a charity on your tax return (tax software will almost always make this painless)
AND you (or your spouse or common-law partner) haven’t claimed a charitable donations tax credit for any year after 2007
THEN you get an extra 25% of your money back, on top of your regular tax credit, on your cash donations up to $1000 this year on your tax return
And if you’re wondering why I keep saying “cash donations,” it’s because this doesn’t count against donation credits for donating things—just money.
Here’s a quick example to show you just how big of a deal this is for first-time donors.
If you donated $1000 in cash this year and your income was $50,000 (aka my favourite it’s-not-absurd-to-think-a-millennial-could-earn-this-salary number) you’d normally get $262.00 of that money back on your federal taxes. That’s according to this calculator from the CRA.
If this was your first time claiming a donation on your taxes? You’d score another $250 back on your tax return thanks to the first-time donor super credit.
You would effectively get back more than half of the money you gave to charity this year.
If that’s not a reason to add “give back” to your holiday to-do list, I mean, I don’t know what is, especially since this is the last year you can claim that first-time donor bonus.
A word of not-advice
As usual, my standard disclaimer is that taxes are hella complicated, and none of this should be considered tax advice for you. It’s just information I thought would be handy, and that I surprisingly enough had no idea was happening this year. (Hey, I’ve only been doing my taxes myself for the four years this first-time donor credit has been a thing, I thought it was a forever deal! It is not, apparently.)
So in the spirit of not-advice, I want to not-advise you to take advantage of the first-time donor credit if you’ve got some extra money lying around and want to get even more of it back at tax time. I’d also not-advise you that the deadline to make any donations you want to claim on your 2017 taxes is December 31st, 2017.
And then I’d actually-advise you to get intentional with your charitable giving, figure out which causes are close to your heart, and set up a recurring monthly donation to them starting in January.
P.S. If you’d love to donate to a cause monthly, but you have no idea where your money goes, I’m going to be running an OG Half Banked program in January: the Track Your Spending challenge. It’s one of the more painless challenges you can do in the new year, since it’s basically just observing your spending, and it’s totally free—and you’ll have all the support you need to actually follow through.
You can sign up to get notified when it launches right here! This is also my last post until the New Year—January 10th, to be specific—so happy everything, merry always, and may you enjoy a sinful amount of eggnog this holiday season (it’s basically melted ice cream, and I’m drinking it in my coffee right now, don’t @ me).
Since Day 1 of writing Half Banked, I’ve wanted this to be a space where money was a normal thing to talk about, ask questions about, and understand—because that wasn’t always the case when I started learning more about my money.
Whether it was a bank telling me I didn’t have enough money to invest (untrue) or another blogger writing a post that made me feel horrible for making what they considered “less valuable” purchases with my money, there were a lot of spaces that didn’t feel welcoming or comfortable.
But that sucks, because money is not this rarified thing that only some people need to know about or understand. It’s not just for other people—it’s for you too, no matter who you are.
That’s why I am beyond thrilled to be teaming up with EQ Bank and their new initiative, Stnce, to help more women access financial literacy and the confidence that comes with it.
What is Stnce—and how did it come about?
The good news is, this isn’t a post about how women are in desperate need of more financial literacy training (although I’m going to keep writing breakdowns of the basics, because hi, no one is born knowing how to do money).
When EQ Bank did some research, they found that while there’s a bit of a gap in financial knowledge between the sexes, the more important (and unnerving) gender gap is in financial confidence.
That’s not great, because most of us will be the sole financial decision-maker at some point in our lives. Or at multiple points!
So instead of stopping there, and releasing an “Oh, isn’t that interesting” research report, they decided to do something about it.
Stnce is the result.
It’s “an initiative that sees a disconnect between competency and confidence, especially when it comes to personal finance,” and we’re taking active steps to do something about it.
Stnce [The First Roundtable - Vimeo
“We don’t have a knowledge issue, we have a confidence issue,” says Kim Kukulowicz, Vice President, Equitable Bank. “This is a problem. In any life situation, women should be in charge of their financial destiny. And the reality is, many of us will have to manage on our own at some point. So, we need to make sure women are confident enough to take their financial well-being into their own hands, pass on that confidence and knowledge to the next generation, and be financial role models for their kids.”
A bit more about the research, though, because it’s fascinating
The most interesting thing that I learned from the research is that women’s financial confidence isn’t actually correlated with their financial knowledge.
Let me give you an example. At the kickoff event, we were talking about the survey results, and specifically, how a staggering 41% of women are “hidden gurus” of personal finance. They had high financial literacy scores, but reported low financial confidence in their abilities.
Even worse, literally not a single woman was confident enough to say she got all of the answers correct—even when she did.
So, as you can probably imagine, our discussions really focused on building confidence. Of course, financial literacy is important, and a must-have, especially for younger women, and women who are facing financial questions they need answers to ASAP. But how can we help make women financially confident?
In my experience, it’s by creating spaces and resources that feel like they’re for you.
So much of finance and financial media can feel intimidating, and like it’s not “for me.” But there’s no reason any woman should feel more comfortable reading about baking cookies (my real self) or makeup (my ideal self) than about RRSPs or taxes or wills or starting a business.
And there’s no reason that those should seem like boring topics, or be boring to read about, either.
So that’s where Stnce comes in
I grabbed this directly from Stnce’s website, because I want to scream it from the flippin’ rooftops:
“Finance should be easy to talk about – a casual topic that can be discussed over brunch.”
Yes yes yes a thousand times yes.
This is just the beginning for Stnce, and I’m so excited to be involved as an ambassador for a project I feel so strongly about. As Stnce grows, it’s going to include…
An e-learning centre, because sometimes, you just want to chill out on the couch with wine while you learn about money, you know?
A tool kit to help women tackle their finances, and
An event calendar for the community, because sometimes, you just need to hang out IRL with people who can answer your questions, in a space that feels like it’s for you
And I can’t wait to be a part of it. Did I say that already? Whatever, I’m going to keep saying it, because I genuinely could not be more thrilled that this is an initiative that a major Canadian bank wants to support and spearhead.
If you want to get involved, here’s what you can do ASAP.
Check out Stnce’s website, and sign up for updates on the project
Building a gift guide for the personal finance community—a community where half of the time, gifts are typically reduced or forgone altogether—is a weird beast, pals.
But since I’ve been thinking about it for a while, this year is the year I got my act together and actually did it.
Here are 12 gifts that you can either give to the personal finance nerd in your life, or give as the personal finance nerd in someone else’s life. Some are both! (Because there’s nothing more frugal than a multipurpose gift, you know?)
And unlike most of these guides, this isn’t a nebulous list of ideas and concepts. Sure, some of them are a bit more vague, but there are actual things you can wrap in here, if that’s what you’re into.
Pre-S. Anything marked with a * is an affiliate link, so I’ll get a teeny commission if you buy it, at no cost to you!
For the person who still thinks investing their money is going to be way too hard (or for the new parents who haven’t set up an RESP for the same reason)
Yes, I’m minorly obsessed with Wealthsimple*, but it really is about a zillion times easier than you think “investing” is going to be—and you can give the gift of investing with their new gift cards*. They start at $50, and whoever you’re giving them to can experience how easy redeeming them, and starting to invest, is from the comfort of their couch. (Plus this is the only gift that will get more valuable over time, unless you’re like, giving them v. fancy Lego they’ll keep in its original packaging.)
For your early-20s sibling, cousin, friend, or random acquaintance who would “never” read a personal finance book
Erin’s book, Broke Millennial*, is my new go-to for anyone’s (especially any millennial’s) first foray into personal finance. It’s very choose-your-own-adventure, so they won’t get overwhelmed, and she drops some serious wisdom for every point of your financial journey. I learned a thing or two!
For the person who needs a bit of Cait Flanders’ wisdom in their life, plus a lot of tracking their spending
I did Cait’s Mindful Budgeting program over two years ago, and I still use the things I learned on a really regular basis. If you know someone who could use Cait’s totally-approachable advice on budgeting, plus a way to keep track of their spending on a regular basis, you can grab a Mindful Budgeting Planner for 2018 here (it’s half-planner, half-get-your-budget-in-shape course).
For the Toronto- or Vancouver-based millennial in your life who thinks they’re never going to be able to buy a house
I will admit that no, I have not read this one yet, and yes, I did buy a house, but everything I’ve heard about this book is amazing, and I fully agree with the concept. Home ownership is not the only path to wealth, and it can be a majorly flawed one at that. Grab this book* for any committed renters in your life—they’ll love that it’s specifically speaking to their financial situation.
For the person who wants to make a statement with their coffee mug
You could even up-level the gift and include a french press, if you know they need a kick in the pants to do a bit more at-home coffee and scale back to fewer lattes (never no lattes, but I can get into fewer lattes). I have this stainless steel one* after sacrificing multiple glass ones at the altar of my inherent clumsiness.
For the 30-something who’s just starting to look at their money and is totally overwhelmed with how much they need to learn and do
Listen, no one thinks that reading about insurance is going to be easy or fun, but Preet Banerjee somehow made it both. This book is a must-have* for anyone who’s feeling overwhelmed at the amount of financial stuff they have to tackle, and it gives you clear, concrete steps to take in the face of what can seem like way too many financial options (and it makes it really easy to know which financial products you need, and which ones you can take a pass on).
For the person who wishes they could go stock up on bulk savings, but wouldn’t really use a Costco membership
Maybe they don’t live near a Costco, or maybe Costco just happens to be the cheapest place to buy one big thing they’re looking to pick up. Whatever the reason, you can actually spend a Costco gift card whether you’re a member or not, and you can use it to buy anything in the store. For bonus points, especially if they’re a car-free human being, add in a voucher for one free round-trip car ride to Costco for when they go to spend their gift card.
For the committed over-shopper in your life (but only one you know really, really well)
Now, don’t show up with this book out of the blue, because it’s a… let’s say, sensitive gift to receive. But if you have a best friend, or a really chill close relative, who could use a guide to doing a serious closet purge, The Life Changing Magic of Tidying Up* is the bomb dot com. It got me to give up things I thought I’d keep forever that I didn’t even use or like anymore.
For the person who constantly complains that food is way too expensive
Good food doesn’t have to be expensive, and one of the ways you can help someone realize that $$$ doesn’t equal taste is by gifting them the Budget Bytes cookbook*. If you want to amp up the gift, toss in a set of reusable containers to help them store their leftovers* and/or pack their lunches* for the week.
For the person who “has everything”
Nice socks. Unless they’re already a Sock Person (in which case you would have heard about it already, and been made to admire all of their new-and-fancy socks on a daily basis at the office) socks are pretty low on the list of things most people will buy themselves. Get them a pair or three of really nice, warm socks this winter—I’m partial to the Kirkland brand of wool socks (they’re so stretchy and warm!) and these classic wool socks from Province of Canada, that feel like someone hand-knitted them just for you.
For the person who loves to hear a good story (and is cool with delayed gratification)
I just really like Cait’s stuff, OK? I cannot wait to get my hands on her new book, which you can pre-order right here*. Since it won’t be released until the new year (January 16th, specifically) you can write down the gift in a unique card, like these ones from Maker House. No offence to Amazon, but that’ll be way better than a print-out of the pre-order.
For the side hustler or small-business owner in your life
The book that made the biggest impact in my life in the past year is Profit First*. It completely changed how I handle my business finances, even as a side hustler who isn’t pulling in the big bucks. It scales up or down to be applicable to any business, and is accessible enough that everyone will like it—even if they aren’t usually into reading about business finances.
If you want to level up the gift a bit for side hustlers, toss in a Passion Planner. It’s the planner I use to keep my tasks as organized as my finances, and it’s specifically great for people who have work AND second work to manage: the bottom of each page has two to-do lists, so you can keep your tasks organized.
Sure, one of them says “personal,” so I guess if you have a ton of personal errands, that works too.
Looking for more great personal finance gift ideas?