Wednesday, January 25, 2006

Personal Cashflow Statement - More than a Budget

When trying to save money, everyone dreads the thought of being put on a budget.

While a budget s important in knowing where your money goes, a Personal Cashflow Statement helps you understand where your money is coming from and might be helpful in improving your savings.

In looking at income, take the time to understand the source deductions on your paycheque, and make sure you are not paying too much. If you are getting a tax refund, this means you've paid too much tax and are lending the Government your money without interest. Money that you could put to better use and collect interest or pay down debt.

A cashflow statement might also uncover opportunities to shift investment strategies and pay lower taxes on investment income.

Monday, January 23, 2006

Debit Card Savings Plans Help You Save Money

There is an interesting program offered by Bank of America to encourage use of debit cards.

We all know that debit is better than credit but, according to the Keep the Change Program Bank of America is putting more money in your bank account.

How it works is when you make a purchase with your Debit Card, Bank of America will pay you the difference between your purchase and the next highest even dollar ammount. Lets say your purchase is $5.49. Under the Keep the Change program, Bank of America will pay you $0.51 and deposit it to your savings account. To make this even better, they will match your keep the change payments for the first three months.

Now why would a bank give away money?

Well...the prospect of getting a free dollar on a purchase, the reality is most products ring in closer to $x.97 or $xx.99 which means the real difference is a matter of pennies so the net savings effect is marginal.

Shifting purchases to debit cards streamlines the transaction costs for the bank and save them millions in handling fees.

Thursday, January 19, 2006

25% of Canadians Raid Their Registered Retirement Savings Plans for Quick Cash

A recent survey conducted by Scotiabank shows that almost 25% of Canadians are using their RRSP savings to meet everyday expenses or significant expenses like homes or education.

The Howared Kabot, national director of financial planning for Scotiavank is quick to point out that "Taking money out of an RRSP should always be a last resort as the funds will eventually be taxed at the investor's highest marginal rate."

If you find yourself looking at your RRSP to meet day-to-day commitments, consider restructuring your RRSP contributions so that you have the cashflow on hand to meet your expenses rather than facing an increased tax bill due to early withdrawls.

Wednesday, January 18, 2006

Understand costs in Precious Metals Transactions

With the rise in Gold prices lately, I have noticed an increasing number of companies selling Gold, Silver and Platinum as an investment vehicle.

While some people may be attracted by the prospect of owning a relatively liquid physical asset like Gold, there are a few things to consider before you start buying bars of Gold.

Yes, Gold is a nice asset to hold, but only at the right price.

Consider the following:
Dealer Commissions
Financing Costs - Some dealers will provide financing for up to 80% of the value which can place you at risk if the price falls.
Storage Costs - Make sure you understand what your dealer is charging to store your metals if you do not take deliver.

Remember, these costs can reduce your ROI and generally make investments in metals unattractive for most.


Precious Metal Investment tips

With the rise in Gold prices lately, I have noticed an increasing number of companies selling Gold, Silver and Platinum as an investment vehicle.

While some people may be attracted by the prospect of owning a relatively liquid physical asset like Gold, there are a few things to consider before you start buying bars of Gold.

Yes, Gold is a nice asset to hold, but only at the right price.

Consider the following:
Dealer Commissions
Financing Costs - Some dealers will provide financing for up to 80% of the value which can place you at risk if the price falls.
Storage Costs - Make sure you understand what your dealer is charging to store your metals if you do not take deliver.

Remember, these costs can reduce your ROI and generally make investments in metals unattractive for most.

Monday, January 16, 2006

Minimum Payments Accumulate Maximum Debt

With the Credit Cards starting to mount after the Christmas shopping rush, many people will choose to try and keep everyone happy by paying the minimum payment on their credit card balance.

While this might sound like a great idea, the interest quickly accumulates, forcing you into greater debt and extending the time for you to pay off your bills.

January is the time to make a concerted effort to consolidate your consumer debt and start out with a financial plan that will get you out of the cycle of high interest payments.

If you lack the cash to pay off your credit card bills, consider a home equity line of credit that bears a lower interest rate AND cut up your credit cards.

If you really need a credit card for personal use, look into reducing your limit or a prepaid card.

This strategy will get you lower interest payments and reduce the likely hood that you'll be in this sort of bind again.

Financial literacy rate gets a "D"

The Kansas City Star ran an interesting article on personal finances that outlines the need for financial literacy amongst Americans.

Reporting on a survey by Opinion Research Corp. for the Consumer Federation of America and the Financial Planning Association, the article points out that only half of consumers in the survey understood that “personal wealth” refers to financial and tangible assets minus consumer debt.

Friday, January 13, 2006

2006 Hybrid Vehicle Tax Incentive...But is there any real Benefit?

A Recent article at MarketWatch identifies a new tax credit strategy designed to encourage the purchase of new hybrid vehicles. While tax credits are great, going out at taking on new debt just to get the tax benefit is not. In addition, the total environmental life cycle cost of buying a new car should be examined closely. The energy and environmental cost of building a new hybrid will likely negate any energy savings that the car would generate. So...Unless you are taking an old clunker off the road, the hybrid purchase may not generate the desired environmental benefits.

Hitting the Jackpot...Lottery or Learn to Save

There is an interesting dynamic when it comes to money management that, often works against those who need it most.

For many low income people, the thought of financial independence is not a tangeable goal and the only way to can picture accumulated wealth is from a Lottery winning.

The reality is, if you have enough time and extra monthly cash, it is entirely possible to generate over $1,000,000.00 in savings. Use our Investment Growth Calculator to determine how much your savings will grow.

Britons Saver ...Americans Spendthrifts

Perhaps it is just New Years financial resolutions but, a report out of the UK indicates that 37% of people are looking to increase their savings rate in 2006.

The survey quoted indicates that 55% of people save on average, 7.16% of their monthly income. This number is quite remarkable when compared to the personal savings rate in the United States which, according to the U.S. Department of Commerce comes in at close to -2%.

Tuesday, January 10, 2006

Canadians Biggest Financial Concern is Retirement Savings

According to a recent survey by RBC, 38% of Canadians identify saving for retirement as their biggest priority while, 28% are concerned about making regular debt payments, 27% are concerned with simply trying to keep their head above water and 25% focused on saving for a rainy day.

These numbers paint an interesting picture but a couple of others in the survey put this into perspective. Of those surveyed, 44% are debt free while 46% who own an RRSP say retirement savings is a top priority.

While the survey states that 65% of Canadians have an RRSP, I would question the validity of this number as 55% of respondents are concerned with simply paying the bills. If this number is indeed accurate, it indicates that there are a number of people setting money away for a rainy day when it is raining right now, and this money could be put to better use paying off consumer debt today.

Monday, January 09, 2006

Settlement Funding...Cash Now from Your Future Payments

The rise in consumer debt has given rise to a new debt reduction strategy that you may regret for years come.

If you have an annuity that provides you with regular payments, Settlement Funding companies may tempt you with an upfiront cash payment inlieu of payments over time. There are a number of factors consider when looking at such an offer.

An properly structured annuity will provide you a guaranteed rate of return.The main questions you must ask when looking at selling your annuity to a settlement funding company is what is the discount rate the settlement company is offering you and what kind of guaranteed return can you generate with the lumpsum money.

A Cure for YourChristmas Shopping Hangover

As the christmas tree goes out and the kids go back to school, the bills for your Christmas endulgences begin to roll in.

Now is the perfect time to look at all your finances and get a better understanding of where your money is going and how to save more. The first step is to list and rank ALL current debts and bills. Include balances, due dates, interest rates and minimum payments.

Prioritize your debts and focus on paying those off with high rates and low balances. Once you have cleared off the debt carrying high interest, strike that off the list and move to the next highest interest rate account.

Think about shifting any extra cash flow into paying off your consumer debt. While now is also the time for purchasing retirement savings plans to mitigate your taxes, look closely at the investment return you would need to generate in order to pay off those credit cards.

Use your New Years resolution to clean house to generate some extra cash through a garage sale or ebay. Clearing out unwanted items can be a cathartic experience and could even put some money in your pocket.

Wednesday, January 04, 2006

Save on Cell Phone graphics

As cell phone technology advances, color phones and downloads has lead to a new revenue stream for carriers as they charge significant dollars to those who want to pay to change the picture on their phones.

If you'd like to get your own custom pictures on your phone without going out and getting a camera phone, check out Pix2Fone.com which was found over at Luddite Lounge and save on picture downloads and cellphone costs

Sunday, January 01, 2006

Cell Phones for the Kids...

Until recently, I did not see the need for teenagers to have cell phones, however, this perspective has changed in recent weeks.

With some of our Kids' friends racking up phone bills in excess of $250/month, the need for prepaid cellphones for kids has really hit home.

As someone who worked in the cellphone application field, which has caused me to become somewhat of a luddite, I have come to really understand just how powerfull the security pitch the carriers are making to parents is when the boy missed his bus one night and we could not track him down.

This precipitate the prepaid cell phone gift this christmas.

This wonderful tool gives us the ability to keep his calls on a budget and the piece of mind that a cellphone brings.

When it comes to a cellphone for personal use look closely at the prepaid plans.
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