piece — expecting maximum results from minimal work.
But no one is saying that you can become a master of your finances the lazy
way; that’s like saying you can get healthy by doing a few sit-ups a week.
I am, however, being realistic. We’re busy. We’re also procrastinators. And
frankly, money matters can be intimidating. We’re not all Warren Buffett
So, here are a few things that you can do to get you started — minimal work
that will get you some sort of result, which is better than nothing.
No-fuss savings strategy: Here’s a strategy that’s easier than
hoarding all of your coins or putting a five in a jar every time you swear. Set
up a separate account and have money automatically deducted into it every
payday. You don’t have to do anything. You won’t even miss it.
“You should save at least 10% of your take-home pay,” says Myron Knodel,
director of tax and estate planning at Investors Group. But you might have more;
you might have less depending on your income, your bills and what you think you
“need” to spend on. The important part is getting into the habit of saving.
Once the savings has been allocated, spend the rest as you wish. Now sit back
and watch your stockpile grow.
Lazybones budgeting: A spreadsheet to a money minimalist is like a
plain spinach salad to a junk food junkie. To avoid creating one yourself, try
using Mint.com or another online money management tool;
the website/app combines all of your financial accounts in one place, tracks
your spending and helps you create budgets.
For tech-free simplicity, do this calculation: income minus fixed expenses —
housing, car/public transit, food, etc. — and consider how you want to spend the
rest (if there’s any left).
Now if your money just disappears as if some sort of reverse tooth fairy is
picking your pockets, keep all of your receipts for one month. “Take all of your
receipts and look at what you spend,” Mr. Knodel says. “It could change [your]
patterns in the future.”
If you have a problem with budgeting and spend more than you should, consider
setting up a separate spending account.
If you rely on your credit card, MasterCard inControl, an online program,
helps cardholders establish their own spending limits such as where, when, how
and for what the card can be used and sends alerts if you exceed your
Hands-off investing: Do monthly withdrawals into an RRSP or TSFA where
someone else makes all of the investing decisions. This requires a little work
in the beginning such as talking to the right advisor; she’ll ask you about your
plans, your risk tolerance, etc. Again, set up some automatic withdrawals.
“The money comes out of your bank account and it goes right into your RRSP
and it goes right into the investment that you’ve chosen or that your investment
advisor has chosen. It can be as little as $25 or whatever you can afford,” says
Larry Moser, am Ottawa-based regional sales manager for BMO.
Sure it will cost you advisor fees whether it’s flat fees, a percentage of
your portfolio or management and operating expenses. But that’s the price of
putting your money to work (while you do little to nothing).
Here’s where procrastinating hurts you. The earlier you start, the better. If
you’re 30 and invest $100 bi-weekly until you’re 65 (assuming a 6% rate of
return), you’ll have $309,678.94. If you’re 45 and invest $200, you’ll have
$200,679.39 at 65. And if you’re 50 and you put $300 away, you’ll have
Easy estate planning: I understand why you’d put this off: who wants
to plan for his or her own death?
But there are some things you can do without visiting a lawyer and writing a
will. If you’re a young couple, for example, with minimal assets, consider the
assets that will transfer automatically to the surviving spouse such as the
jointly owned home, says Tom Carter, a legal instructor at Grant MacEwan
University in Edmonton, and author of Write Your Legal Will in 3 Easy Steps.
Then make sure you designate a beneficiary for your insurance policy. If your
spouse is the beneficiary for your RRSP and tax-free savings account, the funds
will transfer tax-free.
If your circumstances are more complicated (blended families, business
ownership, etc.), to avoid a Jerry Springer-worthy brawl over your stuff, call a
lawyer. It might cost $800. “A good estate lawyer will walk you through the
whole process. You don’t have to get bogged down with thinking you need to know
all of the answers before you begin,” says Melanie McDonald, a Calgary-based
wills and estates partner at Borden Ladner Gervais.
She’ll also help you choose a power-of-attorney to handle your stuff should
you become incapacitated. This person will tell the doctors what to do and
decide where you’ll live.
Debt management for dummies: For most people, your biggest debt is
your mortgage. At the least, make bi-weekly payments on your mortgage. You end
up making 26 payments versus 24. You’ll pay off a $250,000 mortgage at 3.79%
three years earlier (21.9 years versus 25) and you’ll save almost $20,000 in
Our low interest rates are rising. If you are thinking about getting a
mortgage, now may be a good time to get a fixed, locked-in rate. “It may be a
good idea to go into a financial institution and talk about locking in,” says
If your biggest debts are on your credit cards, it may be easier for you to
consolidate your debts into one payment. “You’d go to your financial institution
and say, ‘This is the amount of credit card debt that is outstanding. I’d like
to establish a line of credit with you.’ You’d want to negotiate the rate of
interest…and don’t get yourself into anymore credit card debt,” Mr. Knodel
Source: www.FinancialPost.com Written by leong
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