Mar
02
Have you ever opened your credit card statement and felt like you really messed up again? My hand’s raised ;). Those feelings of regret can become overwhelming. Even paralyzing. I know about regrets first hand. Take my Pink Floyd box set I got when I was 16. Bought it, loved it, couldn’t afford it — and regretted it. You can swap “Pink Floyd box set” for “fancy dinners” or “skis” or “sports car” — all of those I regretted too. There’s one thing that all these “financial regrets” have in common — that sinking feeling that I will never change. But when harnessed the right way, regrets can be healthy. Seth Godin put it best when he said: “If regrets about yesterday’s decisions and actions help you do better work today, then they’ve served a useful purpose.” I’ve put together 3 steps that will help you move past your financial regrets and take action. Step 1: Forgive Yourself Sometimes the hardest person to forgive is yourself. Like my eight week sugar-free streak that was over when a Snickers bar mysteriously ended up in my throat. Okay, it wasn’t so “mysterious.” Next thing you know I was wolfing down Doritos […]
Nov
28
If I gave you $500 a month to put towards your debt, what’s the best way to use it? Should you chisel away at the debts with highest interest rate? Or knock off the smaller ones first? I’m going to take you through two strategies to tackle your debt – Debt Avalanche vs Debt Snowball — and I’ll show you which one works best. The answer might surprise you. Method #1 – Debt Avalanche This strategy prioritizes paying off your debts from highest to lowest interest rates in order to minimize the amount of interest you pay. Here’s how it works: Step 1: Make minimum payments on all your debts Step 2: Allocate all extra money to the debt with the highest interest rate Step 3: Once that debt is completely paid off, focus on paying off the debt with the next highest interest rate Step 4: Repeat until debt-free Let me give you a real-life example. Imagine these are your debts: $12,000 line of credit at 4.99% $8,000 owing on Amex at 19.99% $3,000 owing on Visa at 8.75% According to the Debt Avalanche method here’s how you should prioritize where you put your extra $500 of income: Priority […]
Aug
23
Becomin’ Hip in Brooklyn Eight years ago I ended up in a wheelchair for 6 weeks. Here’s what happened… One day out of the blue my hip started killing me. I was walking like a penguin. I’m usually good at “pushin’ through the pain” but it was so bad we cancelled our weekend getaway to the in-laws. BTW, this wasn’t just an excuse not to see the in-laws…I actually really like them. Fast forward 3 weeks. I was drugged up, stuck in a chair in my Brooklyn living room, and barely able to move. If I shifted even half an inch the wrong way it felt like someone was driving a nail down my whole leg. All the pain meds in the world didn’t seem to help. My wife had to push me in a wheelchair to my MRI. I felt every little bump on the sidewalk. Do you know how many bumps are on Brooklyn sidewalks? I do. I hated every one of them. Ouch. A Stretch a Day Will Keep the Doc Away The following week I got into a top surgeon in Manhattan. He told me that my MRI showed swelling in my sacroiliac joint (SI joint). […]
Nov
12
Dear me, many years ago, Well, it finally happened; I got old. I hit the big 7-0 last week, and it has me thinking about times gone by, about mistakes I’ve made and regrets I hold. Looking back on my life – on our life – I wonder what I could have done differently to protect myself from the financial hardships I’m facing today. I wish I could go back and talk to you at 20, 30, 40, 50, 60, any of those landmark ages, so you could benefit from the financial lessons I’ve learned over the years, and share that advice with your beloved children. So I’m writing to you now to tell you everything I’d like to be able to tell my younger self. If I could, I’d ask you to read my words of wisdom carefully; I would beg you to follow my advice to ensure that you don’t fall into the financial traps that have pulled me down. When you’re 20 Life is pretty great, isn’t it? You’re young, vibrant and healthy, and it feels like everything is an opportunity waiting to happen. Even though you’re still in university, your thoughts are starting to stray beyond […]
Oct
22
When it comes to finances, it’s easy to feel lost. We all know we need some kind of budget, but we aren’t always sure where to begin. Many people start by categorizing their expenses in a spreadsheet or computer program (like Mint.com or Quicken), hoping to figure out where they’re going wrong. The problem is, simply organizing/plugging in numbers won’t solve your financial problems. Let me explain. Going over past expenses is a great way to know where you stand. It gives you a solid foundation to create a cash-flow forecast for the next year. However, what is the next step once your forecast is completed? In other words, how do you stick to the forecast? The truth is that you need both a forecast AND a budgeting system to keep your spending in line. Because while forecasting helps predict what we want to happen with our finances, budgeting provides the means to make sure it WILL happen. A Road-Worthy Analogy Imagine you want to take a road trip to the Grand Canyon. The first thing you do is map out how you’re going to get there (think pre-GPS, please). You calculate the most efficient route and pencil it in. […]
Jul
21
Chosen best of the web by Globe and Mail personal finance columnist Rob Carrick One word sums it up: Disconnected. That’s how most couples are with each other when it comes to their finances. I’m not talking about having separate bank accounts – that’s just a banking preference. What I am addressing is something much more profound: our inability to truly be honest with one another about our financial selves. Deep down, our disconnection stems from being too scared to communicate with our spouses about finances. (And no, shouting doesn’t constitute real communication!) We’re so afraid of being judged or criticized for our spending habits that we clam up rather than discuss the subject. So what can you do about it? How can you overcome the anxiety of talking about your finances with your loved one? What can you do to ease your partner’s fears of being upfront with you? Here are four tips that will help you open the communication lines with your better half so you can create a team-like approach to your finances: 1. Keep your cool If you discover unpleasant truths about your spouse’s spending, it can be tempting to confront them right away. […]
Jul
04
Avraham Byers – Special to Financial Post It was spectacular. The crowd went wild when they saw Robin Van Persie leap into the air for his gravity-defying header against Spain – a play he calls “the best goal of my career.” And rightfully so; it was truly remarkable. Scoring that goal has solidified Hollands’ Van Persie’s reputation as one of the world’s greatest soccer players, earning him the title ‘The Flying Dutchman.’ But those astonishing plays are the exception, not the rule; teams can’t rely on them to win games. At the end of the day, good defensive soccer moves are equally important as jaw-dropping goals, although they’re often given less attention. If you want to win, stopping opponents at midfield may not bring in the glory, but it’s a vital component of the game. It’s great to score five goals, but you still lose if they score six goals against you. The same is true in the game of personal finances. Just like in soccer, if you want to succeed, you need a good defensive strategy. It’s nice to bring in the big bucks, but if the money leaves your bank account faster than it comes in, at the […]
Jun
24
Chosen best of the web by Globe and Mail personal finance columnist Rob Carrick Overspending is a common problem for many people; it creates debt, anxiety and relationship problems, even among high income earners. All too often, people’s spending habits seem to rise to meet – and exceed – their incomes. So why does this happen? What compels people to overspend when they already have the items they truly need? The answer lies deep within each person’s spending personality. Recently, I read Dr. April Benson’s book I Shop Therefore I Am, and was fascinated by what the contributing authors uncover about the emotional and psychological factors influencing our buying habits. I thought it would interesting, and beneficial, to touch on the six key spending personalities they explore: image spenders, bargain hunters, collectors, compulsive shoppers, co-dependent spenders (a.k.a. gift-givers) and bulimic spenders. For most people, their spending personality can influence purchasing decisions on a daily basis, and can sometimes have adverse affects on their personal and financial affairs. If you feel your spending has a tendency to get out of control, it can be helpful to consider which personality best matches your own. As you read through, you may perfectly fit […]
May
29
Retail marketing scientists have mastered the art of seduction. They make a living by influencing your purchasing decisions and, on occasion, roping you into buying something you really don’t need. They have a myriad of analytics at their disposal, and they’re not shy about using them to tempt you into abandoning all rational behaviour and making impulse purchase decisions – the kind that result in shocking credit card bills at the end of the month. Marketing scientists have many tricks up their sleeves, but the most common way they get us to drop our purchasing defences is by provoking us with sales. Sales have a powerful allure, appealing to restrained and uninhibited shoppers alike. Running of the brides One of the most extreme examples of how far sales can drive otherwise rational people to total shopping madness is Filene’s Basement’s ‘Running of the Brides’ sale. (The reference to Spain’s ‘Running of the Bulls’ is entirely appropriate, given the frenzy this sale invokes.) Filene’s Basement is now closed, but while in business, its annual sale event attracted thousands of brides-to-be from around the world, all eager to find their dream designer dress at a rock bottom price. And who could blame them? […]
Feb
21
My grandparents had great pensions, and my parents have OK pension plans. Me though? I have none. The most I’ve been offered by any employer, is a group RRSP. It used to be commonplace for employers to guarantee their employees a specific pension payout for remaining loyally employed with the company. However, in recent years, a lot of employers have shifted the responsibility for your retirement income from their shoulders onto yours. The newer designed company savings plans are entirely dependent on your own savings and participation. These days, it’s far more prevalent for employers to offer matching programs – group RRSP’s are one way of doing this – where the employer contributes a certain amount, say $0.50 for every dollar that you contribute, up to a maximum amount. Although there are some debatable sociological reasons for the shift, one thing is certain: It is less risky for an employer to contribute to a group RRSP than it is to guarantee a retirement pension for its entire workforce. Nowadays, the common group RRSP doesn’t come with much security; the amount you receive at the end is not fixed in stone. Instead, it remains a nebulous number, dependent on interest rates, […]
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