10 Ways to Save Money

They say that if you continue to do the same thing the same way over again, you will end up with the same results.  

Here are 10 ways to save money or to get "free" money that you should consider. 

1. The 24-hour rule - Fight impulse purchases by waiting 24 hours before you buy it.

2. Comparison shop - I just purchased a new Toaster 

Oven and let my "fingers do the walking" on my computer before heading out.  I purchased the unit on sale for less than half price versus other stores and comparable units. 

3. Bundling - Bundling services gives the service provider more business in return for a better deal for you. So bring multiple services to your bank or cable company and negotiate. (I did recently and saved 30% on my cable, internet and cell phone.)

4. Pay bills on time: Paying late fees is a waste of money.

5. Use your perks: Your employer or association may offer perks or discounts. Check them out. But know your prices,sometimes you can do better on your own.

6. RRSP matching from your employer, RESP Grants, etc- Always take free money.

7. Shop with a list - the longer you spend in the grocery store, the more you spend

8. Borrow and share - for items that you only use occasionally, borrow, rent or check Kijiji or Craigslist.

9. Cut your energy usage - Turn off the lights, turn down the thermostat and don't wash your clothes or dishes during peak usage hours.

10. Weekly mortgage - If you pay your mortgage monthly, consider going bi-weekly or weekly. It shaves time and money off of your mortgage payments.

Budgeting Pays

Gordon Pape had an article in the Toronto Star recently on budgeting. The average Canadian spends their money on:

27% Housing
19% Transportation
16% Food
12% Household operations and furnishings
12% Recreation, education, reading
6% Clothing and footwear
5% Health and personal care
3% Tobacco and alcohol
based on a 2009 survey from Statistics Canada, using after-tax dollars
Most families seem to fly by the seat of their pants, which may explain why our personal debt has hit record levels. Fresh Statistics Canada data shows the ratio of debt to personal disposable income rose to 152 per cent last quarter, up from 150.6 at the end of 2011.

What’s missing from this list?
Debt Repayment – specifically credit card balances, student loans, line of credit repayments, etc.
Savings – the rule of thumb is you should aim to save 10 per cent of your income in some form or another.
So you need to add both of these items to your list.
If you already have a budget, start by comparing the average percentages to your own household allocations. If you are spending more than you should in some categories ask yourself why. See if there are some savings opportunities available and, if so, make revisions.

If you don’t know what you are spending your money on – now is a great time to start. Send me an email and I can send you a worksheet you can use to track where you are currently spending your money. Once you know where you are spending your money, you can develop a budget that you can live with.

Just remember – your budget must balance – or you end up deeper in debt.

Budgeting can result in your having more money at the end of the month (also you’ll sleep better.) So get started now.  Call me if you need assistance.

2012 Tax Tips

It’s tax time in Canada.  If you are like most people, in March you assemble all of the required pieces of paper so that you can complete your tax filing by the April 30^th deadline.  Most people who expect money back, file early, while those who owe money wait until the end of April.

In order to help you get ready, here is a list of tax tips I’ve put together, based on my readings of the “experts” and information from Canada Revenue Agency (CRA). 

To ensure that you maximize your deductions, you should always get tax advice from a qualified tax practitioner.

1. Ontario healthy homes renovation tax credit. A new refundable tax credit of 15 per cent of eligible expenses is available for Ontario residents over age 65 who spent money to make their home safer. The deduction is also available to those who live with a family member who is a senior.  

The type of eligible expenses includes changes to make a first-floor or secondary suite for a senior. It also includes grab bars and handrails, wheelchair ramps, walk-in bathtubs, no-slip flooring and hands free taps and hand held showers. Wheelchairs or walkers are not deductible, nor are general repairs incurred to increase the value of the home. 

For more information check this link

2. New Family Caregiver Amount. This is a $2,000 bump to the normal credits if your spouse, child, or other adult dependant has a mental or physical infirmity. Verification is required to indicate when the condition started and its expected duration. Make that appointment quickly to file your returns in time, and remember, if the doctor charges you a fee, claim it as a medical expense.

Additional information can be found on the CRA web site 

3. Are you claiming all of the medical expenses that you are eligible for?  They can be grouped into the best 12-month period ending in the tax year. They can be claimed by the spouse with the lower income, but must exceed the lesser of $2,109 or 3 per cent of your net income.

New medical expense claims. For those who travelled out of their local communities for medical care, a “simplified method” of claiming auto expenses is possible. For a full list of eligible items – check the CRA web site   
 
4. Your safety deposit box is an often missed tax deduction. It’s not the largest amount. Check out the eligible carrying charges and interest expenses.

5. Disability Tax Credit is a lucrative tax credit. It is claimed by someone who is markedly disabled on a permanent basis, or their supporting individual. Especially vulnerable are those with progressive diseases, like Alzheimer’s or cancer.  A doctor or other qualified healthcare professional must fill in form T2201, the Disability Tax Credit Certificate. In many cases, the information provided by the healthcare professional may indicate several years of impairment. Previous tax returns can be adjusted for the tax credit for each year that the Disability Tax Credit Certificate has been approved by CRA. 

To obtain a Form 2201 to apply for the Disability Tax Credit – click here 

For more information about programs available to people with disabilities – click here 
 
6. Qualifying moving expenses include real estate commissions, which can run into the five figures are the most lucrative deduction. You have to move 40 kilometers closer to a new work or business location where active income is earned. If your not sure if your eligible   or what expenses you can claim – click here  

A list of tax relief measures for Canadians are listed on the CRA web site – check the list out.
 

CRA is encouraging Canadians to file electronically, so they have stopped mailing out personalized tax return forms. You can still pick the T1 up at Canada Post or Services Canada or call 1-800-959-8281.

Remember if you Netfile, you must keep all receipts for 6 years.

Where to Find Help with Your Canadian Tax Return

Questions about deciphering the Canada Revenue Agency’s forms? Wondering when you will get your income tax refund or your GST credit? Here is the contact information you need, including toll-free phone numbers, to get the answers you want:

CRA Web site 

•      Have an income tax question? Call  1-800-959-8281     
•      Wondering where your refund is? Call   1-800-959-1956   
•      Waiting for your GST credit? Call     1-800-959-1953   
•      Waiting for your Canada Child Tax Benefit or Universal Child Care Benefit? Call  1-800-387-1193 

Virtual Shoebox 

 

The Canadian Life and Health Insurance Association Inc. has developed an extensive Virtual Shoebox. It is a document that encompasses an inventory of all of your personal and household financial information.   If you have ever had to go through someone else's documentation after they became sick or died - you would make sure that you kept a document like this up to date.   You can get the form on line (click here) or I can get you a hard copy (if you prefer). Just send me an email with your mailing address and I'll send it off to you.

Updates to Group Insurance

Group Insurance Plans

2012 has seen a number of changes to your group insurance plan that you should be aware of.

Taxation

Disability premiums have been an employee paid benefit (or a taxable benefit if paid by the employer) for many years.  In 2012, the CRA changed the rules for Life and AD & D (Accidental Death and Dismemberment) benefits.  They are also now a taxable benefit if paid by the employer. However, the health and dental premiums still are not a taxable benefit.  That is why if the employee and employer share the cost of the benefit, the employee pays the life, AD & D and disability premiums and the employer pays a larger percentage of the health and dental premiums. 

For more information  check out this publication on the CRA web site on taxable benefits.  

If you are an employer, bookkeeper or accountant pages 40 and 41 includes a table that summarized all the information, including which benefits you need to deduct CPP and EI or include the GHT / HST and what code to use on any T4s that you need to issue.

Travel Insurance

In December 2012, Manulife and Desjardin clarified  the rules for out of province travel insurance and many of the other insurance companies will be making similar clarifications to their plans in the future.  The issue is pre-existing conditions and whether they are stable.

Individual travel plans have a clause that states that pre-existing conditions are covered if they are stable for 90 to 180 days (depending on the age of the client).  Snowbirds are aware of this clause and see their doctors as soon as they arrive back home, so should there be a change in their medications, they qualify for travel insurance the next winter. 

The insurance companies consider a condition to be not stable should there be any change to the medications you use or should you visit the doctor because of an issue related to that condition.  Note – you would be covered for anything not related to that condition.

Until recently, if you were on a group plan that had travel insurance coverage, you were exempt from that stability – but that is changing.  If you plan to travel and have had any changes to your medications, you should check witn your insurance company to see if you are covered.

The Toronto Star ran an article on travel insurance just before Christmas.  In November 2012, they also ran an article on 10 things you need to know about travel insurance that you may want to read as well.

The trials and tribulations of a new phone and a happy ending

My experience going from an iPhone to an Android phone

In November, I was the proud owner of an iPhone 3 and it was time to upgrade.  After a lot of discussions, I decided to purchase a Samsung Galaxy S3. I made the decision based on the flexibility of the phone and the great screen.  I incorrectly assumed that I would have little or no learning curve in making the switch.

Surprise Number 1 – with the iPhone, if I downloaded an email onto the phone before I deleted it from the email server, it stayed on the phone.  With the Galaxy, as soon as the message was off the server – like magic, it disappeared from my phone email.  Solution – I changed my Outlook setting, to leave the message on the server.

Surprise Number 2 – I use Outlook as my database to manage appointments and to keep track of my contacts.  In my case – I keep electronic notes on my clients, so the ability for Outlook to sync with my phone is critical.  With my iPhone, I used iTunes to sync my contacts and calendar information.  Samsung has a program as well – Kies.  However, Kies did not carry over any calendar items tied to a client.  In addition, instead of integrating new notes in a contact, it just duplicated the contact.  It took me hours to clean up my Outlook database!

Someone suggested, that I use my Gmail account and sync Outlook to Gmail and Gmail to my phone.  It worked for my calendar, but not for my contacts.

After a lot of online research, I decided to try CompanionLink (on my computer) and DejaOffice (on my phone – the app is in the App Store).  DejaOffice was a free app.  CompanionLink cost me $50 for a one time licence (less expensive than using Microsoft Exchange, which has a monthly fee).  It syncs with my Outlook, but also works if you use any of the other CRM programs (including Google, Act, etc.) and works for Androids, iPhones and Blackberrys. For those of you who are Mac users – there are also Mac options. So now everything syncs effortlessly.  (The other solution would have been to use Microsoft Exchange and my email would have been synced as well.  However, I did not want my contacts personal information stored in the Cloud.)

I am now the very happy owner of a Samsung Galaxy S3 :)