Economic Recovery Not Only Slow for Canada
While many watch holding their breath, the economic recovery seems to be stalling for our neighbours to the south. With an unexpected number of new claims for jobless benefits combined with slowing activity in the manufacturing sector, many economists are concerned the economy is not only stalling, but will take another downward dip back into a lighter form of recession. This risk has caused many investors concern, sending share prices plummeting. Not all analysts, however, share this fear.
John Canally, an economist with LPL Financial out of Boston says, “Just because the economy is slowing doesn’t mean it’s going into a recession, that’s the nuance the market has not figured out. The market has pretty much fully priced in a double-dip recession; at this point we don’t agree.”
But according to the U.S. Labour Department, it was hoped the market would see numbers decline to 452,000, instead, state unemployment claims have risen by 13,000, closing the official number at 472,000. At the same time, stocks on Wall Street have fallen for the fourth straight day in a row.
Nearly eight million Americans lost their jobs during the recession, something Obama promised to address, but as the unemployment rate remains high, it is proving to be a sore spot for the Democrats. Even though layoffs have slowed from last year, many business owners are sceptical when it comes to hiring. Many Americans still doubt the strength and recovery of the recession.
A report released during the last week of June showed only 13,000 private-sector hirings were added to the numbers, a disappointment as economists expected non-government job hiring to increase. As well, the National Association of Realtors showed there was a 30 per cent decrease in the sales of pre-owned homes.
A senior economist at Welch Consulting in Washington, Stephen Bronars says, “It’s looking more and more like the job market is treading water. Layoffs are down from 2009, but hiring hasn’t really picked up and this is disappointing. There is a lot of uncertainty on the hiring side. In order for the recovery to give people confidence it needs to cut across different sectors of the economy.”
The Labour Department reported that for the last week of June, the number of people receiving jobless benefits had increased by 43,000, closing the June numbers at 4.62 million. As the instability of the economy continues to rise and fall, it can add many stresses to those making several monthly payments. If you are feeling overwhelmed by your payments, you may want to consider applying for a debt consolidation loan. There are many private lending institutions that cater specifically to clients with bad credit. A little research to find the right loan and the right lender can have you navigating the financial waters with relative ease.
Filed Under In the NewsHome Renovations and the Return on Your Investment
If you are considering doing some home renovations this summer to improve your house, there are a few things to know ahead of time. There are many projects that can increase the value of your home. There are also many that can decrease its value.
A recent Ipsos-Reid survey showed that two-thirds of homeowners are planning to undertake some type of home renovations this year. With so many Canadians investing in home improvement projects, it’s important to know how much of that investment will be recovered when they sell their house.
Many homeowners will embark on home renovation projects for their own purposes either to improve their quality of life, to meet their needs or simply to pamper themselves. Whatever your reason, it is necessary to assess the cost of the after affect of your efforts in the event you ever decide to sell.
One of the first rules of thumb is to avoid projects that set your house apart from all the other houses in your neighbourhood. If a house looks good on the inside, not only will it sell for a higher price, it will sell much faster. Sticking with local trends and avoiding passing fads is strongly advised. A successful project has nothing to do with the amount of money spent on an upgrade. If a kitchen renovation costs $30,000 but is done in poor taste, resulting in a poor layout, bad colour choices, cheap appliances and a useless work area, this would be an example of a renovation that could easily decrease the value of your home.
Each year, the Appraisal Institute of Canada surveys for the best home projects that yield the best return. Here is a list of their findings:
Highest return
- Bathroom upgrade: 75 percent to 100 percent
- Kitchen upgrade: 75 percent to 100 percent
- Interior or exterior painting: 50 percent to 100 percent
Medium-level return
- Roof replacement: 50 percent to 80 percent
- Replacement of furnace or heating system: 50 percent to 80 percent
- Finished basement: 50 percent to 75 percent
- Addition of family room: 50 percent to 75 percent
- Fireplace: 50 percent to 75 percent
- Installation of hardwood floor: 50 percent to 75 percent
- Construction of a garage: 50 percent to 75 percent
- Doors and windows: 50 percent to 75 percent
- Deck: 50 percent to 75 percent
- Central air conditioning: 25 percent to 75 percent
Low return
- Landscaping: 25 percent to 50 percent
- Interlocking paving stones on driveway: 25 percent to 50 percent
- Asphalt driveway: 20 percent to 50 percent
- Fence: 25 percent to 50 percent
- Pool: 10 percent to 40 percent
- Skylights: 0 percent to 25 percent
Source: Appraisal Institute of Canada
The Appraisal Institute of Canada also reminds homeowners who are considering a renovation, that “If the value of your house exceeds the average market value in your neighbourhood, your renovations will not yield much return. But if your house value is below the average, you can recover a larger part of the renovation costs.”
Filed Under UncategorizedBorrowing Your Way Out of Debt
The idea of borrowing to get out of debt may seem like a bit of a contradiction. For people who have trouble with credit cards, debt repayment, or even bankruptcy, the idea of borrowing for any reason may seem rather reckless. But before eliminating this consideration from a debt repayment plan, consider how it could work to help pay off debts. And remember, borrowing to get out of debt was a major strategy used by banks around the world in the past two years to help them survive the economic turmoil-and it has been successful.
Car title loans can be one way to borrow your way out of debt. It’s not a method many people think of, but your vehicle may be a valuable asset to help you get out of financial trouble. Vehicle title loans are especially designed for people who struggle with credit card debt and repaying their loans and other debts. The approach works because the loan against the vehicle can be used to either pay off or pay down other debts. This, in effect, consolidates money owed. That can make managing debt a whole lot easier. As well, because debts are being paid off, credit ratings can go up. And that can be a terrific advantage in the future when you might want to borrow again. It costs more to borrow this way, that’s true. But if paying off loans, debts, and credit cards is beginning to overwhelm, this approach can simplify your debt repayment, and help you get your finances back in line. It might be a small price to pay to keep you out of bankruptcy.
The loans are also straightforward and easy to complete. Just go online, and fill out the form. Some lenders are even able to process your loan in as little as 24 hours. And, the loan can be direct deposited into your chequing account, for extra convenience.
If you own your vehicle, and it’s less than eight years old, chances are you’ll be eligible for a vehicle title loan. Most people are-about 99% of qualified applicants have their loans approved, for up to 40% of the wholesale value of their vehicle.
It’s a fast and private way to find those extra dollars that might make the difference between being solvent or bankrupt. And give you just enough breathing space to work out a financial plan that can help you regain your footing and get your finances back on track.
Filed Under Managing DebtBaby Woes: Stay Home or Work?
Deciding whether or not to stay at home full time with your new baby is a big decision. It isn’t just about the finances, of course, but finances are one place where costs can be put down in black and white. That might not make the decision any easier, but you’ll know what you’re in for-at least financially!
Staying at home almost always means losing an income. In Canada, it often also means EI will become available, but that’s still generally little more than one-half what you may have once earned. Even with employer top-ups, you may find your income is lower than it once was. But does that mean returning to work will bring you in more money?
Most financial experts agree that, unless you are making one whopping salary, costs to keep your child in daycare will cost most, possibly all, and sometimes in excess, of the salary you make. Sorry as that may seem, it makes the financial considerations a good place to start when you’re debating staying at home versus returning to work once the baby arrives.
Doing up a budget that includes costs of childcare and related costs to working outside the home can be compared to a budget where one parent stays at home. There are lots of online budget calculators that can be used for this purpose-and a telling cost is that many of them have a single line regarding infant costs-day care.
If you do decide to stay at home, there may be ways to make up the difference between what your salary outside the home might be and what you can make working from home. Coupled with other money saving strategies such as breast feeding, cloth diapers (where reasonable), and making your own baby food, you may discover that your at-home salary is not a whole lot less-and may even be higher (gasp!)-than your working income used to be.
Another option might be to work part-time. Your employer may be ecstatic that you would like to continue some of your responsibilities from home. Another advantage to this arrangement is that the percentage of your home you set aside for work can be deducted from your income tax. And be sure to set aside a home space that is just for work-home and office functions work better when they’re separated physically from each other.
The decision whether or not to return to work is much more than one based solely on income, but finances are a good place to start thinking about it.
Filed Under UncategorizedVanishing Careers
Finding a new career today may be a challenge for some. For others, it may prove downright overwhelming. As demographics and technology continue to change, so do the working industries. Many of the jobs that were common ten or 20 years ago have disappeared or simply no longer exist. Some companies have gone as far to combine several different job areas into one responsibility as it is considered to be more efficient.
The following is a list of jobs that, for the most part, no longer exist. They may take you down memory lane, or may act as a guide in the event you are seeking a new career. Either way, these once sought-after jobs are either completely abolished or on their way out.
Door-to-door salesmen were once in high demand. They sold everything from frozen food to household products, knives and vacuum cleaners…even encyclopaedia sets. Since most households now have two working adults, there’s no longer anyone to sell to.
The milkman. Remembering the days when ice, milk and other dairy products were delivered straight to your door. With the vast array of products to choose from combined with high rates of theft, this service is no longer in high enough demand.
For the most part, secretaries have been replaced by technology. The once highly sought after secretary who was responsible for their boss’s correspondence, via steno pad and shorthand, is no longer found in an office. Instead, most bosses do their own communicating through email and cell phones and have assistants who co-ordinate schedules and keep things organized.
Gas jockeys can still be found but in diminished numbers. The once very popular after-school job has been replaced by, well, us, as auto drivers tend to pump their own fuel now. Combined with self-serve lanes and the convenient pay-at-the-pump machines, it’s only a matter of time before gas jockeys are a missed service. Especially when it’s minus thirty.
Used to buy candy or put towards a new toy, money from a paper route was not bad coin for many kids. The day of the paperboy (or girl) has gone. Newspapers have not disappeared even with many readers switching over to online versions of their morning news, but subscribers now find their newspapers have been delivered in the wee hours via adults with cars.
Placing a phone call once required a switchboard operator. The friendly human voice that would ask for the name and number of the person you would like to call has since been replaced with the self-serve system. Customers are now prompted to ‘Press 1 for…’ or just speak into the phone to access the service or person you are looking for via voice recognition.
So many of the jobs we once relied on for both work and for the service, have slowly died out for various reasons. Technology has come a long way in replacing many of these human-placed positions. It can prove intimidating to others who feel left behind by the technological advances.
Filed Under UncategorizedKeeping Your Home Cool in Summer Without Breaking the Bank
Canada may be thought of as a cold country, but Canadians know that the summer months most certainly can pack some heat. During these hot times, many of us struggle to keep the inside of our homes cool. A recent Natural Resources Canada survey discovered that 52 percent of Canadian homes now have air conditioners, up by 33 percent over the past ten years.
With rising energy costs, an additional appliance can make a big difference in our summer bills. There are a few simple things you can do to help ensure your home stays cool while keeping money in your wallet this summer. The first thing to consider is your insulation. If you house has been wet from a flood or any type of leak damage, there is a good chance your insulation will need to be replaced to keep cool in and heat out. Also, check your home for drafts. Not only are winter drafts a drain on the electric bill, trying to cool a home with exterior air circulating in will also add an more to your electricity bill. If you find any holes, it’s a simple solution to plug them with insulation. This can easily save 20 to 60 percent of your energy year-round.
Another way to ensure a cool interior is to keep the windows closed. It’s also important to close the drapes and blinds. This will easily deflect the sun’s heat and keep those rays outside. Having your windows tinted will also add up to a large amount of sun deflection.
Using a fan during the day is much cheaper than using the air conditioner all the time. It may be best to save that cool air for bedtime if your house is still warm inside. Before you plug in your air conditioner unit for the summer, take a few minutes to give it a clean. Check the coolant coils. If they’re covered in dirt and grime, this will cause your unit to work harder, increasing your electric bill. Cleaning this grime can easily save up to 5 percent on your summer cooling costs. . Replacing the air conditioner filter will also make a difference in performance and efficiency.
Planting a tree is not only a beautiful way to enhance your home it’s also a natural way to keep it cool. Planting a tree or two on the south side of your house will add much needed shade for the summer months. If you chose a deciduous tree, they will naturally shed their leaves in the fall, allowing for more light through your house in the winter, not to mention trees add a positive impact to the environment by improving air quality and the value of your landscaping.
Increasing your air conditioner by a degree or two warmer will also shed a few dollars from the energy cost each month. Any of these ideas can keep your bills down and money in your pocket.
Filed Under being frugalThe Temptation of Crazy Heart
At least one take-away from the movie “Crazy Heart” has got to be that you can turn things around at any age and under the worst of circumstances. Even though the main character is a 57-year old, drop down drunk stumbling downhill, a dramatic incident makes “Bad Blake” realize that he’s got to change his ways. And he does. Sure, “Bad” has to pay for his mistakes, but he’s back on the straightaway and heading down success highway at the end of the movie. And we can pull off the same Phoenix trick when it comes to rising out of our own financial ruins.
Even if you have had a long and tough financial past, you can recover from poor credit, bankruptcy, and general money mismanagement. There’s really no secret to it. It’s a matter of “wanting to stop” as “Bad” does, and do things differently.
So what do you do if your spending is way out of control, and you’re spinning headlong into the money ditch? Put on the brakes, just like Bad. Then, clean house, again just like Bad does, and get what’s sent you down that highway out of your financial house.
For financial mis-managers, that can mean a few different strategies. The best one for compulsive spenders might be to remove the ability to spend. So, eliminate all non-cash sources of money, like credit cards. You can even shut down your line of credit, if you ask your banker to close the line to general use, and only allow it to be paid down. Then, use only cash, and don’t even allow yourself to carry a debit card. Make it difficult to get at your money.
Now, budget every single cost, and only go to the bank to get the money you need to live. Besides groceries, most people really can live without access to cash. Even budget your gas use, and fill-up at regular intervals, using cash you’ve taken out specifically for that purchase. If you always go into the bank, and only take out the money you need for specific purchases, you’ll find you spend a lot less than when you were carrying credit and debit cards.
Taking away the ability to spend without thinking-using credit and debit cards-making your cash hard to get at, and living by a budget where you always pay cash are three top tactics to get your financial house in order. These changes can feel like a cold turkey approach to getting your finances straightened out, but just as “Bad” discovered, life is better when the debts are paid.
Filed Under Managing Debt, Saving, being frugalFive Financial Oversights that Cost You Money
If you think you have your finances pretty much in hand, that’s great. But once you get the basics down, there may be some fine-tuning that can help you save even more. Here are five financial oversights that might be costing you needless money every month.
Check your bank statements, and while you’re at it, your credit card statements, too. Look these over every month-at least. Review them every two weeks, if you tend to have a lot of money moving in and out of your accounts. Banks make mistakes, and so do credit card companies.
Always pay yourself every month. It’s a good idea to do this automatically so you have no choice about saving. Even if it’s the smallest amount of money–$20, $30 or even less-setting some money aside gets you in the habit of saving. When you begin to make more money, you can set aside more. Shoot for 10% of your gross, 1% at a time.
Create some kind of home-based system to track all your accounts. Consider a file where you keep all your financial statements-RRSPs, banking statements, credit cards, lines of credit, mortgages, other investments, and savings. File by type-savings, credit lines, and ongoing bills. For monthly bills, like utilities, phones, rentals, number it by the day. It can be as simple as writing the day the bill is due (say the 15th) in large print in the upper left or right hand corner of the bill, and then filing all your bills by due day. Now you’ll be able to quickly scan through your bills and know when every payment is due-and never be late again.
If you’re electronically minded, you can have an electronic notice sent to you-to the minute-reminding you to pay that upcoming bill. But, even though your billing may come electronically, consider printing out at least one copy of a bill to put into a paper-based system. Research shows that when you physically handle material, you’re more likely to remember it.
Now that you’re saving so much money every month, consider getting a chequing account with a small floating balance. Often it’s about a $1000 minimum. These kinds of accounts carry zero cost for most transactions if you maintain the minimum balance. Instead of thinking about the float as money you cannot access, think about it as making you money-chequing accounts can cost $15 and more each month. So if you’re not paying that $15/month, it means your float is making you at least $180/year return on your investment. That’s an astounding 18 percent annual return (when’s the last time your RRSPs did that?)!
Keep reviewing your how you spend your money and where until every dollar you spend is accounted for, and working for you.
Filed Under Saving, being frugalAdvice to Stay Out of Debt
Well, the best advice to stay out of debt, hands down, is, don’t go into debt in the first place. But with Canadian debt levels at all time highs that little bit of terrific advice isn’t going to do a lot of people much good right now. And many of us grew up with debt as a kind of standard of living we saw in our parents’ lives, and now have carried forward into our own. Who doesn’t owe on their student loans? Who doesn’t carry a monthly balance on their credit cards or line of credit?
Although many Canadians, even most, might be in debt, the people we want to emulate are those who have no debt. What’s their secret? Well, odds are, they know a thing or two that we can learn and copy.
First, recognize there’s good debt and bad debt. If you’re a recent grad carrying $25,000 in student loans, you’ll be happy to hear that’s a good debt. It’s considered a good debt because the return on that whopper of an investment should far exceed the money you had to borrow to make it. On the other hand, if it’s a $10,000 debt on spring break trips to southern climes and lovely Margaritas, well, try and get your money’s worth for those wild weekends, and you’ll see what we’re talking about. That’s a bad debt.
Here’s another difference between good and bad debt. A good debt expands what you’re worth, by either making you personally more valuable (because you’ve got an education and know stuff, for example) or adding tangible goods to your portfolio that are valuable (like investments, a home, or business). You’ll know you’ve got it made with good debts when you go into the bank and are immediately ushered to the second floor where the suits hang out.
A big key is to balance your good debts and eliminate your bad ones. That means paying off your credit cards as much as possible, not buying what you cannot afford (like a 42-inch high definition, blu ray television), and being sure to keep up on payments on your good debt. So pay that mortgage every month, and don’t default on your student loans. But that doesn’t mean you have to keep paying those high interest rates on your student loan.
This is another way to manage your debt. For debts like student loans, which can sometimes have really high interest rates, see if you can negotiate it down or buy it out with a line of credit. That can save you significant dollars if you’re carrying a large debt.
Debt isn’t always a bad thing. Owning a home, or capitalizing on a good education, can have terrific returns. Just be sure you know the difference between a good debt and a bad one.
Filed Under Debt consolidation, Managing Debt, being frugalWhen a Good Debt Isn’t
Good debt and bad debt seem like pretty clear categories with easy-to-distinguish differences. Simply put, a good debt should bring you a return that exceeds the investment; a bad debt won’t. Some experts, though, argue that there is no such thing as a good debt. Owing money is owing money, and there is just no two ways about it. That might be true, maybe it’s even really terrific advice, but for most of us, it’s just too hard not to borrow money for school, or to buy a house, car, or other big ticket items. But what can we take from the idea of bad debt to help us with our so-called good debt problems?
First, be careful how much you borrow. The two or three big-ticket items most people hope for include an education of some kind, a home, and a car. Generally, most of us are not going to buy those things without a loan of some kind. It certainly isn’t impossible to get an education by working full-time during the day and going to school part-time at night for 11 years, or buying only as much car as your bank account will allow-say, a 1984 Honda Civic. Most of us, though, aspire to faster degrees, and cars! But everyone has a limit. Know yours.
Tip one: Don’t start school until you know when you’re going. Too many people waste two years’ worth of loans before they know what they want to do-and that’s a lot more expensive than six months’ hitch hiking through Europe while you work out what your future career path.
Tip two: Don’t over buy on your first car. Do you really need an audio or BMW? Wouldn’t a pretty nice, nearly new Golf hatchback do?
Tip three: House buying is a complicated process, but the research still says that people buy on impulse. Before you start looking for a home, put together a checklist that includes a list of the features that might be important to you. For example, do you want to walk to your work place or downtown? Do you spend a lot of time in the backyard, and have a dog or kids that need a fence? Most important, go to the bank before you go house shopping, and see just how much home you can buy. Never reveal that number to an agent, if you’re using one. And don’t be afraid to look at houses being sold privately; it can save you thousands.
In every case, house buying, car purchases, and educational choices, have a budget on what you can realistically handle. Then you’ll never have a good debt go bad on you.
Filed Under Debt consolidation, Managing Debt, being frugal