Canada Money CA

When it comes to major purchases such as a house or major expenses such as providing for your children’s education, major savings goals can seem overwhelming at first glance. That’s okay; if it was easy, everyone would own a nice home and have a Ph.D. It’s not easy, but it’s nowhere near impossible either.

Break It Down

First, break the goal down into smaller components and give yourself a reasonable timeline. Often, people will tell me that “saving that much is just impossible,” or “How do you expect me to come up with that much money by the time I want to do this?” Despite the real estate industry’s incessant warnings, there’s no rush to jump right into the real estate market. Not if you aren’t ready to handle the responsibilities of home ownership. This includes property taxes, maintenance and replacement costs (e.g., the leaky roof, bad windows and broken down furnace that you wanted to pretend would last forever).

At the risk of insulting my friends in the real estate and mortgage industry, I don’t believe in using high-ratio mortgages. It’s not just a matter of numbers but of the effect that mortgage debt has on emotions. When a person buys a home with a substantial down payment, eliminating the mortgage tends to become their top priority. On the other hand, when you buy a house with 5% or 10% down, it’s not your house; it’s the bank’s. You just don’t have enough skin in the game.

Of course, there are exceptions. If the home buyer is very savvy and has a solid short-term plan of action for reducing the debt substantially, there’s nothing wrong with that. For the vast majority, however, once the housewarming party is over and reality comes creeping back, having a high-ratio mortgage can be a crushing weight on the psyche. Heaven forbid a job is lost or an unexpected illness comes up.

If you need to save 20% down and you’re planning on looking at homes in the $250,000 range, you need a $50,000 down payment. Sounds huge, but it doesn’t have to be. If you give yourself a reasonable timeline, such as 5 years, that’s $833 per month. Still sounds huge, but consider two things:

Any income over and above normal pay (overtime hours, bonuses, tax refunds, etc.) should be deposited directly into the home-buying fund.

In Canada, you can withdraw up to $25,000 from an RRSP account to fund the purchase of your first home. For a couple buying their first home, that’s $50,000 combined – in the above example, that’s the entire amount needed to put down enough for a traditional mortgage (20% or more equity in the home). There are no tax penalties for making the RRSP withdrawal, but the amount withdrawn does have to be repaid into an RRSP account within 15 tax years. Since you should be making regular RRSP contributions anyway, this shouldn’t be too much of a burden.

(Note: Any contributions that will be used for the Home Buyers’ Plan must have been in the RRSP account for at least 90 days. Any less time than that and the contributions will not be considered deductible).

My suggestion is to set up an RRSP high interest savings account as well as a high-interest Tax Free Savings Account (TFSA). Then set up an automatic withdrawal plan from your bank account that will deposit at least 10% of your take-home pay into these accounts. (Make sure that the withdrawals happen the same day your salary is deposited to your bank account or you will be tempted to spend it).

If you’re wondering how you’ll manage to get by with a lower income, consider using CRA Form T-1213(04): Request to Reduce Tax Deductions At Source. If you already know how much you will pay into your RRSP monthly, as well as other deductions/credits you normally claim each year (e.g., tuition expenses, deductible interest), you can indicate the expenses/payments/contributions on the form.

The taxes deducted from your pay will decrease and the subsequent increase in take-home pay should be directed toward additional savings, reducing debt or covering fixed expenses. Do NOT use any increase in take-home pay for lifestyle expenses. This is not money for shopping or dining. And, of course, have an accountant review the form before submitting it.

But I digress. Contribute to the registered savings accounts first, claiming eligible tax deductions along the way. If those deductions generate tax refunds, stash those refunds into the accounts as well. Once the amount of money in the RRSP account has reached the withdrawal limit for the Home Buyers’ Plan, cut off the automatic withdrawal from your bank account and set up another withdrawal plan to deposit your contributions into a Tax-Free Savings Account.

Using an automatic savings program, people often find money in unexpected places to put toward their home purchase. I’ve seen 5-year timelines cut down to 3 years and 3-year timelines cut down to the following year. Just take the first step and have faith that you will make it.

For education savings, the same strategy applies, since RESPs offer government incentives to save for education costs. Break the anticipated future cost of education into monthly savings goals and start making the contributions automatically. And while your child is in high school, you should be scouring the internet for available scholarships and bursaries. Education expenses should never come as a surprise because you’ve had at least 17 years to prepare for them.

As always, the information provided in this post is general in nature. I have provided it with the understanding that it is not to be relied upon as professional advice in any capacity. Before making any changes, you should should consult with your own professional advisors for specific advice before taking action.

Many Blessings,

Andray Domise
Independent Financial Advisor
Change your life one dollar at a time, with REAL help for building wealth and reducing debt:
http://www.andraydomise.com

Financial Planning FAQ:

Question: What’s the best financial planning software?
I need to do a financial plan for my family including retirement savings, accounting for various estimates of inflation. My accountant says Quicken financial planner v2 was good, but it can’t be found anymore. He also says that the financial planning capabilities of Quicken aren’t adequate.

Answer: You can do modular planning using web sites from Vanguard, T Rowe Price or fidelity. They all have retirement planners that are decent. There is no nonprofessional (“inexpensive”) softwares that do it all. You do not need a big, integrated package. What you need is:

1. A budget, which can be found online or using an Excel spreadsheet you create.
2. A tax planner, which can be Turbotax or TaxCut.
3. Retirement planner, which can be as above.
4. Life insurance planning.
5. Estate planning: You need a will, financial power of attorney, health care power of attorney and living will.

Question: Salespeople in the financial planning industry?
What publications do you read about financial planning? I am thinking HBR, National Underwriting Magazine? Are they any others? Please let me know.

Answer: Read anything by Warren Buffet or Charles Givens. Also Money Magazine and Forbes are pretty good too.

Question: What are the financial planning requirements for a funeral?

Answer: Call a funeral home and see how much it will cost to hold a service (if that’s what you would like to do), buy a coffin, get a plot of land, stone, etc. Once you have a dollar figure, you can usually buy insurance for this or you can save the old-fashioned way. Put a specific amount aside each month. Or make sure the person plans this expense with their own money/estate.

Question: I need a financial planning company?
I just got married a few months ago and my husband and I wanted to find a financial planner. We are both 24 but we want to save up for our retirement, college for future children, investments, buying a home, etc…. We don’t have much money to start with because we just cleared all of our debt. Does anyone know what’s the best place for us to start?

Answer: Good job by clearing all debt. First make sure to maintain positive cash flow and if your employer offers a retirement plan then make sure to contribute into it. Aside from that get a local financial planner who can understand your needs, make sure to get some references.

Question: What is a Financial Planning Company? What are they doing?

Answer: A company that offers Financial planning services offers licensed financial advisors to assist customers who are looking to create a financial plan. Financial planning helps individuals prepare for their future goals, typically these goals would be planning for retirement, planning to pay for college, and planning for other major life events. A financial advisor will help you develop a financial plan to help ensure that you have the money you need saved to meet your long term financial goals.

Question: Looking for a good E-book for financial planning?
I’m coming off a bankruptcy this year and I vow to get my finances in order. Is there any good E-books out there for financial planning?

Answer: Yahoo Finance has pretty good articles, as does MarketWatch. Head to your local library and see if you can get a copy of “Rules About Money” and “Rich Dad, Poor Dad”.

Question: 7 elements of financial planning?
I have heard mentioned on financial radio shows “The 7 elements of financial planning”. Does anyone know what these are?

Answer: They are: Budgeting, Saving and Investing, Insurance, Debt, Tax, Estate and Retirement.

Question: Financial planning suggestions?
I manage my college expenses with 3 credit cards and pay my credit bills with them. This is cumbersome and I can’t remember if there’s enough cash to pay the bills at that point of time. I badly need to do some financial planning. Any idea/suggestions?

Answer: Managing multiple credit cards is tough, especially if you are still in college. It’s better if you cut it down to only one because it can help you save in the long run. Track all of your purchases and the amount of money you have in the bank either by hand, with a spreadsheet on your computer, or through an online tracking program.

The residents of Canada can get the benefit of grants from the governments so that no dreams remain unfulfilled. Every year the Canadian government keeps many dollars as funds for providing financial assistance to the students, business set up or development of the society. But there are also many scams involved in the process of grants that use personal information for individual gains and such scams are to be avoided.

Where to find the information

Many people don’t know that even in these days of curtailments the Canadian government is working at their level best to provide finance in the structure of grants so that the growth in economical conditions in the country are improved. The Canadian Assistance Programs Directory is a very useful guide to get all the relevant information about the Canadian government grants. Here you can find the different types of grants that are available at both the regional and federal ranks. You can get the information online from their database directory.

Grants for business

It is very practical approach by the Canadian governments at almost all levels to involve in the development of business. They have been long actively taking part in the business matters and supplying with adequate funds. In this way many business establishments are getting to flourish in a new way and the sectors facing losses are getting financial help from all the aspects. Business person when applying for the grants must take some careful steps for applying for the loan.

Before you are applying for the grant proposal you must know that you have to design the plan and outline of the project. Check the different websites to get all the information about the grants that are offered by the Canadian government. See the programs they have funded and try to analyze them properly. Go through the criteria that have been mentioned as the eligibility for your grant category. You must carefully determine the criteria for the assessment of the proposal. Final step should be to present the application in due time.

Grants for students

The Canadian governments are trying to assist the students who are willing to complete the education but cannot do so due to the deficiency of funds. There are different types of grants available for benefiting the students who are attending the schools, colleges, university as they need financial backing. Students who come from families having low income and are high-need students of part-time can get the grants. There are grants for those students who have dependents in their families. Grants are provided to those students who have disabilities and their housing, education, books and other expenses are provided. Special grants to women who are ongoing Doctoral Studies are also given the assistance of grant money.

Is it Possible to get Grant Money from Government?

Answer is Yes. There is legitimate kit that will provide you with Step by Step Instruction and Forms to receive free government grant money. Learn Apply Government Grants and Download Government Grant.

Canadian Government Grants FAQ:

Question: Canadian government grants?
Does anyone know where to find information on Canadian government grants. Our house is leaking everywhere and we don’t have enough money to get it done. I also heard about eco. grants but cant find any information.

Answer: You are probably looking at an energy retrofit grant.

The government will only approve grants which increase the over all efficiency of the home like increasing the R factor of your installation or low waste water plumbing systems.

There are a series of condition that must be met prior to receiving a grant. Unfortunately fixing a leaking system or roof is not usually deemed an eco retrofit rather regular maintenance. Unless you are planning a complete overhaul to increase the efficiency of your home the grants may not apply to you.

It never hurts to investigate.

Question: How can I get a Canadian government grant to write a book?

Answer: Thanks to the internet, books, newspapers etc. are a thing of the past. You should be able to write an e-book for virtually no cost. Better yet, you would not be sub-servient to publishers regarding content. I would totally avoid the government idea for similar reasons. Assuming a grant is available,it won’t happen unless you chose a topic of their liking and/or you have connections.

Question: Does anyone know about Canadian government grants and loans for university studies, not OSAP.
I am located in Ontario and will be attending university next fall and for the next couple of years.

Answer: There are smaller grants and bursaries available from the government. The application booklet I obtained had information regarding these programs (I received a 1 timed “donation” of $500) . I too live in Ontario. Individual universities will also have scholarship programs available upon acceptance. It also never hurts to check with you parents, or your own employer to see if they offer an scholarships. Granted scholarships are taxable income, they certainly do beat having a 30,000 OSAP debt.

For my masters program I received many grants and work study programs from the university that almost covered my educational expenses, however most were research based an only available to post graduate students. It does not hurt to check with your selected university to see if there are any work study or grant programs available. For a first year student they are a rarity, however as you move into you upper years given a strong GPA the university will try to accommodate you.

Question: How to find Canadian governments grants?

Answer: Your best bet may be to contact your provincial office and inquire.

Question: Are there Canadian Governement Grants that help with relocation withing Canada?
I need to move out to BC soon I will be attending some kind of post secondary once out there, is there somehow that the canadian government will help me relocate?

Answer: We moved within Canada years ago. No one helped us relocate but because we were moving due to employment we were able to recover some of our moving expenses at tax time.

Question: Where do I apply for a small business Grant from the Canadian government?

Answer: Start by talking to your local citizens advice, its free and confidential to talk to them and they may be able to point you in the right direction, offer you help and advice.

Question: Are there any Canadian Grants/Tax Benifits for installing and using Green Energy sources in your home?
Are there any Canadian Grants/Tax Benefits for installing and using Green Energy sources in your home – such as putting in solar panels, windmills, etc?

I’ve been thinking of using alternative energy sources when I buy my own house. However I know they are expensive. I was hoping that the government would have some sort of Tax break or grant or some way of financially helping with this sort of thing.

Also, if there is a website or phone number of relevance where I can get more information on this, I’d really appreciate it.

Answer: There are grants, but they aren’t huge by any means. Go to the government of canada website, click on search and enter “energy grant.”

Question: How would I go about getting free crown land from the Canadian Government?
Homesteading is out of the question but what about a land grant, how would I apply for a land grant?

Answer: You would need to go to the registry office in your area and get a permit of occupancy for the land you want, this is basically claiming the land you want. I should warn you only non profit organizations can get free crown land in Canada.

Whether you are moving to Canada or taking a long vacation, it is recommended that you open a bank account if you plan to stay for more than three months. Unlike some countries that depend largely on cash transactions, most Canadians use their bank daily. You can get direct deposit into your account once you get a job, pay bills online, and use your debit card at ATMs. In other words, Canadian banks work a lot like banks in the United States.

If you choose to open an account, you will likely find that it is easy to transfer money to Canada from your current account to your new one. Some countries allow you to open an account before you arrive, but Canadian banks require both government-issue ID, such as a driver’s license, and proof of address. This means you will have to wait until you move to get an account. You will probably also need a reference letter from either your employer or your bank in the United States.

You might choose to open an account a bank that also exists in the United States, such as HSBC or ING. You could also switch to one of the larger banks in Canada, such as TD Canada Trust, Bank of Nova Scotia, Royal Bank of Canada, or Bank of Montreal, to name a few. Keep in mind that the currency of Canada is the Canadian dollar, and $1 USD is equal to about 1.09073 Canadian dollars. Also, be aware that many banks charge a monthly fee for an account unless you are a student. The fee is typically anywhere from 2 to 10 Canadian dollars per month.

If you do not want to wait until you arrive to open an account and transfer money to Canada from your U.S. account, you have other options. One of the cheaper solutions is to obtain a prepaid debit card. You can take one with you into Canada and then add funds to it from your U.S. account to hold you over until you can open a new account. The fee to add money to the card is about $5, and you can add as much as you want at one time for that amount. You can either use the card at stores that accept debit cards, or electronic banking machines. These are called ATMs in the United States, but they are referred to as automatic banking machines, or ABMs, in Canada. They are widespread, typically found at banks and gas stations.

You should choose the best method for you before you arrive. If you like to use cash as much as possible, then exchanging your American dollars for Canadian dollars might be a good idea for you. If you can wait until you arrive and get settled in to start spending money, you may opt to just open a bank account and transfer money to Canada from your account in the United States. If you enjoy using a card and want money the instant you arrive, a prepaid debit card might be best for you.

For more information visit sending money to Canada or visit the https://www.atmcash.com/ home page for information on sending money almost anywhere in the world.

Money Transfer FAQ:

Question: What is the reliable way to transfer money to canada?
I am in search of a reliable , cheaper and faster way for transfer of money to canada.

Answer: I would suggest Western Union. I know you can transfer money all over the country and Canada and maybe South America/Mexico. A lot of people use it and depending on how much money you’re transferring, the fees aren’t too bad. Just make sure there’s a Western Union location on both sides of the transfer. Also, the transfer is almost instant.

Question: Can I instantly transfer cash from bank account to paypal without the wait?
I have a bank account with RBC (royal bank canada) and I want to transfer money from it to my paypal. It says a 6-8 days wait. I have a credit card linked but I need to transfer from my bank. Is there any way to Instantly get the cash into my paypal account with my bank account? No eCheques thats not instant.

Answer: If you physically transfer the money, it can take 6-8 days. If you have a credit card attached to the account, even though you pay from the bank account, Paypal will give the payee/seller the money immediately with no delays. They figure if your bank account is NSF, they will just bill the credit card.

Question: Cheapest way to send money internationally?
Looking for a site like PayPal that will transfer money to other individuals without charging a ton of extra fees. I want to send money from the US to Canada, and the US to Australia.

Answer: My family members and I send money to our family every month with ATMCASH. They have reloadable ATMCASH cards which makes it easy to continuously send them the money they need. It’s cheap, quick, and really easy for us and our family back home.

Question: What is the max. TAX-FREE wire transfer amount in Canada?
My aunt from Taiwan is going to wire some money to lend to my mom in Canada. The amount will be around or slightly exceed $10,000 CAD. We’re concerned that this may exceed some sort of limit and will become taxable. I’d appreciate any info.

Answer: The gift will not be taxable for income tax purposes. However, if the amount of the transfer exceeds $10,000, a report will have to be filed with the Canada Border Services Agency.

Question: Wire transfer lead time from Ontario to USA?
I am waiting on funds of about $110k to transfer from Canada to USA for a business transaction. I assume it is not a same day transaction like a USA-to-USA wire. Does anyone have experience on how long this transfer will take?

I have heard 3-5 business days — is this true?

Answer: I’ve wired money in several currencies all over the world. My experience is mixed. 3-5 days is norm. On 5th business day, I’d start to worry. Don’t count weekends or holidays in timeline.

Stay on top of transfer and check with both parties every day. Ask for documentation proving transfer sent out. If you’re the one sending, get your confirmation documentation and ask for recipients confirmation. Ask CDN bank who they will be using as transfer agent, if one is involved. Also contact recipient bank directly to try and confirm receipt.

Question: When transferring money internationally what is the SWIFTBIC number required?
I am getting money transferred from the UK to Canada and the bank in the UK is asking for the SWIFTBIC number. Does this number appear at the bottom of my cheques. Is it the bank number?

Answer: The SWIFT code does not appear on your checks. You have to ask the bank for this code.

Question: Tax problems from getting money transferred to your account?
In Canada, if I have money transferred regularly to my account, would I have to pay income taxes for it? I mean, does the government track things like that? What if it’s not my income, and somebody else’s money that I’m just holding for them?

Answer: Be aware that transfers of money can be tracked, and are required to be in certain circumstances by the FINTRAC laws. I hope the friend is not using you in a money laundering sort of scheme.

From a tax standpoint you could certainly owe taxes on the interest earned, since the account is in your name.

Question: How long does a swift wire transfer take from canada to south africa?
And what route does the money take? I have been waiting almost three days and I have that funny feeling that my cash is floating around somewhere when I could be spending it!

Answer: Unlike its name, SWIFT is anything but quick. Your bank should tell you how long it’d take before you wire the money. However, if you have sent it already, your best bet is to wait. Some banks, for a charge, trace where in the system your money is. I personally think its an unethical thing for them to do, but with little/no profits to show these days, they (banks) are resorting to all sorts of practices to make money off of customers.

If you live in Canada and happen to face a financial emergency you have the option of getting a payday advance, which is a short term loan with the amount between $100 and $1000 you can borrow until your payday. Payday advance Canada is designed to help people overcome their cash emergencies that may arise due to unexpected expenses such as overdue medical bill, urgent vehicle repair, etc.

In general you have two to four weeks to make a repayment for the loan. On the due date, you can make a full amount for repayment, pay partially or rollover the loan to the next cycle. The two last options may cost you extra fees so it is recommended to borrow at the substantial amount that you can repay to avoid getting another financial trouble.

Payday advance qualifications

There are some requirements you have to fulfill to become eligible for the loan. Basically, you must be a Canadian citizen or resident above 18 years old, have a job with regular salary, and have a bank account. It is just that simple. You don’t have to worry about your credit rating as most payday advance lenders in Canada do not perform any credit checks as part of the requirements.

How to apply?

The easiest way to get a payday advance in Canada is by applying online. You can find lenders operating online giving the customers convenience to simply complete the online application form directly from their home computer. You don’t have to worry about visiting a local loan shop as everything can be done electronically.

With online payday advance you can expect the money to be transferred directly into your bank account within the same day, excluding weekends. Some lenders even cut off the need to fax any document all together. They have some other ways to perform verification without asking you to fax any supporting document.

Understand before you apply

Although it is easy to get a payday advance in Canada, you should understand the various implications of getting a payday loan and deal with a lender that will not cause you any trouble. Make sure that you understand clearly the lender’s policies including how much interest and fee they are charging you. You should only select a lender that is based in Canada and have a reputable name.

Click here to find payday loan companies in Canada [http://www.speedypaydayloan.ca/payday-loan-company.html] online. You can get cash directly deposited into your account from a same day payday loan [http://www.speedypaydayloan.ca/same-day-loans.html]. Check out also how to get a payday loan for people with bad credit [http://www.speedypaydayloan.ca/payday-loan-bad-canada.html] in Canada.

Payday Advance FAQ:

Question: Is there a payday advance that pays out on a saturday in the UK?

Answer: Many bureaus de change do pay day advances, check if you have one near you.

Question: What is 100% legit payday loan / cash advance site?

Answer: Just stick to Money Mart. They are known and can be trusted. If you listen to most people online, you’ll either get scammed or signed up to something you weren’t expecting.

Question: Can Payday Cash Advance companies tell if you already have another load out?
When I went to open an account at a Payday Cash Advance company, they checked on their computer and saw that I already had another loan out with another company. How did they do that? And can all Payday companies do this?

Answer: Payday lenders are creditors just like banks and credit card companies. Almost all creditors subscribe to the credit monitoring services (“your credit score”). Every creditor who is a member also reports their activities to the credit service by social security number. If you check your credit history, you will likely see your Payday loan at all three credit agencies.

Question: How do those payday advance places work? Is it not worth the hassle?

Answer: You want to run away from those kind of places as fast as you can. Their interest rates run between 70 and 423%. It is NOT worth it, and you’ll be hooked into paying them forever.

Question: How can I get a $1000 Loan that ISN’T Payday Advance and doesn’t require a Credit Check?
I’m in need of a $1000 Loan right now, however I just started my new job so I can’t receive a payday advance loan from one of the many companies that does that. Also, my credit is terrible so I need a place that will give me on without a credit check. I’m finally turning my life around, I just need one more piece of help right now and I’ll finally be able to start securing my debt and paying back what I owe.

Answer: Could you go to family members and ask them for moving or perhaps you could sell some items at a pawn shop.

Question: How do I get a payday advance with no checking account?

Answer: You can’t, it’s required.

Question: What’s a legit Payday Loan/Cash advance website?

Answer: There really aren’t any legit ones. Many states have banned them all together because their interest rates are essentially usury, and once accepting a loan, it is nearly impossible to get out from under them.

I would strongly urge you to look at other options. You don’t say why you need the money, or how much you need. Go to where you bank and discuss a cash advance loan with them. In emergencies, sometimes the bank is more understanding than you might think. Sometimes the Salvation Army will pull through as well, if you have one in your area. Take time to look into your community for support, but some people don’t have all the options that come with an understanding community.

Question: Payday loans?What to do?
I know they all basically rip you off, but theres only one place around here that will do a cash advance and I do not have all the needed paperwork to do one. Can someone suggest an online payday loan that they have had good experiences with?

Answer: Before you rush to do a search for “payday loan online” there are a few things you should know about how these types of loans work and what alternatives are available. A payday loan is a short term small-balance loan that is intended to tide you over till your next payday arrives. They can be conveniently obtained as payday loans do not require a credit check. If all you have are a checking account and two recent paychecks, you may be a customer. But there’s a price. Alternatives are pleading with your family for the money, obtaining a credit card or going to your bank.