Category: Finance

2020 was a difficult year for many of us, with lockdowns, quarantine periods, and restrictions on socializing taking place all across Canada.  With nearly all events, activities, and social gatherings cancelled, most of us had little to do which in many cases meant we were suddenly spending a lot less money.

However, due to the uncertainty of employment for people who were put on layoff due to the pandemic, many people also began deliberately working to cut their expenses and save money.  While the motivation might have come from pandemic-related uncertainty, having sensible budgeting and spending practices is always a good idea, and there are lots of money-saving strategies you can start during lockdown that will be just as useful after the pandemic.

Regularly Put Money in Your Savings Account

You should be doing this one anyway, but it’s always a solid financial strategy to put some of each paycheque into your savings account, even if it is only a little bit each month.  This is important for more than just the uncertainty of the pandemic, but should be a regular part of your budget so that you always have a financial cushion in case of emergencies and unexpected expenses, or to save for college or university.

Shop Smart, and Limit Online Purchases

The pandemic has seen a huge surge in online shopping, and for many the expansion of online purchasing options was a vital part of ensuring people in lockdown could get groceries, medicine, and other essentials.  But it is easy to fall into the habit of over-shopping online, especially in many cases during lockdown where people are stuck at home with nothing to do, and no activities to spend their money on.

To save money, be mindful of your online shopping and be sure you are not buying out of boredom, or buying things you don’t need and won’t use.  Consider each purchase not only in terms of price, but in terms of usefulness.  For the things you do need to buy, you can wait for sales or coupon codes.  Some bulk buying can be beneficial, but watch that you avoid spending money on bulk purchases that aren’t necessary, or aren’t as good a deal as they sound.

You can also consider buying previously-owned things such as clothing, books and games, electronics, and many other items, which will cost you less than buying new.  While many thrift shops are closed during lockdown, there are plenty of online trade and marketplace groups, and the habit of buying previously-owned goods will remain useful as a money-saver after the pandemic is over.

Evaluate Your Subscriptions and Memberships

Many services, especially online ones, have moved to a monthly subscription model over the last decade.  While this makes many of these services more accessible to customers, when you are trying to cut down on costs all these small monthly fees can really add up.  During the pandemic, you should assess your subscriptions and memberships to determine if there are any that you’re currently unable to use, and either pause or cancel them to save on the cost.  While subscriptions to gaming or streaming services might still be worthwhile during lockdown for entertainment and online socializing, the membership to your gym might not be so essential right now.

This strategy is equally useful outside of a pandemic situation, and you should always consider whether you are getting enough use out of a subscription service to make it worth the cost each month.

Find Low-Cost Ways to Socialize

Another money-saving strategy that is good for anytime is finding free or low-cost activities when you want to socialize.  During lockdown, socializing has been limited to video calls and physically-distanced activities in many places, but there are lots of low-cost ways to socialize with friends that will translate just as well into cost-effective activities after the pandemic is over.

For example, instead of going to the movie theatre, have a movie night at home with friends and snacks.  Or you can play board games or video games online with friends.  Learning new hobbies is also an option, as well as seeking out free programming and events from your local library, community center, school, or museum.

Cook More; Eat Out and Take Out Less

During the pandemic, many people have been cooking more for themselves at home, rather than going out to dinner or ordering delivery.  Cooking your own food and snacks is almost always healthier, and less expensive, than ordering take out or visiting a restaurant.  Once physical distancing restrictions have eased after the pandemic, invite friends over for dinner instead of going out somewhere, and you can save money as well as show off your culinary skills.

 

Sources

https://ottawa.ctvnews.ca/seven-tips-to-reduce-spending-during-the-covid-19-pandemic-1.4943155

https://www.themoneypages.com/saving-banking/eight-tips-help-save-money-lockdown/

https://www.newschainonline.com/lifestyle/life/7-money-saving-tips-well-be-continuing-long-after-lockdown-over-54120

https://www.goodhomesmagazine.com/inspiration/save-money-during-lockdown/

https://www.theglobeandmail.com/investing/personal-finance/young-money/article-canadians-saving-more-amid-pandemic-gloom-as-lockdowns-put-a-chill-on/

Saving for a rainy day is something we’ve been taught as kids, and with the pandemic hitting us hard last year, we all realized how important it is to have emergency funds in place. However, while having a substantial amount of savings is ideal, not many of us realize that letting our savings merely sit in the bank is akin to keeping our hard-earned cash under our mattress. Nothing happens to it, and in turn, we are allowing it to lose its value due to inflation and low-interest rates.

• A smarter alternative is to make those savings work for you, and you can do that through investments. You’ve probably heard from your parents or grandparents a lot about the traditional methods, and most likely they have worked with them. Traditional methods of investments, like stock investments, mutual funds, index funds, bonds, mortgage-backed securities, and real estate, are tried and true ways, and they’re reliable investment options.

However, if you’re digital savvy, it will be worthwhile to look into investment options you can do online which can deliver results similar to the traditional methods of investments.

Online investment platforms provide an efficient way to manage and implement market positions through sophisticated and well-designed software systems. They come in various formats, and it helps to take the time to do an extensive research to identify the most ideal option for you.

How Do They Work?

First things first, with a digital platform, you can open, close, and manage market positions by way of a financial go-between such as an online broker. These systems boast features that show how your investments are performing, including real-time quotes and charting tools, so no guesswork is required. It’s your money, after all, so transparency is key.

Invest Safely and Smartly

Investing is a great tool for your financial health and future, but it comes at different levels of risk. Be sure to consult with experts and do plenty of research before starting your investment journey.

Making Your Choice

When it comes choosing among tech-savvy investment options, remember it’s not about which outperforms the others, but which will meet your financial objectives and personal preferences the best. Let’s see below.

1. MetaTrader

If you’re after foreign exchange or the forex market, then this option will work the most wonders for you. MetaTrader interfaces with multiple brokers, and it’s your best bet to navigate the forex financial market.

Its best feature, however, is also its downside. If you’re not looking into automating trading in currencies, then this platform may not give you the same benefits as when trading stocks and futures.

2. Robo Advisors

Robo advisors have come a long way. From its inception following the 2008 financial crash, robo advisor companies continue to sprout globally, and one of the most noteworthy ones started right here in Canada in 2014. Toronto-based Michael Katchen’s Wealthsimple is a standout with its user-friendly interface and a digitally engaged communication channel that’s evident of social media savviness.

A downside to robo advisors is that you give it full control and you’re basically a spectator. When you want to take a more proactive approach to your investments, a robo advisor may not be for you.

3. Online Brokerage

Online brokers are the way to go if you are more of the hands-on type. With these, it’s completely up to you to build your portfolio.

The drawback with an online brokerage is a minor one. If your digital savviness is sub-par, then you may have some issues navigating their systems. However, an online brokerage company considers customer experience as a priority, so they must continuously make the effort to make their applications as user-friendly as possible for everyone to use.

Which Brokerage Should You Choose?

Here are three options that have won investors’ hearts:

1. Questrade

It’s easy to see why Questrade should be among your top choices. This company opened its doors in 1999 and has had an impressive streak. It boasts of 50,000 new accounts yearly, $9 billion in assets under administration, and is a nine-time winner of Canada’s Best Managed Companies. They also prove they have a customer-service mindset as they charge no annual fees and you get to purchase ETFs at no cost. In addition, RRSP or TFSA transfers don’t incur any fees either.

2. Qtrade

For young investors, Qtrade may be the most fitting choice available since it gives them the power to take charge of their financial future. Operating since 2001, Qtrade is known for its low commissions, no opening or closing fees, and no annual RRSP or TFSA account fees. Plus, you can buy ETFs commission-free and there’s no charge to transfer your account.

3. TD Direct Investing

It wouldn’t be a complete list without any major financial institutions. TD Direct Investing is way ahead of its counterparts such as iTrade (from Scotiabank), Investor’s Edge (CIBC), Direct Investing (RBC) and InvestorLine (BMO). After all, TD got here first when TD Green Line Investor Services opened for business in 1984 and became the first bank-owned self-directed brokerage in Canada. With this option though, you’d have to be mindful of trading fees of $9.99 per trade.

What It All Comes Down To

We all have our own investment needs, so it all boils down to evaluating your needs and goals to figure out which is the best choice for your online investments!

 

SOURCES

https://www.juststartinvesting.com/traditional-investments/

https://moneysthegame.com/post/is-it-ok-to-be-letting-money-sit-in-the-bank/

https://www.wealthsimple.com/en-ca/learn/investing-in-canada

https://www.moneysense.ca/save/investing/best-online-brokers-in-canada/

https://www.investopedia.com/terms/t/trading-platform.asp

https://www.nerdwallet.com/blog/investing/what-is-how-to-open-brokerage-account/

https://youngandthrifty.ca/the-ultimate-guide-to-canadas-discount-brokerages/

When the World Health Organization (WHO) announced COVID-19 as a pandemic on March 11, 2020, the Canadian federal government recognized the need of providing financial assistance to those who have lost their jobs due to the virus or had to stay at home and take care of their loved ones because of quarantine regulations. It launched the Canada Emergency Response Benefit (CERB), a taxable benefit of $2,000 a month over the course of seven months.

It was reported that 240,000 Canadians had successfully applied within the first hour shortly after Prime Minister Justin Trudeau made the announcement, and roughly an hour later, the figure had already jumped to more than 300,000. The final figures released on October 4, 2020 according to Service Canada and Canada Revenue Agency indicate that a total of 27.5 million applications were received and the total benefits payout was $81.64 billion.

With CERB, a lot of people were hopeful that it will pave the way for Universal Basic Income or UBI, a subject that has been in discussions way before COVID-19.

First, the Basics: What is UBI?

UBI refers to a guaranteed livable income provided to everyone in a population on a regular basis. The amount is sufficient enough for someone to “live a modest but dignified life” according to Evelyn Forget, a professor of economics at the University of Manitoba in the Department of Community Health Sciences and a member of the Basic Income Canada Network, a non-profit that’s advocating for UBI in Canada.

Like with every benefit, however, UBI would have certain criteria. For example, if someone doesn’t have an income of any means, then they will receive the full benefit; if someone is working but receives a low-level income, they will receive a partial benefit. Of course, UBI won’t apply to those who are already above the low-income threshold.

There is a similar discussion of UBI in the U.S., which former U.S. Democratic presidential candidate Andrew Yang alluded to, but this one pushes for the same amount for everyone, no matter how much they’re earning.

Trial Runs

UBI is nothing new in Canada. In fact, 50 years ago, there was a trial run of UBI that took place in Dauphin, Manitoba — a town of approximately 10,000 people which is about five hours away from Winnipeg. A group of economists was the brains behind the program dubbed “Mincome” (or minimum income) that aimed to address rural poverty. The program ran for five years, where an average four-person family in Dauphin was guaranteed an annual income of at least $3,800 – which is equivalent to $20,000 today.

Then years later, in 2017, Ontario — then under Liberal leadership — unveiled its own three-year basic income pilot with 4,000 low-income participants, where individuals received $17,000, couples received $24,000, and persons with disabilities received an additional $6,000. However, the program was cancelled ten months later by Ontario Premier Doug Ford.

Then-Social Services Minister Lisa MacLeod cited the reason for the program’s cancellation was that the government believed it was failing to help people become “independent contributors to the economy.” This is certainly contrary to a report compiled by researchers at McMaster and Ryerson Universities which revealed that nearly three-quarters of respondents who were working when the project began continued to work, even as they received a basic income.

Advantages

In both test runs, the results were actually more positive than negative, proving that there are a number of advantages to UBI. For the 2017 rollout, it was revealed that participants also saw better overall health while taking part in the program — more than half said they were smoking less, 48 percent said they were drinking less, 83 percent described feeling depressed or anxious less often, and 81 percent said they felt more self-confident. Participants also pointed to outcomes like improved diets, better housing security, and less-frequent hospital visits.

As for Mincome in the 1970s, researchers who analyzed the data disclosed that the UBI enabled low-income teens to continue pursuing their studies, rather than drop out and make a sacrifice to provide for their families. There was also a decrease in accidents and injuries because UBI allowed its recipients a choice to avoid unsafe work conditions or working dangerous jobs while stressed or overtired. What’s more, there was also a decline in visits to family doctors for depression, anxiety and sleep disorders —and there was a significant decrease in mental-health-related hospitalizations.

Disadvantages

Of course, those who opposed the idea of UBI have their own arguments to present. For instance, they believe that the money needed to fund a UBI would cause preexisting social programs, like the Guaranteed Income Supplement for seniors, to be axed, leaving those who rely on them without help. It’s said that during the Ontario pilot, persons with disabilities who received UBI had to give up a lot of supports to access the program. In the end, some persons with disabilities just decided it wasn’t worth it.

A lot still needs to be discussed with UBI, but the government should consider it as an option for eradicating poverty in the country.

 

SOURCES

https://rabble.ca/news/2020/12/cerb-showed-us-basic-income-could-work-canada

https://www.moneysense.ca/financial-literacy/explainer-what-is-universal-basic-income/

https://www.thestar.com/news/gta/2020/12/09/basic-income-hailed-as-key-in-kickstarting-the-economy-in-a-post-pandemic-canada.html

https://www.canada.ca/en/department-finance/news/2020/03/introduces-canada-emergency-response-benefit-to-help-workers-and-businesses.html

https://www.ctvnews.ca/health/coronavirus/feds-say-more-than-300-000-canadians-have-already-applied-for-cerb-1.4884675

https://www.canada.ca/en/services/benefits/ei/claims-report.html

The novel coronavirus of 2019 brought on numerous challenges for all of us. However, there was one silver lining in the dark clouds of the pandemic: more remote work opportunities became available.

According to online staffing platform Freelancer.com, they experienced a job growth of 17% in 2020, garnering a total of 2.1 million jobs as compared to 1.8 million in the previous year. Company executives are confident they will continue to flourish, citing that jobs in app and web development are among the most popular.

Freelancing gigs offer a slew of advantages that a traditional “9-to-5” job can’t provide. For one, freelancing allows you to work on your own time to meet your deadlines without your bosses breathing down your neck and checking up on you every hour. What’s more, freelancing rids you of the aggravations of commuting during rush hours and enduring traffic.

However, there’s a downside to being a freelancer, especially when you’re not equipped with finance-savviness. Since the earnings do not come regularly every two weeks like with regular jobs, you may find yourself in a financial quandary sometimes, with no options left but to play the waiting game. But fret not, there are solutions to budgeting your freelance earnings like a pro. Take a look below:

Keep a record of your earnings and spending.

This can’t be emphasized enough: You cannot approach your finances like you’re blindfolded. The best way to do that? Keep track of your money, from what goes in and what goes out. Hold on to those receipts if you must. You can use an old-fashioned ledger or an Excel spreadsheet, but if you’re tech-savvy, then apps like Mint or Goodbudget are ideal for you.

Always prioritize the necessities.

Is a new set of headphones as important as paying off student loans? Of course not. Whether you’re working with freelance earnings or regular earnings, it’s important to always set aside finances for the necessities like your utility bills, student loans, and credit card debt. It’s always good to have these priorities paid off so you can enjoy the rest of your money without guilt.

Stick to a weekly budget.

True, your current freelancing gigs can be double or even triple than what you used to make with regular jobs in the retail or food services industries. But this doesn’t mean you can freely spend every cent that lands on your lap! Give yourself a weekly budget and make sure to stick to it. Not only will this help during those times when gigs run out, it only helps you become more disciplined and wiser on what you spend your money on.

Set financial goals.

Just because you’re a freelancer doesn’t mean that you should do away with financial goals like you would if you have a regular job. If you’re saving up for a car, for example, then set your mind to this and come up with a doable savings plan. Doing so will make you more motivated and smarter with your financial choices.

Plan your vacation accordingly.

You may not have vacation pay, but this doesn’t mean you can’t go on a vacation! However, keep in mind that the time you take for a break means putting your income on pause, so be sure to have enough money to cover the costs while you’re away. This way, you don’t feel overwhelmed taking on more projects than you can handle because you’re trying to catch up on your due payments.

Being a freelancer is a dream job for a lot of people because of the flexibility that it allows. However, if you do decide to take this route, make sure that you’re prepared to make an effort to make your finances work.

 

SOURCES

https://www2.staffingindustry.com/site/Editorial/Daily-News/Freelancer.com-reports-jobs-on-platform-rise-by-17-in-2020-fastest-growing-are-in-app-and-web-development-56377

https://www.forbes.com/sites/laurashin/2014/07/17/freelancers-heres-how-to-budget-your-money/?sh=475256423c42

https://mint.intuit.com/blog/budgeting/best-practice-budgeting-tips-for-freelancers/

https://www.nerdwallet.com/blog/finance/learning-to-budget-as-a-freelancer/

https://www.freshbooks.com/hub/productivity/the-importance-of-budgeting-as-a-freelancer-five-essential-tips

As the pandemic rages on, people continue to suffer from its economic impact, with the unemployment rate pegged at 8.5 percent as of November 2020. However, there seems to be a light at the end of the tunnel, as experts say that the country’s labour market is slowly bouncing back, adding 62,000 jobs in the same month. Still, if there’s one thing COVID-19 has taught us, it’s that uncertainty is a given. With a number of both big and small businesses struggling to stay afloat, it’s a wise move to examine one’s financial health and deduce whether it’s strong enough to survive these challenging times.

Overall, Canadians have realized the importance of saving money. In fact, according to a report released by Scotiabank, since the pandemic began, 79% of Canadians have been careful on how they spend their money, with 58% say they put extra money they’re not spending into savings accounts, while 38% are adding to their investments. With all our lives seemingly put on a pause, travel and entertainment expenses have become a thing of the past, and this is one area in which people see savings potential the most.

Of course, if you don’t count yourself as among the 79% who have turned financial savings savvy during these COVID-19 times, it’s not too late to start making an effort now. Below are surefire tips that will point you to the right direction.

Examine how you spend your money.

Take time to thoroughly do an assessment of your spending. Go through your online banking account, credit card statements, and bills, and see if you notice a pattern on how you’re spending your earnings. If you tend to shop online as soon as your pay cheque comes in and then wait a few days before paying your bills, come up with a plan that will reverse this habit. For example, set up automatic payments for your phone bill and other necessities and don’t think about shopping online until all your monthly bills are paid. In addition, never settle for simply paying the minimum due. Paying off the whole due amount should be your goal.

Set up an automatic savings plan.

Along with keeping your bill payments in check and curtailing your online shopping, set up an automatic savings plan. This way, you have funds set aside as soon as money comes into your bank account, and you will not have to worry about setting a budget each month on how much to save. This allows you to be more disciplined with a savings plan because the amount is set – there is no need to do bargaining tricks with yourself to figure out how much to set aside. It doesn’t have to be a big amount of your earnings. You can start small and then work your way up gradually once you’re comfortable with the idea that a chunk of your earnings is put into your savings account automatically.

Always have a shopping list – and stick to it!

If you’re heading to the supermarket, be sure to make a list of the things you need first. Sure, it sounds old-fashioned, but it’s a great way for you to keep your spending in check, instead of picking up items at random because you have a craving for them or they are in the discount pile. Create a meal plan each week, if you can, so you have a clearer idea of which items to buy. And don’t be shy in utilizing those grocery flyers and supermarket coupons. When you’re saving money, a little always goes a long way.

Maximize customer rewards programs.

If you do have to shop for new clothing items, electronic products, and school supplies, choose stores that offer a customer rewards program. This way, you’re actually getting something back for your spending, even though it may take a while for you to earn the necessary points to get those rewards. But beware of the temptation to shop more to rack up points – this is a tactic for those businesses to get you to spend more. Sometimes it pays off, but most of the time, it tempts you to buy items that you’re not necessarily looking to buy in the first place.

Negotiate for better deals.

This one may be a bit of a long shot, but it’s still worth a try. Check your subscriptions, including online magazine, cable, movie and TV show streaming, and others. Reach out to the customer service team and do your best to negotiate for a lower price. For example, if you have cable, check for the channels that you don’t normally watch and mention that when you’re on the phone with them in hopes of getting a better deal. There’s no guarantee that they’ll say yes, but if they do, it’s definitely worth the effort, wouldn’t you agree?

So there you have it – great tips to turn you into a savings specialist. Start saving!

 

SOURCES 

https://financialpost.com/news/economy/canada-statistics-agency-eyes-savings-pot-of-cash-for-hints-on-recovery-2

https://refreshfinancial.ca/blog/financial-news-and-advice/10-ways-saving-money-can-better-your-life/

https://www.thesimpledollar.com/save-money/little-steps-100-great-tips-for-saving-money-for-those-just-getting-started/

https://www.newswire.ca/news-releases/canadians-spend-cautiously-opt-to-save-for-emergency-funds-and-investments-scotiabank-report-reveals-885341684.html

https://globalnews.ca/news/7501537/canada-labour-market-november-2020/