Making An Emergency Fund When You Don’t Have The Money

making an emergency fund

64% of Canadians have an emergency fund to cover three months of expenses 👏👏👏

An emergency fund is there to help when something unexpected happens – You can’t work for a period of time, get laid off, the washing machine breaks, etc.

But that means that MANY Canadians AREN’T prepared for a financial emergency.

If you fall under that 36% of people, it’s likely for one of two reasons:

  1. You didn’t realize how important they are (if that’s you, read this)
  2. You don’t have the money to make one

Most fall under the second category. And if that’s you, we have one simple change you can make to build an emergency fund when you don’t have the money.

Save once a week.

That’s the trick.

Saving once a month or taking money off of each paycheque works great when you have the money. The problem comes into play when you already KNOW things will be tight or when you’re hit with an unexpected bill.

Adding to your emergency fund will be the first thing axed because, of course, it already feels like an emergency.

If rather than saving $100 per month, we break down our savings to $25 a week, for example, it’s easier to do consistently. And, when it comes to finances, consistency is key. Most people can find $25 even on lean weeks.

Are you winging it with your finances?

There are 2 keys to making this work:

  1. You must automate it
    Manually transferring money over gives you the option to forget and to debate whether you can this week. Do not give yourself that option.
  2. You must put the money into a separate account
    And it’s best if that’s not accessible by bank card. I chose to use a TFSA but a professional who is familiar with your situation will be able to advise best. Jen, our Money Coach, would be happy to help you with that.

Making an emergency plan when you don’t have the money can take time. So be patient with yourself. It takes time and effort to build plans like this.

But it’s worth it to know that you and your family will be taken care of.

How Much Does A Financial Planning Professional® Spend On Her Wedding?

how much does a financial planner spend on her wedding?

Here’s the post and answer many of you have waited for – how much does a Financial Planning Professional® who encourages frugality spend on her wedding?

My husband and I have been married for 8 years now and a frugal wedding has afforded us a number of opportunities we may not have had otherwise. A beautiful home and two awesome kiddos, to start!

I’ll sheepishly say, we spent more than I thought we would. But I wouldn’t change a thing.

As you can imagine, a lot of planning went into this wedding even though it was PLANNED IN 3 WEEKS! This is what we did to stay frugal.

  1.  We had many discussions about our budget (surprise! surprise!) because we knew we didn’t want to go into debt
  2. We gave ourselves less time to plan so that we were limited in what we could do
  3. We went for NICE not extravagant 
  4. We got married during the week
  5. We kept it small – about 24 guests
  6. We picked one thing to splurge on
  7. We accepted as much help as we could get

Could we have done the wedding cheaper? Absolutely.

Especially if we didn’t know there would be some cash given to use. Would I change anything at all? Absolutely not.

Total Wedding Cost: ~$7,500

The Value of Time & Money

time and money

“Not enough” is a phrase we use A LOT. There’s not enough time in the day or money in our bank accounts. The truth is, when it comes to time and money, it’s all about value.

The value that YOU feel you can give or receive in a situation.

Most people have the money to attend a Shania Twain concert. However, if we don’t see value in it, we’ll quickly decline the invitation and choose to spend our time and money elsewhere.

On the contrary, if this is the last tour she’s going on and our best friend is asking, you’d better believe the time and money would be found!

Nothing has changed but how we value the event.

My value for my time is that I do what I enjoy doing.

There are many things we all have to do that we don’t want to – cleaning the bathroom and filing taxes to name a few.

But, when the choice is there, OWN IT.

It’s all about priorities. When we want something, we will find a way to make it happen. Whether that’s moving a schedule around or pulling longer days to bring in extra income.

So, I’ve changed my narrative from “I don’t have enough [time or money]” to “I’ve chosen to do something else instead.”

This simple change in the way I talk to myself has helped me to manage my time and money around the things that are important to me.

By paying attention to the way we talk to ourselves, we can manage our time and money on the things that are important to us.

So, what’s important to you?

How to Separate Your Finances After a Breakup

separate your finances after a breakup

We like to keep our topics focused on building your future and growing your finances. But sometimes things fall apart. Relationships break down and you need to figure out how to divide what you’ve built together. If you find yourself needing to separate finances after a breakup, here are some of the financial aspects you will need to get in order. Working with a professional will ensure all your bases are covered.

Who gets the house?

If you own it, you will likely be contacting a professional to split it. If you’re renting, whose name is on the lease, and can it easily be changed?

Whoever is moving will need to make sure that their address is updated. Use the Government’s website to change your address with the main regulatory agencies.

Also, update Your address with:
  •       Your bank and credit card company
  •       Investment Accounts
  •       Insurance Policies – life, health, house, car
  •       Loans or debt accounts
  •       Service accounts you hold (i.e. cellphone, hydro)
  •       Regulatory agencies you report to
  •       Your employer

How do you separate finances after a breakup?

You have a few options.

If you had a joint bank account, remove one of the names after splitting the funds. Make sure that all automatic withdrawals or deposits coming from the partner who was removed have been redirected.

Otherwise, you can each open your own chequing account and move your automatic deposits and withdrawals there. We suggest leaving your joint chequing account open for a few weeks until you’re sure you haven’t missed anything.

Now, take inventory of your new financial picture. Create your OWN budget and goals to start strong in this new chapter of life.

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If you have investments, decide which ones need to be split (if a lawyer is involved, they will advise). Remember to change the beneficiary on your RRSPs and TFSAs.

To avoid trouble down the road, keep some form of paper trail on what you’ve decided together. If you’re working with a lawyer, they will likely do this for you. If it was a verbal agreement, consider sending an email or screenshot a text message between the two of you, of your agreement.

The only constant in life is death and taxes.

Take inventory of your bills. Change the account holder of any household bills to the person staying in the home. Separate the accounts that you’ve been sharing together – like family phone plans and gym memberships.

Be sure to update the beneficiary (unless required for a loan, children, etc.) on your individual and employee group life insurance policies. It is best to make your beneficiary an actual person, instead of your estate, unless advised otherwise by your lawyer.

If you have health coverage, either remove the ex-partner or talk with your provider about a continuation of benefit coverage or other options available.

The partner being removed, if applicable, should still submit all receipts for services incurred before the separation to get the reimbursement they are entitled to.

If you are working with a lawyer, they will guide you through the process of separating finances after a breakup. They can advise regarding beneficiary changes and agreements you need to make. This list is not exhaustive and there are many more details to work out.

Sending you strength through this difficult time 

5 Steps to Stop Emotional Spending

Stop Emotional Spending

Do you find yourself in the Household section of Superstore or opening the Amazon app on crappy days? Putting things in your cart that you really don’t need, in an effort to feel rewarded for the day’s frustrations and indulge in a little retail therapy? Until you look at your bank statement and realize how quickly those purchases add up.

If that sounds familiar, you’re not alone. 63% of Canadians admit to impulsive shopping and we spend about $8.8 BILLION on it collectively, every year.

It’s easy to get stuck in a ‘stress and spend’ cycle of feeling bad for your purchases, getting stressed, then emotional spending, even more, to try and feel better. 

Stop emotional spending

We’re going to give you 5 steps to stop emotional spending.

First, forgive yourself. Beating yourself up is more likely to perpetuate emotional spending. Life can be overwhelming and finding comfort is so important. Good for you for recognizing the pattern and working towards change ❤

It’s time to stop emotional spending and replace the habit with something new. Our brains aren’t wired to listen to “stop doing that” but, they are wired for “do this instead”. That’s why replacing the habit, rather than telling yourself to just stop, is really important.

Here are a few things to try, to replace the habit:

  • Meditation
  • A walk
  • Cooking your favorite meal
  • Making something – knitting, painting, gardening
  • Reaching out to family or friends and admitting that you need some support today

Committing to a self-care practice may also be helpful. Check out our blog on that topic.

You’re right, it might not feel as comforting the first time. But, over time, your brain will learn to find just as much (or more) comfort in your healthier habit.

Next, remove easy access to spending.

Delete your Amazon app, remove notifications for Facebook marketplace, take credit cards out of your wallet, and delete any saved credit card information from your apps – you didn’t think we’d forget that one did you? 😉.

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Now that you don’t have the immediate temptation, it’s important to give yourself the right tools to adjust.

The next time you’re feeling tempted to indulge in some retail therapy, ask yourself – Would I buy this item if it wasn’t on sale? or How many hours would I have to work to pay for this?

This has helped me catch myself – just because it’s 60% off, doesn’t mean it’s a smoking deal. If I saw this item, and this was the regular price, would I be snatching it up as fast? Or would I be keeping an eye out for a sale? Realizing how much it would really cost can be very sobering.

The last suggestion we have for you is to make goals and a budget.

Turning down something you really want to buy is crazy difficult. Knowing you need to choose between this item and a weeklong Caribbean vacation, however, is much easier.

Give yourself a bigger goal to work towards so that you’re not giving an item up, you’re choosing something better!

These beginner savings tips will help you get started.

Those are the five steps to stop emotional spending. They really will work if you commit to them. Retail therapy is a hard habit to break, so give yourself credit for every step that you take.

Spring Clean Your Paperwork

Does spring cleaning make you think of new beginnings or want to run? On our team, Brittany spring cleans for fun and Alyx would rather spend that time sewing or with family. The most difficult part about spring cleaning must be figuring out how to organize paperwork. Especially if your paper organizing strategy has a lot to do with paper piles. Let’s talk about how we can organize paperwork while we spring clean.

First, decide if you want hard copies or to make it digital.

Keep in mind that you will need hard copies of some forms and that anything you make digital should be backed up (cloud, email, external hard drive).

Locate the following and make a pile on the floor or a folder (physical or digital) for each:

  • Wills
  • Mortgage documents
  • Life insurance policies
  • Health and dental plan booklet
  • Tax returns and Notice of Assessments
  • Home and car insurance policies
  • Banking documents
  • Loan statements
  • RRSP/TFSA/RESP statements
  • Receipts to save

Now that you know where it all is and whether you want hard copies or digital copies, we can organize the “paperwork”. We’ll give you a few options on how to do this.

Option 1: Quick fix for hard copies

Use a boxy file folder with each slot labeled for all the above information.

In January each year, take out old statements, receipts, warranties, and either shred, put into a tax folder, or move to a locked metal document box in the basement. That locked metal box is where you’ll keep your passports, marriage license, warranties, copies of wills, and other long-term important documents. Bonus points if your metal locked box is fire and flood-proof!

Chances are, you have some paperwork on your computer – emailed receipts and such – that also need a home. We suggest either printing those off and putting them in your boxy file folder or reading option 2 and applying it just to those documents. Of course, you would simply substitute scanning your documents by saving them directly into the appropriate digital file.

Option 2: Make it digital

Start by making a folder on your computer for personal documents. Within your folder, create a file for each pile that you have – Will, Mortgage docs, receipts, etc.

Then, working with one pile at a time, scan the documents onto your computer. Change the name of each document to its proper title so that you can find it easily later.

You can organize paperwork as specific as you’d like with this.

You might be content keeping your documents in these main category files and scrolling through for what you need.

Or, you might want to make it more specific. For example, you can have a main folder for your banking documents and create sub-folders within that to separate your statements, contracts, notices, etc.

Remember to have backups of all digital files.

Option 3: Put it all in a locked filing cabinet

organized filing cabinet

This is similar to going digital, but for hard copies. You’ll organize paperwork by making a hanging file for each category with a label.

Then, if you want to make documents easier to find, label a file folder to make more specific categories.

You’ll notice this is very similar to option 1. The difference is whether you want all of your documents in one place or if it’s more convenient to have quick access to the ones you’re most likely to use.

As you’re going through your paperwork, let’s make this even easier for the future.

  1. Know where your will is – It is often kept on file with your lawyer, but you should also have a copy
  2. Make a calendar note for when your mortgage term renews
  3. Review when your life insurance payments are due and if you have any renewal dates. Book a quick call with us if we can help you here.
  4. Review your Health and Dental Plan booklet and be sure you understand your long-term disability benefits
  5. Sign up for CRA’s “My Account”. This site makes accessing documents and benefit information (such as GST, Child Benefits, etc.) much easier.
  6. Make a calendar note for the renewal dates of your home and auto insurance policies
  7. Review your loan statements and interest rate details
  8. Review your investment statements and note your investment choices – ex. Mutual fund, GIC, RRSP, etc.

Now that you have your paperwork organized, you’ll have easy access to your documents when you need them, get reminders on renewals, and you may have found a few ways to save money during your interest and investment reviews!

Once you’ve got all these important documents organized, you’ll be ready for your next step in financial awesomeness! Is your budget the next task on your adulting checklist? Read our blog on the 123’s of Getting Your Finances in Order.

I’m Scared Of My Accountant

How to fire your accountant

This article was written by Jen at Dollar Divas and offered to us to use. Be sure to visit her page!

One of my favourite “ah ha” moments at Dollar Divas came a few years ago during a discussion group. We had been chatting about hiring the right professionals and how to find them. When a woman who had been pretty quiet all evening finally joined the conversation.  

“I dread going to my accountant every year,” she said.  

Saira and I looked at each other and said simply, “Then get a new accountant.”

Slowly the realization sunk in that she could fire her accountant and move her business to a different account. It was like a huge weight was being lifted off her shoulders. This Diva felt loyal to someone she hated simply because she had used him for many years. 

This is not an uncommon issue. 

Many women stick with professionals who are the wrong fit simply because they don’t want to rock the boat—and it needs to stop. 

Here are some tips to help you fire your accountant (or other professional) without feeling the guilt.  

  • Speak up: If your professional is not serving you to your satisfaction, you are not required to continue accepting poor service. Speak up! Most professionals will continue with the status quo unless you voice your concerns. A good professional will change their actions when their clients voice an issue. If you have already taken this step and nothing has changed, then it is probably time to start shopping elsewhere.
  • I like me best: Something I witnessed over and over again is a woman staying in a professional relationship that was not serving her simply because she was afraid of hurting someone’s feelings. Many women have told me that ending a professional relationship is like parting ways with a boyfriend. If this is you, something to keep in mind is, “I like me best.” While putting others above yourself is noble, it is not always in your best interests and there are better ways in which to do this. If you have already tried to talk to your professional and nothing has changed then it’s time to find someone new who can serve you better.
  • Have someone else do it: Ending a long-term relationship with a professional can be difficult for some people. The good news is, a lot of times, you don’t actually have to have that super uncomfortable conversation. Once you have found a new person to work with, they can usually have that conversation for you. In the case of a financial advisor, it is as easy as having them request a transfer from your old institution. No ugly confrontation required. If you get a bitter and angry phone call or email, that will confirm that you have made the right choice by changing.

I can’t speak for all women, but a lot of the women I know are wired to be people pleasers.

While this may serve them well in their personal lives, it is not necessarily conducive to healthy professional relationships. 

Personally speaking, this quality has landed me in more than one uncomfortable situation. Where I was not being served well, but I was too afraid to make a change thanks to some bizarre sense of loyalty. Learning that I can make a change has not only been liberating, it has been lucrative. 

At the end of the day, you need to look out for you, and if you’re not happy, then something has to change. 

The 123’s of Getting Your Finances in Order

how to get your finances in order

Do you feel like you have your finances in order or are you winging it? Talking about finances can be really difficult because the conversations are so emotionally charged. It’s easy to have fears, insecurities, and frustrations tied into our finances. We understand that because we’ve been there too. Rather than getting trapped in that cycle, we’ll walk you through how to get your finances in order.

Step 1: Make a Budget

Have you ever put a puzzle together without having the end picture in sight? Probably not. You know that’d make the task much more difficult than it needs to be. 

The same goes for your budget. Without seeing an accurate picture, it’s hard to understand what you need to do to reach your goal.

How to Start

Grab a piece of paper and write down how much money your household brings in each month at the top of the page. Below that, write the following headings:

  1. household
  2. transportation
  3. food
  4. entertainment
  5. clothing & gifts
  6. others

 

Then, go through your bank and credit card statements for the last month and pair each expense with a heading, and total them up.

Now you know how much you spend each month AND what you spend the most money on.

Add up all of your expenses. And subtract your income from expenses. That’s how much money you have left over each month.

If you’re spending more than you’re making, you need to go over your expenses and your income to see what changes you can make.

To finish off your budget, decide where you want that extra amount of money to go. Maybe debt repayment, a vacation, or one of the following.

Step 2: Make an Emergency Plan

There are SO many angles to look at this from, so we’re going to cover 3 main angles.

Make an Emergency Fund

This is priority numero uno. Your emergency fund should be at least enough to cover 3 months of expenses. And yes, that’s a big number. But this emergency fund is going to keep your budget on track, avoid stress in a financial crisis, get you through a job loss, and a lot of other 💩 that life can throw at you. 

Our suggestion is that you put a manageable amount of money aside each month, into an account that you don’t have access to via bank card, like a TFSA. 

What if something happened and you couldn’t work for a long period of time though?

Just because you don’t have an income, doesn’t mean the bills stop. Because saving enough to cover you (and maybe your partner) taking a long period of time off of work isn’t realistic for most people, get disability insurance. It replaces a portion of your income if you’re hurt or sick.

There are also insurance plans that would help financially if you couldn’t work because your child was sick.

Get life insurance

It’s not for you, it’s for your loved ones. It’ll help them pay off debt (including the house), afford the expenses of growing kids, and finance the changes in lifestyle they’ll need to make.

When we talk about how to get your finances in order, we also need to consider protecting them.

Make a will

Without a will, your loved ones may have to wait a long time and pay fees to get their inheritance. In order to avoid conflicts and ensure your family is taken care of, sit down with a lawyer and knock this off your task list.

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Step 3: Make a Savings Goal

Now that you know what your financial situation looks like and you’ve made sure you’re covered if it ever took a hit, you need to make a savings goal.

Saving looks different for many people – both how you save and what you save for. It could be saving for a long-term expense like retirement, a property, vacation or large annual bills.

Whatever it is, you’ll need to refer to your budget again.

You know how much you have leftover now, so you can decide how much of that you want to put into saving. 

Make sure that you do the math on how long it’ll take to save what you need. Putting $100 aside for a new car each month might sound like a great idea until you realize it’ll take you a year just to save $1,200.

You’ve probably realized that there’s nothing glamorous about getting your finances in order.

It’s not as fancy to whip out a debit card as it is a Black Card nor is it too fun to spend your free time putting this all together. It takes discipline, a firm grasp on what you’re working towards, and boundaries.

But how good would it feel to not be phased by a surprise bill? Or to know you’d be okay if you lost your job?

These things aren’t glamorous but the freedom and security you can afford by following these steps on how to get your finances in order are much more rewarding.

Be sure to share this with your closest friends who want that same freedom!

Take control of your financial future. 

Surviving Coronavirus in Canada

Coronavirus in Canada

Feeling uneasy or maybe a bit scared by what you’re hearing in the news right now? They’re talking about market free falls, a disease that has people quarantined and likely all of your upcoming events have been canceled. People are panicking and bulk buying, and you’re trying to keep your cool while wondering what you can do to survive the Coronavirus in Canada. Knowledge is power, so let’s talk about what you have control over.

The virus is affecting our World way beyond health. 

It’s hitting our communities, lifestyles, and economy drastically. But don’t fret! There are things you can do about it. Right now, it’s important to take care of our communities and make sure that we’re prepared.

How can we support people?

Community is so important in times like these. Sharing resources is the perfect place to start. Whether you have food or coveted toilet paper, sharing is caring. Our local heroes are helping people who don’t have access to their medications and other necessities right now.
Let’s not forget those suffering in silence from their mental health, too. Those with an anxiety disorder that’s being perpetuated and domestic abuse victims who are quarantined in dangerous situations are part of that group.

Reach out to your friends and family. You may not know what they’re struggling with behind closed doors. That human connection and support are so important right now.

Buy local.

You’ll hear us talk about that a lot at Iron & Pearl. Shopping locally can make a big difference, especially right now. These businesses often don’t have online stores or second locations that they can make an income from. It’s a family behind the scenes who relies on the income that their business brings in. Buying local is critical to curbing this financial crisis.

Stock what’s necessary.

At this point, we’ve been instructed to stay home if at all possible. It’s always a good idea to have a couple of weeks’ worth of food on hand in case of an emergency. Surviving the Coronavirus is no different. It’s important to have what your family needs but it’s not necessary to buy stores out of their stock. When we do that, it takes away resources from those who haven’t been able to leave the house – mothers of young children, the elderly, and those fighting on the front lines. Look out for your neighbours.

Keep an eye on your emergency fund.

Your family has told you for years that you need to have an emergency fund. Do you have one? Many people don’t have much of an emergency fund. Either from not seeing the importance of it or because money was tight before any of this happened.

We’re hoping that you see how imperative an emergency fund can be at this point. Check out our blog post on “how to save money without making more” to read more.

Keep an eye on what you’re spending as well. As much as spending would help our economy, spending unnecessary money right now may hurt you later.

Stop looking at your investment statements.

You know they’re not looking good and so do we. Our advice still stands – don’t sell. Have you ever heard the sage advice buy low, sell high? That’s exactly what we should be remembering right now. Unless a professional who knows your specific case has told you to sell now, just hang tight.

“That’s it, we’re done.”

Don’t let yourself get to that point with your finances. There’s no doubt that some people will be hit hard financially by this market free fall. But, there have been measures put in place already. If you’ve been quarantined or laid off, look into EI benefits. They’ve made some big changes to ensure you’ll have at least some income right now.  BC Hydro and the big mortgage lenders are offering for those in a tight financial spot to defer their payments for up to 6 months. Keep in mind, you will still have to honor those payments. But, if you’re genuinely struggling to make ends meet, take hold of this opportunity.

Filling out an insurance application?

It’s going to take longer. If you’ve recently traveled, you will have to be in quarantine for 2 weeks before they can consider your application. Companies have stopped issuing travel insurance and medical tests have been suspended until further notice – making it more difficult to get many types of personal insurance. “Business as usual” may not really be. Insurers have people working from home or locked-down offices so that your questions can be answered, but buying yourself a policy will be more tricky.

Put your phone down.

We’d prefer it if you finished reading this article first 😉 but try not to stay right on top of the news. There are scary videos coming out on social media, headlines that’ll turn your stomach, and helpful Government plans that make you feel nervous about how long this will last.

Keeping yourself up to date may seem helpful, but it can also be anxiety-inducing. If you’re feeling overwhelmed or uneasy about this situation, stay home and put your phone down. At this point, helpful information may actually be harmful to you. Having Coronavirus in Canada is going to be all about preparation and education.

This is a scary time for the World. Building community and leaning on each other might just be the silver lining in all of this.

We won’t be staying quiet in our offices as this goes on! Follow us on Instagram or Facebook for consistent updates on the financial support that Canada is offering and other options available to you.

As always, reach out to us through our contact page and we’ll do our best to help.

Canada's March 18 Covid-19 Economic Response Plan

Why Mom-preneurs Need Life Insurance the Most

why mom-preneurs need life insurance the most

As a busy business owner, do you feel like you’re running around like a chicken with its head cut off? Holding client meetings, being a parent taxi in between, meal planning, running the house and being the glue that holds everything together. Who would do all of that if you couldn’t? That’s exactly why mom-preneurs need life insurance the most.

If working from home allows you to chauffeur your kids, run errands, do chores or be a homemaker, your family would be lost if you weren’t there.

Even if you don’t work from home, hired help and put systems in place so that certain things can run smoothly without you there, your family will still be scrambling to do those little things that often get overlooked. Not to mention how much they’d miss you.

Your business may also be an asset.

Having a plan to cover your business expenses until it can be sold would be a tremendous help to your family. Or, maybe your kids are a bit older and one of them would like to run your business. Giving them or your business (if it’s incorporated) a set portion of your life insurance benefit would afford them what they need to transition your company.

For example:

  • Cost of closing your business
  • Covering outstanding debts
  • Capital Gains
  • Ensuring your employees/subcontractors are paid for their work
  • Legal fees
  • Taxes
  • Financial obligations, especially if you personally guaranteed your debts against your home/investments/etc.

Of course, that’s not an exhaustive list – just a starting point. Talk to your Financial Planner/Accountant and Lawyer to determine exactly what you need.

Especially if you’re a sole proprietor, consider your personal taxes as well.

We want to prevent your family from getting any unexpected, large bills. Sitting down with your Insurance Broker or Financial Advisor is the first step in ensuring your personal and business finances are in order if anything does happen.

Mom-preneurs need life insurance the most because they often juggle two important roles – a business and a home.

You have a very important role and play a detrimental part in caring for both your business and your family. Having a life insurance policy and talking about a plan with your partner can ensure that they’ll be taken care of, even if you’re not there.

Remember, you’re in control of your financial future.

It takes time and effort to put plans like this in place, but it’s worth it to know that your family is taken care of.

If you could use weekly reminders about taking a holistic approach to caring for your finances, join our newsletter!

What Is Disability Insurance?

what's disability insurance

There is a type of insurance that’s painfully underrated. I’ve never understood why. It can save your life – or at least your lifestyle. It’s Disability Insurance. What is Disability Insurance? Well, we’re going to cover that in the short video below!

Disability Insurance replaces a portion of your income if you’re too hurt or sick to work.

It gives you the ability to keep paying your bills so you can focus on your recovery. Maybe you’re able to use WorkSafe or Employment Insurance. Just remember, they only pay in certain circumstances and/or for certain periods of time. If you’re self-employed or working a side hustle and not sure what you qualify for, read these 2 blog posts: What If I Get Hurt At My Side Hustle? | Government Benefits for Self-Employed Canadians

EI Insurable Earnings

With a plan like the one we walked through in the video above, Sam was able to fully recover and didn’t have to stress about paying her bills or have increased debt. Having an emergency fund to supplement her Employment Insurance and extending her personal disability insurance waiting period, so that the benefit starts later, made the insurance premium much more affordable.

Disability Insurance is a very flexible product. You can customize when it starts paying you, for how long, and how much.

You can also choose whether you’re covered for accidents, sicknesses or both.

Accident coverage is a simple concept – it will pay you if you can’t work because of an accident. Sickness coverage, on the other hand, is more robust.

Sickness coverage can replace your income from serious illnesses like cancer or other internal pains like muscle wear-and-tear.

Getting both accident and sickness coverage can cover you from *almost all angles.

What Disability Insurance doesn’t cover is medical expenses and long-term care. Those are 2 separate types of insurance.

The benefits of disability insurance shouldn’t be underestimated.

Here’s an example:

Let’s say Sam is 30 years old and makes $50,000 a year as a bookkeeper. The accident was much worse than a concussion and Sam will never be able to work again.

We’re going to make this fair and compare her after-tax income of $39,586.

Assuming Sam works the same job until she’s 65 years old and never gets a raise:

$39,586  X  35 years  =  $1,385,510

If Sam qualified for the CPP Disability benefit (permanently disabled or likely to die from the condition) and received the average $1001.15 per month benefit:

$1001.15  X  12 months  =  $12,013.80    X  35 years  =  $420,483

Let’s minus her CPP benefit from the income she’s missing out on:

$1,385,510 lost wages    $420,483 CPP Benefit = $965,027.00

That means that in the BEST CASE SCENARIO, Sam would lose $965,027.00 in income. And that’s if she never made more than she does right now.

If Sam doesn’t qualify for CPP disability and again, never gets a raise, she’ll lose out on

0
CAD $

But Sam still needs to pay for her living expenses and might need to pay for medications or disability support now, too.

That’s why we believe that disability insurance is painfully underrated.

Remember, you are in control of your financial future. Plans like this can play a crucial role in securing your family’s lifestyle.

It takes time and effort to put in plans like this, but it’s worth it to know your family will be taken care of.

*Each policy is different. There are exclusions in all insurance policies.

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What are My Life and Health Insurance Options?

Trying to figure out what your life and health insurance options are? You have so many choices when it comes to insurance, so this question can spark some confusion. But you’re not alone!

It’s not uncommon to sit down with a new client and they tell us they’re not sure what kind of insurance they need. They just know what they want to prevent.

You can get just about anything covered by insurance nowadays. Kylie Minogue even has her tooshie covered for an easy $3M.

Getting your THINGS covered is fairly straight forward but it gets a bit more tricky when we talk about covering your PERSON.

There’s an endless list of situations you’ll want to cover but only 6 types of insurance. 

your insurance options

Life Insurance

Pick your benefit amount (within reason) and this plan will pay a sum of money to your loved ones when you pass away. That includes Mortgage Insurance, Term Life Insurance, Whole Life and Universal Life Insurance.

If you have debt or a growing family, this is a must!

Disability Insurance

It replaces your income if you can’t work while recovering from an accident or illness. Without an income, how would you pay your bills?

48% of Canadians have disability insurance and almost all of those people are covered through employee benefits, not because they bought it themselves. The other 52% only has E.I. to financially help in this situation – and that stops after 15 weeks – that’s a scary statistic!

Critical Illness

Pick your benefit amount and this plan would pay you a sum of money if you survive a critical illness like cancer, heart attack, etc. If you need to make changes around your home because your abilities have changed, this plan is a lifesaver. Use it to replace your income while you take time off work or celebrate the fact that you survived!

Health Insurance

Health Insurance can help or cover the cost of prescription drugs, dentist visits, physiotherapy and more. Getting hurt or sick can be more than losing your income; there are expenses that come with it. This coverage, as with all insurance, must be purchased before you need to use it.

There are a couple of health insurance options if you know you’ll need to use the plan immediately. But, those plans cost more and cover a lot less.

Travel Insurance

Canadians are pretty lucky to have the health coverage that we do. But, once we’re outside the border, we’re on our own! Make sure you’re covered wherever you go with travel insurance.

From surprise dental surgery to changing your flights last minute, travel insurance is super affordable for how much it can save you.

Business Insurance

Your life and health insurance options can be set up so that your small business gets the benefit. Having your business as the beneficiary will allow it to keep operating, even if you can’t. Make sure your business is covered! 

From covering the financial loss of your right-hand-worker has to take a leave to offering employee benefits, you have a lot of options!

Remember, YOU’RE in control of your financial future.

It takes time and effort to put plans like this in place but it’s worth it to know that your family is taken care of.

Have some follow up questions? Book a Quick Call with us! We’re here to help 💪

How to Save Money Without Making More

how to save money without making more

Half of Canadians live paycheque to paycheque. That’s a staggering statistic. But, with how expensive some of our main cities have become – I’m looking at you, Vancouver and Toronto – it’s not so surprising. So, how does one save money when struggling to make enough as it is? Here are a few ways you can save money without making more.

Blog post on saving in bite-sized-chunks: https://ironandpearlfinancial.ca/3easysavingtips/

First, you absolutely need to know how much money you make and how much you spend.

This is non-negotiable. There’s no way around it – I’ve tried 😆 There are many options and apps that can help. I gave myself a month to track everything, which gave me a light at the end of the tunnel for the tedious work of data entry. Track what you make and go through every penny you spend on your debit and credit cards and keep receipts for all cash purchases.

You’re right, it’s a pain to do, but saving your receipts for a few weeks and entering information is worth it for how much this pays off!

I entered everything into a blank excel spreadsheet. Here are the categories I put each expense under:

  • Insurance
  • Food
  • Entertainment
  • Gas/Transportation (including car/bike repairs)
  • Gifts/Clothing
  • Medical expenses
  • Phones/Internet/Cable
  • Membership (Netflix, kids’ programs, Amazon Prime, etc.)
  • Work expenses (tools, dues, uniform, etc.)
  • Debt repayment
  • Savings/Investment contribution

You may have miscellaneous expenses to create categories for. The only way to do this wrong, is to not do it! I can almost guarantee you’ll have an unexpected or emergency expense. Do not toss it thinking it was a fluke. There will always be emergency expenses that need to be accounted for.

Once you know how much you bring in vs. how much you spend, you’ll have an idea of where the problems are.

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Save the extra.

Now that you know how much you should have leftover each month, you’ll know if there’s any money left to put in a savings account. I’ve been putting $25 a week into a side account (with compounding interest) for a few years now and it’s been a lifesaver.  Learn more here. Sometimes you just need to save in bite sized chunks when you want to save money without making more.

A few years after starting our own bite sized savings plan, I came across the “latte factor”. If you’re new to that concept, here’s a quick video.

What resources do you already have?

Many people are already working multiple jobs or have other reasons why it’s hard to make ends meet (let alone save), simply saying “you need to make more or spend less”, doesn’t work.

What resources are at your fingertips that you might not be using? Here are a few ideas to get you started:

  • Credit Card Benefits – credit cards often offer little ways to save you money. Like free travel insurance if you pay with your card, bonus dollars if you spend a certain amount,  cash back, warranty extensions/coverage, etc.
  • Employee Benefits – Do you understand your plan? These plans can cover an a lot of health expenses and might offer other benefits. Some companies also offer investments opportunities – don’t risk missing out because you didn’t want to ask a silly question. Someone in your office (probably HR) is responsible for this plan and can help you understand it.
  • Other Member Benefits – The other week, my phone company paid for me to take a friend to the movies just because I’m their customer. We get discounts at certain stores because of my Partner’s company affiliations. Some of my networking groups give me discounts at stores or free first visits. Look at the groups/organizations/companies that you’re a part of and do a dive into what they offer their members!

What’s the interest rate on your savings account?

If you leave your money in a savings account that promises to grow by 0.5% each year (your interest rate) and you leave it in there for 10 years, you’re losing money – thanks to inflation.

Inflation is 2% on average. So, if you’re savings account is only making 0.5% interest, it’s not keeping up!

You’ll hate this next idea but I’m bringing it up because IT WORKS.

Anytime I’ve been in a tight financial spot, I switch to cash. There’s no more of a determining answer on whether you can get take-out than having $1.00 to use.

I take out cash once a week and make envelopes for each category. I chose to do it every week because it’s easier to not spend money when there’s less at your fingertips. Here’s what my envelope system looks like:

Envelope 1: Food $200.00/week
Cat food, cleaning supplies, and other household items are in this budget.

Envelope 2: Entertainment $40.00/week
It’s tempting to leave out when things are really tight, but at some point you’ll be out for an impromptu coffee or want a 6-pack and you don’t want to be tempted to put it on the credit card!

Envelope 3: Gas $60.00/week

Envelope 4: Clothing and gifts $20.00/week
This one typically sits for a little bit until an expense comes up. It feels really good to be prepared!

Envelope 5: Clothing & Gifts $20.00/week

Then, I make sure there’s enough in the account for auto with-drawls – strata fees, car insurance, etc. – and we strictly live off the cash in these envelopes. Some weeks I’m surprised to find there’s quite a bit of money left over! 

Now, I do it even when things aren’t tough because it makes me spend more consciously so I can strive towards the bigger things I want.

Remember, you’re in control of your spending. It takes time and effort to take control of your financial future and say a temporary no to things you really do want. You’ll get from this what you give to it.

Keep your focus in clear sight and I promise, you can start to save money without making a penny more.

 

Your Christmas Budget Cheat Sheet

Did you know that 42% of Canadians don’t have a budget for Christmas? CPA Canada’s study says most of us PLAN to spend less but only about half will actually budget. Hmmmmm. On the flip side, 1 in 5 admit they’re gonna blow whatever budget they didn’t create . In response to that, I’ve created your Christmas budget cheat sheet!

Now, if you’re celebrating the Holidays, Kwanzaa, Hanukkah or a really expensive Wendesday, that’s great too! Use this cheat sheet as you see fit.

Christmas is busy and budgeting isn’t fun. But, and especially if lowering stress and self-care is going to be a New Year’s Resolution, it’s a necessity.

What can you do about it? Well, I’m glad you asked! 😉

Scroll to the BOTTOM of the page and grab a worksheet freebie!

When it comes to budgeting, making a plan is the best route! There are 10 tips in your Christmas budget cheat sheet. You’ll find a few of them have helpful links – be sure to click on those!

Grab your freebie below!

1. Think back to last year:

How much did you spend? Did it seem worth it?

2. Pick a number: 

BEFORE you get to the store, decide how much you’ll spend on each person and keep track of that number.

3. Shop for deals: 

We all have a little computer stashed in our pocket (your smart phone!). Before you hand your card over, do a quick search online and see if another store has a sale on that item.

4. Send an e-card:

If you like to send a Holiday card each year, why not send an e-card? It’s MUCH cheaper (FREE most often) and so much better for the environment.

5. Know why you’re giving the gift: 

Think of that one person (or group of people) that you “have to buy a gift for.” Just in case you need it, here’s your permission to NOT buy them anything. It doesn’t make you cheap or a scrooge. You’re not obliged to buy Christmas presents! That’s an idea that’s been SOLD to you.

6. How many leftovers do you want?:

In our family, we joke about ‘pawning off’ the leftovers so the cook doesn’t have to eat half a turkey 😆 But think about how silly that is! If you find you have a tonne of leftovers each year, try cooking a little less. Now that’s a win-win! Another option is that, after dinner, you bring a warm tupperware and a fork downtown for a homeless neighbour.

7. Pick a name: 

The last few years, our family has been drawing names using this program. (not an affiliate link) It’s made Christmas so much easier! We each pick one name and have a spending limit. It’s really helped our budget and we all leave with things we actually wanted; no ‘filler presents’.

8. Try a more needs based approach to buying for kids:

One thing they want, one thing they need, one thing to wear, one thing to readand one thing for the family.

9. Limit your decor: 

I have a deal with myself to not get more than the 1 bin I have for Christmas decorations (not including the tree). Now, that might be unrealistic to you, especially if you have kids. Maybe it’s 3 or 4 bins. Whatever it is, limit yourself to what fits in the space you’ve allowed. Remember, you’re paying for those items, the bin, AND the storage space they’re in – think storage lockers and extra sqft in your home. If you find a piece you LOVE, something else has to go!

10. Don’t be afraid of change: 

I’m a huge fan of traditions. Especially holiday traditions! But if they’re not serving you anymore, consider making a change. For example, if you always open a few presents on Christmas Eve (which means you have to buy ‘enough’ for Christmas Day too), try switching it up! A family game and a movie might be even more memorable.

I hope these Christmas budget tips come in handy this season! 

Remember, when the lights are taken down, the credit card still has to be paid! It’s worth planning a little now to save yourself from money stress in the New Year.

What’s YOUR favorite tradition during the Holidays? Comment below!

Download Link: Your Christmas Budget Cheat Sheet

P.S. Have you heard of ‘conscious consumerism”? I’d encourage you to look into that. Check out this video on the social responsibility. 

Would this blog have been helpful to find just a few weeks before Christmas? Sign up for our newsletter to get helpful tools like this right when you need them!

3 Easy Savings Plan Tips for Beginners

Today, we’re going to talk about savings plans for beginners!

If you struggle to save money, you’re in the right place. These 3 savings plan tips for beginners are easy to use!

I have been using these for 5 years now. It has helped us out of some really tight spots and got us on a 3-week vacation to Australia.

Look at that beach!

It’s worked so well for us, I thought I’d share it with you. Here are 3 Savings Plan tips for beginners!

The first tip is: SAVE ONCE A WEEK, NOT ONCE A MONTH.

The reason I’m suggesting so often is because bite sized chunks are a lot more manageable. Let’s use $100 as an example. What I’m suggesting is that, rather than putting aside $100 a month, put aside $25 a week. It’s a small enough amount of money that you likely won’t notice it leaving your account, but still adds up to your ultimate goal. Ideally, you’ll be putting aside a lot more than that, but $100 is a good place to start!

The second tip is: AUTOMATE IT!

Unless you’re a total Type A Superstar, you’re not going to remember to log into your banking app once a week and transfer that money over! Let’s just automate it and get the banking app to do it for you. Have that amount set to go at the same time/same day every single week.

If you know what your goal is – maybe you’re saving for a big trip that you know will cost $5,000, here’s where you’ll figure out exactly how long it’ll take you to save up enough. 

If you’re saving $100 a month, it would take you just shy of 4 years to save up for that trip. Now, set that expectation for yourself and be dedicated to putting the $25 a week aside with your automatic transfers set to go for the next 4 years. Option 2 is taking another look at your budget to see if you could bump up the amount you’re saving, even if it’s just by a bit! But it helps to know how long it’ll take up front, so you don’t get discouraged when it’s not happened as fast as you thought.

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The third and final tip is: KEEP IT OFF YOUR CARD.

DO NOT make your savings account accessible by debit (or any other) card. It’s way too easy to see something shiny or put a couple small expenses on that account. But we’ve all been to Costco and know how quickly $20 here and there can add up! So, make it easier on yourself and don’t have easy access to the account.

We’ve found a Tax Free Savings Account (TFSA) worked best for us.

It doesn’t offer you a card to make deposits or withdrawals by and is not the type of account to use if you’re planning on putting a bit of money in and taking a bit out. It is, however, fantastic for saving for goals or emergencies! You also don’t get taxed on the interest you make by keeping your money in the account – that’s where the Tax-Free part comes into play. In a TFSA, you would earn more interest as compared to a savings account over the long term, and the tax-free nature of the TFSA earnings means you’ll keep more in your pocket. Click here to learn more about a TFSA!

It’s been a great option for us and maybe for you too. Please make sure you sit down with a Financial Planner or representative from your bank to see if a TFSA would be a good option for you and to learn about the rules that come with that type of account.

The information in this post is based off of my personal experience and opinions. It is for general information only, so do contact a professional who is able to look at and advise your specific needs before making any decisions. 

Those are the 3 tips that we’ve been using for our own savings plan! We started about 5 years ago and having an emergency plan/savings fund that wasn’t stressful to contribute to has made a big difference for us. These beginner tips have worked great for us and I really hope they work for you as well!