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filing system for income taxes

Why you should file an income tax return

Filing a tax return is important, even if you had no income for the year, as you may be eligible for credits that could result in a refund. Here are several reasons why you should file a tax return. 


It’s that time of year again – tax season. Whether you have income or not, there are many reasons why you should file an income tax return each year.

You owe tax or will receive a refund.

When you file your taxes, there are two outcomes – either you’ll owe tax or you’ll get a refund.

Of Canadians who have filed their 2018 income taxes, approximately 71% have received a refund, with the average refund being just over $1,600.

Owing tax is not as fun as receiving a refund, but it’s important to file a return and pay these taxes by the deadline to ensure you’re not charged interest which will increase what you owe.

Take advantage of non-refundable and refundable tax credits

You may be eligible to receive certain credits from the government but must file an income tax return in order to determine eligibility and your benefit amount.

Non-refundable tax credits:

Non-refundable credits lower your tax payable. They are named “non-refundable” as these credits cannot, by themselves, get you a refund. A few examples include:

  • Tuition
  • Charitable donations
  • First-time homebuyers amount
Refundable tax credits

Refundable tax credits are a specific amount of money deducted from the amount of tax you owe and is the same amount whether you owe $100 or $1000. For refundable tax credits, the government will pay you the refundable tax credit you qualify for whether you owe tax or not, meaning if you had no tax payable, theses refundable amounts would result in a refund on their own. Examples include:

  • Working income tax benefit
  • GST/HST credit

Recuperate any tax you overpaid from your pay cheque

If you’ve switched jobs part way through the year or worked multiple jobs last year, you may have overpaid taxes on your paycheque(s). When you file an income tax return, it allows you to recover any taxes you may have overpaid.

Carry forward or transfer any unused tuition, education or textbook amounts

If you attended a post-secondary level course, you may be able to claim the tuition credit. This credit is non-refundable, meaning if the tuition is greater than the tax you owe, the tax credit can only be used to reduce or eliminate what you owe. Any unused amounts can be carried forward to a future tax year, or you can also transfer to a spouse/common-law partner or parent/grandparent.

Even if you have no tax to pay, it’s important to file an income tax return to claim your tuition, education and textbook amounts so that you can update any unused amounts, and carry them forward to future years.

 

When it comes to doing your income tax return, there are many tools and resources to assist you including information on the Government of Canada’s website.  As well, often organizations within different communities offer free income tax preparation services which you can usually find through a quick Google search. Are there any free income tax preparation services available within your community? Share with us below by telling us which community and who offers the services.

living room of home filled with moving boxes

5 tips for anyone moving out for the first time

Moving out on your own for the first time can be quite overwhelming, especially when it comes to your finances and all of the extra expenses you now have. Here are some tips for managing your finances when moving out on your own for the first time. 


Moving out on your own for the first time is a big life decision. Like any big life decision, it comes with its own set of challenges and excitements. Often, we focus on the excitement of it all – the freedom we’ll have in our own place, being able to make it our own, and more. Yes, those things are exciting, but what we forget or be naïve to is all the #adulting that comes with it, including all the extra expenses we didn’t have before. Paying rent or a mortgage is often a financial obligation people are aware of before moving out, but what often comes as a shock is the actual costs of maintenance, utilities, insurance, groceries, toiletry items, cleaning supplies and decorative items for your new home – really, a throw pillow is $35?!?

Growing up, my family required everyone to help. Whether you were running small errands to the grocery store, cooking meals or helping clean the house, everyone was expected to do their part. We also talked about money including the importance of budgeting, the difference between wants and needs and spending wisely. Although I did not enjoy this or see it as a good thing back then, I now understand that this was preparing me for the day that I moved out on my own.

This day came just a few months ago for me. Though it’s only been a short time of me being on my own, I’ve learned quite a bit. Here are all of the things I’ve learned and a few tips to anyone considering living on their own for the first time.

Shopping & cooking for yourself

I come from a family of five, all of whom were very active and ran on different schedules. This resulted in having large meals that provided many leftovers for the week. Large meals also meant large grocery hauls and bills. As someone who has very little experience in the kitchen, this was all I knew. Needless to say, the first grocery shopping trip was large and the few meals I cooked on my own were enough to feed my entire neighbourhood. This led to a lot of wasted food by the end of the week.

Tips:

  • Make weekly meal plans. Planning your meals also allow you to make a list of only the items you need. When you go grocery shopping, this will help reduce you from buying things you don’t need and save money. Here’s a tool I use: Mealime, a meal planning app for healthy eating.
  • Use a recipe. Often recipes provide serving sizes which can help you understand how much food you’ll be making. Cut the recipe in half in only cooking for yourself or two of you, helping ensure you’re not wasting a bunch of food

There’s food in the fridge

You know when you were younger, and you’d beg your mom or dad to take you out for food and they’d say no we have food at home? Yeah, I never thought I would have that talk with myself. However, eating out or ordering in all the time can add up quickly especially nowadays with all the food delivery apps available.

  • Don’t give in to cravings. Yes, I agree, movie theatre popcorn is way better and why make it at home when you can have it delivered, right? The reality, that craving will cost about 20X+ what it would cost you to do at home and though you may be craving it, your stomach won’t know the difference.
  • Delete your apps. Gone are the days of waiting on hold to place an order and in are the days of clicking a few buttons, within just a few seconds, to place an order for takeout. Because it has become too easy, we don’t take the time to ask ourselves if ‘we really need this’ or convince ourselves ‘there’s food at home’. By deleting your takeout apps, you’ll be forced to go online or call for takeout, decreasing the convenience and providing you time to rethink your spontaneous takeout purchase.
  • Pinterest is your friend! Cooking supper doesn’t have to be difficult. For someone like me though who doesn’t overly enjoy being in or is comfortable in the kitchen, I’m often tempted to just order in. I’ve quickly realized living on my own that ordering out often is not financially feasible and there are many quick and easy recipes out there – I just need to take the time to find them and make them.

Make a budget & stick to it

A budget can be a great tool for staying in control of your finances. It is something most people know they should be utilizing and to some extent do; however, most often this is a tool we start and then forget about or don’t stay on top of. When you move out, your expenses can quickly feel overwhelming if you don’t know how to manage them. My advice, create a budget and stick to it!

Tips:

  • Create a monthly budget using a budget calculator such as the Conexus Budget Calculator. This calculator allows you to get a clear picture of where you are financially and see how your expenses with within the recommended percentages.
  • In order to stick to your budget is to know what you’re spending. Use an expense tracking app such as Mobills. By tracking my expenses daily, I have forced myself to think about and know where I am spending my money, and not just on the big things like rent.
  • Set monthly goals. By setting goals it will feel like you have something to work towards and can get excited about at the end of each month to see if you achieved your goal. And be realistic; if you set unrealistic expectations this will only deter you from your budget as you might feel discouraged.

Be mindful of your spending

As eluded to above, tracking your daily expenses can be a great way to be more mindful of our spending.

Prior to moving out this is not something I did because it was never a worry of mine. I would buy a pair of shoes or a new sweater and not blink an eye. This quickly changed once I moved out.

Tips:

  • Create a list of wants and needs. Now, I don’t just mean your obvious list of food and shelter, but also all those ‘nice-to-haves’. A new pair of shoes or sweater may be needed, but having a list of wants and needs will help you set priority to your needs. This will help you to think through your purchases instead of impulse buying and can make a big difference.
  • Challenge yourself to no spending. Take the day, week or month off from spending on things you don’t need. Instead of eating out, challenge yourself to only eat at home. Or instead of going out with friends, have a game or movie night in. You’d be surprised how much money you can save this way. And hey, we have a blog on that to show you how!

Turn off the lights!

I don’t know how many times I’d leave the lights on while living at home to hear my Mom yell, “turn the lights off if you’re not in the room!” When we live at home there are many things we take for granted because we aren’t the one having to pay for them. The cost of electricity was something I quickly realized was one of those things.

Now, don’t get me wrong, I did know that energy costs money and you need it to power your house. What I didn’t realize though is how my bad habits impacted these costs. Mom was right after all these years – but shhh, don’t tell her I said that!

Tip:

  • Cut your energy costs. Energy costs money and you can control/lesson your bill by watching how much energy you’re using. Check out our Cut Your Energy Costs blog for 8 great tips on how you can reduce your energy consumption. And remember, turn off that light if you don’t need it!

 

Though my parents prepared me for success in the adult world, there were many things I had to learn on my own. #Adulting can be hard, but with a bit of planning, tracking and self-control, at the end of the day it can be fun.

Have you recently moved out on your own, and have learnings of your own? I’d love to hear them – share with me by commenting below.

Pile of sticky notes with New Year resolutions written on them

Adjusting your New Year’s resolutions

If you’re struggling to stick to your resolutions or have already failed trying, don’t give up. Instead, adjust or re-start your resolutions following these tips to help you succeed.


We go into the New Year saying this is going to be the best year yet. And it is…for the first few days anyway. Then the holiday excitement wears off, we go back to our normal routines and continue with the same habits we did before. By mid-January, we start to realize the resolutions we set were a bit more than we could chew and we soon give up on what we said we were going to do.

When it comes to sticking to our New Year’s resolutions, statistics show only 8% of people actually succeed. Why? Often the resolutions we make are unreasonable, unrealistic or we’ve set too many.

Does this sound familiar? If you’re struggling to stick to your resolutions or have already failed trying, don’t give up. Instead, adjust or start your resolution over. The only way to succeed is if you continue trying.

Here are a few tips to keeping your resolutions.

Have an action plan

Resolutions are goals and should have an action plan showing you where you want to go and how you’ll get there. Review these plans every so often and adjust your plan based on your personal situation, helping you to stay on track for success.

Don’t bite off more than you can chew

We can only do so much at once. Instead of trying to do everything at once, prioritize your goals in order of what’s most important to you. Focus on completing one or a couple goals at a time to not feel overwhelmed with trying to do it all.

Celebrate the small wins

Create milestones within your plan and celebrate when you achieve them. Smaller goals are easier to reach and help keep you motivated in reaching your goals.

Ask for support

Share your resolutions with your friends and family. Ask them for support and to hold you accountable to these resolutions. Speak to professionals for advice on your goals and tips for achieving them.

Whatever your goal is, it’s important to be agile and take the time to pause and adjust as necessary.  We may only be a few weeks into the New Year, but now is a great time to re-examine your resolutions and make any adjustments to ensure they’re realistic, reasonable and set up for success.

Did you make any New Year resolutions this year? What were they and are you on track to achieving them? What are some of the challenges you’ve come across? Share by commenting below.

couple sitting on couch, looking at a computer

10 ways to take control of your finances

A New Year means resolutions and often times have a financial component to them. Here are 10 ways you can take control of your finances this coming year.


New Year. New financial you.

It’s hard to believe the New Year has already begun. With a New Year often comes resolutions – creating a plan for the future using lessons from the past – and many times have a financial component to them.

Here are 10 ways you can take control of your finances this coming year.

1. Set goals

We all have dreams of what we want to do and what we want to achieve. Make these dreams a reality by setting goals to achieve them. Organize your goals by priority and be sure they’re realistic and achievable. Tip: Start small. Small goals are easier to reach and help train your brain into believing you can achieve it, increasing your chance for success of future goals. Get started by checking out our Goal Setting Blog.

2. Take action

It’s one thing to say you’re going to do something and actually doing it. Put action to your words by creating an action plan setting dates you want to achieve parts/milestones of your goal by. Hold yourself accountable and reward yourself when achieving each milestone helping you to keep motivated.

3. Create a budget

A budget helps you manage your money, showing you how much you’re bringing in each month and where you plan on spending your money. It can help you not spend above your means and focus on what’s important to you. To make budgeting easier for you, we recommend using our online Budget Calculator.

4. Track your spending

By tracking every nickel you spend, you’re able to get an accurate picture of your spending habits – sometimes it can be very shocking how quickly or how much your purchases add up. Tracking your spending will also help you create a more precise budget based on your spending habits and allow you to identify areas where you may need to change your spending behaviours.

5. No-spend challenges

Each month challenge yourself to a spending freeze for a day, weekend or even the full month for all non-essential items. Or pick a different non-essential category to not spend on such as ‘No Eating Out March’.

We recommend challenging yourself for a day or weekend if doing for the first time. Check out our No-Spend Weekend Challenge Blog helping you succeed in taking an entire weekend off from spending.

6. Save for an emergency

Life can sometimes throw us a curveball, threatening our financial well-being and causing us stress. Set money aside each month into an emergency savings fund for those unexpected life events. Having a fund ensures if your car breaks down or your furnace goes in the middle of winter that you’re prepared and gives you peace-of-mind knowing you won’t need to stress trying to find money to cover these unexpected expenses.

7. Prepare for retirement

We all dream of the day we’ll retire – no more alarm clock, being able to take a nap whenever we’d like and playing that golf game on a Wednesday afternoon. Being able to retire the way we want though requires some planning in advance. Start preparing now by checking out our blog, Retirement: will you have enough?

8. Save your extra money

Throughout the year we come across extra money such as an income tax return or a cheque from our Grandma for our birthday. Though we may be tempted to treat ourselves, consider putting any extra, unexpected money you come across into savings – you’ll thank yourself at the end of the year when you have extra savings in the bank!

9. Invest in a TFSA

A tax-free savings account (TFSA) is a great way to save for just about anything, whether it be a short-term or long-term goal. What you save is not tax deductible nor are you taxed when you withdraw your earnings. As well, in 2019 contribution maximums have increased to $6,000. Learn more here.

10. Plan/review your estate

We often think that planning our estates is something we do when we’re older but in fact, everyone young or old should have an estate plan in place in case something unexpected were to happen to us. Having an estate plan helps our loved ones understand our wishes and how to carry them out if we were to pass. This can include naming guardians for children, instructions for your burial/cremation and how you’d like your property divided up and should be updated at each life event such as marriage, children, divorce, retirement, etc. Start your plan by speaking with a local estate planner or lawyer today.

A New Year symbolizes a fresh start and new beginnings. Hopefully, these quick tips help you feel more prepared to take on the new year and take control of your finances. For more financial advice, we encourage you to check out some of our other blogs or contact us today to set up an appointment with a financial advisor.

five friends celebrating New Year's Eve

Ring in NYE without all the bells

Tired of being let down by the hype of New Year’s Eve? Us too! Here are some tips to help you ring in the New Year without breaking the bank.


New Year’s Eve is a day to look back on the past year, whether that be celebrating your successes or reflecting on some challenges you had experienced. It’s the day to start thinking of the year ahead and what goals you want to achieve.

However, for many, instead of reflecting and goal setting, we get caught up in the hype of the night’s activities. As soon as Christmas ends, we start worrying about what we’re going to do for New Year’s Eve and what we’re going to wear. We tend to forget what really matters, spending the time with the people who helped make the past year what it was. Yes, you may have a killer outfit on and the best party to attend but if the people that matter most aren’t with you, does it really matter?

No expectations approach

This New Year’s Eve eliminate all the stress of finding the perfect outfit or the best event to attend and plan a casual night to hang with family and friends instead.

For a more relaxed day and evening, consider doing one of these activities:

  • Go for an afternoon coffee with a friend you haven’t seen in a few months. Not only will you get to catch up, but the coffee may help you stay awake for when the clock strikes 12!
  • Have a pajama movie marathon – did someone say Harry Potter? Grab some popcorn and snacks and make a whole evening out of it.
  • Get outside and take part in some winter activities such as skating or a game of shinny, tobogganing or build a snowman. Too cold outside? Have a ‘snowball’ fight inside using rolled up socks… clean of course!

Don’t break your bank

Yes, it may be fun to treat yourself for the last night of the year, but we often overspend, waking up the next morning with the feeling of regret. You don’t need to fork out a bunch of money to have fun. Consider some of these fun activities that allow you to celebrate NYE without breaking your bank.

  • Start your day off with breakfast in bed – skip going out for brunch and make yourself eggs benny and pancakes at home. Even better, you can stay in your pajamas!
  • Make your own extravagant meal or have a potluck. Make it even more fun by having a theme. Who doesn’t love a good meal filled with great conversations with friends?
  • End the year with some competition by playing board games. Guaranteed for some laughs and hopefully not too many arguments. A few of our party favourites include Catch Phrase, charades and Pictionary.
  • Have a cocktail potluck. Have everyone bring a bottle of their favourite liquor and make your own fancy cocktails at home. Need some drink inspiration – check out some NYE cocktail recipes here.
  • A party isn’t a party without some music. Have each of your party guests send you their top five favourite songs from the past year and make a NYE playlist to dance the night away.
  • Make a time capsule for the last year. This allows you to celebrate the New Year and reflect on the previous year at the same time.  Have each guest think of a question (e.g., what was the best thing that happened to you last year or what was an obstacle you faced but overcame) and put into a box to look at later in the night and reflect with your friends or family.

This year don’t get caught in the hype of NYE.  Spend the time doing things with the ones you love and create more memories to reflect on in the years to come.

What are some ways you’ve rung in the New Year that didn’t break the bank? Share with us below.

holiday wrapped presents

Giving the gift of time

It’s not about how much you spend on a gift or how big the gift is, but about the emotions and experiences you create. Check out these 30 time/experience gifts, guaranteed to create memories with your loved ones.


Have you ever received a gift during the holidays that you thought was useless junk? If you said yes, you’re not alone! Last year, an Ipsos poll exclusive to Global News showed that one-quarter of people surveyed said most of the gifts they get during the holidays are useless junk.

How we feel about a gift usually comes from the emotions we get from it. Receiving another coffee cup provides us little emotion or satisfaction while receiving some type of experience can cause a variety of emotions and satisfaction, especially those that leave a lasting memory.

This holiday season consider giving the gift of time/experience and making homemade coupon vouchers for your loved ones – guaranteed to create smiles, build relationships and make memories.

Below are 30 voucher ideas to give to your loved ones.

10 ideas for kids

  1. Picnic at the park
  2. Car cleaning – inside and out
  3. Breakfast in bed
  4. Personalized chef for the day
  5. Control of the remote for one evening
  6. Breakfast for dinner – your choice
  7. Backyard camping night
  8. Date night – you pick an activity
  9. Foot rub
  10. Day of ‘I Love You’ – every hour list one thing you love about your significant other.

10 ideas for parents

  1. Sleepover at Grandma’s house
  2. 1-hour reading time with parent or grandparent
  3. You pick the supper menu tonight
  4. Movie night in – your choice
  5. Pillow and blanket fort building contest
  6. Game night – your choice
  7. Stay up 30 minutes past bed time
  8. Pick one item to add to the grocery cart
  9. Day of tobogganing
  10. Day of skating

10 ideas for couples

  1. 1-hour yard work
  2. Breakfast in bed
  3. An evening of babysitting so you can go on a date night
  4. Folding and putting away all laundry
  5. Spa day at home
  6. Cleaning of the bathroom – toilet included
  7. Parents day off – stay in pajamas all day
  8. DIY photo album day
  9. Homemade dinner including serving and kitchen clean up
  10. Design a scavenger hunt for the whole family

 

When creating vouchers for the ones you love consider their age, who they are and what their interests are.

This holiday season remember it’s not about the amount you spend on a gift or how big the gift is but about the emotions and experiences you create. Gifts that come from the heart are usually the best gifts of all.

What other gifts of time/experiences ideas do you have or have you given? Share with us in the comments below.

Hand scrolling through social media on a tablet

The financial pressures of social media

Social media has transformed the way we see things and how we share things. It’s important to understand our true identity vs. digital identity and how social media impacts us in order to keep balance in the digital world.


Have you ever scrolled through your social feeds and saw something that you wanted? Or saw photos of what your friends were doing such as a recent vacation or night out and started comparing your life to theirs. For many, the answer is yes.

Social media has transformed the way we see things as well as how we share things. The digital world allows us to capture every moment on camera and social media has caused us to feel the need to share all of these experiences. How much of what we share though paints the full picture of our true selves?

In reality, what we share on social media is what we want others to see – the food we’re eating, the vacations we’re taking and all the family and friend experiences we’re having. We create a digital identity that often differs from our true identity.

What’s not being shared is those not-so-good things, our behind the scenes – the food mishaps that caused for that pizza to be ordered, the credit card debt we have from going on that vacation or the meltdown we had trying to get our child out the door to their activity on time and realizing team fees were also due that day. We create a false sense of reality and the picture we’ve shared is only giving part of the story to those seeing it.

Outside viewing in

From the outside, when seeing these photos we tend to forget that there’s more to the image than what we’re seeing. Most often, we forget to look at the fuller picture and make ourselves believe what we see is a reality. We don’t think about all the unknown behind the scene details. We start to compare our own lifestyles and experiences to those of others and at times, start doing things outside of our comfort zone to keep up with those around us. We then share these experiences on social to show that we are doing fun, exciting things as well, creating our own digital identity.

It becomes a domino effect. Just like you’re feeling the pressure to keep up and share all the ‘fun’ experiences, others – including those you’re trying to keep up with – are watching your feeds and feeling the same pressures to keep up with you.  The cycle is never-ending as everyone continually tries to keep up with others and at the same time, fails to provide some of the truths of the behind-the-scenes.

Staying balanced

This never-ending cycle can impact us mentally, emotionally and financially. It’s important to stay focused and live the way that works for you, not the way others make you feel you need to live or how you feel you need to share with others. Here are a few tips to staying balanced in today’s digital world.

  • Know the difference between a want and a need. Do you really ‘need’ that pair of shoes you saw on Instagram? Before making a purchase on something you saw, ask yourself if it’s a want or a need? How will it make you feel and will this feeling last or be short-lived? Asking these questions help you be mindful when shopping and could prevent you from making a purchase spontaneously that you later regret.
  • Don’t just do it to check off the box. We grow up thinking we need to check the box based on where we ‘should be in life’. We find ourselves trapped by the mindset that we should have the house, the car, the family, etc. by a certain age, especially if we’re seeing our friends doing it on social media and it can normalize the movement of over-spending. Reality is we’re all at different life stages and all have different goals and priorities. Just because someone else is checking that box doesn’t mean you have to do so as well. Remind yourself of this and do things on your terms – when you’re ready and feel it’s the right thing for you mentally and financially.
  • Quit comparing yourself to others, especially financially! Do you actually know how much each one of your friends makes? Most likely not, yet we make assumptions and then compare ourselves to them. We think ‘well I make about the same as so-and-so, so I too should be able to take a hot vacation each year’. This creates an unhealthy relationship of what reality is, as we don’t really often know the behind-the-scene details. Instead of comparing yourself and keeping up to what others are doing, understand your well-being and set goals for you. Taking a hot vacation may be possible every year but do it on your terms and ensure you create a financial action plan to help you achieve this goal.
  • Be present and make personal connections. Our digital identity is just one piece of the story. By being present and interacting with friends outside of the digital world, you’re able to connect with their true identity. Often times, you’ll start to see the fuller picture of those posts – the behind the scenes – and get a better sense of the true reality of what’s being shown.

Social media impacts everyone’s mental, emotional and financial well-being differently. Understand how it affects you personally and be conscious of this next time you’re scrolling through your social media feeds. Remember that what you’re seeing is just what others want you to see and there’s usually a lot more to the story.

Like what you read and what to hear more? Check out our recent The FOMO Effect – A Panel Discussion, where we spoke with four, amazing local Saskatchewanians to hear their views on the pressures of social media and the impact it can have on our financial well-being.

We want to know – has social media had an impact on you financially? Share your experiences and your tips & advice on staying balanced in a digital world below.

building with credit union logo

Why I made the switch to a credit union

Not happy with your bank, but scared to make the switch? Read the experiences of one of our members who recently switched financial institutions after realizing her bank was not helping her to achieve her financial goals.


My financial institution was determined at a young age and like most, who I banked with was the same as my parents. As I got older, my banking needs changed yet I continued to bank with the same financial institution. Was my inherited bank actually doing what I needed it to though?

I started to realize how important this decision was. As I’m trusting an institution with my hard earned money, it shouldn’t be about staying with the bank that was chosen for me but instead being sure that who I was banking with was an institution that met my financial needs. That’s when I began to understand what type of bank I needed for me, and if I needed to make a change.

What I took into consideration

  • Is my bank listening to me and addressing the financial needs that benefit me – not my bank?
  • What are my financial goals and how is my bank helping me to achieve these?
  • Does my banks’ values align with my personal values?
  • How is my bank contributing to my local community?

I soon came to realize that I didn’t have a relationship with my bank. My account was very transactional but the bank never made me feel like I was anything but a number. I did some research about other financial institutions and through this research, I discovered a few key differences between credit unions and banks.

Here’s what I learned.

  • Credit unions are member-owned while banks are owned by its shareholders. What this means is you have a say on how your credit union operates while banks answer to its shareholders.
  • Credit union profits go back to their members such as offering No-Fee Chequing Accounts.  They also invest their profits back into the local community. Bank profits are paid to their shareholders and your local community rarely benefits.
  • Credit unions are driven by their members. They take the time to listen, ask questions and help you achieve your financial goals. You are their number one priority.
  • Credit unions have a one team model approach and are all part of the Ding Free network, allowing members to access a number of ATMs across Canada for free. With banks, you can only use their products and services and you will be charged for using other banks’ resources.

Overall, the biggest thing I learned was that credit unions and banks offer similar products and services. The way they operate though and treat their members are different. To learn more about the differences between credit unions and banks, I recommend checking out Credit unions vs banks: What’s the difference?

After considering what my current bank offers and evaluating the difference between credit unions and banks, I wondered why I hadn’t started looking into this earlier. Why hadn’t I made the switch – by switching to a credit union, I’d be able to save $185 each year just in bank fee savings – so what was holding me back?

My fears

  • Time! I didn’t want to spend a lot of time having to switch all my payments over or learning a new bank’s products such as mobile and online banking.
  • Was it really worth the effort to make the switch? How much work was involved?
  • What if I missed payments due to the switch resulting in added interest or canceled services.
  • Would I have to give up my credit card? I liked the credit card that I had at my other bank and didn’t want to cancel it.

I started to realize that most of my “fears” were excuses and if I really wanted to take control of my finances I needed to take the time to invest in myself. Ultimately, I liked how a credit union was local and I felt that their values aligned to my personal values. I decided to reach out to Conexus Credit Union, and after speaking with a financial advisor I soon realized they really did care about my overall financial well-being and knew that it was time to make the break up with my current bank and make the switch.

Making the switch

Switching over to Conexus was quite easy, especially with their tool called Click Switch. It allowed me to switch over all of my payments within a few minutes and just the click of a few buttons. My fear of time quickly disappeared.

Tips

If you’re like me and some of your fears include missing a payment due to switching or losing a credit card you love, consider some of the tips below before making the switch.

  • Do not close your current bank account until all of your payments are switched over. Keep the account open for a few months to ensure you haven’t missed anything.
  • Leave a small amount of money in your old account to cover any payments you may have missed switching over to avoid non-sufficient funds.
  • You don’t have to switch everything over at once. It’s perfectly fine to keep your loans or mortgages with your old bank until they expire or are paid off.
  • You can keep your current credit card if you’re not wanting to depart from it quite yet. Check to see if you can link your credit card from another bank to your new credit union account. This will allow you to still view your credit card balance in your new account and help you manage your finances in one spot.
  • If you are looking at getting a new loan to pay out a previous loan at your bank, make sure you get all of your approvals and payout amounts first before closing out your account or changing your direct deposit.

In the end, I made the decision to move to a credit union because I believed in their values as an organization. I felt it was easier to have an open and trusting conversation and it saved me money on bank fees. Ultimately, when determining your financial institution consider how your financial institution can impact your overall financial well-being. For me, choosing a credit union was the perfect fit.

List of payments

How much money should I spend on…

Where should you be spending your money? This blog shares the recommended percentages on where you should be spending your money on things such as housing, transportation and more.


 

A budget is a plan that can prioritize your money. It allows you to see how much money you’ll bring in each month (income) and where you plan on spending (expenses) your money. It also allows you to understand where you may be able to decrease budget within some categories such as living expenses or increase your budget in other categories such as savings. Most importantly, it helps to set a plan to not spend above your means.

A budget can also help you see what percentage of your income you’re spending within the different expense categories. Below we break down the different expense categories and the recommended percentage of income you should be spending within each.

Housing

We recommend keeping your housing expenses to 30-40% of your income. Housing expenses include your mortgage/rent, condo fees, property taxes, insurance, maintenance and utility payments.

One popular rule of thumb says that you should set aside 1% of your home’s value each year for ongoing maintenance (vent cleaning, paint refresh, etc.). For example, if your home is worth $250,000, you should budget $2,500 each year for maintenance. We recommend setting money aside each month into a savings account to cover these maintenance costs when they occur. Doing so, will help you be prepared for those larger expenses and not be ‘scrambling’ to find money within your budget to cover a large expense.

Though many of these expenses are fixed, meaning you can’t change the expense amount, there are a few ways you can reduce these expenses. Consider reducing the amount you use/spend on utilities. This can include installing a rain barrel to collect rainwater to water your yard or trying out one of these eight energy-saving tips.

Transportation

We recommend keeping your transportation expenses to 10-20% of your income. Expenses in this category include vehicle loans, gas, insurance and maintenance.

Some ways to reduce expenses in this category include using city transit, carpooling or saving on gas by using GasBuddy.com to tell you where the nearest and cheapest gas stations are.

Living expenses

For living expenses, we recommend keeping to 20-30% of your income. These expenses include childcare, groceries, eating out, entertainment, phone, personal care, clothing, gifts, donations, medical, etc. Though there are a lot of expenses in this category, many of these are variable expenses meaning they can be adjusted based on your financial situation.

You may not be able to change your childcare fees, but expenses related to groceries, eating out, entertainment, phones, etc. can be adjusted. Things such as cooking at home vs. going out to eat or picking a smaller cable package or cell phone package are all ways to help reduce these expenses.

Budgeting doesn’t mean you can’t have fun but instead helps you be aware of how you’re spending your money and to treat yourself in moderation and within your means. Here are a few creative alternatives to consider to help keep expenses down within these categories.

Debt repayment

If you have debt, such as a balance on a line of credit or credit card, we recommend keeping your debt repayments at 10-20% of your income.

It may be tempting to reduce expenses in this category before others when adjusting your budget, but we recommend trying to reduce elsewhere, like your living expenses before adjusting these expenses. Setting 10-20% of your income towards paying off your debt sets a plan in action for eliminating your debt and helps towards your financial freedom.

It’s important to always budget money to ensure your debt’s monthly minimum payment is covered and then apply extra money to your debt to reduce the amount owed even faster. For additional advice and tips on eliminating debt, we recommend checking out our Eliminating Debt blog.

Savings

For savings, we recommend putting 10% or more of your income into savings each month. This includes savings for your goals (short-term, intermediate and long-term), retirement, emergency savings, RESPs and more.

This category is truly about being sure to pay yourself first. Not sure what we’re talking about – discover more here.

To make budgeting easier for you, we recommend checking out our online Budget Calculator. All you have to do is insert your monthly income, expenses and savings and you’ll get a clear picture of where you are financially. You’ll also be able to see how your expenses fit within the recommended percentages we just discussed.

At the end of the day, setting a budget can help you stay focused on what’s important and give you guidelines on how you’ll spend your money. As for ensuring you stick to this budget though, that will be up to you.

mortgage documents and pen

Fixed vs. variable: picking a mortgage that’s right for you

Fixed or variable? When it comes to picking the type of mortgage rate you want, there are many things to consider. 


There are many questions and decisions to make when buying a house. How much can I afford? Where do I want to be located? How much can I put down? Something you may not be considering though is the type of mortgage rate you want – a fixed rate mortgage or a variable rate mortgage.  Understanding and picking the type of mortgage rate you want is a big decision, and without the proper knowledge and resources, can be quite difficult to make. When choosing the mortgage rate for you, it’s important to look at your situation and ask yourself what you are comfortable with.  Like any big decision someone makes in their life, it often starts with a good old-fashioned pro’s and con’s list.

Fixed

A fixed mortgage rate is one that remains the same throughout the entire term of your mortgage, no matter how much the market fluctuates. With a fixed rate, you’ll know exactly what you’re paying towards the principal and the interest on your mortgage.

  • Pro: Known as the ‘set it and forget it choice’, a fixed rate mortgage provides no risk if interest rates change and can provide a sense of security for people, especially if raising interest rates cause you stress.   
  • Con: Fixed mortgage rates often are higher than variable mortgage rates and are locked-in, meaning if interest rates were to decrease, you wouldn’t be able to take advantage of the lower rates. They typically have higher payout penalties than variable mortgage rates if having to break a mortgage prior to the term being up.

Variable

A variable mortgage rate is one that fluctuates with the market interest rate, known as the ‘prime rate’. What this means is the amount of your mortgage payment that goes to the principal and towards interest can change month-to-month.

  • Pro: Generally, variable mortgage rates are lower and can result in interest savings and provide you with the option to pay your mortgage off faster. Variable mortgage rates also have a lower payout penalty (3 months interest) if the mortgage is broken prior to the term being up.
  • Con: Variable rates have a bit of risk associated with them, as they’re unpredictable due to fluctuating markets. If interest rates increase, the amount you pay towards interest will also increase.

When people hear the term variable, many believe this means that your payment fluctuates. What many don’t know is that when choosing a variable rate you have the option to set your payment amount so it’s the same each time. What this means is that each payment date your payment amount stays the same, but depending on an increase or decrease in interest rates the portion of your payment that goes towards interest and to the principal may change. To learn more, talk to a mortgage specialist.

To help explain the difference between fixed and variable rates further, we recommend checking out this great Know How video by Ontario’s Northern Credit Union.

Your buying situation

There are many factors to consider when choosing between a fixed and variable rate. To help break it down, here are the three questions to ask yourself:

  1. What is your risk tolerance?
  2. What is your financial circumstance?
  3. What are the chances of you breaking your mortgage before maturity?

Risk Tolerance

Everyone’s risk tolerance is different and depends on your personal and financial situation. For some, a bit of risk may be scary, while for others they may be comfortable taking one. If you’re someone who lays awake at night worrying about increasing or changes to payments, choosing a variable rate may not be for you.

Financial Circumstance

Your financial circumstance can have a large impact on determining if a fixed or variable rate is right for you. Do you live pay cheque to pay cheque or frequently spending above your means? If so, a fixed rate may be the better option for you. If interest rates increase causing your mortgage payment to increase does this cause you to worry? If you can handle an increase, a variable rate might be better suited for you.

Breaking your mortgage before maturity

Life happens and things change that may cause you to break your mortgage before your term is up. It’s important to understand when choosing a mortgage the rules around payout penalties – the fee you would pay if you were to break your mortgage before the term ends. Variable and fixed rates have different payout penalty rules and a mortgage specialist can help you to understand the penalty payout rules, but also calculate the payment.

Consider factoring in your personal situation and future goals to help pick a mortgage term length (one-year, three-years or five-years) based on your situation. Ask yourself:

  • What stage of life are you in?
  • Are you purchasing the house with anyone? (e.g. friend, sibling, etc.)
  • Is this home big enough to grow into?
  • Do I plan on relocating for work anytime soon?

With any decision, it is always important to do your research and speak with a mortgage specialist. They can provide you with guidance and advice based on your personal situation, help you to understand market trends and forecasts and assist you in making one of the most important decisions of your life.

To learn more, contact one of Conexus’ Mobile Mortgage Specialists today.