Archives for March 2014

3 Factors That May Keep You From Getting a Mortgage

March 28, 2014 | 1 Comment

When it’s time for you and your family to buy your first home or upgrade to a new home, you’ll be presented with getting a mortgage. And before you begin your house search it’s important that you know what kind of rates you qualify for and how much of a home loan you can comfortably carry.

There are certain circumstances that make it difficult to get a home loan, though.

Here are three factors that can limit your ability to take on a mortgage.

Bad Credit or No Credit

The better your credit, the lower the interest rate on your mortgage will be. That’s why it’s important to work on improving your credit score months before applying for a mortgage.

If you have no credit or bad credit you’ll likely be turned down for a mortgage.

Before applying for a mortgage try the following:

Check your credit score (you can do so for free at a place like Credit Karma)
Check your available credit to debt ratio
If you have a lot of consumer debt work on paying it down

You should also work on saving up a sizeable down payment for your next home.

Self-Employment

Self-employed people can have a hard time getting mortgages – or any type of credit. Generally speaking you’ll need at least two years of self-employment taxes. You’ll also need to provide bank statements showing the income you’re bringing in.

Another choice you’ll have is to apply for a contractor mortgage. Some banks are now making mortgages easier to obtain for independent contractors and freelancers. If you’re in this situation ask your banker for advice for contractors.

You Have Too Much Debt

Having too much debt can not only limit the amount of money the bank will loan you but it can also prevent you from getting a mortgage altogether.

Before you decide it’s time to take on a home loan start working on paying down your existing debts. By doing this you’ll lower your financial burden, increase your credit score, and also increase the likelihood of you being given a home loan.

Conclusion

If it’s time for you and your family to purchase a new home take some time to make sure you’re financially prepared. Pay down your debt, research types of mortgages you may qualify for, and work on improving your credit score.

With hard work and preparation you’ll put your family in a better financial position and hopefully, a new house!

Have you run into any of these problems?

At What Age Should Your Child Get a ”Big Ticket” Gift?

March 26, 2014 | Leave a Comment

When speaking to my friend the other day about Christmas plans, she was detailing what she bought her eight year old for gifts. Included was a laptop. When I inquired about why the eight year old was getting a laptop, she explained that the current family computer wasn’t ”up to speed” in terms of processing for what the girl needed to accomplish school related projects. Knowing that the computer she was talking about was only three years old (since I was with her when she bought it) I called her bluff. I mean surely an eight year old isn’t doing that much computer related homework?And if she is, I’m confident that it doesn’t require that much processing power, let’s be honest! She fessed up that the kid wanted it so they were buying it, and that knowing she would be using it for school made her feel better and that’s what she had to tell herself to justify the purchase.

Am I alone in thinking if you have to justify purchasing an item, and if you’re not totally comfortable with it for whatever reason (an eight year old getting a $500 computer in this instance) that maybe you shouldn’t be buying it?

The other item that comes to mind is cell phones. I didn’t grow up with a cell phone, I didn’t have my first cell phone until university. I relied on the land lines at locations or using my friends parents cell phones (because there was no way my friends had phones of their own, that was unheard of). Though I can’t imagine my life now without one, I also can’t imagine my young child having access to her own iPhone. It blows my mind how many young kids (less than 15) I see with these devices. While I suspect when my little one is old enough to venture out away from mom and dad, we will get her an emergency only/call-mom-and-dad cell phone, I will not be buying her a $500 ‘phone’ that requires a $70+ monthly contract to be attached to it. If she wants one of those she can get herself a job and pay for it herself. Especially since I don’t think it is necessary that a younger that 16-year-old even have access to a device like this.

I understand that it is 2014 and things have changed a lot in the last few years, but there is no way an eight year old needs access to her own laptop or a ten-year-old needs the latest iPhone/Android/whatever. It is difficult to balance parenting, trends, and your child’s wants versus needs. I’m not suggesting you don’t buy wants for your children because a lot of what we buy for our kids as gifts are wants and not needs (toys etc) but we need to set realistic expectations for our kids. They need to understand when they want certain things they need to be willing to contribute towards the item since mom and dad are not open wallets.

At what age do you think it is appropriate to buy kids large items like cell phones, TVs and computers, if at all?

Saving on Family Fun

March 19, 2014 | Leave a Comment

One of the biggest changes in our budget is the need to account for an additional person when it comes to family outings.

Everything from plane tickets, to dinners out to attending our local hockey team now have three people instead of two. Though this is something we obviously expected with a child, it was nice to enjoy the early days!

Gone are the newborn days when she would quietly sleep through the odd dinner out or stay snuggled in my arms, usually asleep during a local hockey game. The little girl is a full grown toddler who now demands her own meals and requires her own seat and if we’re not careful, it can get crazy expensive.

While there are certain things we can’t do anything about, like extra seat for airplanes there are many other areas you can save on.

Meals Out

Eating out isn’t a huge part of our lives (I’d much rather entertain at home) it does happen occasionally. When possible, we opt to look for restaurants that not only have a kids menu but offer discounts for kids such as kids eat free.

Growing up we would go to a restaurant where they offered free Shirley Temples for kids and my parents had to pay $0.10/pound of body weight for kids under 12. Though restaurants probably can’t get away with literally weighing kids in the restaurant anymore, there are still many places the have kids eat free with the purchase of a regular entree.

Online Deals

Online sites such as Groupon can be a great place to find coupons and deals for a family that makes an otherwise unattainable event, possible. This can include things like buying discounted restaurant (I often buy gift certificates for our favorite restaurants when they come up at 50% off) or deals on ticked events.

Take Advantage of Specials

Our local movie theater caters to families during regular school breaks such as spring break and Christmas break by putting on discounted days and promos like buy one ticket get one 50% off. During the rest of the year they offer a cheap ticket price on Tuesday. Going to the movies on Tuesday if the only way I pay, especially with children. If you don’t know, call and ask!

Friends of ours always take advantage of our local stage theater by taking their kids to ”pay what you can” night. Basically you show up on the first Tuesday of the seasonal performance, stand in line and pay whatever you can. Tickets normally start at $40 per person but on this night you can pay as much or little as you want.When you have a family and a budget this sort of event is perfect. This is something the theater has always done but never makes a big public announcement.

Good deals usually require some digging!

Membership Discounts

Sometimes it pays to have a kid (in terms of savings acquired).

If I wanted a membership to our local rec center I would be looking at $600 per year as an individual or I could get a family price (no limit on children) for $750 for the year. My husband, daughter and I can all capitalize on the gym, pool, rink and hundreds of classes for only $150 more per year and as our family grows the price stays the same (as is it locked in as long as you renew annually). This membership also gives us some ”free” events to partake in during the year when we’re looking to have a little family fun without breaking the bank.

How do you save on family fun?

Cherishing Moments

March 12, 2014 | Leave a Comment

The world we live in is moving at mach one. We’re constantly looking to do things faster, more efficient, better. While most of these things are, in my opinion, a good thing, I forget all too often to just live in the moment. I’m always looking forward at point B, not fully experiencing point A.

These past few weeks in particular, my little girl has been super needy. When I’m around she wants mommy. Wants to be held. Wants her blankie. Wants her ”babies” (stuffed animals). Wants attention.

While she has been a bit overly needy because she hasn’t been feeling 100% and is cutting some nasty teeth, I still need to be there for her and I admit, it’s been hard. My phone is constantly going off with both professional and personal notifications. The laundry needs to get done. I need to get groceries. The list of distractions goes on…

This past week in particular, I’ve felt more run down than I have in a long time. My husband injured his leg a week ago and is pretty much totally out of commission. I’ve been working super hard at work because we’re down two employees for different medical related reasons and finally this weekend my immune system took over. I haven’t felt this terrible since before my pregnancy. I officially have no voice, my entire body aches and I’m more than tired.

Why am I telling you all this?

Because I was kicked in the butt this weekend and forced to slow down. The laundry would have to wait. My eyes are too blurry to look at my phone. I can’t get groceries while kid is napping because I needed to nap myself. I didn’t get anything done and we’re still all alive. Everything can wait. For once in a long time I paused. I sat on the couch with my daughter, a cup of tea and 3725 stuffed animals, snuggled under a blankie while my daughter, not even two, reached over and grabbed my hand.

We sat there for a while watching Saturday afternoon cartoons and held hands. She needed me. I needed her and we both needed to just relax together. It was only a brief moment but she grabbed my hand and squeezed it tight, looking at me as if almost to say ”thanks mom, I need you more than laundry/phone/groceries”.

I full heartily believe we as parents can raise better children if we are more engaged in their world. I admit that I’m constantly trying to make her needs work among my own needs and my busy world. There may be 23 other things I need to get done on my day off but none are more important than me showing my daughter she is the most important thing to me and if she wants to sit with me and watch a cartoon or color with her I’ll do it, distraction free.

Life can wait, cherishing moments cannot.

When’s the last time you slowed down?

Helping Your College Student Adjust to Life Away from Home

March 11, 2014 | Leave a Comment

Just because your children don’t wear diapers anymore doesn’t mean you won’t stop thinking of them as “your babies.” This is why, for many parents, the experience of having their teenage kids move out of the house and into the dorms can be a source of anxiety. After all, you won’t be there to make sure they have access to nutritious foods, get plenty of rest and stay away from those “bad influences” every parent fears.

For easy transition, we’ve put together a shortlist of ways parents can use to assist the students adjust to college life away from the nest.

Send a Little Love & Care

Being a short drive away from your student’s campus is a luxury not all parents have. Luckily, sending a little slice of home is an easy way to remind your child that you’re thinking of them. Homemade baked-goods, clothes, knick-knacks or homely keepsakes are all great options to include in your student’s care package. If you’re not a master baker or maybe bogged down with work, have no fear! Companies that sell dorm stuff, like OCM, can send your student care package—and you can even include a handwritten note.

Set a Skype Date

Keeping an open line of communication is pivotal with college students. Text messages are good for short messages, but an even better option would be video chatting through Skype. This way, you not only get the chance to have in-depth conversations better than texts, emails, or regular phone calls.

Fund School Activities

Campus-based school activities is a great way for students to blow off steam, get their mind off of classes for a few hours, and meet new friends. Encouraging your student to find an activity and financially support their choice is an ideal way to make sure they are taking steps to settling into their new life. This will provide them with a sense of closeness and community right off the bat, something that is especially valuable when attending a school that has thousands upon thousands of students.

Plan Visits

Physically checking up on your children and spending time with them is an even better way to help them adapt to their life as a college student. While everyone likes surprises, surprise visits won’t always be met with the enthusiasm you may have been expecting. It’s in everyone’s best interest to make sure the visits are planned at least a week in advance. This way, your budding adults will have time to prioritize their school work and weekend activities (maybe even clean up their dorm room if you’re lucky).

Students may feel homesick, especially if it is the first time they have been away from home. Giving the students their freedom and letting them feel that they are trusted in making the right decisions is the best approach to take.

Photo Credit: Stuart Miles

How did you help your college aged kids adjust to life away from home?

Paying For Your Kids Education

March 5, 2014 | Leave a Comment

I had zero financial help when it came to post secondary and I don’t blame my mom at all. Our children didn’t ask to be born so it is our responsibility as parents to provide for them and make sure their needs are taken care of, as far as I am concerned, it is not the responsibility of the parent to pay for post secondary education. However, if you’re in a financial situation that allows it, you may want to help.

We are currently setting aside a little bit of money each month for our daughter because we’re able to. My mom, though she had a good job, was a single parent and many other financial responsibilities. Though we are setting aside a bit of money for her (including any financial gifts she may get) I will not jeopardize my retirement or other financial goals so she can get a degree debt free.

I know of many people who have remortgaged their house, taken out of their own retirement funds just to ensure their kids have no debt when they graduate. This is crazy to me. Kids who go into post secondary ideally will get a job that allows them to repay any debt they borrowed. Though it will take another three and half years for us to be debt free we are 100% doing it on our own and I have zero resentment to my mom for not helping me. I chose to further my education and opted to do two degrees, not her. At 18 I was making my own decisions.

If you do want to contribute to your kids education, start early. We opened an account for her before she was three months old and continue to contribute monthly. We made it quite clear that, especially when she is young, we didn’t need many gifts for her. We would rather have the money for her savings than another teddy bear. This helps beef up her savings and limiting the clutter in our home! Double win.

It is my hope that like both me and her father, come 16 our daughter will be able to balance a part-time job, school and extracurricular activities (though if she can’t job is first thing to go). It is important that we teach her the importance of saving and plan to match any savings she comes up with on her own (to a max we will decide when the time comes). I think this will encourage good saving behaviour, which hopefully will last a lifetime and allow us to reward her for a good behaviour. Saving money isn’t easy and I’m hopeful this will encourage her.

Though I have no intentions of giving up anything I want in my life her post secondary savings (I would gladly give up anything for something she needed) you’d be surprised how easy it is to find even $25 per month. Over 18 years, while it won’t pay for a degree, it will certainly help offset some post secondary costs and your child will appreciate it!

Do you save for your kids post secondary? Will you pay for all of it no matter what?

When You Really Should….

March 4, 2014 | Leave a Comment

While everyone loves getting free stuff it is also smart to try out a product or service in a trial setting, particularly when there is a risk involved in losing and you are someone who is learning the ropes. Given their potential high-risk nature, the saying really couldn’t be truer for the two activities below:

Investing

With the BoC base rate at a historically low rate of 1 percent and no sign that it will rise in the short term bank savings accounts give ordinary investors little to get excited about. Even though inflation has come down in recent months, the chances are that the money you hold in a savings account is actually losing its value year on year. One alternative is of course online share trading, perhaps through an ISA or your local stockbroker.

Picking stocks can be a minefield for the uninitiated. Values go up and down and the array of options to choose from is bewildering. Are you investing for growth or income? Do you want access to international shares or just the Canadian market? It is enough to scare anyone off taking a crack at the whole world of online share trading. But, there is a way you can dip your toe in the water. Some online trading platforms, like Selftrade, offer virtual accounts where you can play around with different types of shares and see how your portfolio does in the real market but without actually risking any money. It is a great way of trying out your investment system in a safe environment before you are ready to invest for real. Virtually investing like this is free and can allow you to make your mistakes upfront, hopefully avoiding some of the more costly beginner’s errors.

As a word of caution, when you are ready to start investing, look into the fees your provider will be charging. Fees are one of the biggest drains on your investment fund and can hobble it if you aren’t careful. For further information on this can be found here.

Gambling (online poker)

There are thousands of sites for budding card players to choose from and plenty of different ways to lose your money. Online poker play is quite different from the real life version. For one thing it is played at a much higher speed than real life poker and it is common to see several thousand hands an hour being played. Other players can also often see each other’s stats so new fish can be at a disadvantage. Even if you are a pretty good player you will be at a disadvantage when you first start playing online. Fortunately there are sites where you can try playing for free before putting up a stake. Do you play aggressively and aim to scare other players into folding? Or do you play it more cagey and suss out other players’ strategy before raising the stakes? For players starting off there are sites available where you can test your strategy before putting skin in the game. Learn how the format works and play a few hands before buying your chips.