How to Repay Your Student Loans
According to recent statistics by the Canadian Student Loan Program, the average time of student loan repayment is 10 years. Education is one of the most important part of our lives and getting a student loan is an investment that is beneficial for our future. Sometimes the repayment of our loans can be tough and you require services of a financial advisor to guide you, especially if we are freshly graduated and new to the world of adults and bank accounts.
Here are 3 tips that will help you get through the repayment of your student loans:
1. Consult
You can start paying off the loan after finishing the studies or if you have decided to take a year or semester off studying. Every student loan is different and before you start repaying yours, find out about your situation and the best solutions for it, consult with your loan advisor and ask him about these important details:
How much are the interest rates and the monthly payments? In how many years should my loan be repaid? Can I prolong the repayment? Can I lower my interest rate? How will the money be transferred? Can it be withdrawn from my credit card? Can I make my repayments weekly instead of monthly? How can I lower the amount I have to pay off? What will happen if I’m late with a payment?
Do not be afraid of asking too many questions. It’s a matter of finance and stability. Consult with loan advisors to get the ideal solutions for your repayment problems. Also know that people can get repayment assistance plans in specific situations as getting extremely injured or if working as a nurse, doctor, medical assistant in rural communities.
2. Organize
After you find out your monthly amount, get a notebook and start calculating. Make a list of all possible monthly spending and compare it with all possible sources of income. Get a job that will satisfy your financial needs. Do not settle for less and always keep in mind your true worth. At the beginning it may be difficult to find a job in the field you were expecting or studying; so be prepared to work in other areas until you get on your feet. For some people it is necessary working 2 jobs or night shifts.
Figure out what type of payment is most suitable for your needs. Will your monthly repayments be automatically withdrawn or will you send checks to the bank? Each of us has different schedules and tempos, for instance some people prefer weekly repayments instead of monthly.
A good tip is opening up a separate savings account where you can stash the money planned to be spent on debts, insurance, rent, loans and other obligatory spending. This helps you saving up that money and prevents the wild, spontaneous and reckless spending.
3. Prioritize
Be prepared to give up luxurious ways of life. Do not drink a Large Pumpkin Spiced Latte at the coffee shop and do not live alone. Rent is becoming more expensive and unaffordable, especially for people who’ve just finished university. Finding a roommate is a great and fun way to save money whether your roommate is your coworker, friend, parent or other relative. When picking your roommate, make sure it is a sane and reasonable person. You do not want to ruin your mental health for some extra savings.
It may be tough at first but until you get a steady job, you can also try freelancing which offers flexible working hours and a various market for trading crafts. Also, if you have studied a subject whose basis are taught in high school like biology, math, languages or others then put up some adds on the internet and offer lessons to high school or college students. Besides working, another way to earn money is by selling old items as clothing, books, technology devices or furniture. This will liberate your living space and make room for new beginnings.
Why Do People Buy Critical Illness Insurance?
No one wants to think about having a serious illness or finding their car crashed by a meteor; but the fact is that times are getting tougher. Air pollution is getting worse and medical treatments costs increase each day.
So insuring your home, car, health etc. isn’t such a bad idea; especially if you consider the low monthly payments you make which provide you with large sums of cash in emergency situations.
Here are some of the reasons why people buy critical illness insurance:
What Happens to Their Money
If time passes and God forbid you catch a serious illness then the company will insure you get your money. And you can get the whole amount, no questions asked. You don’t have to do daily reports and calculations. The moment the disease has been diagnosed, you can get your investment’s worth.
On the other hand, if time passes and you do not catch a serious illness then you may have the chance for money return. The conditions are different for each company but generally you can cancel the insurance policy and get a percentage of the amount you invested.
Both of the situations have a common advantage. You do not get taxed. To achieve this you must not have a group plan with your employer. Then you might get taxed because the premium payments were made before the pre-tax deduction from your paycheck.
The Extra Benefits
With buying critical illness insurance you are letting go of some portion of the fear on this subject. You know that you have an additional cover up and plan for those kinds of unwanted situations. With other words you paid someone to watch your back.
Critical illness insurance isn’t something that can be approved for anyone. You have to be healthy at the time you buy it and have a pretty healthy family history. There are many types of policies you can buy, each covering different things including a number of the 22 common health conditions. You get to choose which diseases you want covered and how much money are you planning to invest each month. This will determine the amount of money that will be provided to you in a case of emergency.
TFSA Limit for 2019 Rises to $6,000
Just as expected, the TFSA contribution limit for 2019 is $6,000, up from $5,5000 in 2018. In addition to the TFSA contribution limit rising to $6,0000 for 2019, the cumulative TFSA contribution limit will be $63,500 for Canadians who has never contributed to a TFSA and who was 18 years old or order in 2009.
Under changes announced by the Canadian government in a Department of Finance news release on December 7, 2015, 2016, and each subsequent year, the annual TFSA limit is fixed at 5,000, indexed to inflation for each year after 2009, and rounded to the nearest $500, using the consumer price index provided by Statistics Canada.The TFSA contribution limit for 2013, 2014, 2016, 2017, 2018 was $5,500. The limit for 2015 was $10,000 and the limit for 2009, 2010, 2011, 2012 was $5,000.
If you have withdraw from TFSAs, your crystalized gains and losses from withdrawals are factored in to your TFSA room. Here’s the formula:
Unused TFSA contribution room to date + Total withdrawal made in this year + next year’s TFSA dollar limit = TFSA contribution room at the beginning of next year.
Sources
https://www.canada.ca/en/revenue-agency/services/tax/individuals/frequently-asked-questions-individuals/adjustment-personal-income-tax-benefit-amounts.html
https://www.advisor.ca/tax/tax-news/tfsa-limit-for-2019-released/
https://www.investmentexecutive.com/news/industry-news/tfsa-annual-contribution-limit-rises-to-6000/
Basic Insurance Policies Everyone Should Have
There are various options when it comes to buying insurance. You can find an insurance policy to cover almost anything imaginable.
How do you know which insurance policy is necessary for you? You work hard to build wealth in order to live a comfortable life, so you’d want to protect your most important assets. You also don’t want to pay too much money for insurance because it’ll take money away from your emergency fund or retirement savings.
Here are the 5 basic insurance policies everyone should have:
1. Health Insurance
One of the most important types of insurance to have is health insurance. Health insurance is a type of insurance coverage that pays for medical and surgical expenses. This means that you’ll be taken care of incase of an unexpected injury, illness, or even disability. Having health insurance will replace lost income and provide guaranteed coverage for hospital expenses during this time.
There are 2 different types of health insurance: critical illness insurance and disability insurance. Critical illness insurance will provide you with a tax-free lump sum payment when you become seriously ill. Disability insurance will help you to replace a portion of your income if you become disabled and have no way of earning an income due to a disability.
2. Car Insurance
Car insurance is mandatory in Canada. If you’re caught driving without car insurance, you’ll face heavy fines, your license will be suspended, and your vehicle will be impounded.
There are 3 different types of auto insurance coverage in Canada: collision insurance, liability coverage, and comprehensive coverage. Collision insurance pays for the vehicle repairs and medical costs whether you’re at fault or not. Liability coverage covers any damages to property or another person due to an automobile accident. Comprehensive coverage provides you coverage for events that are out of your control such as falling objects, natural disasters, and theft and vandalism.
3. Homeowner’s Insurance
Your home is your largest financial investment, therefore it’s important to protect your home against risks. Homeowner’s insurance protects: your home, your belongings, living expenses, and liability claims. Homeowner’s insurance will help to protect your home against risks like fire, theft, and more. Homeowner’s insurance will protect your belongings against insured loss or damage to clothing, furniture, and other personal property. Homeowner’s insurance will protect your living expenses like a hotel room and storage costs if you’re not able to live in your home while repairs are made after an insured loss or damage. Homeowner’s insurance protect your liability claims if you accidentally cause property damage or bodily injury to others.
4. Life Insurance
Life insurance protects the financial security of the people you live by giving them a tax-free payment upon your death. The cost of life insurance will depend on your age, gender, health, lifestyle, and medical history.
There are 2 different types of life insurance: term life insurance and whole life insurance. Term life insurance is flexible, inexpensive, and allows for temporary coverage. You’ll be insured for a certain amount of time which is going to be fully guaranteed during the entire term. Whole life insurance is a permanent type of life insurance. Your coverage is in place for life and as long as your premiums are paid, your beneficiary will receive the benefit amount upon your death.
5. Disability Insurance
Disabilities can be short term or long term which include major illness, personal injury, and mental health problem. Disability insurance protects you and your family from an unexpected illness or accident that leaves you unable to work and earn an income.
What is Critical Illness Insurance?
What is critical illness insurance? Critical illness insurance is a form of health insurance that provides you with a tax-free lump sum payment to use however you need should you become seriously ill.
This type of health insurance is suitable for anyone seeking financial protection to help cover the costs associated with recovering from a life altering illness or for those looking to protect loved once in the event they experience a life altering illness.
The cost of this insurance varies depending on your age, so the younger and healthier you are, the lower the premium is going to be. However, there are also several other factors such as medical condition, the insurance company, the amount of coverage, and the number of illnesses covered by the policy.
What are the types of illnesses covered by Critical Illness Insurance?
The types of illnesses covered by critical illness insurance differ from company to company. However, typical illnesses covered by critical illness insurance may include:
- Cancer
- Stroke
- Heart attack
- Multiple sclerosis
- Blindness
- Alzheimer’s
- Paralysis
- Kidney failure
You’ll be able to make a critical illness insurance claim if a physician, licensed to practice medicine in Canada and specializing in your particular illness, has diagnosed you with a critical illness covered by your insurance policy.
If the claim is approved, a lump sump benefit payment will be made to you after 30 days. If you don’t make a claim, for example if you die for a reason that isn’t covered by your insurance policy, the premiums you paid may be refunded to your beneficiary.
How does Critical Illness Insurance benefit you and your family?
The physical and emotional strain of a critical illness, as well as the financial impact can be devastating. You may face additional costs in the event you experience a life altering illness such as childcare, medication, home modifications, or treatments out of pocket.
Critical illness insurance can help offset some of the costs that isn’t covered by the Ontario Health Insurance Plan (OHIP). Critical illness insurance can also offer financial relief that can help you keep your retirement plans on track, so you don’t have to worry about the additional costs eating into your retirement savings. You can use the tax-free lump sum payment however you need such as supplementing lost income and covering private nursing costs.
5 Ways to Know You Found the Perfect Home
There is no other decision in life that is more nerve-racking than choosing which house to buy. For many homeowners, buying a home or getting a mortgage is as major financial decision. We fear about making the wrong decision when looking at homes to buy. This is because many of us wants to ensure we’re making the right choice before jumping in. So how can you tell if you’ve found the perfect home?
Here are the 5 ways to know you found the perfect home:
1. You want to go inside the house
You know you found the perfect home if you want to go inside the house. One of the exciting things about looking at home is not knowing which could be your new home. Maybe it’s the one of the right or maybe it’s the one of the left. If you like the house on the right, more than the house of the left, it could be a sign. This sign could mean there’s something about the house that appeals to you.
2. You are possessive about the house
You know you found the perfect home when you are possessive about the house. For example, your real estate agent points out a flaw about the house. Do you feel defensive about your real estate agent saying something so mean about the house? Maybe you see the flaws, but right now it doesn’t matter. If you think you found the perfect home, you’ll want to defend every flaw you see.
3. The house fits your basic needs
You know you found the perfect home if the house fits your basic needs. Maybe the house doesn’t give you everything you’re looking for, but it has the right number of rooms and the space you need. Practical upgrades like a recent window replacement can also add to that sense of security and comfort, showing that the home has been cared for and is ready for you to move in without needing immediate improvements.
4. You want to stop looking at other homes
You know you found the perfect home if you want to stop looking at other homes. This means every house you’ve been to doesn’t appeal to you anymore. Maybe you had a home previously rated at #5, but now you’ve had a change of heart and has a #1 rating in your eyes.
5. Every thought in your mind tells you to buy that house
You know you found the perfect home when every thought in your mind tells you to buy that house. You’re so in love with this house, you can’t stop thinking about it. Your mind is so consumed that every other thought in your heads saying that this is the perfect house for you and your family.
Factors to Consider When Deciding the Location for Your New Home
A house is just a shelter, but a home is what you make of that house. For most people, buying a home is the most significant investment they’ll ever make—one that requires careful thought, planning, and guidance. Beyond the aesthetics and layout, there are many practical factors to consider before making such a major commitment. While your personal preferences matter, expert insights can also make a difference. A financial advisor can help you understand what you can comfortably afford both now and in the long term, while a real estate agent can guide you through market trends and available properties that fit your lifestyle.
One of the most important considerations during this process is location. The neighbourhood you choose influences everything from your daily commute to access to schools, amenities, and future resale potential. Choosing the right location for your new home isn’t just about convenience—it’s a strategic decision that affects your quality of life and the long-term value of your investment.
Here are the factors to consider when deciding the location for your new home:
1. Affordability
Affordability is a decisive factor when it comes to buying a new home. You should keep in mind that not every community will be in your budget. So have you determined what your budget is? It’s very important to determine what you can afford.
Your main concern when buying a house is being able to live comfortably and within your means. You would need to consider everything from closing costs, upfront fees, housing expenses, and the price of gasoline and consumable goods.
2. Commute
Maybe you own a business that has ATVs for sale, sell custom t-shirts, or provide drain cleaning services, so you have the luxury of working from home. But, if you don’t then you would definitely want to consider your commute to work. The amount of time it takes you to get to work or an office space and back home can be a determining factor in your decision when deciding the location of your new home.
Your commute to work can have a significant impact on the amount of time you can spend with your family. In addition, even if you own a car, you should also be considering if the location of your new home is nearby a reliable network of public transportation. This could help you save the time and stress of driving to work and back home, as well as save you money on car maintenance and gasoline consumption.
3. Healthcare Facilities & Services
Do you have young children or a family member in the family that fall sick often and require recurring medical attention? Even if you don’t, it’s better to be within a reasonable driving distance to an emergency room in case something happens to one of your family members. Access to nearby healthcare facilities such as hospitals, nursing homes, and drug stores and pharmacies, as well as healthcare services such as a dentists, optometrists, and pharmacists should be an important factor to consider when deciding the location of your home.
4. Schools
If you have young children in the family, you’ll want to consider if the location of your new home has access to good schools. You should be asking yourself questions such are there public or private schools nearby and are my kid(s) able to walk to school? Even if you don’t have kids, school districts are important features for a community. Living in popular school districts will increase your home’s resale value if you plan to sell your house in the future.
5. Convenience & Amenities
What do you want to have close access to? Do you want to have close access to a gym, park, mall, banquet hall, or grocery store? Or maybe you want to live in an area that’s near the best shawarma or the best Italian restaurant in the city? You should consider if it’s a necessity to be close to shopping and restaurants because some people don’t mind driving 15 or 30 minutes to get to a grocery store or their favorite restaurant.
6. Proximity to Family & Friends
Is being close to your family and friends important to you? Maybe you have a large extended family and you love spending the holidays with your family and friends. If this is the case, you should buy a house that is within driving distance to your family and friends.
7. Crime & Safety
It’s important to feel comfortable where you live because no one wants to live in an area that’s known for criminal activity. Do your digging before you decide one the location of your new home by asking the previous homeowner or your real estate agent.
Essential Health Tips for Retirees
Old age is an unavoidable stage of life. Our body goes through major changes as we age. New complications may arise with each passing year. However, these complications can be managed and controlled so you can enjoy retirement.
Here are the essential health tips for retirees:
1. Eat well
Eating nutritious foods in the right amounts can help you healthy. So it’s important to eat well to help control or prevent many illnesses such as obesity, heart disease, high blood pressure, and more.
2. Keep Active
Aside from eating well, you should keep active. Find something you enjoy to help you maintain strength, balance, flexibility, and promotes cardiovascular health. Keeping active will also help you to sleep better, stay at a healthy weight, prevent or control illness, and more.
3. Regular Checkups
You should get regular vision, dental, and hearing checkups. Some people by the age of 50 notice changes to their vision. For example, a gradual decline in the ability to see small print or focus on close objects. You should book an appointment with your optometrist because it’s important to receive regular eye exams to ensure that your eyes are healthy. In addition, you also want to take care of your teeth and gums in order to last you a lifetime by brushing, flossing, and getting regular checkups.
4. Quit Smoking
Smoking kills because it can cause cancer, strokes, and heart failure. Did you know it also leads to erectile dysfunction because of atherosclerosis and to excessive wrinkling by attacking skin elasticity? You should take this important step of quitting smoking in order to improve your health and fight aging.
5. Manage Stress
You should manage stress by exercising or using relaxation techniques. You can also make time for friends to help you manage your stress. Successfully managing your stress will have a positive effect on your health and how you feel.
What Is An Investment Loan?
We use money to spend on items that we want now such as clothes, electronics, and automobiles. But, what about if you use that money to invest for the future and build wealth instead?
Imagine using your borrowing power to invest. You’re probably doing it with a mortgage or a Registered Savings Plan (RSP). These types of investments have the potential to increase in value over time.
It’s considered a good type of debt because you’re not spending on things that depreciate quickly like clothes, electronics, and automobiles. Therefore, if you’re borrowing to invest, you’ll be investing in your future.
What Is An Investment Loan?
An investment loan is a type of loan that is used to purchase mutual or segregated funds. The purchased funds are held as a collateral which secures the loan; the same way a house is used as a security for a mortgage loan. In addition, the lender holds the funds on behalf of the borrow until the loan is repaid in full.
What are compound returns?
Compound returns on an investment means that returns are calculated on the initial investment and accumulated growth from year to year. Having a larger initial investment growing is essential for compounding success.
For example, say your initial investment is $100K, if you make 10% per year then every 7 years your money doubles. So hypothetically in 7 years you could have $200K, then in 14 years you could have $400K, then in 21 years you could have $800K, and in 28 years you could have $2.8 million.
What are the risk of borrowing to invest?
Borrowing to invest involves a greater degree of risk than a similar purchase using cash. If the value of the investment falls, the borrower would suffer a loss of value beyond what they may have experienced if they invested with only their own money.
You are also responsible for loan payments irrespective of the performance of your investments. So if your investment drops in value, you’ll lose on the investment and still be required to repay the loan in full.
Is an investment loan right for me?
Investors who are looking to benefit from an investment loan will have available cash flow, a high risk tolerance, and a long investment horizon. You should speak to your financial advisor to help you determine if borrowing to invest is right for you.
Tips for Travelling
Are you planning on travelling out of the country? Looking to visit your family or flying south for a vacation?
Vacations are for reducing stress. It should be fun and relaxing. Things can happen to make it a stressful experience.You’re not able to control weather or flight delays. However, you can make your trip a lot more memorable and most importantly stress-free.
Here are 5 tips before travelling:
1. Passport
You should make sure your passport is up to date. Many countries require that your passport is valid for 6 months after your return date. It’s recommended that you renew your passport no less than 9 months before it’s set to expire. Click here for more information on how to renew your passport.
You should bring copies of your passport when you’re travelling out of the country. You’ll want to be sure you can prove your citizenship just in case your passport gets lost or stolen. In addition, you should also leave a copy of your passport at home with someone you trust.
2. Money
You should call your bank to make sure your credit card will work in the country you’re travelling to. Not every place takes credit cards you should always have local cash too. Keep in mind that some countries require travellers to pay in order to enter or leave the country.
3. Luggage
Sometimes, things happen. The airline may lose your luggage. So you should always pack a set of clothes in your carry-on. Don’t forget to bring small snacks because eating in a foreign country can become a task. You should also check what your airline’s rules are to avoid any fees.
4. Research
You should do some local research before you travel out of the country. Research events like festivals and ceremonies, as well as a couple of national dishes to try.
5. Travel Insurance
Travel insurance is very, very important. This will ensure you’re protected on your next vacation, just in case you become sick or get injured. There are also other benefits such as coverage illness, lost luggage, trip cancellation, accidental death, and medical evacuation.