The Marilyn Denis Show | Finance | How to Save Money on Big Things with Kelley Keehn

Click here to view the January 7, 2013 segment

The new book from the Canadian Institute of Chartered Accountants titled A Canadian’s Guide to Money-Smart Living, authored by personal finance expert, Kelley Keehn, is designed to make people feel good about their money.
 

Here’s an excerpt about the emotional barriers to financial health:
 

Banish Negative Thoughts
 

When it comes to managing your money (or lack thereof) in your family, the top excuses for putting things off can be a host of uncomfortable emotions. Defining what you are feeling is a great first step in order to tame the “enemy” and move forward. Think about the following emotions in the context of your own financial situation.
 

Shame
 

A period of hard times because of unemployment or divorce, poverty in one’s childhood and other factors can make a person ashamed of their financial health. Just remember you deserve the best possible life despite these setbacks.
 

Guilt
 

Have you ever made a purchase that you felt terrible about later or even hidden from your family? Did you and your spouse take a vacation that wasn’t enjoyable because you couldn’t stop worrying about how you were going to pay for it? If you feel guilty about your spending, it’s probably because you bought a “want” item and not a “need” item. When you knowingly set money aside and save up for these products and services, not only does the guilt disappear, your level of enjoyment and satisfaction dramatically increases as well.
 

Embarrassment
 

Not everyone feels bad about their financial circumstances, but they probably feel they should know and do more. In an area as vast as your financial life, even the brightest professionals don’t know everything about accounting, investing, budgeting and more. They’re not embarrassed, so why should you be?
 

A Guide to Money-Smart Living is available in e-book and hard copy formats and can be accessed by visiting www.castore.ca/moneysmartliving 

The Marilyn Denis Show | Episodes | Paying for the holidays with credit with Kelley Keehn

Click here to view the video from Monday, November 12, 2012 

As the holidays roll in, stores go wild announcing their sales, savings and gift giving ideas.  For consumers it can either be a dream or a night mare.

Personal Financial expert Kelley Keehn says there are ways to cut costs during the holidays if you choose the right credit card.

Benefits to credit card use range from extended purchase protection to extensive points/rewards, according to Kelley.

Benefits of using a credit card to help you keep track and offer protection and rewards

• If you are able to pay off your balance in full every month, there’s one more reason to pay for your purchase with a credit card: purchase protection. Purchase protection insurance will cover eligible purchases against damage, theft or loss typically for 90 days from the date of purchase.
• Another benefit are the points and rewards that can add up really fast during the holidays
• Interest free purchases for 21 days

What types of cards are best for rewards during the holidays?

• The best card for rewards depends on you and your needs AND if you’re a responsible credit card holder.  If you’re always paying off your balance you can be rewarded big time.  There’s points of course for merchandise, travel and now even cash rewards.  
• Ensure that the annual fee doesn’t actually cost more than your annual rewards.  For example, you net $300 in rewards after your annual fee is paid, which isn’t bad for just using a credit card.  However, if you had a travel card, that might not make much of a dent towards your family vacation. So $300 in cash rewards would be a better fit.

What type of protection is out there and what does it cover?

• Built in insurance options are offered with most cards – if you break or lose something you just bought you’re protected for up to 90 days.  Some cards also offer extended warranties and travel protection.  If you book flights and rental cars, there’s some perks and coverage, but you need to read the fine print.
• You’re never on the hook for fraudulent activity on your account, however, want to keep track of even a small suspicious purchase especially during the busy holiday season.
• Credit cards also help with disputes with a merchant
• Provides tracking of your purchases (as does debit but not cash)

If we’re using a credit, what do we need to do to ensure we don’t over spend?

• Know your limits: you should never have a balance of more than 35% on your credit card
• Just because you have a limit, it doesn’t mean it’s a target to hit. 
• Create balance and purchase alerts – these are great instant re-reminders of what you just bought that can come across your email or smart phone from your credit card company. 
• Don’t be enticed by retail cards offering instant discounts.  Just because you don’t activate it, doesn’t mean it didn’t hurt your credit score -  it does!
• Check your balance and purchases online every morning when you have your coffee.  It just takes a minute and it’s easier than trying to remember some unusual purchase that you or your spouse made when the statement comes weeks later.

How can we avoid the holiday spending traps no matter what method of payment we use?

• Set up and manage expectations.
• The same idea applies for avoiding a financial hangover.  You just need to do a little preplanning.  If you wait until you’re in the retail store, you likely won’t have the willpower, just like going shopping hungry.

For those trying to stay on track, Kelley recommends this online holiday budget resource 

Click here to link to the show - November 20th, 2012

The tight purse strings of a new mom may force her to cut her maternity leave short and head back into the work force. Our personal finance expert, Kelley Keehn, comes to the rescue with advice on balancing the budget to make work-after-baby life stress free.

Is money is the number one reason people cut maternity leave short to go back to work?

Obviously, finances are a huge issue and if the money isn’t there, moms may have no choice.  But if one has a spouse in the workforce and/or they have budgeted well, there may be many other reasons she’d want to get back to work such as:

• Keeping her seniority
• She loves what she does
• She enjoys her stream of income even if she doesn’t need to go back to work financially
• Emotionally, she might really miss the social dynamic of her workforce

If a couple, who are new parents, are looking at their finances trying to determine if going back to work makes sense, where do they start?

Making a budget: list how much you require for fixed expenses (mortgage or rent, insurance, loan payments, utilities, food, etc.) and how much for extras like dinners out.  Now, determine how much money you absolutely must have to be modestly comfortable (with a cushion for emergencies).  Just as no two babies are entirely alike, so too are no two jobs and no two moms.

Consider whether the money you’ll make will offset the costs of earning it.  Calculate your budget based on both you and your spouse’s income and then deduct amounts for commuting, clothing, childcare, lunches – and keep in mind time away from the baby.  Are there options to reduce time away from home – like working part-time, or full or part time from home, or job sharing?

Lastly, make a list of pro’s and con’s of going back to work, for everyone in the household (not financially related) to make a truly informative decision.

**Accept the fact that you won’t be able to do it all (perfectly, at least) and think about what’s most important to you.

Is there a “magic” number (in terms of salary) that you need to make in order for going back to work to be worth it financially?
This all depends on budgeting. Some people with 6-figure incomes need all that money to cover their expenses while others with more modest incomes do well on less money and budget for a stay-at-home mom.

This is a great calculator to help couples determine if they can do it:www.parents.com/app/stayathomecalculator/

What can couples do if they’re in the pregnancy planning stage to make maternity leave easier?

Candor and Openness

Many new couples encounter problems when one spouse fails to be honest with the other about financial issues. Sometimes one spouse will hide debts or spending from the other. This almost always creates problems because it makes it impossible for the other spouse to adapt her spending or to budget accurately.



Budgeting and Planning

Young couples should budget to ensure that spending does not get out of hand. Likewise, planning and budgeting should include money for savings and investment for retirement. A budget will help assure that both spouses are on the same page regarding income, spending, and the lifestyle that is plausible given their financial situation. While one spouse may be more financially inclined than the other, both spouses need to understand and agree on the budget.

Don't Try to Match Your Friends' Spending

Many young couples fail to save enough, and they spend too much. Spending in order to match the consumption of others often will lead to debt and to too little savings.

Invest with a Long-Time Horizon

Young couples have many years during which to save and with which to invest. Consequently, young couples can be more aggressive in their investing than older couples. In fact, some financial advisers encourage young couples to invest exclusively in stocks and to bypass investments in lower risk instruments such as bonds.

The Marilyn Denis Show | Finance | How to Raise a Millionaire with Kelley Keehn

View the video here - October 31st, 2012

Kendra’s question: How do I start my boys on a good path to being responsible with money? They are 7, 4 and 1. Is giving an allowance for chores a good thing to implement this early?

For your 7 year old – absolutely!  But discuss weekly too about his/her responsibility to now make some purchases of their own with that allowance.  You’ll find that they make different decisions when it’s “their money” as opposed to mom and dad always forking over for purchases.  Your 4 and 1 year old are a little young, but they’ll see the positive actions of your seven year old and hopefully hear your conversations as well.  Remember though that their allowance should be earned, not a right at a certain age. 

And as with food, keep in mind to never use money as a reward or punishment.  It should be a fair exchange for good work done.
 
Talk about having kids help out with family budget.
 
Victoria: I am wondering how you teach a young child the fun way to save?

For kids as with adults, it needs to be visual and short term.  Consider a goal thermometer along with a dream board about what they’re saving for.  If they can see it and feel they’re making progress towards something they really want, they’ll enjoy the process and the end result too.

The Marilyn Denis Show | Finance | Marilyn Make Me a Millionaire: Roundtable with Kelley Keehn

View the video here:  October 23, 2013

The Marilyn Denis Show | Finance | The Cost of Home Ownership with Kelley Keehn

Here's the video link to the show:   October 15, 2012

Real Estate Reality Check

#1.  Is homeownership right for you?

• Do you have the necessary financial management skills? 
• Most importantly, do you have an emergency account with at least 3-6 months of your household income set aside in addition to your down payment?
• How financially stable are you?
• Are you ready to take on the responsibility of all the costs involved in homeownership, including mortgage payments, repairs, and maintenance?
• Are you able to devote the time required for home maintenance?

#2.  Are you financially ready and the pre-approval process

• Before the pre-approval process (in which your banker will need this information), you need to know:
• How much are you spending now?
• Do you know all  of your income and expenses? We could have this worksheet from CMHC on the website:www.cmhc-schl.gc.ca/en/co/buho/hostst/wosh_003.cfm (current household budget calculator and) www.cmhc-schl.gc.ca/en/co/buho/buho_011.cfm (household budget calculator)
• Once you have those numbers, you’re ready for a pre-approval with your banker.  This is an essential step before you head out house hunting.  Plus, the bank will hold the interest rate for up to 120 days in case interest rates rise while you’re shopping.  But just because you’re approved for a certain amount, it doesn’t mean you need to take as much as the bank is willing to give you. 

#3.  The next big question is how much can you afford? 

There are great calculators online but there’s really three key factors lenders are looking for when it comes to your affordability:

1. Your monthly housing costs shouldn’t be more than 32% of your gross monthly income.  This is what lenders call GDS –gross debt service – they want to see it less than 32%.  Housing costs include your monthly mortgage payments (principal and interest), property taxes and heating expenses.
2. Rule two is that your entire monthly debt load should not be more than 40% of your gross monthly income.  Entire monthly debt load includes your housing costs, other debts and car loans, credit card payments, leases and more.  This figure is called the TDS – Total Debt Service.
3. Lastly, the third key is the maximum house price you can afford based on the above rules, your down payment and interest rate.

#4.  What’s really important about that last point of affordability?

For a newer home buyer that is worried about their costs, going into a fixed 5 year term or longer might make sense as they don’t have to worry about their rate going up for a while, hence, set payments.

However, as a variable rate over say a 20 year period is unusually less than any fixed rate term, it’s not for everyone.  And I strongly caution those that are getting into homes too expensive because of the low variable rates without considering that rates will go up in the future.  If going variable, you should pad your payment and pay as if you’re in a 5 year fixed.  That way, when rates do go up, you’re already paying more than you have to a have created a cushion.

New buyers should also go in with a maximum possible down payment for many reasons

1. If it’s at least 20% down, you’ll avoid costly insurance fees that the banks require for more risky purchases.
2. Second, you’ll pay a significant amount less in interest over the life of your mortgage with every dollar more you save for a down payment.
3.  Remember, you still need that cushion of a solid emergency account.

#5.  But a payment isn’t the only factor – what about hidden costs?

There’s many the new buyer needs to budget for like property taxes, condo fees, closing costs and of course maintenance.  Plus, a house and condo owner need to get their own inspections to ensure there aren’t’ major possible repairs in the coming years over regular maintenance. A buyer needs to budget for closing costs like legal fees, title insurance, property insurance and more that aren’t always factored into your mortgage payment.

Lastly, don’t let low rates trick you into less of a down payment or bigger house than you could afford.  It’s better to rent a little longer and build up emergency fund than to potentially lose it in the future –just need to heed the lessons of some many in the US.

CHRISTMAS DOESN'T HAVE TO BREAK THE BANK - Make it a no-fuss season

	Source: JOANNE RICHARD, Sun Media, 24 Hours Section: News Page: 16

   The holiday season can wreak havoc on your bank account if you're not careful so, this Christmas, it's time to buff up your negotiating muscles, get savvy about deal spotting and practice your frugal intelligence.
    "It's about getting more for less, but being smart about it," says money maven Kelley Keehn.
    Don't equate frugality with cheapness or stinginess. Money matters and frugality's all about seeing value in keeping as much of your hard-earned cash as you can, and being creative while reducing spending, especially during the holiday season, says the Edmonton-based speaker and author of eight books.
    First of all, make it a no-fuss, no-muss season. Ask yourself and your family precisely what you gave and received from each other over the past few years. "If you can't recall the gift within moments, it just shows you that all the stress, fuss and expense was soon forgotten.
    "So should you really do the same this year? Or pare down your lists (and) help others in need to put Christmas in context," says Keehn, of kelleykeehn.com. 

 

Read the full article here.