Archive | August 2012

Friday hodgepodge

I love the internet and the hodgepodge I find around it. Friday hodgepodge will document my favourite links from the blogosphere, news, and random hilarity.

My favourite blog posts this week:

Finance Fox – You’re not a writer and you probably will likely never be one…unless…

Fabulously Broke – The money gap in relationships: Where one partner earns more than the other

Live Strong – Strengthen your self control

News you should know:

Bank of Nova Scotia will be buying ING! What does this mean for INGers?

Speaking of which, Canadian banks are doing quite well. Dividends, anyone?

South of the border, President Obama takes your questions. Bizarre but kind of cool.

Things that are hilarious to me and potentially offensive to you:

How to suck at your religion

Beauty and the BEAT (Found this a few weeks ago but too good not to share! You’re welcome.)

Jersey Shore is over?!

Have a great weekend!

LF

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Switching bank accounts: onwards and upwards!

As mentioned in a previous post, I recently decided to switch over to PC Financial. The reason for this switch was mainly the increases in my banking fees as of late. Of course I understand that I’m paying for service and convenience, but as an avid online-banker, I am perfectly happy doing all of my banking online. In fact, going into the bank to close my account was probably the first time I’d set foot inside a branch in years. As such, I’m happy to move over to CIBC’s little sister PC.

The process

Give yourself about one month to get everything switched over. In my case, the process included:

  • Opening up a PC account and adding bill payees
  • Switching over my direct deposits from my part-time job
  • Waiting for my contract job to finish (I didn’t want the additional work of switching over my direct deposit when I only had 1-2 pay periods left)
  • Canceling my automatic transfers into my ING savings account

Most of these tasks are simple, but switching over direct deposits can take some time. This is why I decided to switch over while between jobs. This way it was one less direct deposit transfer to worry about.  Last week, once I confirmed that my deposits were in fact being received into my new account, I went in and canceled my CIBC account. It was quick and painless!

My line of credit

Irrational blogger confession: I have a CIBC line of credit with an interest rate of 6%. I love my LOC. Back when I had no money, I put about $3,000 on it for a car repair. I’ve been slowly chipping away at it to the tune of a few hundred dollars a month, leaving about $1,300. I always think it’s pretty silly when people leave debt while they have enough money to pay it off, and this is exactly what I’ve been doing. I definitely see why people do it now! It’s psychological and it makes you feel like you have more money than you do. Although the interest on such a small sum is miniscule, it definitely makes no sense to pay any interest at all.

After apprehensively paying out my LOC and closing my chequing account, I am happy to say I’ve slashed about $20 per month in banking/interest fees! Small changes people, small changes.

What’s next?

Confusingly, I now hold too many accounts including:

  • PC Chequings
  • PC Savings
  • ING Savings (one individual, one joint with bf)
  • CIBC Line of credit

I am not entirely sure what one rather small individual is supposed to do with five bank accounts so I’m going to have to get organized! As some of you may know, ING is facing some upheaval resulting in a potential large bank buyout. Not sure what this will mean for current INGers? Potential fees I say!

I know some bloggers like to keep many accounts for different purposes but I would personally prefer to keep one savings account and earmark for different purposes. I will probably try to stay within the PC family to keep things simple and cancel my individual ING savings account. I will also be keeping my LOC for emergencies. Not many of you know it, but I am not a huge proponent of an emergency fund!

Have you ever switched bank accounts? 

The evolving North American dream

I imagine that by now most Canadians know about the new mortgage rules that went into effect last month. Am I right? There is a strong possibility that I am wrong.

Below is a great summary by the CBC of what the changes mean in dollars and cents.

Source: CBC.ca

Essentially a reduction in amortization period from 30 years to 25 years means that your monthly mortgage payments will increase but that you will be paying significantly less interest in the long run. In addition, you must put down 20% (increased from 15%) of your home’s value.

 What does this mean to us?

Now that I’ve paid off my debt, I’ve been zeroing in on some new financial goals. I’ve come to the conclusion that within the next few years, I’d like to own a home. Although these new changes will make it more challenging to do so, I think they are certainly a step in the right direction. Lax mortgage rules caused much of the economic chaos that has run rampant within the past few years. Tight mortgage rules will force us to think twice before committing to home ownership. Too many of us buy too many homes that too few of us can really afford.

Rent vs. buy?

Just kidding, there is way too much material online pertaining to this debate. Do what makes you happy.

The American/Canadian dream?

To many North Americans, owning a home is the ‘American’ or ‘Canadian’ dream, but there’s nothing dream-like about being house poor. Perhaps the new dream should be to enjoy life, save as much as you can, and buy a house when you’re ready to put a sizeable payment down and can afford a higher monthly payment with a shorter amortization period. Or perhaps the new dream should be to rent if you don’t want to commit to buying. I recently met someone that owned a condo, sold it, and now rents an apartment in a great part of town. She is happy with her choice and loves the freedom.

The dream can be whatever you want it to be as long as you know your limits, spend within your means, and create achievable goals. What are your immediate goals pertaining to home ownership? Are you content renting?

LF

Blog note: In an effort to reduce the number of posts about blogging, I’ve decided to include blog notes within posts to update you guys. In case anyone has noticed, I have indeed been gone for the past few weeks. I’ve recently started a new job and it has required a bit of adjusting. I’m hoping to slip into some sort of routine soon enough so bear with me! Another reason for my absence is that yet again, I wasn’t sure what direction I wanted to take the blog. I think I’ve decided and as a result, you may see some changes visually and content-wise.