Blog - Fee-Only Financial Planning / Advising in Kitchener Waterloo Cambridge - WD Development


What helps when terrible things happen

I love the practicality of this podcast in general, this episode in particular.

Nora covers her own terrible thing and what helped her, and includes other's stories of what helped and what they appreicated most in their hardest times.


Is this episode only about how money helps in terrible times?  No.  Money is mentioned several times and I want you to hear that from people who have experienced unplanned deaths and other sudden changes.  I also want to hear about the other needs that people whose lives have been upended have and how you could step closer to be a support and bring some peaceful moments to families who have had an experience that they wish never ever happened.




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House Affordability


Need personalized advice on what's affordable or how to adjust to increased expenses?  

Adjustment Plan- intro call/ planning session + summary letter/ check-in session at 3 mnths - $1200 incl HST


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Dealing with debt in family businesses

I love this post by Elaine Froese.  My hope is that you come away from reading it believing that there are solutions when you have debt, you can change your current situation and the effort to change is worth it

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Education is an important step in many careers, and it can be expensive.  Five ways to fund education costs


1. Using a Registered Education Savings Plan (RESP) in Canada or a 529 plan in the United States


Both of these plan types are designed to give parents/grandparents/ family & friends a place to save for a child’s post-secondary education costs.  The contributions made to the plan are not tax-deductible, however, the investment returns within the plan are tax-sheltered until the money is withdrawn.  These accounts work for child up to the age of 17.  There is a lifetime maximum contribution, and there may be some annual limits that you need to be aware of.  The money within an RESP or 529 must be withdrawn for the purpose of education, otherwise there will be tax consequences on the investment growth and any government grants received.


2. Using a Tax-Free Savings Account (Canada)


Many people use a TFSA to save for education.  The contributions are not tax-deductible, however, the investment returns within the plan are tax-sheltered until the money is withdrawn. A TFSA can be used to save for a child’s education or your own return-to-school as an adult.  There are annual contribution limits; you can confirm your lifetime contribution room and amount available at myCRA.  There are no restrictions on the use of the money within a TFSA.


3. Using a non-registered account 


Depending on your education goals & costs, you may save in a non-registered account- either a savings account (no investment or market risk, the money is safe and the value will not fluctuate) or an investment account (investments work if you have a 3-15 year timeline for the money to grow).  There are no specific tax advantages in a non-registered account- any income that the account generates will be reported on your income tax return annually.  The benefit of using a non-registered account to save for education- you have a dedicated place for savings, you can track your progress and you will know how much you have when you start a program.


4. Borrowing 


Student loans, bank loans and using a line of credit (secured or unsecured) are possible when you are looking to increase your education.  In my experience, it’s important to understand the timing of payments: a student loan will not require payments until you graduate; a bank loan will require payments immediately; a line of credit requires interest-only payments as soon as you start borrowing.  It’s important to understand how much debt you may end up with at the end of your program.  It’s important to understand the job prospects and starting salaries in your chosen field.  It’s important to include your other life goals when you are mapping out your potential debt load at the end of your program- are you planning to get married? have children?  do you anticipate moving at the end of your program?  


In Canada, you can borrow from your Retirement Savings Plan (RSP) using the Lifelong Learning Program- this gives you access to funds, some time to pay back and there's no interest applied (unlike a regular loan or line of credit).  I advise using this option very cautiously- numerically, it looks good.  Practically speaking, it doesn't work well for most people who use it and they don't end up 'ahead' of other borrowing methods.  In my experience- if you can give your RSP account one job- 'be there for my retirement' and work out your education costs another way, it is less confusing, less discouraging and easier to pay back the costs.


5. Earning income while in school or accessing funding


Is it possible to work while you’re in school?  Can you buffer the costs of your program and your living costs with a part-time job?  If you’re returning to school, can you attend your program part-time and still work?  Are there any scholarships/bursaries/ funding available?  Check with the institution that you are applying to- there are numerous programs that are under-used; largely because they are hard to find.  Ask questions early in the process and broaden your search.  My favourite example- if you grew up in the foster system or as a Crown ward, check out this list for the options in Ontario.  Every province has options for kids who grew up in care and now want to pursue post-secondary education. 

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Know your income.  It seems like a silly step, but many of us don't know our after-tax, after-deduction income.  I mean what lands in your bank account after your income taxes have been deducted, any costs that you pay for a health benefit plan (FYI- that disability insurance that you have through work? lots of us pay for our own disability insurance with after-tax dollars, which is a great thing.  And it reduces how much of your salary you take home), and any RSP savings that you do.  Know how often you are paid, and convert that into how much lands in your bank account every month.  If you are paid bi-weekly, you need to multiply your number by 26, then divide by 12.




Add up your fixed costs.  You can break this down either by pay period or by the month.  Make sure you correctly account for any weekly or bi-weekly payments (mortgage and car payments often occur like this- we like the feeling of accelerating our mortgage payments and car dealerships like the smaller advertised payments with a bi-weekly or weekly schedule)  Anything that is scheduled to go out, or goes out on a regular basis in a roughly predictable amount is a fixed cost.  These are costs you have already agreed to.  I mean ALL of your fixed costs- mortgage/rent, car payment and cell phone may be the obvious ones.  I want you to include your gym membership, Netflix and that life insurance policy that you pay for once a year.  I also want you to include amounts for car maintenance and home maintenance.  You bought the car- car repairs shouldn't be a surprise.  You bought the house- maintenance and repairs are not a surprise.  Make sure that your bank account isn't surprised.  And if your bank account is surprised in the short-term, while you're getting the hang of your fixed costs- make different choices in your variable spending.




Whatever is left over after adding up your income (either per month or per pay period) and subtracting your fixed costs is available to pay for your variable costs.  Variable costs are all of the things that may still occur regularly and may still be essential AND the costs vary enough to make it difficult for most of us to work with a traditional budgeting framework.  Gas, groceries and clothes are essential, and they happen regularly....but we often over-estimate how much we're going to spend, or we're trying to use a traditional budgeting framework.  We plan out how much we're going to spend on groceries.....we pick up a few extra things on that trip we made while we were hungry......after the month is over, we update our budget.....realize we missed.....and get frustrated and feel like we failed.  Don't do that.


Once you know your income and your fixed costs, move the remaining amount over to a different bank account that you only use for your variable costs.  Now you know how much you have before your next paycheque, and you can decide ahead of spending whether to shop for clothes, go out for dinner or buy that thing you saw the other week that would look great in your living room.  Not in hindsight, foresight.  You know you've covered all of your scheduled costs in your main bank account.  You now have a bank account that clearly shows you how much is available to cover the costs that you can exercise some control over- either in the timing, the amount or both.

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Women, Careers and Money

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Financial help when you're separating


When you're separating from your spouse/partner, it's hard to know what to do.  Sometimes, it's harder to know what to do with the advice that you're receiving- some advice is from professionals, some comes from those close to you, some comes from out of left field.  With all of that advice, and with the long-term repercussions of the decisions made in this uncertain time, how do you choose who you're taking advice from?


In this video, I talk about how I work with clients in this situation.  As a Certified Divorce Financial Analyst, I have a process that I go through with clients to help them make the best possible decisions and create clarity in both the current scenario and future scenarios. 


And, I've left in the usually-deleted first moments of the video- where I'm trying to get comfortable on camera- enjoy!






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Planning for Aging

We're all getting older.  Lots of changes go along with that.  Listen to Episode 7 of Sara makes Sense: Decade of Healthy Aging (link to episode on the home page) for my discussion with Margot McWhirter on how to navigate changes in our physical and mental capacity and connect better to our physical environment.


From a financial planning perspective, I work with clients on planning for and managing these changes in a number of ways.


The first discussion is often centred around the house- do you want to stay in your current home?  If you have a spouse or partner- do they want to stay in the current home?  Would a different home be desireable?  In my experience, couples often have different thoughts on the current home, sometimes strong thoughts.  If your plan is to use the value of your home to fund your retirement income needs, it's important to plan for the sale and re-settling.  Although many people carry the idea that a home is an easy way to 'build equity' or build net worth, many often forget that to use that equity/net worth, you need to sell the home to access the money.


If you want to stay in your home, and have other savings/ investments that can be used for income, there are other considerations, as Margot makes clear in Episode 7.  Her comments on the interplay between our physical environment and our capabilities are meaningful- small changes may take a dangerous, frustrating environment back over to manageable and relaxing.  A number of years ago, I worked with a client who was losing her eyesight.  She lived alone most of the year, and wanted to stay in her current home.  After one consultation, she made small changes that made a world of difference in her safety, ability to manage on her own, and her confidence level.


If you would like to see the financial trajectory of how the plans you have in your head for how and where you are going to age play out over time, book an introductory call with Sara.  


If you need to review the intersection of physical capacity, mental capacity and your environment, you can reach Margot here

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Sara McCullough
September 16, 2022
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Fraser Lang
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