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Canada Pension Plan: how to figure out what it means to youSaturday, September 23, 2023
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Canada Pension Plan
When you are working, you contribute to the Canada Pension Plan based on your earned income.
Once you are age 60 or older, you can apply to receive payments. The amount you receive is based on your earnings history, and possibly your personal situation.
The next few posts will answer a few questions about CPP. It's important that you understand the program basics, where to find information about both the program in general and your situation specifically, and the role CPP payments will play in your future.
Today's post answers a few basics about the program:
Random associations: Today is National Pot Pie Day. These are two chicken pot pies from Sweet & Savoury Pie in Waterloo. If you live close, I highly recommend stopping by and trying a pie!
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How to fix financial mistakesWednesday, July 12, 2023
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When you are hard on yourself about any mistake, including financial mistakes, it can help you find a solution or it can hold you in a place of stress, worry and continued mistakes.
There are often a number of ways to fix mistakes, including financial mistakes.
For today, consider starting with the poem Do not trust the erasrer by Rosamond S. King. One of the most important parts of changing your finances is changing your mindset. Developing solutions or changing behaviour with the same mindset that got you to where you are is unlikely to get you out of where you are. |
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Making Decisions while GrievingWednesday, April 26, 2023
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Making decisions can be difficult on a regular day. Grieving a loss isn't a regular day. Making decisions can become more difficult, more exhausting and the stakes may be higher.
When you're grieving and faced with decisions, it's important to understand your current situation is, what decisions need to be made immediately and which decisions can (and possibly should) be made later.
The best decision may be to wait to make a decision. How to do you that? You decide on a short-term plan that deliberately allows room to make a long-term decision when you have more time, energy and clarity. This looks like putting an inheritance, severance payment or separation settlement into a savings account and letting the bank know that you are not making any other decisions for 12 months (so please don't ask if you would like to speak to a wealth advisor or buy a GIC).
To read more on making decisions while grieving, read Noushin Ziafati's interview with myself, Sandra Fry and Ti Zhang here |
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Finding your Fixed expensesMonday, January 23, 2023
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Fixed expenses- the money that you’ve already spent based on the choices that you’ve made. These expenses are scheduled to go out at a regular time in a roughly regular amount. The exceptions to the ‘regular time, regular amount’ rule are costs to maintain your house (if you own) and your car. These expenses are less predictable in a short time period, but ARE predictable over a longer time period. The other truth about these expenses is that they WILL happen. If you own your home, you can put off some maintenance for some amount of time, but you can’t put maintenance off forever. Same with your car- the first few years of a new car are often pretty low-expense on the maintenance side. Then expenses will rise. Plan for this; it’s not a surprise. You own the thing, you need to maintain the thing. Your fixed expenses are not the only required costs that you have, however, if you want to organize your spending & saving in a sustainable way, you need to know what you’ve already committed to and what expenses you can make day-to-day choices on.
To find these expenses, take a look through your bank statements and credit card statements for the past 12 months. You are only looking for 'regular time, regular amount' expenses. Don't total all of your spending; some cateogries that occur regularly are going to be omitted in this exercise because the amount varies enough that the category will throw off you feeling in control of your money.
Use the chart below as a guide: expenses listed on the left are fixed expenses- that's what you're looking for in this step. Expenses on the right are variable- leave those off for now. There's a few situation-specific exceptions that may make sense to you- if you use a meal delivery service, that's a fixed cost- you know how much is leaving your account to cover that decision. Using the meal service moves it from a variable (grocery) to fixed (contract) expense. If you commute for work, and know your gas costs, maybe it should go on the fixed expense list. Be careful about adding too much to the fixed list, unless you really wanted a full budget experience! If you do, great- use both sides of the chart and brak out all your transactions for the past 12 months. If you want a faster solution, focus only on your fixed expenses.
Once you've totalled your fixed expenses for a month, including due dates, line those up against your income deposits. You'll start to see where they line up, and where they're giving you trouble. You'll also start to see how much money is available from each pay period/ income deposit to cover your variable expenses.
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Organizing your ExpensesMonday, January 16, 2023
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If organizing your finances has moved to the top of your priority list, that’s great news. If you’re feeling confused & frustrated about your finances and would rather pull your own eyelashes out instead of dealing with them, but, it’s a new year and tips are everywhere you turn, I’m glad you’ve read this far.
The majority of work that I do with clients involves the foundational work related to money in/ money out. You need to know these numbers before you start making changes. You need to know what’s happening now to make effective choices that will move you to a better place over time.
If you need a new look at your money and are ready to do some math, this post will give you a framework for understanding where you are now and what changes will improve your situation.
Step One: knowing how much is coming in and when
You need to know how much is deposited to your bank account and when that happens. When we try to untangle our finances, we often talk about our salary. In this context, that is not a useful number. None of can make choices on the full amount of our salary. There are deductions before any money lands in our bank account. Sometimes the deductions are large. And valuable.
I recommend that you look back at a payslip from 2022- look for the net amount deposited, or if you have your last payslip, find the year-to-date (YTD) net amount. That will tell you how much lands in your bank account. This is the amount that you need to focus on when you’re asking questions about what’s affordable. Draw out the timing of the deposits so that you can compare your deposits to when your expenses happen.
See the chart below for a list of common deductions and an explanation of the benefits to you. Need more clarification on what's happening in your specific situation? Contact Sara for an appointment by booking an initial consultation here or send an email
check back on Jan 23 for Step Two: finding your fixed expenses
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New 2023 numbers, Part 2Friday, January 6, 2023
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Next up in 2023 numbers that matter:
Canada Pension Plan contributions: $3,754.45 for employers & employees/ $7,508.90 for self-employed Canadians. This is a noticeable hike; it's part of a multi-year plan that was approved by the provinces & feds in 2015. Good news- there is also increased benefits that are funded by this increase.
EI premiums: $1,002.45 for employees on max insurable earnings of $61,500
Canada Pension Plan payments: max monthly retirement payment (age 65) $1,306.57. A note that the average Canadian receives 56% of the max amount - $731.68/mnth. CPP pays a number of other benefits, including post-retirement benefits, disability and survivor benefits. For the entire list of CPP & QPP benefits, click here |
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New 2023 Numbers Part 1Monday, January 2, 2023
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What helps when terrible things happenFriday, September 16, 2022
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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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When you're separating from your spouse AND you are transitioning your farmMonday, July 18, 2022
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House AffordabilityMonday, June 20, 2022
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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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Sara McCullough 73 September 23, 2023 |
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Fraser Lang 1 May 10, 2017 |