A big thank you to all of our clients who provided us with feedback on their recent experience working with a Money Coaches Canada associate.

Robin from Vancouver is the winner of a $100 Chapters card from our most recent survey respondent’s draw. Congratulations Robin!

What our clients are saying

Once again 100% of our clients reported that after working with a money coach they feel more in control of their finances and received good value for the fees that they paid.

Specifically, here’s what two of Money Coach Karen Collacutt’s clients had to say:

Prior to working with a money coach, money was something of a burden. When I kept my personal debt problems away from my significant other, it made conversations of planning for the future a difficult thing to discuss about. Because of that guilt, I found that I was spending money on things to make me feel better about the guilt, but this wasn’t solving the problem.

It’s improved all aspects of my life and I’ve never felt so much freedom prior to going through the money coaching process. My relationship with my partner has improved greatly and we are happy to be able to plan for the future, instead of worrying about debt.
~ Eugene, Feb 2012

The impact on my financial situation was immediate. I expected it would take time to dig out from under, but results happened after the first meeting! I now control my money…it does not control me. Rather than being a victim of my circumstances, I now take action to proactively plan my budget around upcoming expenses and the impact of that is amazing. No more high credit card balance and no more dipping into my line of credit….yippee. I now have power over my finances AND, more importantly, I now have freedom and peace of mind rather than worry and concern. Who knew it could be so easy!!!
~ Gay. A, Administrative Assistant, Barrie, Ontario Feb 2012

Suggestions we will be implementing

We will be providing more practical resources, tools and money tips in our newsletters and we will be introducing a Q&A column on our blog starting in June 2012.

If you have any questions that you would like us to answer, email us at askamoneycoach@moneycoachescanada.ca or post a comment on our blog or Facebook page.

To learn more about working with a money coach, contact us for a complimentary consultation.

Good, Bad & Downright Awful in Canadian Investments Today
by Rob Carrick (Personal Financial writer at the Globe & Mail)

Written in 2010, post the financial market debacle of 2008-2009, this book offers a straight talking, no-nonsense, opinionated approach of the investment industry and particularly the various types of investment products. Filled with plenty of on-line resources, it’s a good read, with the benefit of hindsight for some key learning from the last downturn.

Who should read this book?

People looking for a better foundation of investment principles, knowledge, a better understanding of financial verbiage, lessons learned from the last downturn and people who are thinking of opening an on-line brokerage account a.k.a “do-it-yourselfers”.

Key points & take-aways

• Chapters on Mutual Funds, Stocks, ETFs, Bonds, GICs, Do-it-yourself investing, Investment Advisors and additional resources
• Suggestions on essential building blocks of a portfolio
• Solid, low-fee mutual fund investment company recommendations for those looking for help
• Lessons taught by the 2008-2009 stock market meltdown
• Cautions regarding traditional Bond mutual funds
• Reasons to consider becoming a DIY’s & some advice for “novices”
• Ten traits of a good/bad Advisor
• Tons of on-line resource information for you to do your own homework!

Reviewed by Renée Verret, BComm, Certified Money Coach

Investing in Real Estate

Have you been wondering about investing in real estate?  There is a lot of discussion about it in the media these days.  Are we in a bubble or is it still a solid investment?   Many people are wondering if it is a good idea for them and just how they might get started.  Join Karen Collacutt, Educator with the Women’s Financial Learning Centre and Director of Training with Money Coaches Canada and Joey Ragona, Real Estate Authority Coach & Investment Specialist with JDR Investments as they discuss what you need to know.

Listen to our Let’s Talk Money Podcast by clicking the link below:

Investing in Real Estate

Joey Ragona can be reached at his blog: www.EngagedInvestor.ca

Have you worked with a personal trainer? A coach for singing, soccer, weight loss or business?

Coaching moves you forward!  Bruce Sellery speaks with our own Sheila Walkington about how Money Coaching shifts the money mindset and provides the proverbial kick in the butt that many need to be successful.

Have you been wondering if Money Coaching might be for you? Read on!  http://www.moneysense.ca/2012/04/20/a-personal-trainer%E2%80%94for-your-money/

By Karen Collacutt, CFP, Certified Money Coach

Are your financial papers all over the place?  Are bills and documents hard to find?  Would you like more control over your household finances?  Well, families and individuals who focus on their goals and dreams become more conscious about their spending and make better overall financial decisions.

If your papers are piling up and hard to find, your journey to empowerment and control with your finances will quickly get derailed.  By setting up systems to automate and structure your money, and the never-ending paper that goes with it, you can get and keep your financial house in order.

Follow these three simple steps to increase control and confidence in Your Financial System.

1. Create a Money Spot
Choose a particular location for all financial information to land when it comes into the house.  Try a three-tiered tray system or three baskets.  Collect the tools you need to manage your family finances: stapler, sticky notes, stamps, paper clips, envelopes.  Keep them handy at your Money Spot so you can complete your financial tasks in one sitting.

Basket 1: All incoming financial information.  Teach your family (and yourself) that all financial documents and requests go to the Money Spot: bills that arrive in the mail, receipts from your wallets or your cars, your child’s field trip request… anything to do with money and the family finances.

Basket 2: Bills to Be Paid. Set up 2 file folders in this basket – Bills due to be paid during the 1st-15th and bills to be paid 16th-31stof the month.

Basket 3:  All items to be filed.  Place all paid bills, statements and information here; ready to be filed once you have dealt with them.

2. Choose a Money Day
Decide when you’re going to deal with your money. Book a time each week, or each pay day to handle your finances.  It could be weekly - Money Mondays, Financial Fridays, or perhaps bi-weekly Pay Day Parties!  Instead of trying to handle finances daily, choose the time and day you will sit down and deal with all of your finances for the previous week or two.  Use My Money Day Checklist to keep you on track.

3. Create and Maintain a Financial Filing System
Get rid of that six-inch stack of papers that isn’t filed!  Download our tool My Financial Filing System to organize your papers and know exactly where to find them.  Use the third basket in your Money Spot to collect your papers to be filed. Then file them at least once per month.  If you do it every Money Day, they won’t build up and you will have very little to file each time.

Setting up these three systems will completely organize your household finances.  You will know where your documents are when they come in and long after you deal with them.  A sense of order and peace will follow, allowing you to check on your finances periodically and easily.

Remember, staying on top of your finances doesn’t mean shuffling financial papers every day.  Streamline your System and Focus your Finances today so that you have more time for creating and living the life you want tomorrow…

By Karin Mizgala

A financial plan is a roadmap
to help you define your financial life goals and to give you the tools, information and structure you need to organize your finances to live the life you want.

• How do I balance today’s goals with a secure financial future?
• Do I have enough money to retire comfortably?
• Which investments or financial products are suited to my needs?
• What do I need to know to make the best financial decisions?

A financial plan will help you answer these questions in an organized, structured manner. By creating a financial plan, you will know what steps you need to take to get you from where you are now to where you want to be with more confidence and greater ease.

A comprehensive written financial plan generally includes the following:

• A clarification of your short, medium and long term goals
• A statement of Net Worth
• An analysis of your cash inflows and outflows (budget and debt strategies)
• A review of your current investments and investment strategy advice
• Retirement/Financial Independence projections including pension decisions
• A review of your insurance needs, group benefits and estate plan with recommendations
• The action steps needed to implement your plan and stay on track

Do I need a financial plan?

If you are feeling anxious about your finances, a well-developed financial plan can give you the comfort, confidence and direction to ensure that you are on track to meeting your life goals and what steps to take if you’re not there yet.

Or if you are experiencing a major life change or transition such as retirement, marriage, divorce or job loss, the process of creating a financial plan will help you systematically consider and address the financial complexities these life changes bring.

Clients who have a financial plan report that they have a better handle on their cash flow, have a plan to pay down debt and are more prepared for emergencies. They have a better understanding of their investments, they know what to do to retire comfortably and have more peace of mind.

A Financial Planner typically provides a written financial plan which outlines your goals, problems and considerations, recommendations and an action plan. Although the planning document is a valuable tool, the real benefit is in the planning process itself. A trusted advisor who understands your goals, your relationship with money and the financial numbers can provide solutions to create more joy and ease in your financial life.

Here’s how one of our recent clients described the benefits of the financial planning process:

“I felt scattered and not really sure where to start or what specific areas to look at. Now I feel like I have been given a direction and a map to follow. I could see exactly what I needed to do, and I felt more confident following through with these steps knowing that there was someone I could ask if I ran into any problems. I also have tools that I can use to check up on my own financial health in the future.”

What is the difference between a Financial Planner and an Investment Advisor?

A Financial Planner uses the financial planning process to help you manage all aspects of your personal finances more successfully. All of your financial needs will be considered including: budgeting and savings, debt management, tax planning, investments, insurance, retirement and estate planning. The ideal Financial Planner will also place a strong emphasis on personal financial education so that you are better informed, more confident and in control of your financial affairs.

An Investment Advisor focuses primarily on recommending, implementing and managing your investments. Some Financial Planners also provide investment management services.

Financial planners generally fall into 2 categories:

1. Financial Planners licensed to sell investments or insurance
Typically this type of financial planner will provide you with a financial plan for free if you purchase (or plan to purchase) investments or insurance with them. Others referred to as “fee-based” financial planners may charge a fee for the plan then give you the option to invest or buy insurance from them.

The model of financial planners licensed to sell financial products is the most common one with the advantage of being a one-stop-shop for clients looking for financial planning and investment management. However, there is also a potential for conflict of interest in a model that blends planning advice and financial products. Ask for full disclosure on what services you can expect and how the planner will be compensated.

2. Financial Planners who don’t sell financial products
“Fee-only” Financial Planners or Money Coaches charge clients a fee either hourly or by project. Fees typically range between $1,500-$4,000 depending on the complexity of planning needs.

Some “fee-only” Money Coaches provide comprehensive financial plans and others will help you address specific issues such as getting out of debt or saving for the things you want.

Note: The terminology in the financial advice industry is not standardized so be sure to ask questions and to clarify what you can expect from your advisor no matter what model of financial advice works best for you.

How do I find a Financial Planner?

Finding the right financial planner usually takes some homework and investigation. You can start by asking friends or family for a referral and you are wise to interview more than one Financial Planner. You can get tips on questions to ask and how to find a planner on the Financial Planning Standards Counsel website. The personal finance magazine MoneySense also maintains a data base of “fee-only” financial planners.

The clearer you are on what you are looking for in terms of guidance and what you expect from the relationship, the better you will be able to find a Financial Planner that works for you. Do your homework, take advantage of complimentary consultations, ask questions and trust your instincts.

Need help with your Financial Plan?

If you would like some support and guidance in creating your financial plan, check out our upcoming weekend workshop Smart Money Essentials offered through the Women’s Financial Learning Centre or book a complimentary consultation with one of our fee-only money coaches.

Karin Mizgala is Money Coaches Canada’s CEO and resident “money shrink”.

By Sheila Walkington

Are RSPs still a good investment? Should you be paying down your mortgage first? Or are Tax-Free Savings Accounts (TFSAs) a better savings strategy? These are some of the questions we hear from clients who understandably are confused by the many and varied options. And while in general I tell them investing in RSPs is a good idea, there’s by no means a one-size-fits-all answer.

There are some advisors who suggest paying down your mortgage first and there are cases where that makes sense. But usually it’s best not to wait to save.  You may be paying your mortgage for 25 or 30 years so if you wait for the day it’s paid off, there may be little time to catch up on your savings for retirement and you lose all those years of RSP growth.

A two-part strategy that grows your RSP and shrinks your mortgage is to make your RSP contribution and then take any tax refund you receive and use it to pay down your mortgage.

There are other considerations in making your decision and here are some questions to ask yourself before you make your RSP contribution.

– Are you under the age of 50 and do you have 10 to 15 years left before you retire? If the answer is yes, contributing to an RSP usually makes sense.

– Are you in the highest income tax bracket? For every dollar you contribute to your RSP in the highest tax bracket, you reduce your taxable income, in effect getting you a tax refund of $437 for every $1,000 you invest if you live in BC.  (Tax rates vary slightly province to province).

– Is the interest rate on your mortgage less than 4%? If that’s the case, you may better off putting the money into an RSP than using the funds to pay down your mortgage.

– Do you have less than $200,000 invested in RSPs? Even if you think you’ll work past 65 and your expenses are modest, you’re still going to need to save and invest for retirement.

– Is your income less than $40,000 a year? If your income is less than $40,000, use a Tax-Free Savings Account (TFSA) instead of an RSP. You can shift the money to an RSP later if your income increases. You get a tax break for making a RSP contribution but you are taxed on every dollar when you start taking money out. So you’ll want to make sure that you’re getting a high enough tax break on the money you contribute. At $40,000 a year, your tax break is 22.7% if you are a BC resident.

– Is your income likely to be considerably higher in the coming years?
Perhaps you’re working part time or you’re earning what amounts to a training wage while you work towards credentials that could boost your income. It makes sense to get the largest tax break you can for your RSP contribution, so as in the case above, put your money into a TFSA and wait until you can get a refund that’s 33% or higher.

– Does your employer benefit plan match RSP contributions?
If your company has any provision for matching RSP or pension contributions, take advantage of it.

– Should you borrow to make an RSP contribution?
This is another one of those situations where the right answer for one client might be wrong for the next. If you have little or no taxable income, don’t borrow for an RSP. If you’re in the highest tax bracket, consider borrowing but only if you don’t owe money on credit cards or other high interest debt.  Borrow only if you’re able to pay off your RSP loan within the year and use your tax refund to help pay off your RSP loan.

Related articles:
Are RSPs still a good investment
Do you know where your RSP is?

Sheila is Money Coaches Canada’s co-founder and “Debt-WHYs Diva”.

The start of a new year is a good time to review the resources that help you make your best money decisions. We know that money can be a scary topic but knowledge is power and there are many resources geared to letting you dip your toe in the waters.

You don’t have to become a financial analyst or a planner — you’ll simply learn a lot that will help increase your confidence in making financial decisions and help you to know what questions to ask.

To start on your “homework” for 2012, check out some of our favorite money resources. There’s something for everything and for every type of learner — whether you’re self-motivated, you prefer group learning or you’re looking for one-on-one learning opportunities.

Overall Favorite Money Resource

Globe Investor — This section, both online and in print, keeps you up-to-date on both the bigger economic picture and the financial markets as well as personal finance and investing news.  Find it online at www.theglobeandmail.com/globe-investor.

Our Favorite Books

What’s Good, Bad And Downright Awful In Canadian Investments Today. Rob Carrick, the Globe and Mail’s personal finance columnist, has written several useful books that will help you become more financially savvy. www.robcarrick.com

The MoneySense Guide to Retiring Wealthy, from the Canadian personal finance web site MoneySense comes with several guides, including this primer for a step-by-step financial plan. Find it at www.moneysense.ca/books.

Smart Couples Finish Rich: 9 Steps to Creating a Rich Future for You and Your Partner  (Canadian Edition) by David Bach, a bestselling author and financial coach. Bach and his ‘Finish Rich’ advice are found online, in books and in the news media.While Bach is an American and some of his advice is US-oriented when it comes to tax and other issues, many of the basic financial steps are those that apply no matter what side of the border you’re on. We also like Smart Women Finish Rich.

The Soul of Money: Transforming Your Relationship with Money and Life by Lynne Twist  A unique look at money that deals with our attitudes towards it. Your relationship with money is really a first step — until you truly examine your attitude towards it, it is difficult to start getting a handle on how to save, spend and invest.

Money, A Memoir. Women, Emotions and Cash by Liz Perle – While women would share stories about their most personal issues, Liz Perle tackled the one that remained a taboo — money. And more specifically our emotional relationship to money. Her book tells her own story and those of other women. You may see yourself in those stories; you’ll come away from reading it realizing that if you are to truly take control of your financial future, you have to be honest with yourself about the influence money has on you.

Our Favorite Workshops

Heads & Tails of Money Seminar
This 3 hour seminar will help you discover the impact of your beliefs on your financial behaviours and will show you how to align your spending with your personal vision.  Toronto, Fri Jan 27th or Sat Jan 28th

Wealth Academy for Women
In this lively, dynamic, highly participatory day of workshops you will learn how to negotiate, make the most of your career, develop a financial plan and more. All proceeds are donated to Dress for Success, an organization that empowers women financially. Vancouver, Sat Feb 25

Smart Money Essentials
Whether you’re completely lost in matters of finance or simply seeking confirmation that you’re on the right track, this weekend workshop is the perfect start for taking control of your finances and creating a foundation for your ideal life.  Weekend workshop – Vancouver, Apr 14th and Apr 15th

Our Favorite Home Study Program

Smart Money Essentials with a monthly Question and Answer hotline
A comprehensive hands-on primer for people who are looking to learn more about managing their money and want to create their own basic financial plan. In addition to a learning guide, worksheets and downloadable audio learning, you also have access to our monthly question-and-answer hotline, which gives you a chance to ask any questions that arise as you take control of your finances.

Our Favorite Blogs and Web Sites

Boomer and Echo: www.boomerandecho.com
Gail Vaz-Oxlade: www.gailvazoxlade.com
Canadian Couch Potato: www.canadiancouchpotato.com
Daily Worth: www.dailyworth.com
Smart Cookies: www.smartcookies.com
Retire Happy – Jim Yih: www.jimyih.com
Steadyhand Investments: www.steadyhand.com/blog

More useful websites, podcasts, worksheets and articles listed in our Resources section

Our Favorite Professionals
Here is our list of Vancouver-based professionals we have worked with and recommend, from lawyers to insurance and investing specialists.

Money Coaches Canada
Meet our Money Coaches Canada team. Our coaches are located in several cities across Canada and work with clients either in person or using teleconferences and on-line meeting tools.

A big thank you to all of our clients who provided us with feedback on their recent experience working with a Money Coaches Canada associate.

Every quarter one survey participant drawn randomly will win a $100 Chapters gift certificate.
This quarter’s winner is James from Winnipeg. Congratulations James!

What are clients are saying
Clients said they came to Money Coaches Canada feeling fearful, frustrated, overwhelmed, powerless, apprehensive, nervous and anxious about money.

100% reported that after working with a money coach they feel more in control of their finances and have the info they need to make better financial decisions.

Here’s what Money Coach Renée Verret’s client had to say:
“I felt scattered and not really sure where to start or what specific areas to look at. Now I feel like I have been given a direction and a map to follow. I could see exactly what I needed to do, and I felt more confident following through with these steps knowing that there was someone I could ask if I ran into any problems. I also have tools that I can use to check up on my own financial health in the future.” – Roxanne

Suggestions we will be implementing
A project to review and revise our worksheets and reports to make them even more client-friendly is underway. We are also using more on-line tools and technology to improve the client experience for clients who are working with coaches at a distance.

To learn more about working with a money coach, contact us for a complimentary consultation.

By Sheila Walkington

The financial planning advice industry has largely focused on clients who have money to invest. But where do you turn if you need guidance and advice on how to better manage your day to day finances, start saving for your goals or to get out of debt?

If you are struggling with debt, your options for advice will largely depend on the severity of your debt problem and your ability to repay your non-mortgage related debt within a 4-5 year time period. While there is no shortage of alternatives, the quality and the ethics of the advice vary dramatically so be very sure you find a service that meets your needs and you understand exactly what you are signing up for.

What to expect in terms of Service and Fees

1.   If you’re a well-paid professional juggling money, work, family and frustrated that you’re not getting ahead financially due to debt or inadequate money management skills, then a fee-only Money Coach may be the ticket. A Money Coach will help you clarify your goals, identify blocks to financial success and create a system for allocating monies appropriately to your short, medium and long term goals. A key component to money coaching is to help clients shed negative attitudes and bad habits around money and to provide the structure, accountability and motivation to stop sabotaging their financial goals. Fees for a 4-5 month money coaching engagement typically range from $1,500-$2,500.

2.   If your debt level (not including mortgage) is very high relative to your income and no matter how you crunch the numbers, the situation feels hopeless, then your best bet is to speak with a bankruptcy trustee about the options available to you. Fees and obligations vary depending on whether you decide to go the route of a bankruptcy or a consumer proposal.

There are other credit counseling or debt settlement consultants but many are not regulated so be sure that you are clear on what service they can provide to you and how you are actually paying for their services.

The best way to get financial advice that fits your needs is to be very clear on what your challenges are and what problems you are looking for someone to help you solve. Do your homework, take advantage of complimentary consultations, ask questions and trust your instincts.

Sheila is Money Coaches Canada’s co-founder and “Debt-WHYs Diva”.