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Monthly Archives: December 2010

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Financial Tips and Advice…It Must Be Friday!

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shhhHappy Friday DINKS! Today we are discussing our wisdom and where we got it. Maybe our financial wisdom came from our expensive education. Maybe our business savvy instincts came from street smarts and learning from others. Regardless of where we learned our knowledge, we now have it… and we got it somewhere.

What is the best piece of advice you ever received?

Today I am going to share some great pieces of advice that I have received over the years from several people including everyone from my Dad and Reverend Run (of RUN DMC).  We are also going to share our love for other blogs and their posts about personal financial advice.

Here are some of the best pieces of advice I have ever received:

“You are only limited by your imagination” My Dad

“Discipline and Self Control are key; we can’t have everything we want. Set Smart Goals, research and be specific. ” Gail Vaz Oxbdevill, reality financial guru.

“Don’t worry; it’ll all be perfect in the end, if things are not perfect it’s not the end.” Reverend Run, from the iconic rap group RUN DMC

“Nice people in business end up on welfare” Kelly Cutrone, owner of the Public Relations Firm Peoples Revolution.

“People who spend money before they make money go bankrupt” Simple and Basic business advice from entrepreneur Vicki Gunvalson, owner of COTO Insurance and Financial Services.

“If you spend less than you have, then you will always be rich.” Jill Zarin, owner of Zarin Fabrics in NYC.

Here are some other blogs that offer great financial advice:

50 Plus Finance tells us that “Grandma’s Money Lessons Still Are True”. This is a great post that hit it right on the nose for me.  Dave didn’t learn from his parents, he learned from his Grandparents.  Their strict rules set him straight and now he is a personal finance blogger.

J. Money on Budgets Are Sexy advises us “Don’t Go Shopping While Drunk”.  While we are intoxicated we can’t control our behavior. Therefore, going shopping while drunk leads to impulse purchases and overspending. Not to mention acting like a total fool in public.

Investor Junkie discusses the importance of teaching our children about the importance of personal finance. Even President Obama teaches his two girls about money management. Investor Junkie comments on his post “Obama Educates His Children About Finance.”

Money Crush discusses life lessons and advice that also apply to personal finance in her post “Struggling with an Ongoing Issue Ask Yourself This.” If it’s not broke, then don’t fix it. But if it sucks then change something!

(Photo By Steven DePolo)

DINKS Reality: How Dirty would you get for a Job?

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jobs, careers, job advice

For this edition of our newly added DINKS Reality, we are going to discuss our jobs and careers.

Whether we like our job or we don’t, whether we have attained our career goal or we haven’t attained it yet, our job brings in our monthly income. Our monthly income pays for our lifestyle and living expenses. We know that unemployment is high, and many people have lost their jobs in the past few years.

If you lost your job, what would you do to get another job?

If you have a degree would you accept a job outside of your area of expertise?  Could you accept a lower paying job? I definitely would accept a job even though it undervalued my skills and experiences, because ½ of my previous salary is still more than I would make while being unemployed.  I would also accept a job outside my area of expertise, because money is spent in all the same places, it doesn’t matter how we get it.

Dirty Jobs on the Discovery Channel follows a crazy man named Mike Rowe who tries every type of job imaginable at least once. Mike is not going to office buildings trying to be a mailroom clerk, and he is not working at major corporations as a COE.  If you have ever watched Dirty Jobs then you know what I’m talking about.  If you have always been employed with a cozy office job, would you be able to accept a manual labour job if it was your only source of income?

As DINKS, if we lost one of our two incomes some of us may be able to survive. But for some others, our lifestyle wouldn’t be sustainable.  It’s gut check time. Think about what you would do to get a job.  Could you and would you swallow your pride to provide for your family?

Lady DINKS I ask you… (Especially if some of you are in Nevada) could you, and would you resort to the world’s oldest profession if you had no other choice? Before you answer I want you to really think about it…could you, and would you do it for your family?  Working in the sex industry as a stripper, an escort, a call girl, or a prostitute is a high paying job with low moral standards.  We would be making a lot more money in the sex trade than we would be making at a job that pays minimum wage.

Male DINKS! I ask you…if you and your spouse were both unemployed, and about to lose your home, and cars, and all other luxuries of your DINK lifestyle, would you let your spouse work in the sex industry to save your financial health?

Dirty Jobs airs on Discovery Channel Tuesdays at 9 pm.  Check it out to see Mike Rowe work on a Maggot Farm, as a Butcher, in a Coffee Plantation, and as an Ostrich Farmer…just to name a few.  He makes my crazy bank clients seem a bit more normal. Every Wednesday morning when I come to work, I appreciate my air conditioned comfy office job just a little bit more.

Photo By PinkSherbert

Could You Live Without Your Credit Card?

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living without a credit card, credit card advice, credit card tips

eiffel towerAs a financial planner for a leading international financial institution, I am learning about the financial systems in other countries.

France doesn’t have a credit system.  The credit system doesn’t exist in France. If you had to, could you live without your credit card?

Some of us charge everything to our credit cards all month long to earn travel points or reward points. Then we pay off the bill in full at the end of the month to avoid any interest charges. If you didn’t need to and you didn’t earn any points, would you still use your credit cards for daily purchases? We may not use our credit cards out of necessity; we may only use them out of convenience.

However, some of us couldn’t survive without credit. In an idealistic world we would never use credit as a form of payment, because we should never spend money that we don’t have. That’s exactly how it works in France. French people do not spend money that they don’t have.

Financial institutions do have VISA and MasterCard in France; however it is linked to guaranteed money from their client’s bank account.  I very often have newly immigrated clients call me when they get their first credit card bill because they don’t understand why there is a balance owing on their credit card.  I have to explain to them that their spending is not automatically debited from their bank account each month.  However, clients do always have the option to set up a pre authorized payment plan.

France does offer regular loans to their clients, but they do not have revolving credit. There are home loans, fixed rate loans, and variable rate loans; they are a lump sum of money that is repaid over time, and very often the loan is secured by an asset.  Revolving credit such as credit cards, overdraft protection, and lines of credit do not exist in France.

Although the “Credit Cards” in France work almost the exact opposite as our system here in North America, there are some similarities.  “Credit Cards” in France have a limit just as our credit cards do in North America.  However, the difference is that the limit in France is a spending limit, and the limit in North America is a credit limit.  This means that the client has a maximum of $1000 they can spend each month; and at the end of every month the $1000 is debited from the client’s bank account. There is no carrying a balance from month to month, because the money is not borrowed.  People in France spend as much on their credit cards as they wish to pay, whereas in North America we charge as much as our credit limit.

In North America, our Credit Card limit is based (among other things) on our credit history and our employment.  In France, the spending limit is based on client’s assets.

If you lived in France could you live without your credit card?

Photo By Eustaquio

Retiring With a Mortgage

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retiring with a mortgage, mortgage advice, retirement talk

As we grow older, so do our parents.  As we move out from our childhood homes our parents have become DINKS-Again.  It is becoming more and more common for our parents to retire and sell their home for various reasons.

My father is currently thinking of downsizing. He says that it is because he is tired of the amount of work that it takes to keep a household and backyard up and running all year long. He also says that his mobility (at 57) is becoming limited, and he has pain in his knees as he walks up and down his stairs.  My Dad’s main reason for wanting to sell his home (which is not my childhood home) is the monthly cost.  He moved into my step mother’s house and she refinances her mortgage every 3 or 4 years when she needs extra cash.  I am not even going to get into the lack of financial knowledge by my step mother because as they say…Been there, done that.

My father would be happy to downsize to an apartment or condo from his current 2 story house.  I personally don’t think he will be happy because he loves to entertain, and he loves his space. But, my father knows what is best for him.  However, less space means less upkeep; and a smaller apartment means less work for him.  He is also considering moving to Florida or Arizona…we will see how that works out.

I think it will be ok if my father decides to rent an apartment because it is carefree living, and it will be a lot cheaper every month for him. However, owning a condo is definitely not for him. It will still be work since he will be responsible for all the upkeep inside the condo.  It will be less work, but it will still be work regardless.  The equity in my father’s house is not enough to pay off the existing mortgage and buy a new condo. They will be able to use the money from the sale of their current home for a down payment…but that’s about it.

My mother couldn’t be more opposite than my father, hence the divorce. My mother and her boyfriend currently live in the townhouse that she purchased after the divorce from my father. Now, she wants to move out of her gated community townhouse and buy a home with a large backyard, and possibly a pool.  My mother is (not so secretly) hoping that she will need the extra bedrooms because my sister and I will soon be moving closer to home and having grandchildren.  I don’t have the heart to tell her that I highly doubt this is going to happen anytime soon; so she shouldn’t spend money on hopes and dreams.

My aunt told me that she never plans to sell her home. She does not want to downsize even though the upkeep of her 3 storey, 5 bedroom, 3 bathroom home is a lot of work.  My aunt’s home is in a fabulously overpriced neighbourhood and her mortgage is completely paid off. She would make a killing if she did sell it. She doesn’t want to sell her house because my cousins would be very upset if she sold their childhood home. Instead she redecorates every 4-5 years and it’s like moving, but without the hassle.

When your parents retired did they downsize, upgrade, or stay in their current home?

(Photo by BrayDawg)

What do you know about your Parent’s money?

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parent's finances, parent's money, financial status

We have discussed my father a lot on DINKS Finance, and today we are going to learn a little bit about my mother and her financial situation.  Over the last three years my Mom has gone through an experience that we will all eventually have to face. As our parents get older, they will need someone to take care of them…and to take care of their finances.

My grandmother started to take less and less care of herself to the point where my mother had to step in and take control of my grandmothers living situation as well as her personal finances.  The living situation became controllable in stages. First, my mother had a nurse come into my grandmothers apartment twice a week to clean and cook her meals. When that didn’t work out, my grandmother moved in with my uncle. Finally, when my uncle was no longer able to take care of my grandmother they moved her into a senior’s residence.  My grandmother now eats 3 healthy meals a day, and gets the daily medical attention that she needs.

Could you clean up your parent’s financial mess?

Moving my grandmother into a senior’s residence was the least of my mother’s worries at that time. She had no idea what was in store for her when she had to pack up my grandmother’s apartment. When my mom went in to my grandmother’s apartment to pack up all of her personal belongings, she found multiple items, orders, and unopened boxes from the home shopping network.

My grandmother had ordered everything from full ladies wear suits to new dishes, and she hadn’t even opened all of the boxes.  The grandmothers spending and lack of financial self control lead my mom into a messy financial situation.  My grandmother had charged thousands of dollars of debt onto her credit cards, and my mother was left to clean up the financial mess.

Of course my mother could not bail my grandmother out of debt and therefore she declared bankruptcy on behalf of my grandmother.  My grandmother signed a Power of Attorney over to my mother and now my grandmother lives on a very small allowance at her senior’s home. My mother uses my grandmother’s pension to pay her monthly rent at the senior’s home, and she also provides her with a small monthly allowance to get her hair and nails done at the senior’s residence.

How much do you know about your parents finances?

I know which financial institution my deals and I know where she has her business but I do not know anything about her accounts or her financial standings, or her life insurance.  I don’t know if my mother will also leave a financial mess behind for my sister and I to clean up.

I think it is important that we learn about our parent’s finances.  Maybe not all of the financial details, but at least we can learn the basics.  It is better to prepared while they are here, than be shocked when they are gone.

(Photo By FlashPro)

Our Finances and the People who manage them

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Happy Friday DINKS!  Today we are going to touch a personal topic for me, our relationships with our financial planners or personal bankers.  As you know I am a personal financial planner and I have had some of the same clients for over 5 years.  I don’t personally have a personal financial planner who manages my money, but I do know other financial planners who have their own personal financial planner.

I want to know what you think of your personal financial planner, or personal banker. If you do have a personal financial planner did you personally choose them or where you “assigned” to them?

If you have been with your personal financial planner for several years, have you developed a personal relationship with your personal banker? I have clients who have invited me to their homes for dinner and to their children’s weddings. I have also been invited to meet my client’s friends at their country club, as well as to their birthday parties.  I have even had a client drive with me on my shopping trip to NYC because they needed a ride.  For the record, we did not stay together or come home together…that was a nightmare to explain at the border. In return I have clients who expect to be invited to my wedding with Nick…if I ever get married to Nick.

When we spend so much time with the same person, it is normal to develop a personal relation with them…even if they are our personal financial planner.  As the majority of my friends work in finance, I am always fascinated to know how people outside of “the bank world” see financial services employees.  Do you like your personal financial planner? And now the million dollar question…Do you trust your personal financial planner 100%?

Here are some other articles from around the web about money management and personal financial planning.

And here are a couple carnivals we participated in this week — I was Editor’s Pick for one!

DINKS Reality: Do you have a Holiday Party Budget?

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party budget, holiday party planning, party planning

For our first official DINKS Reality post we are going to look at budgeting and overspending on a show called Party Mamas.

During the holidays we all have a lot of expenses such as gifts for our family and friends, dinner parties, travelling costs, as well as our office gift exchanges.  It seems that everything during the holidays costs money.  What about your home, do you have a decorating budget during the holidays? It costs money to decorate our Christmas tree, set our Thanksgiving table, and style our new year’s outfit. Is all of that decorating in your holiday planning or does it break your budget?

This week I watched an episode of Party Mamas where a man was obsessed with decorating his home for Halloween.  I have to be honest; Canadians have the impression that Americans celebrate everything over the top. If it is big and large it is American. I totally love that about America!!! I love everything about American holidays from the Macy’s 4th of July fireworks to Rockefeller Center at Christmas.

On this episode of Party Mamas it was actually the Dad who went overboard.  His holiday decorating motto was “We’ll put it on the credit card and worry about it later.” This may be the biggest financial mistake that a person can make.  It’s the financial equivalent of people who drink because they think it makes their problems go away.  When they sober up their problems are still there; when the holiday party is over the bill will also still be there.

The funniest thing about this Halloween episode of Party Mamas was that the candy was delivered with a truck and fork lift….8000 pieces of candy….YIKES!!!! Have you ever had 8000 kids visit your house on Halloween?

This is mass consumption at its worst…and it was all charged on his visa card with a 19.9% interest rate. Have you ever thought about the cost of hosting a party? Not only are the holidays themselves very expensive with gifts and travelling, but if we choose to host a party it is an added financial expense.  What is the most amount of money that you ever spent on a party?

The expenses for the Halloween party included $2000 for his costume which included a professional makeup artist, and $3000 for a coffin. They also spent excessively on a custom-made welcome banner, a movie projector and screen that was constantly playing movies on their front lawn, and let’s not forget the 8000 pieces of candy.

Does the excitement of the holidays consume you and break your holiday budget?

(Photo By Chris VanDyck)

What happens in Vegas…Comes home on our joint credit card bill

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cons of a joint credit card, downfall of a joint credit card, joint credit card account

This past week I had an “interesting” experience with my clients, and I felt the need to share with everyone (minus the names for confidentiality reasons of course).  They say what happens in Vegas, stays in Vegas.

But what happens when your Vegas activities follow you home on your joint credit card bill?

This past week one of my clients left me four urgent messages on my voice mail before 9 am.  With my Starbucks still in my hand and my coat still on, I called her back as soon as I arrived at the office.  It turns out that she had some very large transactions on her joint credit card with her husband. Her credit card was now over her limit.

She had no idea what transactions had been charged to her credit card. She was made aware of the over limit status on her credit card last night because she tried to buy groceries and her transaction was declined.  In the 4 years that she and her husband have been my client, they have never come close to their $35,000 credit card limit.

When she contacted our customer service call center to verify all of the transactions the representative was unable to confirm her identity; therefore the representative could not provide any information over the phone regarding these transactions.  The next morning I was able to confirm the recent transactions that caused her joint credit card to be over the limit.

Along with other various transactions at restaurants and stores, there was a $7500 charge from a popular hotel in Las Vegas and an additional $4500 at a “nightclub” in that hotel.  I can’t tell you which hotel and nightclub it was but I can tell you that the slogan is “Las Vegas’ most seductive experience.” Needless to say my client was furious “$4500? Kristina I’ll call you back!” she yelled into the phone as she hung up. She did confirm that her husband was currently in Las Vegas for the weekend on a business trip.  I made sure to make a note of this on my clients account so that he could not try and report these transactions as fraudulent at a later date.

Of course I visited the “nightclub” website and there is a daily photo album posted with pictures of all “employees” and guests.  The services included by this “nightclub” are body painting, private photo booths, as well as models, dancers, and showgirls.

Less than 10 minutes later I received a call from the husband, who was still in Vegas.  “Why did you call my wife about charges on my MasterCard?” he asked.  I explained to him that he didn’t pay with his sole owner MasterCard; he paid with his joint VISA card. Our fraud department called his wife to verify the transactions for security purposes.

We know from a previous post that DINKS would not leave their spouse if they were unemployed.  But, would you leave your spouse if they spent $4500 on hookers in Las Vegas?

There are pros to having a joint credit card, such as we have 2 people spending on the card and therefore we can earn points faster. We also have someone to share the monthly bill payment, and with 2 incomes on the application we are more likely to be approved for a higher limit.  However, joint credit cards can also be a downfall. When something is joint there are no secrets.  Once I bought Nick basketball tickets for his birthday and the credit card bill arrived before the tickets did, so it completely ruined the surprise.

(Photo By Conor)

Owning is Good. But Renting is OK Too.

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owning vs renting, owning a home, renting a home

Real Estate is a good investment because over the long term the investment value should increase. However, it’s ok to rent. Renting is better for the budget but Owning is better for the bottom line.  Do you choose to rent or do you choose to own your home?

Some people think that tenants who rent an apartment cannot afford to buy a home. This is not always the case.  Some people choose to rent for the convenience and hassle free lifestyle.  Last summer I put down a deposit for a brand new two bedroom condo in a great neighbourhood.  Of course my boyfriend Nick and I don’t need two bedrooms.  But we could use the spare bedroom as a home gym, or an office since we both occasionally work from home.

Last summer mortgage rates were very low, and my bank staff rate made my five year mortgage interest rate even lower.  After I reserved my condo unit I had 15 days to come back to the builder with my deposit and proof of financing.  The day before I was supposed to return to the builder I had a major panic attack.  I woke up one morning totally stressed, and covered in sweat.  Buying a condo was a major financial commitment that I was just not ready to make.  I quickly called the builder and told him that my financing was not approved. Therefore he could put my reserved unit back on the market.

I am not sure exactly what happened that day, or what induced my panic attack; but I knew that I couldn’t buy a condo last summer.  Again, I am not sure why because Nick and I had been searching for a condo for over almost a year.  We visited 6 developments, and this development was the first one that we both agreed on.  I know that Nick was also relieved when we decided not to buy the condo.  He didn`t put up a fight at all. No rebuttal, no arguments, just “ok”.

We are currently in our 3rd apartment in 11 years and although living accommodations could always be better, for the price we pay in rent each month, we are very happy.  We currently live on the top floor of a 21 floor high-rise building.  We have 2 huge parks and several other amenities within a short walking distance.  As we are 21 floors up we have an amazing view.  I am sure that one day we will own a condo, but for now, renting is ok too.

Owning is Good

  • I have more nosy neighbours than I would like to have. Our condo was in a four floor building with only 32 apartments.  Less people to be poking around in our affairs.
  • I hate that my elevator and often other parts of my building sometimes smell like wet dog. Our building allows pets.
  • Shared laundry facilities. This is a less than desirable fact of apartment living.  Always having to make change, and keeping a close eye on my clothes so someone else doesn’t touch them.

But Renting is OK Too

  • One monthly bill. Nick earns a fixed salary but a major part of my income comes from commission.  Therefore it is easier for our budget if we have fixed expenses.  Every month we pay one bill which includes our rent, hydro, and electricity.  We also have full access to a gym, indoor pool, and 24 hour doorman.
  • It is hassle free. Nick and I are definitely not the next Mike Holmes or Bob Vila and therefore when some breaks, or clogs, or malfunctions we just have to file a work order with the office and our problem is fixed within 24 to 48 hours.
  • No liability. We don’t own the building or the structure and therefore when we have damage due to heavy rain, winds, or snow the repairs do not cost us anything.

Photo By Wonderlane

Weekly Recap: Holiday Savings and Medical Spending

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Welcome to Friday DINKS…another work week is over and soon it will be time for our weekend to start.  With the recent passing of Thanksgiving and other holidays quickly approaching, today we are discussing how to save on food and gifts during this holiday season.

Do you splurge during the holidays or do you still try to save and live financially responsible?

While we are on subject of unnecessary spending, and on a subject totally not related to the holidays, I recently got my flu shot and it cost me $100 for both Nick and I to get our flu shots. I should also mention that this expense is NOT covered by our private health insurance.  I am just wondering if any of you DINKS got your flu shot this year and how much it costs to get a flu shot in the USA.  I know that I shouldn’t complain about health care.  I also know that spending $100 on 2 flu shots is better than losing 4 days of pay while I am sick at home with the flu.

I know this isn’t related to the holidays, and I know that it’s not a big deal in the grand scheme of things, but it still really bothered me that I paid $100 for 2 flu shots.  If the H1N1 virus was such a huge worldwide health pandemic, then I think that flu shots should be free for everyone. Thanks for listening (I mean reading).

Back onto the topic of saving during the holidays, I know that we all have a lot of expenses during the holidays. Here are some tips on how to save money during the holidays:

Brooklyn Bitches on a Budget offers delicious side dishes for discount prices.

Out of Debt Again discusses how a dehydrator can save money on food during the holidays as well as all year round.

The Girl with the Red Balloon discusses how to save on homemade Christmas gifts.

E-cards are another great way to save time and money during the holidays.  Yes, I know it’s a little bit impersonal; but it saves money on cards and stamps.  It also saves a lot of time.

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