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Author Archives: Kristina Tahnyak

Avatar photo About Kristina Tahnyak

Tahnya is a Certified Financial Planner and former Investment Advisor turned marketing and communications professional She holds a degree from Concordia University, is debt free and currently works in the field of digital marketing.

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Living in a world without paying rent

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no rent, rent-free, living in a world with no rent

Good morning Dinks.  Let’s talk about a perfect world…a world without rent or the need to make a mortgage payment every month.  For some of us this is a reality, if you purchased your home at a young age maybe you are currently living mortgage free.  But for many of us our monthly rent or mortgage payment is a reality – and it’s also usually the biggest expense that we have each and every month.

A little extra pocket change per month

But what if you didn’t have to work to pay your mortgage every month? What would you do with an extra $1100 per month? That’s the amount of my monthly rent payment.  If this was three years ago I would happily live rent free and use the money to pay off my debt – and trust me I would have paid it off a lot faster.  Now if I had an extra $1100 per month I would save half long term for retirement and half short term of other goals such as new furniture and travelling.  I think we can all agree that having an extra $1100 per month would be really nice.

What about a lot of extra pocket change per month

I keep seeing a commercial for Publishers Clearing House where they surprise lucky people with $7000 a week for life.  Now that’s definitely a lot of extra pocket change and it’s definitely a lot more money than I need to live each and every month.  Even if we still had to pay rent, an extra $7000 would definitely improve my quality of life.  I would travel more, save more and maybe even upgrade to a bigger apartment – but not too much bigger because more space means more cleaning.  I would definitely stay in the city because suburban living is just not for me. What would you do with an extra $7000 per month?

Would you give money to your family?

I would like to be a good person and say that I would give lump sums of cash to my immediate family members, but that is just not true.  My Dad lives with a psycho woman who controls every single aspect of his life from his car and his computer to his money and his friends.  I would love to give my Dad money to make his life better but I know that he wouldn’t be able to spend it at his own free will so I wouldn’t give him anything.  However, I would tell him to pick one place in the world and pay for this entire vacation for as long as he wanted – the psycho step Witch would not be invited.  The sad thing about that is she wouldn’t let him go without her so once again my Dad wouldn’t be able to enjoy my money.

I would offer the same vacation deal to my mother, sister and my best friend – an all expenses paid vacation anywhere they want.  I would also set up an education fund for my 5 year old niece to make sure that she can afford to go to school anywhere in the world and not have to work full time while studying.

What would you do with an extra $7000 per month?

Photo by tahnyakristina

Money Master Ben Franklin

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There are many people famous for being good with money. Bill Gates is consistently ranked in the Forbes list of the world’s wealthiest people. Warren Buffett is widely considered the most successful investor of the 20th century. Dave Ramsey’s debt-elimination programs are extremely popular amongst today’s financial community. However, if Benjamin Franklin were still alive today, he could have given all three of those men a run for their money (no pun intended).

Ben Franklin is probably most famous for being a Founding Father and scientist, but he’s also known for his evergreen financial principles. Let’s take a closer look at some money lessons Franklin can teach us today.

 “Rather go to bed without dinner than to rise in debt.”

I’m sure Ben Franklin wasn’t a proponent of starving yourself in the name of preventing debt, but he does believe that slashing expenses to an extreme level is better than incurring debt.

Takeaway: Don’t live beyond your means. If you’re in debt, eliminate whatever you can to escape your debt as quickly as possible. Do you really “need” cable TV? That summer trip? Take-out lunches? Honestly evaluate your current situation and dedicate your newfound savings to paying off debt.

“If you would be wealthy, think of saving as well as getting.”

This one’s pretty simple… if you want to be financially wealthy, you can’t buy everything you want. Addiction to material possessions will kill your savings.

Takeaway: If you’re tempted to spend your earnings every time you get paid, do this first: take a set amount of money or percentage of your income and put it directly into a savings account every pay period to use only in emergencies. Eventually, you won’t even miss this money and will build up a nice emergency fund.

“Think what you do when you run in debt: you give to another power over your liberty.”

It doesn’t take a smart guy like Ben Franklin to remind us that being in debt is stressful. Anyone who has received calls from debt collectors or past-due bill reminders in the mail knows this reality. The fact is, when you’re so far in debt, your life choices are dictated by your debt and the need to pay it off. Everything else is secondary.

Takeaway: Don’t take on more debt than you can handle. For big purchases like houses, cars, or education, only take on loans that you know you’ll be able to pay off. For credit cards, shop as carefully as you do with cash. If you’re already ensnared in debt, use a tool like ReadyForZero to plan your payments and help you become free of debt as soon as possible.

“Beware of little expenses; a small leak will sink a great ship.”

Lastly, Ben Franklin stresses the importance of keeping little expenses in check. And for good reason– according to this infographic from GED Academy, the average American spends $1,092 on Starbucks and $145 on lottery tickets each year. Those $2 Powerball tickets and $4 frappuccinos may not seem like a lot as you’re buying them, but small expenses add up and can quickly derail your budget.

Takeaway: Keep an eye on your expenditures, whether it’s by writing everything down or using a program like Credit Karma to track everything for you. Huge shopping sprees are easy to diagnose and kill– it’s the smaller things that mount up and silently cause major damage.

Bottom Line:

Ben Franklin was and continues to be extremely influential in teaching generations the role of money in the economy. Keep his principles in mind and your finances will thank you. Good luck!

This post was written by Jenna Lee, who manages the social media channels and writes for Credit Karma, a free credit management website that helps more than 18 million consumers monitor their truly free credit scores.

 

Photo by tahnyakristina

Weekly roundup: Working from home and a Starbucks giveaway

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Good morning Dinks and Happy Friday.

It’s a short work week for all our American friends celebrating Columbus Day and all our Canadian friends celebrating Thanksgiving.

How did you enjoy your long weekend?

I got back from my week long trip in New York City and enjoyed five lovely days of rest and relaxation because I came home from New York with a killer cold.

That’s what I love about long weekends (and vacations) – no alarm clocks, no schedule and absolutely nothing to do if we don’t want to.

To everyone who is in St. Louis right now enjoying FinCon – I wish I was there.  Post lots of pics, I ‘ll be following your moves on Twitter.

Enjoy these great posts from our personal finance friends.

Budgets Are Sexy – Side Hustle Series: I’m a Chick-fil-A Cow

My Diary Entry is giving away a Starbucks gift card

Upside of Money – It’s such a wonderful bank

Enemy of Debt – Creating The Right Mindset to Get Out of Debt

Thirty Six Months – Hanging Out with Friends: Do It on a Budget

Man vs Debt – Working From Home: How Do You Find Clients?

Photo by tahnyakristina

When, where, what: The choices we need to make in retirement

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retirement, preparing for retirement, retirement plans

Good morning Dinks.  Let’s talk about one of my favourite subjects, retirement.  I love retirement because it means that I don’t have to wake up to my alarm clock and trek through four feet of snow to sit at a desk for eight hours.  Yes, in 25 years I am definitely looking forward to my retirement.

I also love retirement because I am a financial planner and helping people plan for their retirement is a major part of my job.  It’s actually also my favourite part of the job.  I love the planning part of my job, but I could definitely live without the customer service and the sales pressure.  So yes, I am looking forward to the day when I don’t have to get up and go to work anymore.

I have clients who aren’t so keen about their retirement.  They save money because they know they need to but they aren’t actually planning when and how they are going to retire.  So let me ask you a question Dinks, are you actively planning for your retirement or are you just saving money for retirement?

Ask yourself these questions to help plan for your retirement

When do you want to retire?

The days of people retiring at 65 years old are gone.  Nowadays people who are retiring from their first job with 30 years (more or less) of service are starting to enjoy retirement at a much earlier age, my father retired at 55 years old with full pension benefits and he has never looked back.  On the other spectrum of the scale there are also a whole group of baby boomers who aren’t ready to retire yet.  If you like your job and all your friends are at your job you may be hesitant to say good bye to the working world, even if you are older.

Where will you spend the rest of your life?

The decision where to retire has a huge impact on the income that you need to survive during retirement.  Even though retirement is about so much more than money (meaning time and quality of life) it does play a major role in the type of retirement you want to have.  Will you downsize your home, will you move in with family, will you relocate to a warmer climate or will you just stay put if your home is mortgage free – these are all questions that we need to ask ourselves when planning for retirement.

What do you want to do during your retirement days?

I have so many clients who have big dreams of living a luxurious live in retirement.  They think that their retirement days will be spent golfing in the mornings, lunching with friends and fishing in the afternoons.  But the truth is that all of these activities cost money.  We can old afford the retirement we want with the money that we have saved.  It’s great to have retirement dreams but they can only come true with proper financial planning.

How do you want to spend your days in retirement?

Photo by tahnyakristina

Dividend investing: Are you convinced?

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dividend investing, investment, stock market

dividend investing, investment, stock market

Good morning Dinks.  So often we discuss investment trends and types of investments, but today I want to discuss our investment strategies.  Different people have different investment strategies based on their personality, risk tolerance and time horizon.  If you are saving for the short term maybe you are putting your money into a high interest savings account because you don’t want to take any risk with your money.  If you are young and saving for your retirement in the long term maybe you are investing in very specific company stocks, geographic regions or specific industries because you are comfortable taking risk over the long term.

Do you invest in dividends?

Maybe you prefer to earn a steady (but low) interest because you are a more conservative investor.  If you don’t like to take any risk on your hard earned money then you are definitely a more conservative investor.  If don’t mind taking a gamble with your money because you don’t mind taking risks in order to potentially gain more on your investments then you are definitely a growth oriented investor.  So whether you prefer to earn a conservative interest or growth with capital gains, we want to know…how are Dinks investing their money.

If you have read any personal finance blogs lately (or ever) then you have probably read a post or two about dividend investing.  Actually there are financial bloggers and investment professionals who have published books on the sole topic of dividend investing – how to do it, why it’s a good idea and the benefits of receiving dividends.

Some investment professionals consider dividends to be conservative investments because they pay out a steady stream of income in the form of quarterly dividend payments.  Some other investment professionals consider dividends to be equity investments because they invest in stocks of specific companies.  If investing in specific company stocks is a little bit too high risk for you then you can invest in dividend stocks indirectly through pooled investments such as mutual funds and ETFs.

The benefits of dividend investing

I personally like investing in dividends because they provide a perfect balance between income and equity – so I absolutely understand why they are considered to be both. Dividend stocks invest in large companies that pay out a percentage of their profits to their share owners.  So technically they are equity investments because they invest in stocks of companies, but they also pay out income (usually on a quarterly basis).

I hold dividends indirectly through mutual funds because I like the diversification factor of investing in several different countries without having the minimum required investment amount. However, I also hold stocks directly through myself brokerage account. I invest in companies such as Coca-Cola, Disney and JP Morgan Chase Bank.

I am admittedly not a risk taker when it comes to my investments, so I like the security of investing in dividends because they invest in large, well-known companies that have a history of stable growth.  Because I am also investing in stocks with my dividend investments I have the potential for capital growth over the long term when the stock price goes up.  It’s a win-win.

By way of a quick follow up another great way to invest in dividends is to hire someone to do it for you.  If you’re looking at that one platform you should probably avoid is Motif Investing.  My blogging colleague Jeremy Biberdorf over at modest money gave them a big thumbs down.  Click here to check it out.

Do you invest in dividends?

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Stupid couple’s money myths

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money myth, couples finances, couples money

money myth, couples finances, couples money

Good morning Dinks. So you got married and now you are starting your life together, this means you have to start creating your financial life together too.  Some couple’s choose to keep their financial affairs separate from each other and some other couples choose to merge their money with joint bank accounts and joint credit cards.

Make the decision as a couple

Merging finances doesn’t have to be an all or nothing decision.  You can choose to keep your personal checking, savings and retirement accounts separate; but choose to open a joint checking account so that you can share monthly expenses related to your life together such as groceries, utilities and housing costs.

My boyfriend and I recently opened a joint checking account (after dating for 14 years) and honestly we don’t use it very much.  We are already so set in our financial ways that changing them now seems silly – but that’s just us.

Find a couple’s purpose

As with everything else in life, we shouldn’t expect our spouse to change their ways.  There are two things that I always know will never change about my boyfriend: his love of sports and his will to remain independent.  It took me 14 years to convince my boyfriend that having a joint bank account is necessary – and I work in a bank.  But now that we have it we aren’t really sure what to use it for.

As a financial planner I see newlyweds come into the bank to open joint bank accounts and join credit cards because they feel they have it, but that just isn’t true.  There is not one money management strategy that works for every couple because everyone has different levels of income, different expenses and different financial goals.  Before I open a joint bank account I always ask the happy couple “What is the purpose of this account?”

Here are 2 reasons why you should not open a joint account:

1. You want to change your spouse’s financial habits.  I don’t know about you, but my boyfriend never does anything that he is told.  In fact, if you tell him to do something he will most likely do the opposite.  If you are a saver and your spouse is a spender, don’t forcefully try to get them to change their financial habits.  People are like animals, they have to be trained and rewarded with good behaviour.  If you want your spouse to save more and spend less I suggest taking a soft approach.  Next time they want to buy something ask them “Why do you need it?” This behaviour will become a habit and even when you aren’t around your spouse will start to ask them self “Do I really need this?” before they make any purchases.

2. You think that two incomes are better than one.  If you want to open a joint bank account because you feel it will be easier to save money let me tell you from experience that this is not true. Two incomes coming into a bank account just means there is more money to spend.  If you aren’t in the habit of saving money, having access to double the amount of money won’t help change this habit.

 

Photo by pinksherbert

Weekly roundup: Personal loans, couples and marketing tricks

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Good morning Dinks.  It’s Friday October 11 and Happy Canadian Thanksgiving to all our friends up north.  I wish that I could tell you I was on my trip in Washington D.C. right now, but unfortunately that is just not true.  And no I don’t want to talk about it.

I hope you all have a great weekend. Enjoy these posts from our personal finance friends.

– Credit Sesame – When is a personal loan is better than a credit card?

– LearnVest – Investing 101: What is a security?

– Go Banking Rates – 5 Personal Finance Books You Absolutely Need to Read This Fall

– Budgets Are Sexy – Couples money quiz

– Clever Dude – Marketing Tricks: Smaller Packaging Will Cost You More!

 

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How do you manage your pay check?

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manage your paycheck, managing finances, money management

Good morning Dinks.  Let’s talk about my favourite subject…spending money.  As you know I am a reformed spend-a-holic so discussing how we choose to spend our money is near and dear to my heart. Now that I am more financially responsible I still like to know how other people are spending their money.  I know that I got into debt by spending carelessly on things that don’t matter such as clothes, restaurants and vacations.  Now that I manage my money wisely I spend money on groceries, household items and things for our apartment.

One of the major habits that I changed after I decided to live financially responsible was the way I paid my bills.  I used to pay my bills in full as soon as I got them – which I couldn’t afford to do.  So then I ended up using debt to live until my next paycheck because I spent all my money on paying bills.  This was a really bad financial habit – only I didn’t know it at the time.

Afford to manage your money

Now I don’t pay all my bills with one pay check.  Now I split all my bills down the middle and pay half of the total amount each time I get paid.  It’s much more manageable and it fits nicely into my budget.

My budget also changed greatly over the years.  I used to think my budget was the amount of my paycheck and I spent it until the money was all gone, this was usually within a week.  Then I would live on credit for the next week until I was paid again.  I don’t have to tell you that this was a really bad financial habit.

Set good financial habits

Now I set aside a set amount (percentage) of my paycheck for food and housing costs, I include an amount for savings into my budget and then I spend the rest on personal items and entertainment.  I also like to keep a floater amount (a minimum) in both my savings and checking accounts in case of an emergency.  I know that I could save even more money for my short and long term goals, but I choose not to.  I save what I think is a good enough amount and I enjoy the rest of my money.

So many reformed spend-a-holics go to the extreme once they see the light.  They go from always over spending to never ever spending a penny more than they need to.  I could have gone this route, but I am grateful that I didn’t. I did not take that extreme measure because I still like to enjoy spending my hard earned money on nice things.  The difference is that I now spend my money on things that are worth the cost like nice vacations and quality furniture for my home etc. I don’t splurge very often and I always second-guess my purchases before I make them.  I don’t want to work hard and not be able to enjoy the fruits of my labour – so I spend moderately while saving at the same time.  I guess I found the perfect balance between spending and saving.

Photo by orphanjones

She won’t leave him, not even for the money

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couples problem, financial problem, living on one income

Good morning Dinks.  One of my colleagues and friends is going through a really tough time right now because she is facing a fork in the road of her relationship.  I have known Kate for almost seven years and she has been with her husband for almost just as much time.  Kate met Ken (Oh I know what you are thinking, but those are not fake names) in 2007 and by 2010 he was her husband.

Kate and Ken always appear to be the perfect couple: loving, committed to each other and apparently on the same page.  But there are definitely some financial issues underneath their picture perfect exterior.

Being a supportive spouse vs. looking out for yourself

Shortly after Kate married her husband Ken lost his job and their marriage has been on the rocks ever since.  As a newlywed Kate tried to be a supportive wife; but now three years later, she is tired of carrying around the financial burden of providing the only income in the family even though she loves her husband very much.

The job loss was a major blow to Ken’s ego and he hasn’t really been the same since that day.  The couple’s standard of living has not changed much due to the loss of income because they both had good paying jobs. Now they live comfortably off one income.  The only thing that has really changed now that the couple lives on one income is the amount of their savings.  Kate and Ken have not dipped into their retirement accounts or their emergency funds but they have also not made any contributions into those accounts over the last three years.

That doesn’t change the fact that Kate is out there every day working hard to provide for her family.  It’s difficult to be the sole provider when you agreed to enter into a partnership.

At what point should you call it quits because of money stress

Kate loves her husband, but after three years of marriage she’s not sure if the love is still mutual.  Kate doesn’t understand why her husband is not doing everything that he can to help elevate some of the money stress that he has caused his wife.

Although their finances have not greatly suffered (apart from their savings) due to the loss of one income, their marriage definitely has.  Kate resents her husband for not working harder to find another job and she just doesn’t understand why he still hasn’t found a permanent full time job.  Ken has done some freelance contract work over the years, but he is far from having a stable income.   I have not talked to him about the situation but I am sure that he will say that he doesn’t want to settle for a job that he feels is below his skill set.

How do you compromise if you don’t see eye to eye

Of course Kate and her husband don’t see eye to eye about this situation.  Kate feels that Ken should contribute financially and Ken feels that Kate should be more understanding about his personal situation.

So how do you and your spouse compromise when you can’t agree?

Photo by PhilandPam

The 3 dumbest money mistakes you can ever make

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money mistakes, financial blunders, money problems

Good morning Dinks.  So often we read about all the great things that people do with their money to save it, grow it and keep it safe.  But what about all the bad things that people do to lose their money, not invest it wisely and just plain waste their money? I for one love reading more about peoples mistakes than their glories, although sometimes I am a sucker for a good success story.

You know the saying “Learn from my mistakes”, well that’s exactly how I learned about how to manage money.  As a teenager and young adult I had no idea how to manage money and I made a ton of mistakes like overspending on clothes and dining out, applying for several credit cards that I couldn’t afford and making only the minimum monthly payments on all of my credit cards.

I like to know what not what to do with money as oppose to knowing exactly what to do because I feel if I know what not to do everything else will work itself out.

So here we are, these are 3 dumb money mistakes that I see people make every day

1. Counting on money that you are hoping for but don’t have.  People do this a lot with their tax return refund.  They hope for the best situation, aka a big tax refund, and make plans for the money before they even know if or how much money they are going to receive.   The problem with having expectations for money is that you are fixated on what you want to buy with the money and if it turns out that you aren’t getting a tax refund you spend the money anyways…usually on a credit card because you don’t actually have the money.  This is a problem.

2. Don’t spend money on your credit card and hope to pay it off later.   This was my personal motto in my early 20s.  Every single time I wanted to buy something but didn’t have the money I would tell myself “It’s OK I will charge it now and worry about paying it later.” That is a really bad financial habit, actually it’s probably the worst financial habit you can have.  What usually ends up happening is that you keep spending money and don’t have the income to pay it off.  Definitely a bad financial habit.

3. Don’t keep cash in your wallet.  I could leave my house at 8:30 am with $20 in my wallet and by noon it will be gone.  Breakfast, a snack, some gum and a coffee later all of my money is gone.  It’s easy to spend money when we have cash on hand; so don’t keep cash on hand.  Spending money can quickly add up when we say “Oh it’s no big deal if I spend $4 on coffee and it’s nothing if I spend $5 on breakfast”, but if we do that three times it can quickly add up and our $20 is suddenly gone…and then some.

What is your dumbest money mistake?

Photo by jaaron

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