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Four considerations if you’re saving for a new vehicle

Vehicles are often the first substantial investment any of us make. How much we spend on vehicles can also vary wildly. A brand new sedan or coupe with bare minimum ad-ons will run a person well over $20,000. If you’re looking at new luxury vehicles or larger pickup trucks, that price tag can easily jump up to close to $100,000.

Buying a vehicle is a process requiring a lot of steps: from saving for a down payment to figuring out your financing options and looking through different vehicle options and deciding what works best for your lifestyle. There’s a lot to think about, so we decided to help by pointing out a few different ideas to keep in mind when saving for a new vehicle. 

Take public transit while you save

Even if you already have a vehicle now, saving for a new car can easily speed up by avoiding paying extra for gas and parking. In 2017, CityNews in Toronto asked its social media followers whether they preferred public transit or driving their own vehicle. Though the opinion was split in the audience, the numbers showed a different story. Looking at the overall cost of two major daily commuter routes in the Greater Toronto Area, the cost of public transit came out to about half of what it costs to commute daily by car.

Cities like Toronto or Vancouver have commuting lines across the city and into every suburb and almost every city across Canada has a public transit system that can make commuting easier and more affordable. For example, Edmonton has park and ride stations where you can park your car all day for a fraction of the cost of parking in the downtown core (sometimes the parking is even free) and you can catch a train or a bus directly to the business centre of the city. This can substantially reduce your daily commute costs and make your savings goals a lot easier to attain.

Know the trade in value of your current vehicle

The minute a car is sold and drives off the lot, it starts to lose value. Vehicles are depreciating assets and their value is in how they help your life (like getting to work easier, seeing friends and taking road trips). This is different from investments like Tax-Free Savings Accounts which build monetary value over time. But that doesn't mean you shouldn't buy a vehicle! You just need to think differently about how the vehicle would add value to your life.

There are some free online tools you can use to get a sense of the true trade-in value of your current vehicle. Auto Trader, Carfax and Black Book Canada all have free online tools that allow you to input your vehicle’s information to see how much you can really expect to get when it comes time to trade in.

Buy used through a dealership or a private seller

New cars are pretty. They have all the neat bells and whistles and people do not exaggerate when they talk about (*sniff*) that new car smell. But remember, cars are a depreciating asset. A model one or two years older can come at a much lower price and nowadays, anyone can find a spray can of new car smell.

If you do decide that used is the best way to go for your budget, then it’s important to figure out where you want to buy. Dealerships and private sellers both have their benefits. With a private seller, you can usually get a better price on the car, have a little more room to negotiate and you won’t need to go through a credit check to make the purchase. If you’re going through a dealership, you can qualify for financing options, you can pull the full history on the car you’re looking at and even address any recalls there might be on the vehicle parts.

If you do go through a private seller, you can hire a mechanic to inspect the vehicle and ensure there is nothing to be concerned about. This is an added expense but depending on the price you negotiate, this could still come in much lower than a dealership price tag.

Do your research 

If you’re trying to be savings conscious, it might be best to pass on the cars you saw on Fast & Furious. At the same time, going automatically to the lowest priced option might also not be the best use of your hard-earned money. There’s a balance to strike when it comes to your budget and getting the most out of the vehicle you purchase.

Websites like Slice and Driving.ca often publish lists of what they think are the best cars to buy in Canada. Kelley Blue Book takes a bit of a different approach. This website ranks cars by value for money, making sure that you make the most out of each dollar you spend on your vehicle. Cars and trucks are often an extension of a person’s personality so these websites help make sure the vehicle you decide on works best for your lifestyle.

What do you think are some of the best vehicles you can buy? How do you approach buying a new or used vehicle? Like us on Facebook and Follow us on Twitter to keep this conversation driving.

Be savvy about going back to post-secondary Expand/Collapse

It’s never too late to explore new post-secondary options! Whether it’s getting your master’s or bachelor’s degree, or looking at after-degree certificates and diplomas, there’s no shortage of ways to open up new career opportunities.

Heading back to school is an important decision that can often result in better career opportunities. Knowing what you should be saving for, and what you can have funded by grants and bursaries, is key to making sure that education remains financially attainable.

Before you fill your backpack with books and pick out your courses, here are five ideas to think about if you’re heading back to school.

Know your funding options

The go-to solution for paying for school tends to be provincial and federal student loans. If you qualify, these can be some of the best funding options you can utilize with incredibly low repayment rates. In addition to student loans, there are plenty of alternate ways of paying for your schooling. 

Provincial and federal information websites typically also have information about scholarship and bursary programs, which give you money for your studies and often the only requirement to receive this funding is that you complete your studies. If you’re looking at some postgraduate research work for a master’s or PhD, there are also grants through the federal and provincial governments and sometimes even through the school where you’re interested in researching. Check with the school you’re interested in attending to find out what grants, scholarships and bursaries are available to you.

Know your banking options

For most, RRSPs are for retirement and sometimes for a first home. But did you know you can also use your RRSP to help pay for your education? The federal government’s Lifelong Learning Plan (LLP) allows you to withdraw money from your RRSP to help pay for any level of post-secondary.

Much like using your RRSP for buying a first home, it’s technically a loan. You have 10 years to pay back the money you withdraw from your RRSP, typically one-tenth of the money back each year. But unlike other loans, this money goes back into your RRSP with no interest accumulated on what you pay back.

Know your school options

Smaller universities and colleges tend to be much more affordable for annual tuition and offer similar studies as the major universities. The Universities Canada website provides a chart for all the post-secondary institutions they represent and provides information on how much students would be paying for tuition each year. New Brunswick’s Mount Allison University and Royal Roads University in Victoria were ranked as two of the most affordable schools in the country offering both undergraduate and postgraduate options.

The program you choose could also impact how much you pay. In 2017, Global News looked at a variety of post-secondary programs and found that dentistry, medicine and law carried some of the highest price tags while education, agriculture and humanities were among the most affordable.

Know the cost of living in your city

Knowing which city you want to study in could make a big difference in how much you spend. In fact, Canada Study News found that our country has three of the best cities in the world for students of all education levels: Toronto, Vancouver and Montreal. The University of Toronto and University of British Columbia are two of the most prestigious schools in the country. They are also in two of cities with some of the highest cost of living in Canada.

If you’re looking to study and live in Toronto or Vancouver, make sure to have a strong savings plan to help you prepare for school and a good budget in place for when your studies begin. Alternatively, you can select a prestigious school in a more affordable city like Edmonton or Montreal. This still gives you access to world-renowned schools at a much lower cost of living. In fact, Montreal has the highest concentration of students in all of North America due to its affordable tuition and student living.

Know your earning potential after you graduate

Time and time again, statistics show that education leads to better earnings. Research from Stats Canada outlines the higher education benefits and a 2017 report from CTV further illustrated many of findings from the federal government.

There are many degrees that focus on applicable careers after graduation. These include business, healthcare and engineering. If you’ve already completed an undergraduate and are still thinking about further schooling, after-degree programs are often designed with specific employment options for when you finish. Talk with a career counsellor to see where your local job market is seeing a high demand. This could help you with your education decisions.

Are you thinking about heading back to school? Where in the world and what subject would you want to study? Like us on Facebook and Follow us on Twitter to let us know!

Making summer a little savvier Expand/Collapse

The Canadian summer is something to be cherished. When it arrives, we love enjoying every single second that we can out in the sunshine and heat. Thankfully, there’s no better season for saving than summer. No matter where in the country you call home, there is no shortage of summer fun available at little to no cost. We’ve put together five ideas for your savvy summer.

Take a road day-trip 

The destinations you can enjoy don’t need to be that far away. In fact, there are destinations in every province that could easily take no more than a day to drive to, check out, and drive back. Take an adventure with your friends and save some time and money!

Have you checked out Port Hope, ON, and its preserved main street from the early 1900s? Or Paris, ON, which is often voted as the prettiest small town in Canada? Across every province, there are neat small towns nearby worth a day trip adventure and can help scratch the road trip itch.

If you’re curious what might be near you, Google the towns near you and check out the TripAdvisor app for tips on what to check out in these towns. From our research, TripAdvisor seems to have the most recommendations for almost every small town you can think of. Trust us, if they have a full guide for somewhere like Tilt Cove, NL (with a population of four people), they’ll have info about the towns near you.

Better yet, take a staycation

We’ve talked about the benefits of a staycation before when we blogged about saving while travelling. Summer is probably the best time of year to take a staycation and explore the city you call home. If you live in a city like Toronto, Montreal or Edmonton, it seems like every week there’s another festival or art installation to spend your days off checking out.

How well do you know every neighbourhood around your town? Have you found all the hidden gems and local treasures? National Geographic did an entire article on how to be a tourist in your own hometown (which happens to be Toronto in this story), and there are plenty of tips to help you make the most of a staycation.

Get outside

Summer time is made for getting outside and filling your lungs with fresh air and having the sun shine on your skin. The best part about spending more time outside? It doesn’t actually cost any money. Park spaces are especially good for a perfect summer’s day.

Most municipal websites will list where to find local parks and playgrounds, including spray parks and wildlife preserves. These sites will also list operation hours and local bylaws to ensure that everyone in your community can enjoy the outdoor space.

From picnics to exploring foliage and even snapping some nature and landscape photos with your phone, outdoor spaces can easily satisfy your curiosity, creativity or social needs. Local park areas also often will host events or outdoor classes, so check with your community league or association to see what’s been planned for the summer.

Join a scavenger hunt

Remember how fun scavenger hunts were when you were a kid? You get a list of hints or specific things to find, you dig around your neighbourhood or a park to try to find everything on the list and some of the even craftier kids found ways to sabotage the other teams and rack up their own points. Even if you don’t have kids, scavenger hunts can be a lot of fun.

Have you ever tried a scavenger hunt bar crawl? Or a scavenger hunt road trip? There are tons of ways to make your scavenger hunt a lot more fun for grown-ups. Taking photos with your phone of everything on your scavenger list can help make sure you don’t need to spend any money while you and your friends make a summer day a little competitive and a lot more fun.

Find a beach

Finding a beach seems obvious if you live on the coast in a city like Vancouver or Halifax. But for those of us living in a landlocked province, finding a beach requires a little more research and planning. Even if you’re in Alberta or Ontario, there are plenty of lakes within driving distance that are calling out to you for a beach day.

Knowing exactly what you need for a beach day can help make sure you keep your spending in check while taking in some sun and sand. Towels, sun screen, snacks and water to drink are essential for beach trips. If you’re heading into a beach town, convenience stores often mark up the prices for these basic beach needs. Make sure you’re picking up everything you need for your day by the lake or the ocean before you head out of town to keep down your costs.

What are your summer plans? How do you plan to make the most of the warm weather while it’s here? Like us on Facebook and Follow us on Twitter to let us know! 

Eating better on a budget Expand/Collapse

For a lot of us, eating healthier feels like a luxury. Frozen microwave meals and fast food may be quick and easy in the moment, but in the long run you’re not giving your body the essential nutrients it needs to function. Not to mention, you can end up spending more money on convenient food than you would by refocusing your diet.

Delicious and healthy food doesn’t have to come with a hefty price tag. And everyone deserves to eat well! That’s why we compiled five ideas to look into if you want to eat well and save some money while you’re at it.

Look for ways to save on groceries

This seems a lot easier said than done. But if you know what you’re looking for, you can easily cut down on your grocery bill without sacrificing quality of food.

A good place to start can be the brands you buy. Though we all have our go-to staples for things like peanut butter and yogurt, venturing out into other brands when they’re on sale could help you save a few dollars. Even buying house or no-name branded items can see you spending a lot less each time you’re at the grocery store.

Buying in bulk is another great way to reduce your overall grocery cost. Though you’re spending more at the start, if you conserve and pace your meals right, your bulk purchases could last you months. Having a freezer helps with this as well. Freezing anything you don’t immediately need can help reduce food waste.

Coupons are another great friend to anyone looking to spend less. Though you won’t often see the same level of extreme coupon stories in Canada like you do in the US, paying attention to deals and specials can help with savings that add up fast. Some grocery stores will even have their coupons or weekly flyers at the store’s entrance for you to take advantage of.

Find free online cooking classes and recipes

Gone are the days of needing to buy recipe books or take expensive cooking classes to get some new culinary ideas. Now, free online publications and YouTube have made accessing simple and gourmet recipes and cooking instructions much easier.

Not all recipes and cooking instructions are made equally, so always investigate your source before trying something at home. Some helpful websites include Tasty and Food Network Canada and some handy YouTube channels include Epicurious and Bon Appetit. Each of these sites offer high quality and accessible recipes absolutely free.

If you’re especially brave and want to try something a little more off the wall, check out Munchies, Vice’s food channel. Munchies helped launch Toronto-based chef Matty Matheson into stardom, and they share recipes and cooking instructions on their website and YouTube channel exploring a few unconventional ingredients.

Start growing your own vegetables and herbs

Growing your own herbs and vegetables doesn’t cost much at all and is probably easier than you think! Seed packs for most herbs and vegetables cost only a few dollars, and are available at most hardware and home stores. Once the vegetables and herbs spring up, they can be used for plenty of meals.

Just like recipes, there are plenty of free online instructions on how best to grow your own herbs and vegetables. You don’t even need a full garden to start. Lots of edible plants can easily grow in your apartment or on your balcony. Pro tip: start small. Try growing a couple of low-maintenance and quick-growing herbs like mint, chives or basil. This is a fun way to start looking at food differently and find a new passion or hobby at very little cost.

Make the most of leftovers

When you’re going through your new recipes and trying out new ideas, it’s sometimes a good plan to make a little more for leftovers afterwards. Packing up what’s left from the night before can make for great lunches at work or even second dinners later on in the week. Leftovers can also be the basis for new meal ideas. Take a look through some of the recipe websites we suggested to see how your leftovers can become a whole new dinner.

If you made a big roast beef or chicken, keep the leftover meat and bones to simmer for a soup broth or cooking stock. This broth can be used right away for a soup or stored in jars and put in the freezer to be used later on. By doing this, you’re reducing food waste and making the most of what you’re already buying.

Have any amazing recipes you want to share? How do you save on food while eating healthy? Like us on Facebook and Follow us on Twitter to let us know!

Smooth AND affordable Expand/Collapse

Whether it’s your first apartment or your dream home, there are tons of ways to save a little extra money while moving. It’s hard to imagine moving as an expensive endeavour, right up until you actually have to move and you see where your money winds up going.

It’s easy to keep moving costs low as long as you know how to set yourself up for success. We collected five factors to think about to help keep moving expenses to a minimum.

Fix up your old place before you go

Before you get into your new place, it doesn’t hurt to do a little (or a lot) to your old place. Making sure the home you’re leaving is in tip-top shape might cost you a little extra now, but will help save you a lot more in the long run and might even wind up making you a little bit of money.

If you’re renting, nothing feels better than getting back your damage deposit (if your province has damage deposits). Some landlords can be picky and even a messy house or apartment can mean losing a few hundred dollars for a clean up. If you want to guarantee your deposit’s return, it may be worth it to hire out to a cleaning crew. And when you get that deposit back, you can use that money towards any unexpected expenses while moving (we’ll look at some of those later on in this blog) or put it away and grow some savings rewards.

If you own your current home, even the lightest renovations can mean big returns on your home investment. Something as simple as a fresh coat of paint can boost the perceived value of your home. Other larger renovations like updating your kitchen can mean thousands of dollars in return once you sell your home.

Downsize, downsize, downsize

We’ve talked about the financial benefits of downsizing before on this blog. But did you know downsizing could also help you save money on your move? If you’re hiring out to a moving company, they normally charge by the hour or even by weight if you’re moving longer distances. Reducing your overall stuff means reducing the amount of time that you need help from a moving company, reducing the amount of weight you have to move and reducing the amount of money you ultimately need to pay them.

If you’re moving everything yourself, downsizing still can help. Having less to move means not having to rent as large of a vehicle, or not even renting a vehicle at all. It also means fewer trips between your old and your new place, so less time and less fuel spent hauling items you may not even necessarily need to take with you.

Donating to thrift shops and community-based organizations can also be a great place to start when downsizing. For a lot of items, though, you could also hold a garage sale or sell some of them through local buy and sell social media pages and websites such as Kijiji, Letgo and Bunz (if you’re in the greater Toronto area). This way, you’re earning some extra money for your move, which might come in handy.

Save for the unexpected

As with any change, there are always unexpected or hidden expenses. Did you save enough to have your old place professionally cleaned? Do you need to pay for a couple of extra hours for the moving company you hired? Are you on top of all fees and deposits for your new place?

Planning ahead with your savings can help prevent a lot of the headaches that come with unforeseen expenditures. Motive Financial offers savings accounts like its Tax-Free Savings Accounts (TFSA) and Savvy Savings Account to help you put a little extra money away to help with the unexpected.

Spotting fraudsters

Research is an important part of making any big decision. Moving is no exception. It’s always important to be cautious of potential scams and be alert to what to watch out for.

For instance, “hostage loading” is where movers hide some of your belongings and demand more money before delivering your things to your new home. This is one of the most common scams that can occur while moving, but there are ways to avoid fraudsters and protect yourself.

The Canadian Association of Movers keeps a list of reputable moving businesses and collects data on reports of moving companies scamming people. According to a Global News report, even online reviews for companies can be misleading as fake reviews can be easily drafted and published. Thankfully, Global News also provides a list of what to spot to make sure the moving company you hire is legitimate.

Moving insurance

There is nothing worse than finishing your move only to find out that some of your valuables broke during transit. Small trinkets and decorations usually aren’t that big of a deal to lose, but if your couch or bed ends up at your new home totally unusable you could be out hundreds or even thousands of dollars.

Having all of your belongings insured before you move is a good way to protect yourself in case anything valuable is damaged or destroyed during your move. Most major insurers provide coverage as part of a move with their homeowner or tenant insurance policies. Moving companies also offer this additional coverage.

Have any tips to help someone with their move? How have you saved a little more money while moving into your new home? Like us on Facebook and Follow us on Twitter to join in the conversation.

Four ways to spring clean your finances Expand/Collapse

The sun is getting warmer, the days are getting longer and we’re sneezing more from our snow mold allergies. It must be spring. This time of year is about taking a deep breath, refreshing yourself and coming out of winter hibernation (we should be proud of ourselves for surviving the 2019 polar vortex). It’s also the time to get tidying. Spring cleaning, however, isn’t only for your home.

From streamlining those savings goals to finding ways to cut down on your monthly spending, we compiled four ways to spring clean your finances.

Clean up your debt

The average Canadian has two or more credit cards. This is in addition to car payments, mortgages, lines of credit and private student debt that many Canadians hold. This is a lot of money owed to different places at various interest rates, making monthly budgeting difficult.

However, there is a way to simplify your debt. Many financial institutions offer debt consolidation. Through debt consolidation, financial institutions essentially give you a fixed term loan that pays off all your various debts and has the balance owing at a single source (and often at a much lower interest rate).

If you qualify, this is a solution that allows you to better control your debt and reduce your monthly payments while still gaining traction on your principal. The one catch is that working with some groups who offer debt consolidation can affect your credit score. Make sure the financial institution you’re dealing with doesn’t affect your credit when consolidating debt.

Typically, larger established banks are able to offer debt consolidation without affecting your credit score but they have much stricter requirements to follow. Private creditors can also offer debt consolidation services usually with much fewer requirements, but these groups will often affect your credit score.

Clean up your monthly spending

How often do you check your monthly bank statements? Checking your monthly statements could show what you’re paying for that doesn’t provide any value. We’ve all signed up for those monthly subscriptions that we completely forgot about. From online music and movies to gym and private club memberships, a lot of us pay quite a bit of money each month for services we don’t even use.

Spotting those extra charges and fees and working to minimize or completely cut out those expenses can help keep your monthly budget in check and open up tons of room for savings. If you haven’t used these subscriptions in the past month of two, maybe it’s time to end the subscription and find a no-cost alternative that works better. This could even extend to banking fees. All of Motive’s accounts have no monthly fees.

A way to help with non-essential spending each month is to give yourself a cash allowance. How this works is after you pay all your monthly bills like rent, phone bill and student loans, you pull out a set amount of cash for nights out and shopping. If you can stick to this budget each month for fun spending, you can start to see the positive benefits of a cleaner bank statement.

Let’s have a challenge. Go through your monthly account activity and see if you can cut it in half. Even see if you can fit your entire monthly account activity onto less than a single sheet of paper. Minimizing your monthly expenses could help you in not just cleaning up your finances but keeping a lot more money in your account.

Clean up your savings plan

We should all be saving more, but it can be hard to maintain that motivation. Some savings accounts come with hefty fees that chomp away at your money and some don’t even have savings rewards.

Having a savings goal is one of the first steps to take in cleaning up your savings. Knowing why you’re saving and setting an end goal will help keep up your savings momentum and ensure your money is going towards things you value, whether it’s saving for your first home, your next trip or your future retirement.

Finding the right savings account to fit your needs also helps your motivation. Motive’s Savvy Savings Account and Tax-Free Savings Account offer high interest rewards and no monthly fees. This is one way you can keep your savings plan on track and your monthly expenses down.

Clean up your home

Seriously, this can actually help. There are a lot of reasons why a tidier home can help with personal finances and all of them stem from a realization that maybe we spend too much on things we don’t need.

Being tidy often means downsizing. From clothes to collectables, downsizing might actually seem counterintuitive when it comes to finding financial balance. There are three things that need to happen after you downsize.

The first is to realize that all the things you let go of you never actually needed. The second is to hold on to that feeling of a clean and decluttered home to help motivate you to stay away from bad spending and collecting habits. The third is to not buy and replace any of the items you’ve downsized. Purging a closet shouldn’t be an excuse to go shopping.

To ensure that anything you downsize won’t cause financial strain later on, there are a couple of rules from the Minimalists you can try out for yourself. The first is the 20-20 rule, which asks if you can replace the item in less than 20 minutes for less than $20. Another is the 90-90 rule, which asks if you have used something in the last 90 days and if you will use it in the next 90 days.

Any home tidying and downsizing should be about appreciating the things you have. Marie Kondo, author of the book The Life Changing Magic of Tidying Up and star of the Netflix hit Tidying Up with Marie Kondo, often talks about sparking joy. When something sparks joy, you appreciate it on a much deeper level. It’s that appreciation that ultimately prevents us from buying any more than we need to and recognizing how much we have.

How are you spring cleaning your banking? Is there anything you’re thinking about minimizing? Like us on Facebook and follow us on Twitter to let us know how you’re breathing some fresh air into your finances.

Travel Tips for the Savvy Saver Expand/Collapse

Getting ready for summer travel is a good way of getting through the final cold months of winter. Planning ahead and daydreaming of sunny beaches can lead to some overexcitement while you’re looking at vacation packages. If you’re not careful, this anticipation of escaping to bright adventures can lead to drained savings and maxed-out credit cards.

But with the right tips and planning, your summer travels don’t have to throw off your financial goals.

Start with a savings plan

It’s always best to plan out trips without having to depend on credit. There are a lot of credit cards out there with cash rewards for big purchases and it can be easy to get swept up in the credit bonuses. And though you almost always need a credit card to book a trip, it’s always best to have the cash on hand to quickly pay off that purchase. Paying off a big credit purchase like a vacation could compound the rewards and also help to boost your credit score.

One of the best ways to make sure you have that cash on hand is with a savings account. Setting up a savings account for your travels helps you put money aside every month dedicated to booking your flights and accommodations. But it’s not just the money getting you to your destination that you need to worry about. Plan out the money to take with you. Keeping to a cash diet can make you less dependent on your credit cards. Save ahead for booking your trip but don’t forget about the money you want to bring along. This will help ensure that you’re not racking up new debt.

Look at conversion rates

A lot of countries around the world have currency worth more than the Canadian dollar. This means that for every dollar or pound or euro you spend while abroad, you could be paying as much as $2 Canadian. But there are just as many countries whose conversion rates are a lot lower, meaning your Canadian dollar is worth a lot more.

While you’re thinking about your next trip take a look at how far a Canadian dollar can take you. The Bank of Canada has a conversion rate calculator on its website. To give some better context, Attaché on YouTube measures conversion rates and local prices with metrics like how much a pint of beer or a Big Mac will cost. By looking at conversion rates, you might start thinking differently about where you want to explore for your next adventure.

Find the best bundle deals

Websites like Expedia and Travelocity are used regularly by Canadians to bundle flights and accommodations to maximize the best travel deals possible. There is no shortage of different travel websites like these, but you can maximize deals even further.

All-inclusive deals can see you pay for your flight, hotel and all your meals with a single booking. Destinations like Mexico, Cuba and the Dominican Republic have countless all-inclusive resorts and sometimes even offer on-site entertainment and activities as part of their packages. With all the necessities taken care of, you don’t have to worry about bringing along as much spending cash.

Consider a staycation

If travelling abroad is looking too expensive, there is an alternative. Staycations are becoming increasingly popular with people taking advantage of their time off to explore the cities they call home. This is time that can be spent discovering new neighbourhoods, experiencing street art and even finding a new favourite restaurant.

For people living in smaller communities, there’s also the option of exploring your larger counties. Are there breweries in nearby towns you haven’t experienced? Maybe festivals worth venturing into? Finding ways to make staying close to home more like a vacation could help you still find the adventure you need without spending as much money.

What are your summer travel plans? Have any advice or insights on destinations that can help others save on their vacations? Follow us on Twitter and Like us on Facebook to share your own savvy saver travel tips.

TFSA or RRSP, what's the best way to save for your first home? Expand/Collapse

March 1 is coming up fast. For a lot of Canadians, this time of year signals the end of their Registered Retirement Savings Plan (RRSP) contribution period for last year’s tax season. For many Canadians, putting money into an RRSP can be a step towards one of the biggest purchases they will ever make — their first home.

A first-time home buyer in Canada can withdraw up to $25,000 from their RRSP to help with the down payment on a home purchase through the Government of Canada’s Home Buyer’s Plan. Why is an RRSP the best go-to- for a first-time home buyer’s down payment when the actual purpose of an RRSP is to save for retirement?

There are a lot of different factors to consider when you start saving for your first home. We can help give you a good running start by helping you decide where best to start saving for your down payment.

Going for an RRSP?

The main appeal of using an RRSP to save for your first home is the Government of Canada’s Home Buyer’s Plan. This is essentially one of the only situations where pulling money from your RRSP won’t result in any tax penalties. If you’ve been saving into an RRSP for a long time, it could make a lot of sense to draw your down payment from here. This especially makes sense if you pay into another pension plan either on your own or through your employer. This way, you still have money regularly going towards retirement that will remain untouched.

There is a catch, however, in using your RRSP for a down payment on a home: it is technically a loan. The part of the Home Buyer’s Plan that’s often overlooked is that the money taken out from the RRSP does need to be paid back into your RRSP, or you’ll face the same tax penalty of a normal pre-retirement RRSP withdrawal. First-time home buyers have 15 years to top up their RRSPs with what they used for their home purchase, which is typically more than enough time.

The maximum amount that a first-time home buyer is allowed to withdraw under the Home Buyer’s Plan is also only $25,000, which might be a smaller percentage of your home’s value depending on where in Canada you’re looking to buy.

The ideal situation for a down payment is 20 per cent of the home’s total value, but first-time home buyers have the option of only putting down five per cent and adding Canada Mortgage and Housing Corporation (CMHC) insurance to their total mortgage. Putting down only five per cent makes the $25,000 a little more realistic for a down payment but adding the CMHC insurance is extra money on your mortgage that won’t be equity for you in the long run.

Maybe a TFSA works best?

Since the Government of Canada introduced Tax-Free Savings Accounts (TFSA) in 2009, millions of Canadians have opened one and started a savings plan. There’s a lot more flexibility in holding a TFSA than there is in an RRSP, mainly around how often you can withdraw. Where RRSPs only let you withdraw under specific circumstances, TFSAs let you withdraw any time you want.

TFSAs build interest over time, which means that your money ends up making a little extra while being saved and that interest can build up over time making your savings worth a whole lot more. Motive Financial offers some of the highest interest rates on TFSAs in Canada. And all of those high interest rewards remain tax-free even after you withdraw from your account.

One consideration for a TFSA is that no one can hold one until they’re 18. Canadians can open and contribute to an RRSP at any age, so many who do use their RRSPs for a down payment may have been contributing to it for most of their lives. If you open a TFSA and contribute a lot, you’ll be able to build your down payment goal quickly and see some rewards from your investment.

It’s hard to know what’s the best way to save for your first home and it’s always best to discuss your options with a financial advisor before making any major decisions. RRSPs, TFSAs with Motive Financial are a good place to start with meeting your homeownership goals.

Four savings savvy New Year’s resolutions. Expand/Collapse

It’s good to have ambitious resolutions but it can be easy to let them fall by the wayside, especially when you can rationalize that giving up on one means you’ll do better with another.

Think healthy eating means spending more at the grocery store? Does working out more really require the most expensive gym membership? Saving more money doesn’t have to impede other good intentions for a new year. In fact, they can go hand-in-hand a lot more smoothly than expected.

Five of the most common New Year’s resolutions are to be better with money, exercise more, eat healthier, spend more time with loved ones and learn a new skill. A common misconception is that to achieve the last four, you need to sacrifice the first. Not true. In fact, you can achieve any of these other four goals without losing sight of your financial goals.

Saving money while eating healthier

A lot of people think that healthy eating is more expensive. In fact, what typically costs people the most at the grocery store is convenience. And the healthiest meals always start with raw ingredients. Global News looked into this around this time last year and posited that a single person can get their grocery bill down to $50 a week by avoiding the frozen and pre-made aisles and sticking to fresh produce and simple flavour components.

Even items like pre-made sauces and marinades can be avoided to help with both the grocery bill and eating healthier. A jar of sauce can be full of processed ingredients and sugars and might be good for only a single meal. By instead buying simple flavour components to help achieve the same flavour profile, you’ll spend less in the long term and wind up eating much healthier. Websites like Tasty have no shortage of simple and healthy recipes with step-by-step instructions on how to make delicious meals with simple ingredients, like this mason jar recipe for a simple and healthy tomato sauce.

A thrifty way of working out

One of the best exercises anyone can do is also the least expensive: walking. Any exercise’s benefits are usually specific to the individual and their genetics, but universally there seems to be little debate over the benefits of walking for an hour a day. From weight loss and improved heart health to better sleep and increased metabolism, it’s almost miraculous how much you can improve your physical health from finding the time to take a stroll.

Though summertime walks through the neighbourhood are totally appealing, it’s a little more difficult to find that same attraction when it’s minus 20 degrees outside. If bundling up to brace for a chilly walk isn’t your thing, it’s not impossible to take your strolls indoors. Take a walk through a mall (just try to avoid the stores and the enticing winter sales), find a community rec centre that isn’t charging a lot for admission or even find ways to do laps through your own home.

If you’re looking for something a little more than walking, there are tons of great exercises you can do for free at home. YouTube channels like Fitness Blender and Yoga with Adriene offer free and easy to follow exercises that don’t require any expensive exercise equipment. The videos usually run between 10 and 40 minutes, making the workouts easy to fit into your day.

Spending time doesn’t mean spending money

Reconnecting with friends and family can be the easiest of the resolutions to achieve while saving more money. Though the initial instinct when seeing loved ones may be to go out for dinner, find a play or concert to attend or go shopping together, catching up with the people in your life doesn’t have to require spending on an outing.

Have a cupboard with some dusty board games? Have a dinner idea you’ve always wanted to put together? Want to try baking a new recipe? Invite your loved ones over for an afternoon or an evening. Whether it’s a board game, a meal or a home baked treat, great conversation will inevitably take over and you’ll feel that connection rekindle.

Learn something new, for free, every day

This is probably the most difficult resolution to achieve without spending money. New skills and hobbies almost always require some sort of investment but there are ways of reducing that investment so you can get down to trying your hands at something new sooner. Subscription services such as Skillshare allow you to explore online courses on different subjects from curated industry experts. From creative writing courses from author Roxane Gay to creating digital videos with Buzzfeed’s Matt Bellassai, there are a few courses offered for free but the subscription is usually pretty small compared to the value gained from the instructional videos, typically around $10 a month.

But if this subscription still seems like it’s going to cut into your savings goals, there are other ways of finding courses and educational opportunities at no cost. Community leagues and local libraries often have programs that deliver new skill instructions to its members. The other option is from free online services such as YouTube. Though industry experts can sometimes share good information through YouTube, there are very few quality controls so be wary of the content you’re viewing.

How are you achieving your New Year’s resolutions without sacrificing your savings? What insights do you have that we could add to our list for little to no spend resolution hacks? Follow-up on Twitter and Like us on Facebook to let us know how you’ll be tackling your 2019 goals while keeping up savings.

Top 5 bad spending habits to break in 2019. Expand/Collapse

With the holiday season closing out, minds are fast moving to January and New Year’s resolutions. We’ve all made them and rarely do we stick to them, but resolutions to break your bad money habits can be made easy to start and even easier to achieve. Smart spending, building your savings and knocking down that debt are all within reach in 2019, and we have a five quick tips to help you along the way.

1.Nail down your most unnecessary spending

Knowing where your money is going is a great first step in knowing how to break your worst spending habits. From frequent dining out and home food delivery apps to paying too much for snacks at the movies, taking a closer look at where and when you spend can help you figure out where you can start saving. Even noticing how often you use monthly subscriptions to services can help you hone in on where you can save a little more each month. How often are you using Spotify and Netflix? Are you actually sticking to your gym routine? Is there anything that comes at no cost that you can use to replace these monthly subscription services? Asking yourself these questions and being honest about your regular usage could help you nail down where you could be spending a lot less money.

2. Pay more than your monthly minimums on your debt

The longer you carry a balance on your credit cards and your lines of credit, the more interest you’re going to pay. Making larger monthly contributions to your debt not only pays off what you’re owing more quickly and ensures you’re paying less in interest, it also can benefit your credit score. Far too often we can find ourselves looking at our credit statements and budgeting around the minimum monthly payments and thinking we have a little more still for disposal income. Those minimum monthly payments barely scratch the surface of what’s owing and often cover mostly the monthly interest. By making those larger monthly payments beyond the minimum, you can save a lot more money in interest payments and set yourself up for a much better monthly cashflow without the looming debt.

3. Stop using credit while you’re paying off credit

Putting larger monthly payments on your credit cards isn’t open permission to keep using credit cards. Especially after the heavy holiday spending, this is the time of year when it’s most important to put your credit on ice until the balance is paid off. A cash diet can be a difficult adjustment but is the most surefire way for paying debt that’s costing you more in interest charges. Set up a strict budget for each month that includes all monthly bills and debt payments beyond the monthly minimums and stick with it. Spending doesn’t have to completely stop in January, but making a budget with a strong cash focus makes sure that anytime you do decide on some spending, you have the cash in hand and you’re not relying on any more credit.

4. Avoid January sales

January always sees a lot of big sales creep up. Shops are looking to clear out the last of the stock that didn’t sell over the holiday season and Boxing Day. The temptation of these kinds of sales can be hard to resist, but with heavy holiday debt still fresh it’s important to avoid the allure. The comfort of retail therapy during the January slump adds to why shopping during this time of year is an important impulse to combat. Battling the January sale inclination doesn’t have to mean going into winter hibernation. There is no shortage of fun and low to no cost winter activities people can dive into that doesn’t involve making stops at the mall. Check out this CBC list of 50 things Canadians can do to get outside and enjoy the wintertime.

5. Set up a Tax-Free Savings Account

Poor spending habits can be made even worse when you don’t have any savings set up. When it comes to unexpected expenses, making big purchases and thinking about the future a Tax-Free Savings Account is one of the best assets you can have to help keep you financially secured. Luckily, Motive has an award-winning TFSA for you! Far too many Canadians rely on credit cards and other forms of debt to help them out when an emergency arises, to book vacations and travel plans, and even auto repairs. Tax-Free Savings Accounts help keep money aside from normal monthly expenses so you have the help and funds you need. And best of all, Tax-Free Savings Accounts build interest over time, so the money you put away can start making you money as well.

Have any pieces of advice of your own that we missed? What are your worst spending habits that you want to break? Let’s continue the conversation on social media. Follow-up on Twitter and Like us on Facebook to let us know how you will be changing your spending habits and setting yourself up for more financial success in 2019.

Expanding your financial literacy with tips from Motive. Expand/Collapse

As we mentioned earlier this month on social media, November is Financial Literacy Month! Becoming financially literate is a lifelong process, and we’re never done adding tips to our information banks (just as we’re always adding dollars to our actual banks).

So we’ve asked Motive Financial employees to see what financial tips they wish they’d known sooner that they’d like to share. Here’s our Top 7 Tips:

1. Pay yourself first—Julie, Motive Internet Banking Agent II, Motive Financial

This tip is a classic! When you receive your paycheque from work, consider setting an automatic transfer to your savings account so that saving becomes automatic. You’re paying yourself first with your paycheque, and then can use the remaining dollars to take care of the rest of your expenses and bills.

2. Avoid impulse purchases—Janice, Internet Banking Agent II, Motive Financial

We have addressed this tip in social posts before. The impulse monkey can be a tough one to shake! But if you’re able to break an impulse spending habit and avoid those spur-of-the-moment, don’t-need-it-but-gotta-have-it purchases, you’re miles ahead in your journey to financial security.

3. Put your money in a savings account that has withdrawal restrictions—Pam, Internet Banking Agent III, Motive Financial

Once you’ve paid yourself, that balance can look very tempting after awhile. Consider using a savings account that has withdrawal restrictions to help you resist the urge to move money around. Our Savvy Savings account offers this plus the added incentive of a 2.80% interest rate. Need we say more?

4. Compare ”needs versus wants” for certain purchases—Barb, Internet Banking Agent III, Motive Financial
Okay, we sympathize: sometimes you really do need that latte in the morning when you’re running late and your automatic brew didn’t start. But truly consider the ‘need vs want’ rhetoric that’s motivating your purchases. The more you avoid the ‘wants’, the more you save for the big goals you have.

5. Use the exchange network for ATM transactions for lower fees—Zong, Internet Banking Agent III, Motive Financial

Bank fees are one of the most unnecessary things to spend money on. There are so many ways to avoid these sneaky ‘small’ fees that over time add to quite the sum. Look for exchange network ATMs to withdraw money without fees, and only spend what you withdraw.

6. Set reasonable limits on non-necessities and stick to them—Pat, Assistant Manager, Motive Financial

While being fiscally prudent, it’s important to also acknowledge that sometimes you’ll want to grab a bite on the go, or treat yourself to a luxurious latte on the way to work or replace some staple clothing that has been worn out. Set reasonable limits on what you intend to spend on these non-essentials, and check in on your budget to ensure you’re sticking to it!

7. Plan ahead as much as possible! Cook meals ahead of time so you aren’t tempted to go out as often—Adam, Manager, Motive Financial

Batch cooking can be a lifesaver. Not only are you able to buy in bulk and save on the cost of groceries, cooking meals ahead of time lets you come home and unwind instead of stressing about what to make for dinner that night, which can lead to grabbing the keys and heading to a restaurant.

We hope you enjoyed this and our other shared financial literacy learnings and workshops this month!

Tips or treats? Why not both! Expand/Collapse

Happy October, everyone! To wrap up our month of Tips or Treats (missed some? Check out #TipsOrTreats to catch up!), we wanted to summarize some of the best Tips we’ve encountered, and the potential Treats that come as a result of great money management! We hope you enjoyed our Tips or Treats month, and if this summary is helpful please share it on social media.

Tip #1: Avoid impulse spending
This can be a difficult habit to break, but impulse spending can undermine even the best budgets! Spending impulsively can rack up your credit card debt, affect your payment schedules and lead to huge buyer’s remorse and regret. One great way to try to get these impulses in check are to impose a “hold” period before making purchases. If something costs $200, wait a few hours then make the decision to buy or not. If something costs $1000 or more, wait a full week before completing the purchase. All good things are worth waiting for, and if you give yourself time to fully consider a purchase you can feel secure in your decision to buy!

Tip #2: Adopt a spending mantra
This can be a helpful way to evaluate your spending decisions that are less impulsive, but more about convenience or time-saving. It can be hard to keep long-term goals in mind when you’re in the moment living your day-to-day life, but adopting a spending mantra can give you pause for thought before buying that $5 latte or sandwich from the cafe down the street. If you’re saving for a trip, consider “Is this coffee better than that vacation next year?” (fill in the applicable purchases and goals for your situation.). Sometimes, the answer might be yes! But, if you’re checking in with yourself every time you take out the debit card, you can feel confident that your monthly statements reflect your best interests.

Tip #3: Check your interest rate
This is true on any financial account, borrowed or owned! This makes any finance-related decision making very straightforward. Which savings/RRSP account should you open? The one with the best interest rate, of course! (And hey, if you didn’t know, ours are pretty good.) What debt needs to be paid down first? The one with the highest interest rate, clearly. What credit card should you open? Best look at those interest rates, and be wary of the “promo offer only” low interest rates that flip to much higher interest rates after your promo period ends. See what we mean? Ask one question, and suddenly several other money decisions are much more clear!

And here are your treats! By considering all of these financial tips, you’ll be in a great position to “treat” yourself to a small reward. Whether it’s a nice dinner out or a more long-term goal of a vacation, car, or house, keep those treats in mind and celebrate when you can — you deserve it! 

Hit the refresh button! Expand/Collapse

You don’t need to wait for January to hit the refresh button on a new year!

September symbolizes so many new beginnings; new school years, or a fresh start at work after the summer holidays have passed. As you begin to cycle your wardrobe and integrate your warmer pieces, break out the crockpot for delicious fall stews and soups, and get settled in your new school and work patterns, make sure your finances don’t get stuck in the setting summer sun.

We have compiled these three simple tips to help your money match your fresh new fall feeling!

1. Review your summer spending, and adjust your budgets if necessary.

We know, we know: the best intentions can sometimes be derailed by the beautiful summer weather. How can you pass up the opportunity to enjoy all the season has to offer? Hit a quick refresh this fall by sitting down with your summer financial statements and review where your money was spent and why. Question if that is still in alignment with your goals, or if you’d like to adjust your budgets for new goals. It’s never too late to make a new start!

2. Estimate what you’ll need for holiday spending, and begin to plan for those expenses.

It feels like summer just ended, but before you know it the holidays will be upon us! Thanksgiving marks the start of the season and if you’re not paying attention it will be 2019 in a blink. After examining your summer numbers, take a look at where you can pull money from to save for your holiday festivities! Did you register for some summer classes that don’t fit your fall schedule? Review those memberships and recurring payments! Once you see where every penny (or nickel, rather) is going, it’s easy to see where you can reallocate. There are several ways to trim here and there, like on your bank fees. Have you taken a look at our great fee-free chequing and savings accounts yet?

3. Check your local flyers for seasonal deals on produce or household items.

We mentioned this in our Back to School post, but this point bears repeating: there are some great deals in flyers! Check your local supermarkets and food stores for their deals of the week, and plan your meals around those specials. Have fun with it, and experiment with new recipes that can make cooking at home a new adventure each night. When you find a great deal, buy in bulk and freeze if possible, to continue maximizing your savings as you work through your stockpile.

Back to school for the super savvy savers Expand/Collapse

We all know the four seasons: Spring, Summer, Fall, and Winter. However, one big season not on the calendar that might affect your life more than the others is the Back to School season!

Regardless of whether you’re preparing for your first stay in a dorm, or getting your kids ready for their latest school adventure, this season can be one that hits your wallet hard. But this doesn’t have to be the case!

Here’s our top three financial pieces of advice to get into the classroom (any classroom!) without breaking the bank.

1. For the college students: Learn to love your kitchen!

College is usually the first time outside the family home for young adults, and it can be quite a shock to adjust. One of the biggest ways to make a difference to your bottom line is by learning how to maximize your food and supplies budget early. Get a travel mug and brew your own coffee in your dorm instead of stopping by that coffee shop on the way in! Same goes for lunches; having healthier food ready to grab-and-go can save time and dollars both. Ditch the car and your associated costs, and use public transportation if possible. Post-secondary campuses are often well-connected to city transit routes! Lastly, ensure that you research your textbooks options; there are tons of resources to help you buy used or digital textbooks instead of purchasing all new.

2. For the K-12 set: Check your sales and reduce, reuse and recycle!

Identify your core supply needs, and look at a variety of options in different stores. Comparison shopping helps ensure you’re getting the best deals possible! Check flyers — lots of supply stores will have back-to-school specials on throughout August — and see what is on sale when and at what store. Lots of places like Walmart, Superstore, and others also offer an option to shop online with in store pick up as well. And don’t forget to recycle! Look at what supplies you still have from last year, and determine what can be salvaged. Emptying out binders to use for another year or two is a great way to maximize the life of your supplies. Pencil cases often can go multiple school seasons before needing to be replaced, as well as backpacks and other soft supplies.

3. Dollars and cents sense for all: TSFAs and smart banking

And of course, having an account that offers great interest rates and no fees is a great start too! Contact one of our Motive agents to learn more about our TSFA and no-fee chequing and savings accounts to help manage your money for back to school and beyond.

 

Money in the Cloud Expand/Collapse

As our technology continues to evolve at an ever-quickening pace, so too does the technology associated with banking and our money. And while all the changes may seem a bit alarming, it’s important to keep an open mind! Remember 25+ years ago, when we weren’t sure if it was safe to send electronic transactions over the internet?

Today, we seem to do most if not all of our banking online! Some banks — like yours truly — are even online only! As banking continues to evolve, running banking operations from in the cloud instead of through physical servers can seem risky, much like internet transactions did back then. But we must keep an open mind as our technology works to help make our lives and systems easier.

But what could cloud computing in banking look like, you may ask? Well, it’s looking pretty cool!

Running banking operations in the cloud instead of through servers and data centres is a huge infrastructure burden removed from the banks, and one that increases the security of your data. Data is one of the most valuable assets for any bank, and they are always innovating and improving data security to ensure that it is safe. One thing that a cloud computing system can do is to take the maintenance and upkeep of these server systems off of the bank’s plate and into the hands of a dedicated tech company to monitor and update; think companies like Google and Amazon. Their businesses are built on data and high-functioning servers, so they are well-equipped to manage the cloud computing needs of other business entities like banks and large companies like Apple, Xerox and dozens of others.

Cloud computing can sound less secure when you first think of it, but by trusting these technology giants to manage data security and server upkeep banks can be assured that their physical servers are always properly maintained and prepared for malware or viruses. This should provide additional peace of mind for banking customers as well!

This also helps banks turn what used to be a heavy up-front cost investments into equipment and software into smaller, ongoing operational costs. This means that banks can manage these smaller operational costs more closely instead of trying to estimate the cost of a much more time and labour intensive project when a new server or piece of software is needed.

All of these behind the scenes benefits and cost-saving can then be passed along to the customer as well! By having a flexible and adaptable method to store data, this allows increased collaboration with partners and customers, leading to more services offered by banks to their customers. Think of Apple Wallet, Google Wallet, PayPal, and all the other ways in which you can digitally manage your money.

Bottom line, your banking should never be scary! If you ever have questions about your banking security or how to best manage your digital accounts, our Motive account managers are always ready and willing to help.

Planning for your big summer purchases Expand/Collapse

Summer is a great time of the year for so many reasons: school’s out, the weather’s nice, you can spend more time outside and many communities have fun activities or events throughout the season.

It’s also a popular time of year to start considering some major purchasing decisions! Housing listings and sales tend to peak in the summer months, when it’s easier to both show your home and consider moving into a new one. New cars can be appealing during the summertime as well; you can enjoy the snow-free driving conditions and maybe even plan a road trip or two with your vacation time.

All of these major purchasing decisions are important, but what should people consider before signing on the dotted line? We’ve asked Pat Neitsch, Motive Financial’s Assistant Manager for her expert insight to make sure you’re getting the most out of your new vehicle or home purchase.

Before you even consider what you’re buying, think of what’s motivating you to do so, suggests Pat. “You need to evaluate your lifestyle, where you’re at. Do you want to be closer to schools, are you looking in the country, in the city, to be closer to work, or trying to downsize? Whatever the case is, these are the questions you need to evaluate prior to making any of these big decisions. Where are you at right now?”

Incidentally, Pat has just finished moving as well, purchasing a house in the city for her family to be closer to her elderly parents. And as she’s just experienced, sometimes your motivation can help you make a lot of the important decisions ahead of your financial considerations.

However, beware of those sneaky hidden costs, wrapped up in the details around your new purchase that you might not have added to the final total cost of your investment. “There are a lot of factors that come into making a decision, and there may have been some that you’ve missed,” Pat explains. These can be things like the costs associated with insuring that amazing new vehicle, or heating that beautiful home in the winter months.

These incidentals can add up, and make what was a savvy purchase turn into one that cannot be carried. “You buy with great rates, and can get a great big house because the interest is manageable, but then what about this great big house that you then have to heat in the winter and cool in the summer?” she forewarns.

And it’s not just houses that may surprise you. Vehicles have similar hidden costs, like the price of premium versus regular fuel. “Have you seen the cost of that lately?” Pat exclaims. New vehicles also come with a higher insurance cost that your insurance provider may not initially explain.

Although these extra expenses can inevitably creep up on you, this is where the Motive team can really help out — by talking with you and digging deeper to understand your needs and offer tips for saving your money. Through having these conversations directly, we can ask you some of the questions that might help reveal the hidden costs you maybe haven’t yet considered — and then help you plan around them.

And even if you get caught up in the moment of the exciting idea, we’re here to make sure the practical and mundane details are looked after too. Get in touch with us today.

Inside Motive Financial's personalized client service Expand/Collapse

When you call most online banks you probably expect automated answering machines, hold music and scripted hellos. When you call Motive Financial, you can expect something a little different. In fact, if it’s not your first time calling, you might even be on a first name basis with whoever’s on the line.

This month we gave Pat Neitsch, Motive Financial’s Assistant Manager, a call to discover just how personable phone interactions can be at Motive. If her enthusiasm and helpfulness were any indication of what Motive client service reps might be like, we can assure you it goes above and beyond the usual phone call with your banker.

According to Pat, “conversation comes naturally to Motive Financial clients. They talk openly and feel comfortable enough to bring up all kinds of topics,” even those unrelated to banking. Pat recalls one such example from a client service rep who received a call from a client looking for financial advice before travelling overseas. “The client had called and told her that he was going to be travelling overseas. And she suggested some points of interest in the locations that he was going to, including where he could withdraw funds if he needed cash. She also talked to him about the maestro fees involved and when and where to make necessary foreign exchanges. He was very happy. She also mentioned to him about booking excursions in Thailand based on her own experiences because she didn’t want him to get overcharged on his trip.” 

Building relationships with clients is also a lot easier with Motive because of their close knit, small team. Clients have the ability to call Motive and ask for the same representative they spoke to last time. Pat says these personable interactions have even led to Motive clients being on a first name basis with the staff. “The fact that you can phone and ask to speak to the person you were talking to before is huge,” she explains. “We very much encourage our client service reps talking to the same person more than once and developing a bond with them.” As a result, clients often don’t have to go through the motions of sharing their financial history — because their Motive client representative already knows it. 

“Clients can also talk to our reps as long as they need to,” says Pat. “We’ve had clients stay on the phone for up to a half hour or an hour at times.” At Motive Financial, there’s no limit to the amount of questions you can ask. Pat reiterates, “ Our philosophy is whatever time it takes to get whatever they need to get done.” 

When asked if Motive employees feel more connected to their clients than other online bank agents might, Pat confirmed that “everyone knows the client and they always know who’s calling.” “It’s a stronger relationship than most non-face-to-face interactions. They can pick up and take off on where they left off in the conversation,” which typifies the ideal personalized banking experience online. 

When asked to explain Motive’s client service to someone in just a few words, Pat says without hesitation, “Personal, helpful, guiding.” She adds,“We really want to try hard to provide a personalized service — to listen to the client and try to find the right solution with the right information.” 

In conclusion, we asked Pat a few of her favourite things about speaking to Motive Financial clients. “I like the variety,” she remarks. “You never know what kind of conversation you’re going to get, especially since it’s cross country. You get to know people and the region they’re in. It keeps us on top of what’s going on in that area.” 

Just in case you were looking for a little extra motivation to pick up the phone, Pat reiterates Motive’s dedication to seeing their clients succeed. Motive Financial understands the importance of listening and building a relationships with all clients to help meet their unique, individual savings goals.

Motive Smart Spending Series: Home improvements you can save on Expand/Collapse

This month, in preparation for home buying season, we’ve been sharing ways savers can practice smart spending on their home — whether it’s small upgrades, like LED lights, or bigger upgrades, such as hot water tanks or kitchen appliances. Budgeting for home improvements is a strategy all homeowners, new and old, should adopt. As much as we’d like to cut home maintenance from our monthly budgets, doing so can help us avoid debt and pay our future selves in the long run.

There are two types of home maintenance activities you can build a savings plan for. The first involves regular home maintenance activities that contribute to a smooth running home, such as changing out your furnace filters, replacing light bulbs and sealing your windows and doors to avoid energy loss. These activities should be done on an annual or seasonal basis, as they can improve the appearance of your home, boost your security and decrease your energy consumption.

The second type of home maintenance to budget for are updates needed over a time span of 5 to 10 years — think fridges, broken sump pumps or hot water tanks. If you’re not prepared for these types of repairs or upgrades, you’ll incur much more than a headache and a couple hours of clean up. Homeowners who don’t allocate a certain amount of savings for larger home expenses like these may face a considerable amount of debt down the road when it comes to replacement and repair costs.

Other things to consider saving for might also include upgrades to wooden windows and doors, kitchen cabinets or outdated faucets. For example, replacing wooden window frames with vinyl or fibreglass not only improves the energy efficiency of your home, but it can also reduce the amount of upkeep required to maintain them. Steel doors as opposed to wooden doors are another alternative — they tend to be safer, easier to clean and stain, as well as enhance the look of your home. All of these larger upgrades can help modernize your home and make it easier to sell one day.

To make sure you’re prepared, we recommend setting up a “big ticket” home maintenance account as well as a “smaller ticket” home maintenance account. If you’re not sure how much money you should be setting away each month for home costs, try using the one per cent rule of thumb. According to this rule, one per cent of the purchase price of your home should be set aside each year for ongoing maintenance. For example, if your home cost $300,000, you should budget $3,000 per year for maintenance.

While this rule of thumb can give you a ballpark estimate of annual maintenance costs, it doesn’t consider other factors that go into maintenance required for a home. There are several environmental or situational factors that can impact the cost of maintenance and repairs to your home, including: age, location and the type of home you have (single-family vs. attached). So be sure to include these elements in your estimate. Your home is one of the biggest investments you can make and if cared for properly, it can provide for you long after your possession date.

At Motive Financial, we understand that you work hard for your money and want to see it grow. That’s why we believe in the benefit of starting small and growing your savings over time — by providing relevant information on today’s financial landscapes, as well as better rates and easy to use products. Our number one goal is to see you reach your savings goals, whatever they may be.

Tax-free advice on the TFSA Expand/Collapse

The Registered Retirement Savings Plan (RRSP) is great for long-term savings, but what if you want a short-term option as well? Not to mention the ability to withdraw from it before you hit 72. Cue the Tax- Free Savings Account (TFSA) and right along with it Motive’s Assistant Manager, Pat Neitsch, to give you the inside scoop on this savvy savings strategy.  

The TFSA is a flexible investment account that can help meet both your short- and long-term savings goals. It mirrors the RRSP as both can be used for long-term savings. However, you can deposit after-tax cash into a TFSA and still withdraw the money tax-free.

In other words, “the RRSP is for later in life, whereas your TFSA is for right now,” emphasizes Pat. It offers you the freedom to grow your money without having to lock it away completely. For example, should you need to dip into your savings for a vacation or something bigger like a down payment, you can. Just be sure to track your contributions and withdrawals, warns Pat, as like the RRSP, the TFSA has its limitations.

This year for instance, the contribution limit is $5,500, meaning you can contribute $5,500 now or carry forward the unused portion to next year. But be careful — many Canadians have been shocked to discover they’ve incurred monetary penalties as a result of over contribution.

Say you withdraw $5,500 from your TFSA in January 2018 but put the same amount back in June 2018. That redeposit will be considered a double payment and subject to a tax penalty of 1% per month on the amount over contributed.

Besides keeping track of your contributions and withdrawals, Pat’s biggest piece of advice for utilizing a TFSA is contributing to it regularly. “As soon as you start, you realize the benefits — even if you’re only contributing a small amount,” she reiterates. Start by taking advantage of the few dollars you normally spend on lattes each week. Minimal contributions, paired with the TFSA’s compounding power, can go a long way in a short amount of time.

The TFSA also moonlights as an investment tool because of the variety of interest bearing options available. Depending on your tolerance for risk, your plan can include everything from Guaranteed Investment Certificates (GICs) and mutual funds, to stocks and bonds and exchange-traded funds (ETFs). Just be sure to talk with your financial advisor on the best strategy for your goals and income level.

Pat emphasizes the benefit of flexible savings strategies to help you start small and grow your savings over time.

RRSP resolutions you can keep Expand/Collapse

The decorations have been stored away, distant relatives have come and gone and your savings are a little more worse for wear. So, likely the last thing on your mind is how much you should be contributing to your RRSPs (Registered Retirement Savings Plans).
In addition to New Year’s resolutions, January brings with it the start of RRSP season, a time when most Canadians make large lump-sum contributions to their RRSP accounts in hopes it will reduce their tax bill or produce a tax refund. This can sometimes come with pressures that commonly result in unwanted loans, lines of credit or no contributions made at all.

Don’t get us wrong, RRSP season is a great reminder and motivator to contribute to your savings each year but it shouldn’t be the sole reason to do so, especially if it means emptying your short-term savings or taking out unnecessary loans when it’s not feasible to do so.

This month, we’re taking a page from Motive’s Assistant Manager, Pat Neitsch, to get her advice on the best RRSP strategies to adopt this year in hopes it will ease your stress in the coming months and, more importantly, years.

An RRSP, put simply, is a savings or investing account with certain tax-saving characteristics. RRSP accounts are used to help you reap savings over an extended period of time and are often contributed to during your prime earning years.
One of the main benefits of an RRSP account — and why RRSP season occurs when it does — is the ability to use your contributions to defer taxes. As a result, the total value of your savings will grow more quickly because by the time you withdraw from your RRSPs — with age 71 being the latest you’re allowed to — you’ll be in a lower tax bracket, which means you’ll incur more tax savings than if you were to withdraw money now.

When asked when to set up an RRSP account and how often to contribute to one, Pat couldn’t emphasize enough,“the sooner the better.” As far as contributions are concerned, Pat recommends small monthly contributions, starting as low as $25. “It’s mind blowing how much money you can put away over a 10-to 15-year time span, as even small contributions can make a big difference,” she emphasizes. If you aren’t able to contribute as much as you hope this year, Pat suggests creating a savings plan for the coming year that allows you to contribute a small amount once or twice a month. That way, by the time next year rolls around, you can relax.

The benefit of monthly contributions also significantly outweighs the cost of a potential tax break, especially if you’re resorting to borrowing money to set up an RRSP. With set contributions all year round, there’s no need for you to panic come January to make a lump-sum contribution. Your investment returns will also be tax sheltered. And the best part is your savings will become a priority throughout the entire year, which is what most of us are striving towards.

What shouldn’t you do with an RRSP account? “Don’t use it as a casual savings account,” Pat cautions. When you contribute to an RRSP, you need to set it and forget it. “Sometimes people think they can withdraw from their RRSP to buy something of scale, but when you do that, the government takes a significant amount of tax right off the top of your earnings and only aggregates it further based on how much you’re withdrawing,” explains Pat. The only exceptions are certain government programs. For example, under the federal Home Buyers’ Plan, you can withdraw up to $25,000 from your RRSPs without paying tax, but you have to repay the full amount within 15 years. A secondary example would be if you want to withdraw from your RRSPs to finance your education. In that instance, you can only take out $10,000 per year and, once again, the money has to be paid back. Outside of these programs, if you try to withdraw money from your RRSP you’ll face a steep withholding tax, which could be as much as 30 per cent of the money you withdraw.

If you already have an RRSP and you’re looking to contribute a larger sum this year, Pat suggests checking your Notice of Assessment form the government sent you after processing your last tax return. And as always, meet with your financial advisor to discuss what options are best for you. This year, the deadline for making an RRSP contribution for the 2017 tax year is March 1, 2018, so plan any meetings and discussions ahead of time to ensure you’re not missing out.

If you don’t have an RRSP, or you’re just not able to make a large contribution this year, don’t stress. You still have three months to contribute and set up monthly payments to get a head start for next year’s tax return. Motive Financial provides competitive RRSP GIC savings strategies and rates that are designed to meet your specific needs and help you to save for retirement and receive tax benefits now.

Pat reiterates Motive’s aim of making saving money easier for you. They understand the benefits of starting small and growing your savings over time while providing better rates and easy to use products — all accessible online or by phone.

Don't chase the rates Expand/Collapse

With 16 years’ experience in the banking sector (with 12 years in-branch), Pat Neitsch, Motive Financial’s Assistant Manager, knows a thing or two about saving money. Her favourite thing about working at Motive Financial? “The opportunity to serve clients across the country, and to talk to people and learn about what’s happening in various regions,” says Pat.

The online bank’s small but savvy group of financial experts are a big reason why clients choose Motive Financial. Through their personalized, one-on-one service, it’s easier for them to build trusting and lasting relationships with their clients. According to Pat, “You can call and ask for a specific person and more often than not, get that same person over and over again.” The stronger the bond of trust, the more financially beneficial that relationship becomes with your bank meeting your unique financial needs.
Many of Motive Financial’s customers and followers also aren’t aware that the team is based in Edmonton, which gives them firsthand insight into not only the economic realities facing Albertans but also Canadians overall.

When asked what top saving pitfalls she has seen over the course of her career, Pat says a big one is that most people spend — and oftentimes waste — their time chasing rates. “It’s a proven fact that if you stagger your money in one- to five-year GICs (Guaranteed Investment Certificates), you will earn more money than chasing short term rates.” She notes that promotional rates, for example, end up costing a lot of time and energy to hunt down. Pat suggests a slow and steady approach instead. “Don’t chase after what looks like the highest or best deal; find moderation and keep it steady,” says Pat. “Put money away and leave it alone.”

By staggering your money in GICs, you can eliminate the guess work that comes from choosing interest rates. For example, if you have $10,000 to invest in a GIC, you could put all $10,000 away for five years. Or you could stagger them — $2,000 for one year, $2,000 for two years, $2,000 for three years and so on. The benefit is you don’t have to guess which term will give you the best interest rate. Since you’ll have money invested in each, you can then take advantage of upward swings in interest rates. Likewise, if the interest rate is moving downward, only some of your money is exposed to the risk of lower rates.

Misuse of products like the TFSA (Tax Free Savings Account) is another common issue. From Pat’s experience, many view the TFSA as transactional, like a debit account. “If you keep taking your money out, you aren’t getting the interest, so you aren’t really saving the tax either,” she cautions. “Saving takes time.”

Her final piece of advice is reminiscent of what you heard back in school but still important: Do your homework. Pat reminds us,“Banks are offering the same products, however, everyone is at different phases in their life requiring different products.” Find the option most suitable for you by doing your background research and understanding your options.

Motive Financial is an Edmonton-based online personal bank, founded in 2008 under its previous moniker of Canadian Direct Financial. Pat highlights their aim of making saving money easier for you by understanding your personal financial needs while providing better rates and easy to use products – all accessible online or by phone.

Putting financial security within reach Expand/Collapse

As Motive Financial’s Division Manager, Adam Skoreyko firmly believes that everyone can get a jumpstart on their financial well-being through saving – even if it’s just a few dollars every month. “The earlier you can start, the better,” says Adam. “Saving is something that should be done as early as possible where it becomes a habit to set aside a certain amount of your income per month.”

For quite a few years now, Adam has been giving advice on how to improve one’s financial health – along with heeding it himself. He credits his deep interest in strategic development as what first drew him to banking and is gratified in helping people be more financially successful. “I enjoy working in an industry that’s so foundational to people, in regards to their money,” says Adam. “You get to help people through providing them with greater economic security. And I find that to be another rewarding aspect of my job.”

As a division of Canadian Western Bank (CWB), Motive Financial shares the same high level of commitment when it comes to client service. “Finances are very important to people and can be very confusing, as it’s not always clear what the best option is sometimes,” notes Adam. “But we’re working to provide better solutions for our clients – all within the comforts of their own home.”

One of the biggest misconceptions Adam sees when it comes to saving is people thinking they need to get there quickly. “We live in a world of instant gratification, and our future selves are much more optimistic than our current selves,” remarks Adam. “Saving requires delayed gratification and discipline as there’s no easy quick fix – everything good comes to those who wait, as the old saying goes.”

Adam can’t stress enough the importance of saving as early as possible with as much money as you’re able. “Compound interest is the eighth wonder of the world,” says Adam. “However, you need a long enough timeline to see the dramatic impact it can have on your savings.” He adds that saving doesn’t have to take up a large portion of your income but can build in increasing amounts over time where it becomes part of your routine.

When asked what advice he would give his 25-year-old self, Adam says he would advocate refraining from buying big ticket items that seem important in the immediacy of the moment but don’t lead to personal satisfaction over the long-run. Conversely, small sacrifices can also go a long way. “I used to buy coffee more than once a day from a local shop,” notes Adam. “However, switching to drinking coffee provided at the office ended up saving me almost $1,500 a year from unnecessary spending.”

Motive Financial is an Edmonton-based online personal bank, founded in 2008 under its previous moniker of Canadian Direct Financial. Adam highlights their aim of making saving money easier for you by offering better rates and lower fees – all at your fingertips online or by phone.