Common myths are everywhere: sharks don’t get cancer (not true); the Great Wall of China is visible from space (ditto). They exist in the world of personal finance, too.
Myth: I don’t need to worry about our budget or finances because my partner manages the money.
Fact: “Even if someone else is in the driver’s seat, you should be an active passenger; not asleep in the backseat,” says Linda MacKay, senior vice president, retail savings and investing at TD Canada Trust. “Sit down at least a few times a year to review your finances, budget and goals. You should know where your accounts are and have access to your investment, credit, and bank statements. And even though you’re not the driver, you still might be responsible for any financial accidents, so taking ownership of decisions is important for everyone involved.”
Ah yes, the common myth that thngs will be better with more money (read the article in full). I can tell you this that is never true even though people like to think so.
As was pointed out people are just lousy with how the use their money. When they get more they think they can now unbuckle the belt and have fun. No planning 🙁
Very good read. I didn’t know TFSAs can be used to hold mutual funds and investing. Not sure why CRA and banks don’t tell you this. I always thought it was for savings accounts. Good to know.
Not always the best advice by having your partner manage the finances. I was in a relationship like this and i was too dependent that things became sour when i discovered they were doing extra things on the side with our budget without consulting.
I personally think both should always be aware of everything. Maybe that is what people do but for me that is not what happened.
Hmm CPP in my opinion will not be around when we retire. So i disagree with that part. Harper et al. have dropped hints of raiding it and potentially replacing it with a crippled version. I’d be very surprised if it is here in the same form 10 years hence.
I am lousy at my finances but one thing i did learn this year was how useful credit cards were. More specifically, the grace period. Why should i use my debit card when i can use credit cards which is borrowed money and pay it back a month later? Seems more efficient. Which is what i now do. 🙂
Ahh so RRSPs can be accessed without penalty via the Home Buyer’s Plan? I get the impression from the piece this can happen each year ($25K)? Is that true? I am doing further reading and i get the sense it is a one-time thing for first time buyers. Well, more reading for me.
People are always looking for excuses to not be financially responsible. Just look at the young. They want to enjoy and party and so the last thing they want to do is responsible management. The want an excuse not to.
I remember the times when bank accounts were 4% easily. Today it just isn’t very wise to consider these as worth it — typical rates are 1% or lower. Bank of Canada will be adjusting rates this year but its still better to put money in the markets than banks.