Guest post: Saving Money When you Invest

I’m happy to introduce this guest post (not a sponsored post) by Gail Bebee.

Gail Bebee is Canadian personal finance speaker and author of No Hype – The Straight Goods on Investing Your Money and President of The Ganneth Company.

Gail has mastered the finer points of investing through years of hands-on practice in the investment trenches and extensive personal study. Gail is a popular media contact and has appeared on such shows as CBC’s The National, CTV’s ProvinceWide, Linda Leatherdale’s Money Line and Newsworld’s CBC News: Business.

Most recently you can find’s tips on investing in RRSPS in risky times in Homemakers magazine.  

I hope you enjoy this guest post - Gail will be returning to Saver Queen with information on RRSPs and TSFAs. 

Saving Money When You Invest

by Gail Bebee

Before you invest a dollar of your hard-earned money, learn the investing basics.  You’ll reduce the risk of making poor investment choices.  My book No Hype - The Straight Goods on Investing Your Money, is a good place to start.  

Another great way to save money is to pay off debt, as quickly as possible.  It’s a guaranteed return on your investment equivalent to the interest rate you pay on the borrowed money. Start by paying off any outstanding debt on your credit card.  They usually charge interest rates of 18% or more. Better yet, pay off the monthly balance on your credit card when it is due and avoid those stiff borrowing charges.

Take the time to understand exactly what you are buying before purchasing any investment.  You’ll avoid expensive mistakes such as paying a penalty to sell a mutual fund before its minimum holding period is over. 

You can save money every month by being choosy about where you have your savings/chequing account.  Shop around to find the bank offering the highest interest and the lowest banking fees. Take a look at what ING, PC Financial and ICICI Banks have to offer. But do make sure your bank has an ATM near your home or where you work; using your bank’s ATMs saves the charge ($1.50 or more) if you use another bank’s machine. 

Finally, always think for yourself before investing.  It’s my number one universal rule of investing.   Ask yourself: “Is this investment really right for me?”  You’ll avoid expensive mistakes if you ask yourself this one simple question before you invest.

Gail Bebee

Personal finance speaker & author of No Hype-The Straight Goods on Investing Your Money, all the investing basics for Canadians from a savvy financial industry outsider.

Find out more and buy online at www.nohypeinvesting.com

Frugality v. simplicity: Reconcilable?

As I write this, my kitten is gazing out the open window, fascinated by the snowflakes that are gently, whimsically gliding around in no particular direction at all.  

Life is simple, life is good.

This is a post that I’ve been thinking about writing for a while, and it poses a bit a a dilemma for me: the seeming similarity and yet contradictory nature of frugality and simplicity.

When discussing the merits of frugality, inevitably the argument arises that frugality enables us to slow down, enjoy what life has to offer, reduce our wants and focus more on what really matters to us.  (See my earlier post, The fulfilling frugal life, for example). To me, these are the fruits of frugality that almost anyone can achieve, provided they have their basic needs met. 

For some, the main purpose of becoming frugal is to eliminate their debt load once and for all.  For others, it is taking a pro-active approach to make sure that they will outlast this recession without winding up in a van down by the river.  For others, frugality is a lifestyle choice based on religious or spiritual beliefs and values. Whatever the aim, frugality can offer a fulfilling life filled with simple pleasures, treasured time with family, and a renewed appreciation for the richness and beauty in the universe.  A snowflake. An apple seed.  Silence.  Tremendous beauty surrounds us but is rarely paid appropriate attention. By living frugally, we have the opportunity to remove ourselves from the constant bombardment of “stuff” that occupies our minds, our homes, and our time.  A frugal life allows us to escape the abrasive and intrusive nature of advertising by eliminating television, paparazzi, and malls from our daily experiences.  Instead we may find awareness brought to once forgotten pleasures like cooking, focused attention to friends and family, time in nature, the crunch of snow under our feet on a quiet evening walk. What more, frugality brings out gratitude for what we have, and far from leaving us feeling deprived, can actually allow our attention to turn to the abundance we already have.

I have always appreciated these aspects of frugality.  Granted, this kind of living was not forced on me through poverty, but nor was it consciously attended to.  My first recognition of the pleasures of frugality came as a student in Peterborough.  I recall walking down a street, enjoying the beauty around me in the pretty churches and simple homes.  I purchased a hockey t-shirt at Zellers for $11.  It made me so happy, to treat myself to this simple gift.  Not a deluge of clothing.  Not the latest fashions. Just one simple item.  Because I rarely bought clothes for myself (It is a hippie-town, after all - no one cares about fashion) this item made me feel special.  I became aware of the joy I received in simple ways - the friendly bus drivers, the pretty streets, the sunsets that could be observed from our home on the top of one of Peterborough’s many hills.

It is this joy from pleasant simplicity that I am seeking in my life.

But what is frugal is not always simple.

I often advocate saving all sorts of recyclable items.  Couponing.  Stockpiling.  But all of these things can clearly conflict with the simple life. We can become packrats, hanging on to everything we own, in case we might need it in years to come.  While resourceful, do we truly want more “stuff” taking space in our homes?  And what about “gaming the system” through an almost obsessive search for coupons and freebies?  As all my readers know, I love couponing and enjoy getting things for free when I can.  But can these goals co-exist with simplicity?

The biggest contradiction between simplicity and frugality lies in the stockpile.  In efforts to cut back our grocery budgets, it is common practice among frugal bloggers to stock up on non-perishables when prices are low and when you have an abundance of coupons.  In theory this makes sense, but stockpiling can easily get out of hand.  Recently a man in the UK passed away from dehydration after being trapped in a maze of junk inside his home. Frugal Dad wrote about the issue, asking how thick or thin the line is between stockpiling and hoarding.

An example of stockpiling can be found at Saving Your Cents. You can see the results of one of the author’s  stockpiling grocery trips - on a triple coupon day with an 11 foot, 8-inch receipt that took 45 minutes to process at the check-out.  

Looking at the author’s blog it is no doubt that she is very resourceful and she estimates that she saves about 70% on her grocery bill each week.  But I wonder, what are the true benefits of stockpiling, and don’t they conflict with the other merits of frugality?  If we take the time that might be spent in a mall, or watching TV, and spend it shopping to get the best deals and freebies, we might save money, but we’ve done very little to add richness to our lives through the pleasures of simplicity that frugality can offer.

I suspect that frugality can offer a life of rich fulfillment.  By taking only what we need, reducing greed, reducing clutter, we can live in simple abundance, appreciating wholly what we have around us, not weighed down by too many extras, not a slave to any of our possessions or rigid determination to get the best deal.  Just simply, joyful, frugal living.

Do you tend to err on the side of frugal or simple living, or have you reconciled these two?

A delicious stew recipe from Mom

My mom is very health-conscious, and has become an ultimate soup master.  For Christmas, she prepared 9 scrumptious, super healthy, individually portioned frozen soups.  I’m still waiting to get the recipes from her, but in the meantime, I’ll share this tasty recipe with you.  She occasionally passes recipes my way, and this time even took a photos so I could share it on my blog!

Here is my Mom’s recipe for a frugal chicken stew straight from a recent email.

1 cup all purpose flour , 2 tbsp chopped fresh parsley, 2 tbsp butter, 1 1/2 tsp baking powder, 1/4 tsp salt znd 1/2 cup milk. In a food processor, or by hand combine everything but the milk..stir it in last and drop in stew by tablespoons.. Cover and simmer for about 15 minutes until dumplings have risen. Don’t think I’ll do this, as it doesn’t add any nutrition, but it would be very stew like!

***

Tips from the author to frugalize this soup further:

- Make your own chicken or veggie stock. To learn how, see my earlier post, My Day in the Kitchen, or visit Fighting Forclosure to read How to Make Your Own Vegetable or Meat Stock.

- Pick and choose your veggies depending on what is on sale this week, or what you have the fridge.  Not all ingredients are required, and on the same token, lots of other veggies could be included.

- Freeze your kale when it’s about to turn.  It will come out nice and crispy, making it easy to just flake off into the soup

I hope you enjoy!

How to avoid getting kneed in the package at tax time

Tax time is approaching!  Here are some great links on learning how to pay less tax.

If you are a small business owner, read these strategies to reduce your income tax from About.com:

8 Small Business Tax Strategies to Reduce Income Tax

Check out my other posts on tax-savings by Saver Queen:

Tax-Free Savings: Who’s got the best rate?  

The Top Ten List 

How to beat student poverty 

Giving back wisely 

To learn more about what you can deduct, go straight to the source:

General Tax & Benefit Guide, 2008 - Deductions. 

Read Gail Vaz-Oxlade’s post on how to pay less tax all year long:

Tax refunds are not your friend

Here’s to avoiding that “knee in the package!”

Free Yoga Mat

Get a free yoga mat with four proofs of purchase (receipts) of Astro Zero Yogurt, either family size or 12-pack.  

Right now you can find coupons on the back of the 12-packs, including two $1 off coupons for Astro yogurt! 

As I mentioned in Saver Saturdays, Astro Yogurt is on sale right now at No Frills (check flyerland.ca to see No Frills prices in your area) for $2.99.  If you use the $1 off coupon from your first pack, each pack becomes $1.99!  Packages of Naturegg also have 50¢ Astro yogurt coupons hidden inside (check under the lid before buying).

See Finding in-store coupons for more tips on where to find great coupons.

There are no apparent shipping & handling fees, making this a genuine free treat!

The Saver Queen Shopping Challenge: And the winner is…

I’d like to thank everyone who participated in the Saver Queen Shopping Challenge to support their local food bank.  Your generosity during this time of hardship for many and despite your own need for frugality was truly inspiring.

I’m sorry that it took me so long to announce the results. However I am pleased to announce that after a random draw, Catherine is the winner!

You will receive a $10 gift card for Tim Hortons to give yourself a little winter pick-me-up.  Please email me with your mailing addresses and I will ship it out to you right away.

Thank you for participating and inspiring others with your goodwill this season.

How to have your own pub night at home

On Friday, Josh and I decided to avoid the cold, stay inside and save money. But that that didn’t mean we didn’t feel like going to the pub.  So we re-created the scene at home!  Our menu:  veggies with blue cheese dip, chicken fingers, crispy bread chips with two dips - guacamole & hummus.  (And beer. but we didn’t make that ourselves.)

Here is a step-by-step guide to how to have your delicious pub-food that is far healthier, tastier, and cheaper than the real thing!

1. Veggies with Blue Cheese Dressing

Chop up a variety of veggies - we used the old pub standby, carrots & celery.  No further instruction required.  I used Martha’s dip recipe - it was unbelievably good!

Ingredients

Finding in-store coupons

As I’ve mentioned before, a great way to get good coupons is in grocery stores and on the products themselves.  Shopping at Zehrs last week (which was a big mistake, by the way - I couldn’t believe how expensive that place was in comparison to Food Basics) I did find many great coupons.  Keep an eye out for these goodies:

1. The Foodland Ontario calendar - find it in the Ontario produce section (I found it near the squash).  The calendar has recipes and a coupon in the back for 75¢ off Gay Lea sour cream.

2. Save 50¢ off Welch’s grape juice

3. Save 50¢ off 2 Knorr dry soups

4. Save 50¢ off Yoplait Source yogurt

5. Save 50¢ off Mott’s Fruitsensations

6. Save 75¢ off Egg creations egg whites

7. Save $1 off Astro yogurt - available on Astro yogurt 12-packs

8. Save $1 off Astro probiotic yogurt drinks - also available on Astro yogurt 12-packs

For more tips on how to find great coupons see earlier posts:

Coupon tips

Zen and the art of coupon clipping 

Did you spy an in-store coupon or coupons on product packaging lately?  

Saver Saturdays

Here are my favourite deals this week!

*Freebie alert*

Rexall: Crest Pro-health toothpaste: $1.99.  Use in-store coupon (from Shoppers Drug Mart) for $2 off = FREE!

UPDATE: Unfortunately, this freebie expired yesterday. I’m sorry I didn’t notice it earlier! Did anyone take advantage of it?

METRO

Yoplait Source yogurt (16 * 100g) $3.99 - use 50¢ off in-store coupon = $3.50

Blackberries (160g) = 99¢

Always/Tampax $2.99 - use $2.50/2 coupon from Brandsaver = $1.75

ZEHRS

Hothouse tomoatoes = 99¢/lb

Broccoli crowns = 98¢/lb

Gay lea butter = $3.99

Gay lea sour cream - $1.99 - use 75¢ coupon from in-store Foodland Ontario 2009 calendar = $1.25

McCain International pizza - $4.99 - use $1 coupon from Save.ca = $3.99

Always/Tampax $2.99 - use $2.50/2 coupon from Brandsaver.ca = $1.75

PRICE CHOPPER

Oasis health break juice - $2.49 - use $1 coupon from Canadian Living = $1.49

Hothouse tomatoes = 99¢/lb.

FOOD BASICS

2 pack McCain Traditional pizza = $3.99

Catelli pasta healthy harvest & smart pasta - $1.49 - 50¢/2 in-store coupon or coupon from Save.ca = $1.24

Herbal Essances shampoo & conditioner 180-355ml = $1.69

NO FRILLS

Astro yogurt - $2.99 - use 50¢ off coupon from Naturegg package = $2.49

Ristorante pizzas - $3.99 - use $1.50/2 coupon from Save.ca = $3.24

Europe’s Best vegetables = $1.99

Blue water season fish fillets = $2.49 - use $1/2 coupon from Naturegg package = $1.99

Salon Selectives shampoo & conditioner = $1.49

If you found a great deal in your neighbourhood, please link in with Mr. Linky or leave a comment.  If linking in, please put the link directly to the post that shows the deal - not your homepage.  Thank you!

Tax-free savings: who’s got the best rate?

Have you opened your Tax-Free Savings Account yet?

As I’m sure most of you are already aware, you can now open up a tax-free savings account with any major bank and contribute up to $5000 each year; you never pay tax on the interest you earn.  The TFSA can hold cash, securities, mutual funds, GICs and Bonds.  If you do not contribute your full amount  you can increase your contribution the next year.  So if you can only contribute $2000 this year, next year you can contribute $8000.

And TFSA’s do not affect eligibility for any kind of federal inc0me-tested benefit.

Red Flag Deals has plenty of information on the subject, including an article called, ‘TFSA: Take Advantage of a New Tax Haven - Another Way to Add To Retirement Income And Plan for Emergencies” By Bennett Gold LLP, Chartered Accountants.

They have also provided a nifty comparison chart to see who has the best rate. 

Although you should do your own research before opening an account, here is a quick summary:

The Tax-Free Savings Account Winners & Losers

Best  Second Best rate: PC Financial - 3.05%.  2.55%

PC has a no-fee account, which means it’s free to open the account or transfer money in or out, with one exception: there is a $50 fee to transfer the money to another institution.  

Second First place: ING - 3.00%

It’s is about on par with PC Financial.  They are offering a bonus interest of 13% on your first $100 if you deposit before the end of this month.  This equals $13 - not enough incentive to open an account there, in my opinion, but they have a good rate and no fees - not even a transfer fee. 

Highest rate: CTFS: - 3.50%

But this interest rate only lasts until March 30th, at which point the interest rate drops to 2.50%. The comparison chart at Red Flag Deals shows 3.75% until March 30th but this was not consistent with my research.

Similarly, HSBC is currently offering a rate of 3.50% but this is only until March 16th, at which point the rate also becomes 2.50%  (Once again, the comparison chart at Red Flag showed 3.75%.)

Since you will be theoretically keeping your tax-free savings in the account over the long-term in order for your compound interest to work its magic, the bonus 1% interest on $5000 or less over the course of a couple of months is pretty meaningless, and will not compare to earning more over a longer period of time.  My humble opinion is to pick the best rate for the institution that is going to meet your needs for the long-term and not to get suckered into initial “bonus interest” specials that are kind of fly-traps for bargain hunters.

 Runner’s Up: CIBC and BMO - 2.50%

They each have a rate of 3.00% percent.  BMO has no transfer out fee and a $50 minimum; CIBC has a $100 transfer out fee and a $25 minimum.

The worst: Scotiabank - 1.75% - eeyuk!  RBC and TD have rates at 2.50%.

Remember that interest rates can change, so it’s important to pick a financial institution that meets your needs for the long-term and not get jerked around by special bonuses.  Look carefully for hidden fees before making a decision. 

The bottom line is that the TFSA is a great way to save (or invest) your money.  It’s not tax-deductible though, so they will not replace RRSPs.  If you are interested in more ways to reduce your taxes check out some of my earlier posts where I provided tips on how to do so:

The Top Ten List - number nine has a few strategies on how to save on taxes.

How to beat student poverty - see tip number 13 for a few ideas of what you can claim.

Giving back wisely - although the 2008 is over, here are a few ways to tax-efficient ways of giving that you can consider for next year.

General Tax & Benefit Guide, 2008 - Deductions.  Go straight to the source - here is a list of all deductions you might be eligible to claim from the CRA.

*UPDATE*  As mentioned by Sally, PC has now dropped to 2.55% making ING the winner. (Thanks, Sally!)