The Benefit of Hiring a CGA to Help With Our Taxes

 

Since my first job, I’ve always done my own taxes. Honestly for the average, straight forward return I can’t imagine why anyone would ever pay someone else to do it. This year however we has the first big change with me claiming freelance income. It took me a few weeks to gather all the info I thought I would need, and quite a few emails with fellow Canadian bloggers, but I finally gathered all the info I thought I would need.

Lesson #1, keep good records!

I opted to use a trusted tax software and after inputting all the information I had gathered, it came out with a net owe for our family. My husbands refund slightly offsetting my balance to pay. Though I was satisfied with my information, I decided at this point to find a CGA and get them to take a look at everything, confirming what I had done is right. I won’t lie. I had also heard of dream stories where the person brings the return to a CGA with a balance owing and with a few magic numbers being added, leave with a refund instead. I was somewhat hopeful…

Lesson #2, the yellow pages aren’t a dead commodity yet!

I have quite a few friends who work in different aspects of the finance industry but no general accountants. I didn’t have the first sweet clue where to start looking. At work one day during lunch I pulled out our yellow pages and just started calling. The first place I called (a larger firm) left me frustrated telling me help with returns starts at $375 and an hourly rate of $175 on top of that. Not what we were looking for. We wanted advice more than anything and weren’t interested in spending that much money especially since we already owed money!

I didn’t give up and called a few smaller places until I came across the guy we ended up going with. I instantly liked him on the phone, quickly explained what we were looking for and he was more than willing to help, bonus being could meet us after hours! He would charge us a rate if $75 for the hour and help us in any way we needed.

Lesson #3, spending money on professional advice is never a waste of money.

I have to be honest I went into the meeting thinking I knew everything and he was just going to confirm this, allowing me to sleep at night knowing I had done it right. The meeting was so much more than that! Though I was right with all the information I had gathered, some of my percentages were off. He was able to give us the confidence to increase some of the percentages (I was being too conservative with some things) and explain the reasons why. An example being internet. I was only claiming 50% of our internet bill saying 50% was for blogging related stuff and 50% being used for personal. He explained while we may use internet 50% of the time for personal usage that doesn’t matter because without any internet I couldn’t blog at all and therefore can claim 100% of internet.

He also explained that I shouldn’t worry as much about tiny details. I’m being honest about claiming my freelance income and trying to pay CRA money. So many people in my situation would try to get away with  not claiming at all. He went over benefits of claiming our home office too, something I hadn’t even considered. The calculations we did regarding the home office were very respectable and within reasonable norms. All of this is info I wouldn’t have known unless I talked to someone who has done this as many times as a CGA.

We chatted for almost two hours and he charged us for 1.5 hours total. $130 later and we left his office feeling much better about our situation.

I input the changes we discussed in the meeting when I got home and we both came out with a refund! It’s nothing like refunds I’ve received in the past (some years upwards of 8k with student rebates) but it’s something,  I don’t owe which is enough for me! Especially since we weren’t expecting a refund at all, we’ve decided to put it towards a few things we need for the house (maintenance) rather than debt, a decision I’ll explain in another post :)

Though this was the most money I’ve ever spent to do taxes ($130 for CGA plus $30 for tax software) I learned so much! It was money well spent!

Has a CGA ever helped you with taxes?  Did it help?

March 2014 Debt Repayment. This One’s For The Record Books!

When I say for the record books I don’t mean in a good way. March was a real bitch. It was expensive with the unexpected $850 car bill, my best friends father died after a two year battle with ALS, a former co-worker lost a 26 year old son tragically and we were hammered with a snowstorm which meant some lost job income (I don’t go to work, I don’t get paid). Needless to say I’m ready for April but so far Mother Nature isn’t cooperating. We’re covered in snow and ice. Beyond ready for winter to thaw out a little.

View from living room window during last weeks storm

View from living room window during last weeks storm

With everything going on I wasn’t sure if I would be able to meet my target of putting at least $2068 towards debt but…. I did!

I put a total of $2133 towards debt in March. $65 more than minimum required (to be debt free in 48 more months)! If I’m being honest, I forgot to make the extra payment before the 31st and technically paid it in April but it was from March income so that’s how it’s getting organized in my books.

Looking forward, things start getting expensive. April is an expensive month for us with Easter and three important birthdays but we also have an ”extra” pay in April to help offset these costs. We don’t budget our two extra pays each year per se. We use them as we need them when the month approaches. In the fall our extra pay (they usually fall april/october) is always used  to pay for my licensing fee which is due in October ($700) and set aside the rest for Christmas. The upcoming spring extra pay this year will hopefully be for used for birthdays, making up the $525 shortfall from February debt repayment and rest in savings for our summer vacation. This of course will only happen if the world cooperates with me and just leaves me be for a while. Seriously.

How was everyone else’s month? How do you budget bi-weekly pay?

What Are Installment Loans Used For?

Installment loans are large sums of money that are paid off over time. It can be for purchases, an actual financial loan or lines of credit. The terms will vary on each loan depending on the terms of the client and your personal credit. There may also be administrative fees or finance charges applied on top of interest. It is important to read the fine print before agreeing to the loan.

Obtaining Credit

If you need a credit card or an approval for a purchase, an installment loan is the ideal option. You are able to pay credit off over time in small payments. The best thing to do when you get credit is to double or triple the payment. Always pay more than the minimum payment. What this does is pay down the amount of the loan more rather than putting more toward the interest than the loan amount.

Pay a Large Purchase over Time

A large purchase, such as a home or car often requires payments to be spread out over time. This is what an installment loan is for. Most consumers consider this to just be a mortgage or car loan. The term installment loan is foreign to them when it is referenced as an installment loan. It is rare to be able to purchase a home or car in one payment. The good thing about these loans is that you can pay a little extra each month, such as an extra $20 even, and it helps reduce what you are paying in interest.

Line of Credit

A line of credit is something that is generally offered through a specific brand. It may also be offered for equity or home improvement purposes. This type of loan is different as it is solely gauged by the creditor themselves and not an actual bank. Their terms are different as well as their eligibility requirements.

Installment loans are good to obtain, when you are able. Keep in mind though that the better your credit is to start with, the less interest you will end up paying. What you want to do is ensure that you have enough income to afford repayment beyond minimum payment requirements. This helps you to pay the loan down faster and pay less interest. Consider it as saving you money over time. Getting what you need, rather than what you want, is satisfying when you are not stressed with having to put forth lump sums of money at one time.

 

Are Your Financial Goals Preventing You From Reaching Other Goals?

weddingIf you’ve been reading this blog for anytime you already know that I’ve never let our debt stand in the way of doing things we want.

We had a wedding and honeymoon.

We’re homeowners.

We’ve traveled.

We have a daughter.

There are a lot of people who wouldn’t even consider doing any of these things until their debt, or other financial goals, were reached. Though we’ve accomplished every major milestone we have wanted while in substantial debt, without incurring anymore, there are a some aspects of my life that are affected because of our financial goals and I have to wonder sometimes if it’s worth it.

My Health and Exercise Goals

This may seem sort of silly but right now I am more interested in concentrating almost all of my efforts into this blog and my freelance writing then I am taking an hour to workout. Our goal is to be debt free in 48 more months and we’re already one full month behind because of our little tire incident that set us back a few hundred bucks. Since I work full time my free time is quite limited. I find myself putting my efforts into making more money and building my side income before my health/exercise. If I wasn’t so concerned about making more money it would likely be the opposite, ‘’me time/exercise’’ first, then blog. I’ve been trying to wake up earlier than I already do but my kid is an early riser as well so getting exercise done before she wakes is difficult. I may have to start waking at 5:30am though to get ‘er done but then I’ll be toast by 8pm which means zero blog and freelance time.

My Social Life and Me Time ”Goals”

Again, because I’m most interested in this blog and working towards making a freelance income goal every month, I’d much rather work in this come Friday night than waste time watching a movie or such. I still make time to maintain the relationships that are important to me with friends and family but without my freelance gig I’d have even more time to spend with them (but less money to do things…).  I feel like I do enough considering our situation but know when we’re debt free, I’ll still blog and write but at a much slower pace rather than under tight deadlines. It helps that my husband is the king of planning and loves having friends and family around so he’s the one that makes sure I get out of the house from time-to-time ;)

Our Home “Goals”

Don’t get me wrong, the house is far from neglected and we clean and maintain it. Nothing is broken and we’re aware of things that need to be taken of (like needing new doors for front and back doors) but my little painting project a few weeks ago, where we started re-doing our bedroom? The walls are still totally bare and probably will be for a few more weeks, if not months. We haven’t decided what we want to do on the large open walls and I haven’t had the time, nor have I made the time, to think about what to do. Again getting back to priorities, side income and building wealth trumps wasting time figuring out wall picture configurations. I used to love filling my free time with DIY projects and art.

Part of me feels like my priorities are a little backwards sometimes. I beat myself up over not accomplishing everything (pictures on walls, exercising an hour per day and sticking to a perfect meal plan all while freelance writing) but I’m human. I have decided that while we’re working towards debt freedom other things aren’t as important. I do what I can for exercise and constantly working on productivity to make the most of my free time. For me, that’s enough for now because I know how amazing our life will be in 48 months when we finally reach our goal.

Do you let your financial goals interfere with other aspects of your life?

Snowball? Avalanche? or Neither? Which is the Best Debt Payoff Strategy For YOU? Maybe Neither!

There are many ”expert” methods out there to help you tackle you debt. The two biggies being the ”Snowball” and ”Avalanche” methods but there are other, unique, methods too. We listen to other people all too often not looking at our own situation and analyzing it. Experts try and tell us that their method is the best and we listen to them. We, as a society, don’t question things enough.

Snowball Debt Repayment

This method, probably made most famous by Dave Ramsey, suggests organizing your debt payoff in such a way that you pay them off according to size from smallest amount to largest. The logic being we gain debt payoff momentum and are more encouraged to continue on in our efforts when we see results and gain the satisfaction of paying things off. The big drawback to this method being you could likely end up paying more in interest since interest rate isn’t taken into consideration when prioritizing.

If you’re the type of person who gets excited about paying something off in full (rather than just paying a balance down) this method will likely work well for you.

Avalanche Debt Repayment

Interest rate is taken into consideration with the repayment option. Organizing your debt from highest interest rate to lowest and start repayment accordingly. This method ensures you’re debt free and paying while paying the least amount of interest.

To me this method makes the most sense. While I understand the logic behind momentum gained with the snowball method, if you were to calculate potential interest paid between the two one may be inclined to switch methods.

Which is Best For Me?

Neither.

Snowball doesn’t work for me because I lose thousands in interest and I like the idea of paying as little as possible, as fast as possible.

Avalanche doesn’t work for me because my highest interest rate loan offers me a tax discount come April and my lowest interest rate loan is effecting my credit score so I want it eliminated ASAP.

Every debt repayment strategy needs to be personal and while both of these methods make sense in their own ways I need to look at my situation and realize that neither is exactly appropriate and guess what experts? I’m Ok with that. I’m Ok with not listening to your ”expertise” and I’m Ok with doing what is best for my family’s fiances. You should be Ok with challenging experts too.

We tend to get lost in hype over stuff. Again I will reiterate that both of these methods are good and the main goal of debt freedom is priority but it’s important that we don’t forget that they’re not the only ways though. If something someone else is doing doesn’t work for you, don’t do it, it’s just that simple. I’m going against the grain. I’m currently working on paying off one of the loans that offers me an income tax deduction because it’s like a thorn in my side and I want it gone. Then I will likely shift my financial efforts over to the 0% interest loan because it pisses me off. I don’t care that it’s 0% and I have 5.5% interest loans as well.

I’m paying off our debts according to how much the annoy me, not what the experts say. How are you working on your goals? Any other rebels out there?

Having a Kid While in Debt

I am of the opinion that there is no perfect time to have kids. There will always be something on your list. A trip. A renovation. Sleeping past 6:30am. Even people who are in financially ideal situations for kids, will have some reason why they may not be ready.

We haven’t always been the most responsible with our money. Not that we were irresponsible,  but we certainly didn’t have a clear picture where our money was going once all the bills were paid. We did what we we thought we were supposed to do. Get educated. Get job. Get married. Get house. I knew one thing though, our debt was big enough that I didn’t know how we would ever have kids. At least have them before we’re 40 (not that there is anything wrong with having children into your 40′s, just not for us). There was simply NO way we could have kids before 35 without debt. We made the decision to just go for it, debt be damned, we’d make it work.

We all hear stories about couples wanting children and it just not working out for them for whatever reason. I didn’t know how easy or difficult it may be to have a child so we simply decided one day to stop ”not, not, trying”.ultrasound

Apparently we’re fertile. The goalie was pulled in August, I was pregnant three weeks later. I certainly didn’t think it would be that easy. Now I was really freaking out. My goal with deciding we’d get serious about having a family was to finally spend a few months getting our finances in order. With the gestational period as well I thought for sure I would have oh, 1-1.5 years to get our ducks in a row before a kid came. Not nine freaking months! Apparently that’s the gamble you take…

I live my life believing everything happens for a reason. I have to in order to keep me sane. I’ve said it before but getting pregnant, having a difficult(ish) pregnancy (being put off work early as a consequence), and finally having a child, is exactly the fire under our asses that we needed. I really don’t know if we’d be on the track we are if we didn’t have a kid.

People who are in debt often have a thing, or moment, that finally makes them realize something needs to be done and for us, it was having a child.

Having a kid while in debt isn’t easy. Actually it’s significantly harder. While we pay for daycare, without this added cost, we could put the money towards debt. Me staying home to offset daycare costs doesn’t make sense for us. One, I make too much money to not work even with daycare costs and, two, I have no desire to stay home. I love my daughter more than anything in the world but I also love my career. I didn’t go to university for six years to not work. I want both.

My husband and I have to make the decision to put her first. While this is fairly common place with all parent/children relationships when you’re in debt ever single decision is important. She will always get fresh fruits and veggies, clothes, and all needs met before our wants and needs are met, no matter how basic. If we run out of something (like this week I have no salad for my lunches), I’ll deal with it. If she doesn’t have the required fruits and veggies for her meals, we will always find a way to make it work. She needs new shoes more than I need a replacement pair of scrubs for work. You get my drift.

Travel is limited with kids and being in debt. We have big plans for future travel (think desires to attend the Olympics in eight years) but for now, and until the debt is gone, our travel plans are limited. Every two to three years we plan to go to a family reunion, last year it being in Boston, and another one in the works for next year (location TBD). These trips will trump any other travel plans (like FinCon) for now.

I won’t lie, having a child while in debt isn’t easy. She didn’t ask to be born so it’s our responsibility to provide the best life we can. Every decision you make affects you and your financial situation but know what? I still wouldn’t trade it for anything. We’re making the best of it and making it work. Sure I could live in the ”what if’s” (like what if we didn’t buy a house when we did and reallocated our money) but what’s the point. This is our life, debt and all. All we can do is try our hardest to improve it.

My $35 Oil Change Cost Me $850

Ok, so obviously the oil change didn’t  cost $850, it did in fact only cost $35, the problems that the oil change discovered cost us over 800 additional dollars.

Our tires our shot. Our 10 month old Bridgestone tires that I wrote about here. Wicked eh? Needless to say we didn’t have a ”new tire fund” going on since we had just dropped $700 on tires 10 months ago and we thought with rotating with winters we should be able to get three to four years out of them. Since it was advised, and confirmed by other sources, that they should be replaced ASAP for safety reasons they will be placed this week being paid for with our emergency fund. We have a three pay month coming up so we should be able to top our ER fund pretty quickly.

Long story short it’s technically our fault. The tires were placed 10 months ago at a store that only sells tires. They sell, install and balance tires. We weren’t even thinking after they were placed that we would need to go somewhere and have a separate wheel alignment and suspension check. We just paid for the tires and drove on our merry way. We’re not really ”car people” but we’re not idiots either and my husband does know some stuff but this was the first time we’d had tires placed anywhere other than a fully licensed garage where it’s assumed (and executed) that the alignment and suspension would be checked at a time like placing brand new tires.

Want to know what happens when you place new tires on a vehicle whose wheels haven’t been aligned for what is now two years? They wear unevenly, though there was zero driving indication of any problems, half of our tires (outer half) were totally bald down to the smooth rubber. Less than 25,000 km, tires are shot.

The tire that we bought 10 months ago, we have come to learn, is also not an ideal tire for our vehicle, compounding the issue. Wicked. $700 could have been better spent. The people we met this weekend, who performed the oil change and notified us of the problem, went into quite the detail about how the tire we had purchased wasn’t a ”bad tire” but certainly not ideal for the type of vehicle we have and would never suggest anyone buy said tire for our vehicle. It was a new technology ”green tire” which claims to save on fuel economy but only lasts about 50% that of a traditional ”non-green” tire. Also, it’s technology is too new to prove any claims substantially. So though we thought we had done our homework we essentially wasted away $700.

Needless to say we’re pissed. Pissed at ourselves that we didn’t have an alignment done. Pissed that the wrong tire was sold to us initially  and pissed that we need to take so much from our little emergency fund. I’m thankful that we’re now in a position with the emergency fund that allows us to buy the tires without stressing the eff out but still stings to knowingly spend $1,500 on tires within one year.

Has one of your mistakes ever cost you money?

Best Ways to Save Money on Health Care Expenses

From monthly premiums, co-pays, prescription drugs to doctor’s visits – the amount of money needed for health care every year can be overwhelming. Fortunately, it is possible to save, while still getting the best medical treatment. Here are some of the best ways to save money on health care expenses.

Choose In-network Providers

In-network providers are doctors, pharmacies and other care providers who have arrangements with health insurance companies to help control medical costs. It pays to use providers within the network of one’s health plan because of the low-cost of care involved.  Visit sites like Healthcare.org to find the plan that fits your medical needs and stays within budget.

Be sure to check the website of your insurance company to find a list of providers who are within its network. It really helps to avoid paying unexpected expenses associated with visiting out-of-network providers.

Consider a High-Deductible (HD) Plan

A high-deductible plan involves paying a high amount of out-of-pocket expenses before insurance kicks in. For people used to paying $20 office co-pays, switching to a high-deductible might seem counterproductive, especially when trying to save money. However, it can actually help save hundreds of dollars per month because of the lower monthly premiums. For healthy families who don’t visit the doctor regularly, this option is worth considering, as it can help save some money in the end.

Most HD plans allows people to open health savings accounts, where they can save (pre-tax) money to pay for insurance premiums, as well as out-of-pocket medical expenses. Any unused money on the savings account continues to grow year after year.

Ask for Generic Prescriptions

Generic drugs are not only FDA-approved and safe, but also contain similar active ingredients as the doctor’s prescription. They are a good way to save money because they are less expensive and work the same way. Therefore, always ask your doctor if there is a generic alternative to what you’ve been suggested.

Get the Recommended Preventive Care

Regularly going for the recommended medical exams, immunizations and screenings, can help detect a problem in its early stages, making it easier to treat. In the long run, this can help save hundreds of dollars that would otherwise be used in treating serious conditions that were not detected early.

Stay Healthy

Maintaining a healthy lifestyle helps to stay out of the doctor’s office, thus lowering health care costs. Eating healthy foods in the right proportions, getting enough sleep, quitting smoking and regular exercise, are just some of the ways to stay healthy. For those who find it hard to hit the gym regularly, walking is an easier alternative. Make it a habit to go out daily for a quick stroll and use a pedometer to track your progress; preventative measures are the best way to shave dollars off of your health expenses.

Compare the Prices of Lab Tests and Prescription Drugs

Before visiting that doctor-recommended laboratory or pharmacy, consider visiting a couple of other medical facilities to compare their prices. Because different facilities charge differently for their services across the country, it is possible to get prescription drugs or lab tests done at a lower price.

Shop Around for the Best Price

Though we shop around for the best price when it comes to our clothes and food, we often forget to do this when it comes to health-related products like vitamins, medical alert services, topical creams and more. Just because you have a written prescription doesn’t have can’t take order items online. For example, Replacemycontacts.com sells discount contact lenses, enabling you to choose between more than merely the offered price of your closest pharmacy.

Check the Medical Bill Before Writing a Check

According to the Medical Billing Advocates of America, about eight out of ten medical bills have errors. It is therefore in your best interest to take time, and check the medical bill thoroughly to ensure that everything is in order before paying.

If there is anything that is not clear, contact the hospital’s billing department for further clarification. Doing this will help save money that would otherwise be wasted in paying for unknown charges.

 Follow to the Doctor’s Orders

Research shows that 20 percent of patients don’t buy prescriptions they get from doctors, while another 10 percent don’t take their medications correctly. Failure to follow the doctor’s orders can make one’s condition worse, landing him back in the waiting room. This is yet another medical bill that can easily be avoided by being obedient.

The above simple tips, if implemented, can help to significantly reduce health care expenses.

 

Stop Saying, Start Doing! Tackling My To-Do List

Yesterday you said tomorrowThis is my new moto. I am the queen of procrastination and know what? It stresses me the eff out! I sometimes live as though I have no control over things I really should but don’t make the time to do so. That’s no way to live now is it?

Organization is key to a successful and stress free life, at least for this chick right here. Being organized, from knowing where every single paper in your house is to managing a routine is the only way I will be able to accomplish everything. I’ve made excuses for too long and bumping items further down on my to-do list rather than prioritizing and actually getting them done, it’s ridiculous actually. I’ve become a lot better than I used to be but when someone does something, no matter how improper for so long, and still gets results, it’s hard to change. I still get everything done but the process is never fun or as easy as it should be.

Though I’m at my pre-pregnancy weight I need to start working on those 10-15 lbs that found me before I got pregnant, bad. And I want them gone before my kid’s birthday in precisely three months. Googling exercise routines and not doing them is no good. Dreaming about how I would like to look without putting any effort into it again is doing me no good.

Again with exercise, I need to accept that I will never and no one can make me, enjoy a class like Zumba or anything that requires coordination. I can’t walk and chew gum so doing anything that requires watching and attempting to make myself mimic is setting myself up for failure. I get more frustrated with myself. I do better with independent activities that I can 100% control without anyone telling me how or what to do (type-A?). That being said I’d love a personal trainer to yell at me and me alone everyday and challenge me.

Solution? I need to stop with the excuses, get organized and start waking up before the kid (which probably means 05:45) and getting it done. Run/walk on the treadmill until it warms up outside and get a consistent strength training workout going. Plan hikes with friends (though likely not at 6am). I used to wake between 05:45 and 06:00 when I was in university to go to the gym before class so I know it’s in me, it’s all about routine.

Getting a proper life insurance policy has been on my to-do list for, oh, almost two years. I don’t even know where to being searching for one so I just haven’t done it. I need to look into this more and actually do it. My 42 year old co-worker is currently undergoing radiation treatments for stage four cancer, life is a cruel bitch sometimes and I can’t mess around anymore with a kid.

Solution? Monday call my office and get the number for a patient of mine who I know could point me in the right direction. He’s a financial planner who works with various insurance brokers daily. I trust him and any contacts he’d give me.

We need to set up my husbands pension contributions. Again he’s been entitled to this for over a year and we haven’t followed up with the offer losing out on one years worth of free money (matched contributions by company).

Solution? Get hubby to start with an email to his financials coordinator at work. His company profile is a bit intricate and complicated so this is the starting point for now.

Do you have anything on your ”To-Do” list that isn’t getting accomplished? How do you plan on getting them done?

Long Overdue Blog Love

Deer in our neighborhood this week, a rare siting in the suburbs.

Deer in our neighborhood this week, a rare siting in the suburbs.

It’s been too long since I’ve done a post sharing some blog love. I used to do a weekly post but it just got too overwhelming but every now and then I like to remind people how much I appreciate them in different ways and maybe point out a few new blogs I may have stumbled upon. I read a lot of blogs daily but I can’t always comment (commenting on touch screen phone is annoying and frustrating!)  and while my intentions are to comment when I get home it usually doesn’t happen. Blogger fail. Here are a few posts and bloggers I love and admire daily!

Erika from Newlyweds on a Budget keeps it real and recently wrote about what lifestyle inflation means to her now that they’re debt free. I wrote a similar post about how I plan on partaking in lifestyle inflation when our debt is paid off, so you can say I relate to her.

Holly from Club Thrifty shows us her mad DIY skills in her spiffy kitchen remodel!

Michelle, the queen of making shitloads of side income (though in her case, now full-time job) tells us how to make $1,000 extra per month.

Jordann tells us how she’s going to save $23,000 THIS YEAR!

Jessica wonders if anyone would quit their job to be on a reality TV show, Ummmm  not me.

Harry from PF Pro wrote a guest post for John about balancing a 9-5 job while actively pursuing a side hustle. I loved this post Harry!

These are just a snippet of posts I’ve loved over the last week or so! Have a great weekend!!