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January/February 2015

Commentary - Hans H. Mathisen

"If... then LIFE LETTER for January looks at some possible financial resolutions you could make for the new year, and the effect of certain actions on those reslutions.

"How to avoid these money leaks" - Most people don't get too concerned when they lose a dollar here or a dollar there. But, an accumulation of these money "leaks" could eventually sink you. LIFE LETTER for February points out some of these leaks and how you can avoid them.


The symptoms of heart attack are explained in LIFE LETTER MATURE for January. You could save your own life, or someone else's by knowing the different symptoms of heart attack.

LIFE LETTER MATURE for February looks at "your digital estate" and some of the things you may need to consider when planning your estate.

Hans Mathisen





If... then

Well, it's that time of year again, when almost everybody makes New Year's resolutions. Soon, most will break a resolution or two (perhaps more) and many will just give up trying altogether. It generally takes about 28 days for a new habit to become relatively permanent. It's important to keep trying for at least a month to get on track towards a goal, and that's exactly what a new year's resolution is - a goal. It may help to understand the effect of certain actions on our financial resolutions:

If you carry a balance on a credit card, then you will pay much more for the item than you intended. Most credit cards have an annual interest rate charge in the neighborhood of 20%. Any new purchases while still carrying a balance from a previous month will also incur that interest charge. That sale price may not look so good after all.

If you do not have the right kinds and amounts of insurance, then you could face financial ruin. Even though auto insurance is required, most people wouldn't dream of taking the risk of driving without it. However, many Canadians fail to adequately insure their most valuable asset - their ability to earn an income. Without sufficient accident and sickness insurance, even a short absence from work due to illness or injury can wipe out any savings you have. Most mortgage foreclosures start this way.

Inadequate life insurance protection can mean serious financial upheaval for your family. Their lifestyle depends on the income you bring into the household. Without it, they may be forced to sell the family home or liquidate RSPs at an inopportune time making the financial hit even worse.

If you don't save adequately for retirement, then you may not be able to retire when and how you want to. You have the "young you" and the "old you" money in your wallet. If you don't send the old you money ahead, then it just won't be there when you need it.

The Federal Government has several incentives to encourage you to save for your retirement. The main two are Registered Retirement Savings Plans (RRSPs) and Tax-Free Savings Accounts (TFSAs). RRSPs offer tax-postponed growth and TFSAs, like their name suggests, provide a tax-free savings arrangement. Work with your financial advisor to figure out how much needs to be set aside.

If you don't have a rainy day fund, then you will be ill-prepared for the little disasters that occur from time to time. Experts agree that you should have a minimum of six months to a year of income set aside to deal with the financial hiccups that we will all experience. Credit card limits do not count.

If you don't follow a budget, then you probably find yourself scrambling at the end of your paycheque or racking up credit card balances to get to your next payday. Without a plan, it's far too easy to overspend and end up in the vicious cycle of carrying a balance.

If you don't save regularly, then you may miss out on opportunities when they come along. Without some money set aside, you may miss out on starting your own business, getting an education upgrade, or moving into a better home or neighborhood.

Working with your financial advisor can make it much more likely that you achieve your goals.

Understand the consequences – because it’s the responsble thing to do.

Call Hans Mathisen today at (306)242-7042.
or email -

Copyright © 2015 Life Letter. All rights reserved

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How to avoid these money leaks

You may have heard the term Death by a Thousand Cuts. defines it as ". . . the idea that a small cut will not kill you but, if you get enough of them, you could bleed to death." Many mistakenly believe that a buck here or a few bucks there are no big deal. Individually, perhaps not. But when all are added together, it can lead to financial bleeding to death.

Recurring monthly service plans - Those services that we all "need" can also be the cause of serious financial leaks. Included in this list are cable TV, cellular telephones, Internet, even your utilities like power, water and natural gas. Look at what and how much it costs and decide if you really need it. Contact your provider to see where you can save on your monthly bill.

Gary saves $52.50 per monthly on his cable bill by switching to basic instead of premier service.

Darlene calls her cell phone provider every six months or so to have them review her usage and recommend a lower cost plan. Savings - $18.75 each and every month.

Carl saves $21.00 per month by choosing a slightly slower Internet connection, but it's still very fast.

Jack and Diane found that making a few changes on how they do things made a nice difference on their monthly utility bills. Turning down the thermostat while away and overnight, unplugging small appliances they weren't using, and paying more attention to the water they were really wasting put almost $20.00 per month back in their pockets.

Impulse buys - There's a reason stores put certain items near the cash register - because so many shoppers will grab them on impulse because they are lower priced items, so why not? And many larger purchases don't look so good the next day.

Sara sets aside only so much money each payday and when it runs out, she has to wait until the next pay cheque. She now spends $50.00 less per month.

Dave and Rachel adopted a 24-hour rule for all purchases over a certain amount. If it still seems like a good idea the next day, they'll buy it then. On average, they save about $150.00 monthly.

Daily frittering - Judging by the line-ups every morning at the local drive through, a lot of people are buying their coffee on the go. And many get the largest size.

Bob started making his own coffee into a to-go cup and saved two ways; $1.50 less per coffee, and avoiding loss of time and fuel in the line-up.

Carol switched to a small latte instead of a large, saving $1.00 or so a day and 80 fewer calories.

The forgotten - It's common to sign up with a credit card for something and forget about cancelling it when done or not using it anymore.

Ted and Alice review their credit card bills each month to make sure they haven't missed anything. They get a better handle on where their money is going, too. Figure they save almost $1,000 yearly.

So, the items above may not appear to add up to too much, and the list is by no means comprehensive. However, this short list added up to almost $5,400 per year. And we haven't even talked about meals at restaurants! Go ahead, put some Band-Aids on those little financial cuts and stop the bleeding.

Avoid the small cuts – because it’s the responsible thing to do.

Call Hans Mathisen today at (306)242-7042.
or email -

Copyright 2015 Life Letter. All rights reserved

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