I knew what cheques were. I saw that when you wrote one you received things in return. I had a bank account. I had a piggy bank. What I didn’t have was a conversation, an allowance, or anything consistent or concrete that taught me anything GOOD about money...other than the fact that it was GOOD to have it.
I don’t know whether it was a generational or gender issue in my house, I suspect it was a bit of both, but the overall vibe was that money was something that happened TO YOU, like a fairly tale or tragedy, not something that you DID, MANAGED, SAVED, CONTROLLED or to which you would pay the least bit of ATTENTION.
By the time I was 8 or 9, wandering down to the ATM on a Saturday to get cash for my mom (yep, I did) I quickly saw the correlation between my mother’s mood and the remaining balance, which was always too low, and a surprise, EVERY - SINGLE - TIME. My mom was a well educated, well paid spender whose financial plan was based on HOPE. Hoping that she still had some room on the overdraft. Hoping that a cheque hadn’t gone through so this face to face purchase would not go awry. In her defence, she did the only thing that she knew how to do. That’s all parents can do, I think. I see that now, at least. That was how she functioned, and that was how (more or less) I learned about money as a kid.
I have thought about many ways to address talking to kids about money but, as I’m not a parent, WHO AM I to give advice? I have no idea how parents manage to do all that they do on any given day, let alone talk to their kids about money. Being a former nanny, I know that success in a day with a toddler can sometimes only be measured by how many healthy things you were able to sneak into a smoothie because they won’t eat anything else!!!! (*exhale....5...4...3...2...1....)
So, instead of trying to come up with a master plan, I’m sharing this brief post that showed up on FaceBook from Humans of New York. It sums up what, in my mind, will instil the basic money tools that kids need to learn before anxiety ridden emotions, and real, adulthood consequences attach themselves to the almighty dollar.
“Every week I get one dollar for allowance. Then I get to choose the section where I put my dollar. There are four sections: spend, save, donate, and invest. If I put a dollar in the ‘invest section,' my parents give me two extra pennies at the end of every month. I’ve only used my 'spend section' twice! I have way over $10 in my 'invest section.' I used to have more but I took some money out and put it in my 'donate section.' We used to it to buy food for people who don’t have much money in their 'spend section.'”
One paragraph (from the voice of a child) that can turn financial confidence and compassion into a habit.
Thank you for reading!
I grew up as a city girl who knew more about jewelry and fine clothing than your average 7 year old, so it never ceases to amaze me how buying a house has turned my “Holt Renfrew Tendencies” into “Home Depot Domination.”
Growing up, I don’t recall anyone in my household doing repairs or touchups in the house...well...unless you include the pink surgical tape holding up the subway tiles in the corner of our shower. It was not done, taught, or expected. What I know of my grandfather, a well dressed officer turned business man, he wasn’t doing the repairs either and was happy to pay a professional to get the work done.
These days, my weekends usually include some form of improvement around our fixer upper. Thanks to TV, magazines, and let’s face it, Martha Stewart, I am less and less intimidated by projects around the house, and I have the pink, steel toed boots to prove it.
(yes, my tool “kit” is a shower caddy - don’t judge)
Now, would I be a home reno diva if I didn’t have a handy dandy hubby?
Probably not...or at least not as much.
But, by being a home owner (sorry, let me rephrase that: Being the payor of a mortgage) you quickly realize that learning how to do “stuff” might not be such a bad idea. We’ve done the math and if we had paid my husband and his team to do all of the labour in our home (not including materials) we would be in the high $$, $$$ range.
(this is why I suck at Twitter...talk talk talk...)
You’re never too old - or too fancy - to become a Depot Diva or Divo.
- Renovation + Garden shows
- You Tube “how to” videos
- Friends, Neighbours, and relatives
There are endless FREE ways to learn a new skill that you never imagined for your self and, if I can do it, you can do it too!
I’m not saying you should learn how to do it ALL (ie: electrical, plumbing or gas work) but, if you can learn how to do one thing really well, just ONE THING, you’ll feel like a million bucks every time you look at your miraculous handy work. Your wallet will feel a lot better too.
Thanks for reading!
I am 42.
My husband is 50.
We have a 21 year mortgage on which we have 13.5 years left to pay it off.
At that time I will be 55ish, and my husband will be 64ish.
(Knock on wood, fingers crossed, throw salt over your shoulder, live on a street named after salt.)
Our home value has almost doubled in 7 years by virtue of its detached existence in Toronto.
SO? WHO CARES?
Well, we do. And depending on your age, and how close you are to retirement as you read this,
you might care too.
We want to retire. No, we want to retire comfortably, without worry, so we continue to put everything we can into our home (instead of clothes or gadgets) because, so far, it has been the most reliable and lucrative saving vehicle we have ridden thus far. When an investment property opportunity popped up, we faced it head on.
It was a rental bachelor suite that we (ironically) renovated for a client who is now planning to sell. I asked them to give me a week or two to put an offer together, and broker my own deal. They were gracious and on board with our offer if we could make the numbers work. No bidding war. Just a straight up sale. Sweet, right?
The plan was simple:
- get a separate home equity loan for the down payment
- have the renter pay off the new mortgage
- pretend that there won’t be any obstacles in our way
- laugh all the way home to count our money, jiggity jigg!
The NOT so simple parts of the plan:
- for a rental purchase you need to use your NET income to qualify
- since we are self employed we have low NET incomes, mine in particular, was obstacle #1.
- we already HAVE a property/mortgage
- we needed a minimum 20% down payment for a rental property...possibly 25% depending on the lender
- we needed more cash than that because of the approximate $4000 in closing costs , $6000 refinance penalty at the current lender, 1-2% B lender fees ($2000-$4000) for the new mortgage (because we only *almost* qualified for a B lender with our self employed GROSS income.
- our current property (however) needs a new roof and driveway and, when I say need, I mean NEED, so the refi was getting bigger and bigger by the second.
- we would have to pay a CMHC insurance premium on the additional funds (around $3000.00) because our original mortgage was insured and a full refi (instead of a line of credit) was the only scenario that brought us in line.
- THIS WAS SUPPOSED TO BE SIMPLE!
- we were limited by B lenders who might not fund a condo that was shy of 500sq.ft. This is hard enough in A lending because the Toronto market is becoming overwhelmed with mini condos, let alone open space bachelor pads without a separate bedroom. I did it for a client, but our financial scenario was making it difficult for us.
- and then (!!!) we would be left with a NEW 30 year mortgage, larger than the original one on our first property, that we wouldn’t have paid off until ages 72 and 80.
- after all that, our ratios were still not entirely in line to qualify fully (there is always the option to beg directly with the business district manager)
- due to the higher interest rate of the B lender (4.25%), we would have to charge rent higher than market value which would make it harder to find/keep a tenant.
- our own monthly expenses would increase outside of our comfort zone due to the new, LARGER mortgage on our first property and no room for the unexpected.
- also, if we ever needed to live off of the equity in our current home in a reverse mortgage, a large portion would be eaten up by this new refinanced scenario.
We had all of this equity, but in the end the numbers said, this is not going to happen today. Our retirement vehicle #2 would have to stay in the show room for a little bit longer.
I’m frustrated that I was not prepared enough for this perfect opportunity.
I’m frustrated that I have not saved enough for another down payment.
I’m frustrated that I haven’t (yet) invested in a new retirement vehicle.
I’m supposed to be f*$king rocking this property thing!!!!!!
But the risks, the list of penalties and costs, our ages, our fluctuating incomes, TWO 30 year amortizations on TWO properties, however, out weighed the gains in this moment.
In other words:
We would not sleep at night with this financial frame work swirling around us.
I wanted it to work, and the fact that I was able to convince my husband to keep the conversation going longer than a day was what I thought was the sign form the universe that this was going to happen!
IT SHOULD HAVE HAPPENED.
What WOULD have made it work?
A CASH down payment.
Higher NET income (for me)
If we had had that CASH down payment, or if my NET income was higher, we would have narrowly qualified in a way that would create a more manageable scenario. We would not have had to refinance the same way, we would not have incurred fees, we *might* not have had to go to the B side with higher rates, our renter would have paid off everything at market value, AND our current property vehicle would not have been jeopardized. Ironically, the money we put into our current house is also why we have so much equity in the first place. There’s a little bit of chicken & egg scenario going on here.
The NEW plan?
- Don’t give up
- DO keep swearing like a trucker about this for a little bit longer
My goal is to write a happier ending in about 3 years, but until then, I encourage my readers to continue to seek out financial success stories and keep ME posted on how YOU plan to get ahead.
Thanks for reading and sharing!
note: all opinions expressed on this blog are
solely my own and do not express the opinions or
views of Mortgage Brokers City.
After a good computer clean up, freezing screens, swearing, and a toddler-esque meltdown (me, and the computer) the conclusion was to get a new one instead of investing in an overhaul. (Damn it, AGAIN!)
My gut reaction to these unexpected $$$ expenses is always the same:
- tell everyone about my panic
- research how panicking will get me the best deal
- tell everyone how I (sort of) beat the system (by panicking, clearly) and saved $300
- be funny or sarcastic about giving in to the lure of shiny new things, ignoring the fact that others are worried about where their next meal will come from. (This is me inserting a little perspective.)
I know this is not a big deal...to some...but to me, I can’t help but react to ANY financial upheaval, no matter how insignificant to the observer, any other way than the way it was modelled to me as a child. And, I’m not alone. I see it in some of my clients, too; holding their breath, or tearing up, thinking they haven’t done, or saved enough, no matter how hard I try to prove the contrary.
This gut reaction stuff is why I started the blog, which helped me start a business (run on empathy), and it’s why it now only takes me 12 hours (instead of days) to wake up, and hit the yellow brick road again despite the Wicked Witch of the West’s attempt to paralyze me with financial fear. And when I say wake up, I mean it. At 3:30 in the morning, after going to bed with a hefty new visa balance, my brain did me the favour of making me juuuuuuust conscious enough to be aware of the the voice inside my head, saying,
“You’re an adult, you’ll figure it out, you always do.”
The next morning I clicked my heels, headed out to pick up my airy new apple, and came home to emails from two new students (who would pay off my bill in short order). I figured it out instead of feeling bad about:
- buying shiny new things (that’s another story)
- myself and how I still have the shadow of old, negative financial blueprints written all over me in invisible ink
Gut instincts (or learned reactions), be they financial, emotional, or any other ‘fill in the blank’ category, are what make us unique, but they can also do double duty and make us (me) feel out of place when our (my) reactions to a problem seem out of scale to the situation at hand.
I’m living proof that reactions can change, evolve, and turn into an asset, instead of a hindrance ....well...they can if you’re awake enough at 3:30 in the morning to hear the uncharacteristically logical advice from the voice inside your (my) head.
It might only be a small victory but it’s a victory, nonetheless, and I’ll take it, thank you very much.
This blog was brought to you in part by my jazzy new gadget (no regrets!!!!),
and my VISA card.
The Coles notes response is: YES
The 900 page, unabridged response is: YES, I can get you the best rate for YOUR FINANCIAL SITUATION.
The difference between those two answers is subtle but important. Rates are NOT the only factor to consider when you are preparing to jump into the property game.
- Mortgage Rates are directly connected to a mortgage product
- That product must be the best for your situation
- Everyone’s situation is DIFFERENT
Take cell phones, for example: The lowest RATE out there might be $9.99 a month, but the PRODUCT is a rotary dial flip phone, no data, no texting, and no incoming calls.
Mortgages are exactly the same: Sometimes the lowest RATE puts you with a mortgage PRODUCT that is just as archaic as a your Dad’s first car phone that you plugged into the lighter jack. YOU GET WHAT YOU PAY FOR.
In our current financial climate, however, we are facing a boon of awesome rates paired with fantastic mortgage products. BUT, and there is always a BUT, you, and your financial situation need to qualify. Yes, your neighbour’s brother in law’s cousin SAYS he has the lowest rate but, again, what is the product that goes with his flip-phone mortgage?
When I am scoping out a rate + product out of the 30(+) lenders available to me, there are many things to take into consideration that will affect what you qualify for:
- Income (and type: salary, contract, self employed, stated income)
- Credit score
- Down payment
- Previous Bankruptcy?
- Gifted Down Payment?
These factors are the tip of the iceberg for qualifying. What you may not realize is, when I’m scoping out your options, conditions and road blocks tend to pop up that indicate that we might have to take a different route. Some clauses include:
- Must quick-close in 30-45 days (there will be a 90 day close % rate, and a 120 day close % rate)
- No Self Employed or Stated income deals (generally, we know which lenders to avoid)
- No pre-approvals
- No rural properties
- Credit score above 650
- Must have minumum 5% of own funds for down payment
- No rentals
- Conventional deals only (20% down payment)
- High Ratio, insured mortgages only (less than 20% down payment)
- Live deals only
- 25 year amortization only
- No 15% top ups to net income
And the list goes on. If you don’t meet just one of those conditions, it’s back to searching (and, p.s., that’s what I’m here for.)
When it comes to PRODUCTS, you and I also need to consider your future options:
- If I refinance in 5 years at different lending institution, what are my EXIT fees?
- Is this a STANDARD mortgage or a COLLATERAL mortgage?
- If I want to put a lump sum on my mortgage, what are my pre-payment privileges?
- If I have a growing family, can I extend my mortgage if I buy a bigger house?
- Is this product portable? Can I take it with me to my new condo in the middle of my 5 year term?
Again, the list goes on, but THIS is why the 900 page, unabridged answer is so important for YOU, especially if YOU are an artist. We work in such an abstract and creative world, we forget that when it comes to finances, more specifically YOUR FINANCES, there aren’t any shades of grey. Your numbers go into an algorithm and come out as a profile. It won’t look like anyone else’s (which is the only artistic aspect of the process).
I’m only scratching the surface on this topic but, I sincerely hope this helps when the time comes to get you suited up with hundreds of thousands of dollars (run away screaming!!!) to buy your first home.
Thanks for reading!
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All opinions expressed on this blog
are my own in their entirety .