Money123: Spending tensions ahead of Valentine’s Day

Do you think your partner spends too much?

You’re not alone.

Ahead of Valentine’s Day, 35 per cent of respondents to a BMO survey said they think their significant other spends too much money.

And about one-third of Canadian couples (32 per cent) say spending is often a source of disruption in their relationship.

While financial differences proved to be a source of tension for many, the survey still found that the majority of Canadian couples feel they are compatible in terms of financial planning, with 82 per cent saying they share similar financial goals.

Meanwhile, two-thirds of couples said they share equal responsibility for initiating discussion about household finances. That was especially true for younger generations, with millennials (25-34) and generation Z (18-24) most likely to split financial responsibilities evenly.

“Many couples continue to underestimate the emotional implications involved with money; this can lead to miscommunication, disappointment and conflict,” said Gayle Ramsay, head of everyday banking at BMO.

Read more about poll’s findings here.

Why all your friends are moving to Alberta

Housing prices, higher interest rates and taxation policies.

These are the key factors driving inter-provincial migration to Alberta from pricier provinces like Ontario and British Columbia, a report out from Re/Max Canada this past week shows.

The real estate company looked at tax rate increases, home values and mortgage rates in key markets in six provinces, including Vancouver, Calgary, Winnipeg, Toronto, Montreal and Halifax.

It found that while some Canadians moved within their respective provinces to seek lower home prices, close to 60,000 moved to Alberta, Nova Scotia, New Brunswick and Prince Edward Island, with Alberta absorbing the bulk of inter-provincial migration.

Re/Max Canada president Christopher Alexander said prospective buyers from Ontario and B.C. are looking to sell their properties in markets like Toronto or Vancouver and invest in Alberta or in Atlantic Canada’s major centres.

“In addition to affordable housing values and extensive job opportunities, Alberta is well known for its position on taxation, with no provincial sales tax and zero land transfer tax on residential real estate,” he said.

Read more from the report here.

Is your grocery bill higher than usual? This may be why

In late January, the CEO of Metro warned that prices for some items were likely to rise as an industry-wide “blackout” period for supplier cost increases was set to end.

That period, food researcher and Dalhousie University Agri-Food Analytics Lab director Sylvain Charlebois said, is often seen from November until January but when it ends, Canadians are left with the bill.

“So the blackout period, of course, leads to higher prices, and fees a few months later leads to more higher food prices,” Charlebois said. “I don’t see any benefit for consumers at this point.”

Price increases come from suppliers, which are often passed on to consumers.

Mike von Massow, a food economist at the University of Guelph, said the issue with price freezes is they can “bite in two directions.”

“If you say we’re going to contract this and prices have gone down, unless you have some sort of out in the contract, those suppliers will expect that same amount of money because they’ve contracted it as well,” he told Global News in an interview.

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– THE QUESTION –

“I’ve got a 240k equity access attached to my checking account, (better rate and no service fees than my previous line of credit) that I originally qualified for thinking I was going to purchase a vacation property with, but have since changed my mind. Each month I might access a total of $100 of these funds solely for the purpose of keeping this account active. My question is, would my credit union ever decrease my equity access as I near retirement, or would I have to do any re-qualifying as I’m clearly not using anywhere near what I’m capable of? I don’t have any other debt including a traditional mortgage. I consider these funds as an extremely accessible emergency account that I don’t want to part with, especially after financially helping my aging parents, who never thought to get an equity access and no longer qualify.”

— A Money123 reader 

“A credit line can be a great choice to cover cash emergencies. You need an emergency plan, not an emergency fund.

Instead of having a large amount of cash sitting around in case of an emergency for which you don’t have time to save, a credit line can provide those emergency funds.

You are handling your emergency credit line responsibly. They can be tempting to spend. Used responsibly like you are doing, an emergency credit line can give you peace of mind.

Banks don’t normally reduce or take away a secured credit line because your income declines, as long as you make any required payments. We have had clients lose both their jobs just before their mortgage came due and their secured credit line was not affected. In the early 1990s when Toronto real estate plunged 30 per cent, many homes were worth less than the secured credit line limit, but the banks didn’t reduce the limits. With low retirement income, you may not be able to refinance or increase it, but the credit union will likely allow you to keep your credit line forever.

You might be doing the right thing with transactions to keep it active, but probably it’s not necessary. If you leave an unsecured credit line unused for a long time, financial institutions will change them to inactive and eventually close them. However, credit lines secured by your home, like yours, are not usually closed for inactivity. Even if they did, moving $5 once per year would probably be as effective as $100 every month. To give yourself confidence, you could ask your credit union to confirm that their policy is not to have secured credit lines go inactive.

Since you may retire soon, it is a good idea to ask the credit union to increase your credit line limit to the maximum possible a little while before you retire — while you qualify. Once you retire, you probably won’t be able to increase it. Then you have it for decades through your retirement.”

— Ed Rempel, fee-for service financial planner & tax accountant, Unconventional Wisdom

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