De-Bunking Your Budgeting Barriers
If you don’t have a million dollars in your account right now, it is likely that you hate budgeting. It’s even more likely that you’re annoyed, even enraged, the moment the topic arises. It’s an interesting phenomenon, we all want to be financially successful, yet this first step is often the hardest to overcome. People confide so many reasons why this is true for them.
Here are a few of my favorites:
- I know I don’t have the money to do what I want.
- I’m a grown person, I don’t need anyone telling me what to do or where to spend my money.
- Ugh, budgeting is painful and unrealistic – I don’t know what’s going to happen next weekend…
Robert Downey Jr. captured in a moment of great relief; very similar to the collective sigh of the business community across Canada as the 2018 Federal Budget was released.
Yes, it could have been worse. Certainly, there was speculation that personal income tax rates would climb slightly higher and no one knew what was in store for small business. Thankfully, personal tax rates were left unchanged.
However, the income sprinkling rules outlined in July 2017 held strong and the rules pertaining to passive investment income weren’t as harsh as predicted. Specifically, Budget 2018 has implemented two simple measures as it pertains to passive investment income:
BC’s 2018 budget was announced on February 20th. Its focus was to provide lower income households with tax relief. It provides some parents with reduced child care fees while also reassuring parents that spaces in child care and in schools would become more adequate.
There are numerous articles that focus on the many highlights (some are listed below) that will work to assist the many varied interests of middle and lower income households in BC. Less reported however is that in order to provide the tax relief outlined within the budget, the BC Government will undertake a record-breaking capital spend and increase overall taxes to the tune of $4.4 billion over three years.
As some of you may know, there have been some imposed changes that will decrease our borrowing power when it comes to purchasing a home. As of January 1, 2018, you will need to qualify under more stringent rules in order to get the mortgage you desire.
Assuming all other factors remain unchanged, once the new changes are in effect you would qualify for an amount 18% less than you would under the current mortgage rules. (more…)
In the competitive market we face today, purchasing a home can be a daunting task. There are a few things to be aware of that can help make it a little less daunting. The First Time Home Buyers Plan and some new advantages that were recently introduced by the Provincial Government help soften the blow.
To help make this overwhelming transaction a little less arduous, the federal government allows first time home buyers to withdraw $25,000 from their hard earned RRSPs, tax free. These funds do need to repaid back into the RRSP over a 15 year period or the portion due could become taxable. An eligible couple could potentially withdraw a total of $50,000 between the two of them towards the purchase of a First Time Home. For more information on HBP eligibility and repayment schedules click here.
Due to increased home prices in BC (specifically Lower Mainland), the Provincial Government has responded and provided a few additional advantages to those wishing to purchase a home for the first time. These additional advantages are: (more…)