Rob Carrick
August 4, 2017August 2, 2017

Living alone is bad for your personal finances.

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From a basic sharing of expenses to the availability of tax breaks, you’re better off financially if you have a spouse, partner or roommate. But as 2016 census data shows, singles now account for the biggest slice of Canadian households. Possible trend of the future: The relationship of financial convenience, where people of all ages live together to save money.

As chair of the Ottawa chapter of CARP, a group representing retired people, Janet Gray hears from a lot of senior women about discrimination against singles. “They say there’s an injustice – almost a penalty – for being single,” said Ms. Gray, who is a financial planner with Money Coaches Canada.

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Read more: Census 2016: More Canadians than ever are living alone, and other takeaways

Retired couples can take advantage of pension-income splitting, where a higher-income spouse or common-law partner shares up to half of his or her pension with the lower-income spouse/partner to reduce taxes. Payments from a registered pension plan can be split before age 65 or later, while payments from a registered retirement income fund or registered retirement savings plan can be split at 65 and older. There’s no similar opportunity to save when you’re a single retiree.
The financial disadvantages of being single are especially noticeable in retirement, but they’re significant even for millennials. Ms. Gray said a single person would typically qualify for a smaller mortgage than a couple, which limits the ability to buy in expensive housing markets such as Vancouver or Toronto.

“At 35, you could find yourself buying a first house and having to go to mom and dad to ask, can you co-sign for me?” she said. “It’s kind of demoralizing.”

The old cliché about two living as cheaply as one may be exaggerated, but Ms. Gray figures that singles pay 75 to 80 per cent of the costs incurred by a couple. Whether one or two adults live in a home, major costs like mortgage payments, property taxes, utilities and maintenance are the same.

There are some additional tax breaks beyond pension-income splitting that benefit couples, not singles. Here are a few highlighted by Mark Goodfield, a partner at the accounting firm BDO Canada LLP:

The spouse or common-law partner amount: This tax credit is claimable if you support a spouse or common-law partner with income of less than $11,635 for 2017.
Medical expenses: Partners can combine their medical expenses to get the most benefit from this tax credit.
Charitable donations: Donations by spouses can be combined so that they qualify for the enhanced tax credit available to charitable giving of amounts above $200 ( a lesser credit applies for smaller donations).
Adam Morke, an accountant with Stern Cohen, said there aren’t as many tax breaks for couples as people think. “Canada’s income tax system is, generally speaking, designed around taxing individuals as opposed to couples,” he said in an e-mail. The idea that couples are hugely advantaged may come from the United States, where there’s more opportunity for them to save on tax.

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It was Ms. Gray, the financial planner, who floated the idea of the relationship of financial convenience. It’s a concept that may be particularly well suited to expensive cities where both houses and rental accommodations are expensive. Achieving financial independence as a young adult in these locations may depend on some kind of sharing of expenses.

The 2016 census data found that almost 35 per cent of people between the ages of 20 and 34 lived with at least one parent, up from 30.6 per cent in 2001. Between a challenging job market and pricey housing, young adults are increasingly having to rely on family for financial support.

Having a roommate seems like a university or college thing, but maybe it’s time to consider it as an option at all ages. Pension-income splitting isn’t available to roommates, but they can pool their financial resources to afford the high cost of housing and enjoy the emotional benefits of companionship. Don’t they say that one is the loneliest number?

 

 

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Moving Your Business Idea To Reality

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 Posted by YouInc.com – March 23, 2016 at 12:00 am

Moving Your Business Idea to Reality – What’s Stopping You?

Do you have an amazing idea for your business? So why is it still an idea and not a part of your business plan? There are plenty of reasons not to act on an inspiration. In some cases your hesitation prevents you from making a costly mistake and in others it just stands in the way of your success. Examine why you’re not moving forward with your idea and consciously decide whether it’s the right move for your business.

Time. Almost by definition, entrepreneurs have very little free time. However, you need to view your time as a resource. Are all of the activities that you’re spending your time on creating value for your business? Would it make more sense to reallocate some of your time to this new project?

Don’t let an inspiration wither away in your indecision; either move forward with it or dismiss it.

Money. Almost every entrepreneur is painfully aware that you have to spend money to make money and that it is difficult to be successful without taking on some degree of risk. However, making the wrong investment or taking the wrong risk can cost you everything. There are no easy answers here. You need to make the best decision that you can with the information that you have and hope for the best.

Indecision. There are reasons to move forward and there are reasons to stay still. When you don’t know which way to go, the easiest thing to do is nothing. Remember that doing nothing is a decision in itself and sometimes it is the riskiest move of all. Look closely at your idea and analyze the positives and negatives, as well as the risks and opportunities. You may still decide not to proceed but at least you are making a conscious decision about the direction that your business will take.

Fear. You don’t have to be in business for long to know that there is a lot to fear. Your friends with nine to five jobs look at you and imagine that you have nerves of steel, but the truth is that after suffering through a few failures, it’s scary to put yourself in that position again. It’s okay if you decide that this isn’t the right time to take a chance. However, if you feel like you’ve lost your nerve, then you need to take some time to reflect and decide how you’re going to move forward with your business.

The world doesn’t need more dreamers; it needs leaders with the knowledge to make good choices and the courage to carry them through. Don’t let an inspiration wither away in your indecision; either move forward with it or dismiss it. If it is a good idea and you don’t act on it, it won’t be long before someone else does.

Ottawa Woman’s Mastermind “What Do You Want’ New session starting April 7/16

@newlawofsuccess  Tags: fear, idea, indecision, inspiration, risk, profiles, business plan, business success, entrepreneur, money, success, time, time management