Spending

CBC’s Canada’s Worst Cellphone Bill

March 9, 2010

21 comments

A recent episode of Marketplace on CBC featured cellphone customers who claimed to have Canada’s worst cellphone bills (you can watch it here). Cellphone customers had racked up thousands of dollars in charges either in air time, texting or, what appears to be fairly common, roaming charges while traveling abroad.

The typical phone horror story also involved a dispute with the phone company: the customer claims she was misinformed in the phone store and the phone company points to the contract, which says something else. The customer is in tears, the phone company sticks to its guns and it makes for great TV. Especially, when Wendy Mesley, the show’s host adds to the debate by saying those rapacious phone companies are charging 15 cents for a text that costs them a third of a cent to provide.

I’ve had my share of complaints with service providers and while I found myself sympathizing with most of the customers, it was hard to say the phone company was entirely at fault (except the lady who was incorrectly charged airtime and the phone company gave her the runaround). The hidden charges may be buried deep in the fine print but it is there and the client signed a contract agreeing to pay and the phone company is within its rights to demand payment.

I was secretly glad that we’ve ditched our pricey monthly plans and gone the pre-paid route. Our annual cell phone bills with an el cheapo plan from Speak Out Wireless available through 7-Eleven costs us less than $50 per year not including the price of a phone. Granted, not everyone can be a light cellphone user but everyone can easily find ways to cut down on their monthly bill.

This and That: Dog days of summer edition

August 13, 2009

18 comments

I’ll be participating in a live discussion on investment topics on Globe Investor on Monday, August 17, 2009 at noon. I hope you can join in.

  1. Investing is fairly simple — develop a good plan and stick to it. Many investors don’t even have a plan but even those that do have trouble with the “sticking to it” part. Dan Richards wrote in The Globe and Mail about the behavioural traps that keep investors from sticking to a plan. Michael James also noted that when stocks are down, investors fail to rebalance believing their plan might be too aggressive.
  2. I don’t want to pick on The Star but its headline (Canadians paying through the ear for cellphones) is representative of a recent OECD report on cellphone prices in 30 countries. Dig deeper into the reports and you’ll find that Canada actually ranked 11th (out of 30 countries) in low-use, 3rd in “medium-use” and 12th in “high-use”.
  3. Rob Carrick shows how to build a diversified portfolio with just three iShares ETFs.
  4. Tim Cestnick listed the things that can help with winding down a loved one’s estate.
  5. Thicken My Wallet says that financing a small business is a larger-scale version of personal money management and the lessons of one apply to the other.
  6. Million Dollar Journey wrote about the Guaranteed Income Supplement (GIS) and its clawback. Personally, I’m hoping we won’t receive GIS!
  7. Claymore is conducting the 2nd Annual Next Top Model Summer ETF Competition. Larry MacDonald has some tips on winning stock picking contests. Last year, I picked CLO, COW and GAS and finished somewhere near the bottom.
  8. Kids will be back to school in a couple of weeks. Chaya Cooperberg wrote about how back to school shopping is stressing parents out.
  9. Where Does All My Money Go? featured a guest post by Daniela Garritano on having a champagne wedding on a beer budget. Speaking of weddings, Realizing Retirement, a new financial blog, featured the first in a series of posts on planning an actual budget wedding.
  10. Summer is also the time for vacations. Four Pillars says that to calculate the true cost of vacations, you have to net out the expenses of staying home.

With temperatures topping 30 degrees in Ottawa, summer seems to have finally arrived in Central Canada. Have a great weekend everyone!

The Home Renovation Tax Credit (HRTC)

February 8, 2009

65 comments

It could be argued that we are in an economic crisis because we spent too much, saved too little and binged on credit. It is ironical, therefore, that the biggest tax measure in Budget 2009 would be a tax credit that encourages Canadians to spend even more. Leaving aside the larger question of how putting extra money in our pockets for replacing a roof or furnace that we would be replacing anyway, calling it “stimulus spending” and financing it by going into deficit makes much economic sense, let’s look at the big questions people have about the new Home Renovation Tax Credit (HRTC):

How much are we talking about anyway?

The HRTC is a non-refundable tax credit that could provide up to $1,350 in tax relief. The 15% credit applies on all eligible spending exceeding $1,000 but not more than $10,000. For example, if you have $3,000 in eligible spending, you’ll qualify for a tax credit of ($3,000 – $1,000) x 15% = $300. Remember that the tax credit is family-based. If both you and your spouse are working, either of you (but not both) can claim the credit in your 2009 tax return.

I replaced our furnace in December, 2008. Would the spending qualify for the HRTC?

No. The HRTC is a temporary tax credit and eligible expenses should be incurred after January 27, 2009 and before February, 1, 2010. The budget document also says stipulates that the expenses should be under agreements entered into after January 27, 2009.

What qualifies as “eligible” spending?

Budget 2009 states that “renovations and alterations to a dwelling or the land on which it sits that are enduring in nature” qualify as eligible spending for the HRTC. The renovations could be done on a home, cottage or condominium. The budget document says the following qualify as eligible spending: Renovating a kitchen, basement or bathroom; installing new carpets or hardwood floors; building a, addition, deck, fence or retaining wall; a new furnace or water heater; painting the interior or exterior of a house; resurfacing a driveway; laying new sod; etc.

I’d like to replace our kitchen appliances. Does it qualify for the HRTC?

No. Purchase of appliances, furniture, electronics and tools does not qualify for the credit. Routine maintenance such as carpet cleaning, furnace tune-up, snow removal, lawn care and pool cleaning does not qualify.

While it makes sense take advantage of the credit for home improvements that you were thinking of making anyway, it may not make much sense to incur additional expenses just to get 15% back. Also, it is possible that the HRTC becomes too popular and contractors jack up their prices in light of heavy demand. So, you might want to get quotes for home improvement jobs now when most people don’t seem to be aware of a new temporary tax credit.

A further concern is that you need receipts to claim the tax credit. With many contractors working on a cash basis, it is possible that the tax credit would be reduced by a higher renovation bill. Still, this year you may want to keep every Home Depot and Rona receipt in a separate file so that claiming the credit becomes easier at tax time. The relevant portion of the budget that deals with the HRTC can be found here.