Building a House – Matt Lukas shares his experience

sectional couch

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As my wife and I do our progress inspections of the new build, we find ourselves getting into discussions about the new furniture and fixtures that will complement the house’s new style. We’ve visited a few different retailers to discuss our options – and we’ve done some research to figure out when is the right time to buy.

I’ve been a little taken back by sticker shock on some items – we want to get a new sectional sofa for our main living space, but I can’t justify spending over $5,000 for a couch, no matter how comfortable it is. The sales associate was on-the-ball noticing my look of dismay, and quickly chimed in that in-store financing was available. Not a bad idea, but not for me. couple with their dog

In my last blog I talked about budgeting, making sure my cash flow matched the needs and wants I had at the time. So while I could forego a little bit of savings to have a really nice couch – it doesn’t make long-term financial sense for me to spend the money now on furniture, and potentially forego years of retirement savings or dip deeper into my emergency savings if something bad happens.

This experience brought forward a few financial tips you may find useful.

Number one: Applying for in-store financing

Credit is important, using credit is important – but using your excellent credit to temporarily finance household goods is detrimental to your credit. Equifax Canada says that up to 15% of your credit score is comprised of the length you have established credit. New credit can hurt your score over the short run. They also note that 10% of your credit score is comprised of the type of credit you own – Mortgages, loans and lines of credit are good; credit cards are okay, in-store financing or prime lending is not so good and can hurt your score over the long-run. So, let’s go back to my situation in the furniture store.

Here I am, sitting on an expensive couch that my wife and I like, we’re feeling the pressure of buying from the salesperson and we need to make a snap decision about money. My best piece of advice, take your time and walk away if necessary. So, that’s what we did.

Number two: Do your research

It turns out, that awesome, expensive couch we were sitting on is manufactured and shipped from the States. As of right now, the Canadian dollar trades at roughly $0.75 USD – so from my perspective, the item is overpriced by 25% just based on the disparity of the currency. If I was buying last summer, this item should have cost much less.

My outlook has changed slightly, now when shopping for furniture, I’m going to ask about Canadian-made items – the pricing is much more competitive, the shipping and manufacturing time is less, and the quality is truly comparable.

Number three, my last point: Compound interest

I mentioned earlier that this type of purchase could significantly impact years of retirement income, and you may have scoffed and thought, “Really Matt, over $50 or $100 a month?”

The truth is, I’m not retiring tomorrow, and my investment time frame will be another 25 to 30 years (depending on the financial decisions I make today). The more I contribute to my savings now, the more opportunity that money has to earn interest; and, that interest earning interest, and so on. A wise man once said, “The greatest tool an investor has in their tool belt is time”, don’t squander the time you have now to plan for your future.

Tools I recommend:                                                                         

YNCU Retirement Planning Tools: https://www.yncu.com/Personal/ToolsAndCalculators/Calculators/RetirementPlanner/

Consumer Reports:

http://www.consumerreports.org/cro/index.htm

Equifax Canada: http://www.consumer.equifax.ca/home/en_ca

Follow me on Twitter @matt_at_YNCU for updates and more ways to be financially fit.

 

house under construction

Are you buying or building a house? Share your comments and questions with us!

March is Fraud Prevention Month

girl with red hair getting credit card number stolen on computerProtect yourself from fraudsters!

Here are some steps you should take to prevent fraud from happening to you or to someone you love (courtesy of Crime Stoppers and the Waterloo Regional Police Service).

 
ELDERLY FRAUD/SCAMS

• Beware of the “hi grandma/grandpa, it’s me” telephone scam. Hang up and report.
• Always know who has access to your bank accounts, cheque book and credit/debit cards.
• If you suspect an elderly friend or relative is getting exploited, report it. They deserve better.
• Never provide anyone with personal or banking information to receive what they claim is a lottery prize.
• If a pushy salesperson is trying to convince you to buy something, be rude but safe: close the door.

Senior Woman Giving Credit Card Details On The Phone

 
IDENTITY THEFT

• Do not post pictures of your ID on social media, even if you’re proud of passing your driver’s test.
• Remember that when stores ask you for your personal information, you can say no.
• Always protect your mobile device with a PIN, pattern or password.
• Try using SuperGenPass for secure and diverse passwords.
• Get to know the privacy settings on your social media accounts and be careful of what you post.
• Your personal information is a lot like the ‘one ring’ in Lord of the Rings: “Keep it secret, keep it safe”.
• Do not pick security questions other people would know the answer to or could easily find out.

 
ONLINE FRAUD

• Never reveal who you bank or invest with on social media.
• Make your passwords complex and change them often.
• Online ads often have malware in them. Disable them by using an Ad Blocker tool.
• Beware of chic investment websites, their credibility and security varies.
• Always mouse over links in all emails to ensure they go to the URL they claim to.
• Your bank will never randomly email you asking you to confirm your password and personal information.
• Beware of online charities and ‘fund me’ campaigns. Don’t take them at face value, they could be scams.
• Always shred your bank statements and other sensitive information, don’t trash it.

 
CREDIT/DEBIT CARD FRAUD

online fraud, man without face on laptop computer
• Never write down or share your PIN number with anyone for any reason.
• Always cut up old cards and IDs into small pieces and dispose of them separately.
• If you lose your credit or debit card, call your bank asap to have it cancelled.
• When shopping online, only use well-known retailers with secure (https) checkouts.
• Review your account statements diligently and report any suspicious or inconsistent transactions.
• Do not use your credit or debit card in suspicious terminals or machines. Your hunch is correct.
• Never provide your credit card information to anyone on the phone.

CHEQUE FRAUD

• Never pre-sign or partially fill out any cheque, even if it is in your possession.
• It’s a scam if someone sends you a cheque or money order and asks you to return a portion of the funds.
• When mailing a cheque, wrap it in a printed paper or card to make it harder to detect.
• Always use cheques in numerical sequence to make any lost or stolen cheques easier to detect.
• Most banks have an option to view an image of every cashed/deposited cheque you wrote. Use it.