I was able to put a big checkmark beside my 2023 personal finance resolution, which was for my wife and I to get our wills updated. Now, to set a 2024 goal.
I’m thinking it will be more estate planning, specifically a review of all our savings and investment accounts to ensure we have chosen beneficiaries or successor account holders/annuitants. If you’re looking for ideas or inspiration for your own 2024 financial resolutions, I’m here to help.
For this first newsletter of 2024, I have assembled a collection of links to advice on credit cards, saving money and investing, as well as commentary on the economy. Some thoughts on not only picking some financial resolutions, but following through:
- Pick only a few: Two or three is plenty
- Pick achievable goals: Rather than getting out of debt, how about halving the amount you owe or reducing it by, say, 25 per cent?
- Pick goals with an impact: Think not just about how much money you’ll save or make, but also about peace of mind. Relieving money stress has a big payoff in mental health.
If you’re up against it financially as a result of inflation or high borrowing costs, ditch the goals and aim for survival with a minimum of damage. It’s not said enough, but personal finance is very elastic. What you don’t accomplish this year can be a focus in 2025
Now for a 2024 personal finance and investing toolbox:
The best of credit cards: Almost 190 cards were considered for this list of best cards on the Savvy New Canadians blog, with winners chosen in 23 categories. Here’s another list of the best credit cards for 2024, this one from a financial website called Ratehub. And now for a rare example of a credit card that is improving its rewards. Usually, it’s the reverse.
The worst of credit cards: Some real life examples of how long it takes to pay a substantial credit card balance if you make the minimum payment. We’re talking decades.
Dig deeper for households savings: After two years of inflation and high interest rates, you’ve probably tried a lot of ideas for saving money. Here’s a list of 15 tips for finding savings at home – I like the two suggestions related to vehicles.
Set up your finances: On the understanding that a fresh perspective can be helpful in presenting personal finance, here’s a list of money management lessons from Lord of the Rings. Yeah, the book and movie series.
What’s ahead in the mortgage market: Rates for fixed mortgages were coming down in late 2023 – here’s a look at what to expect in the year ahead.
Keeping it real when buying a new vehicle: Readers of this newsletter know I struggle to process how much money people are spending on new cars, SUVs and trucks. Here’s a list of the cheapest vehicles in the Canadian market. Notes on a few of them: I drove a Nissan Sentra rental recently and was surprised how good it was to drive, and how comfortable it was; I was in an Uber driver’s Volkswagen Jetta recently and had to compliment him on what a nice vehicle it was; I drove a Mazda3 rental not too long ago found it to be a comfortable ride, but so-so on pickup and fuel economy
Your 2024 economic questions: An economics forecasting company looks at the biggest questions about what will happen to the economy in 2024, including the expectations for interest rates. Now for a look at some of the big economic trends in Canada and globally in 2024, including consumers embracing “shrinksumption,” which means pushing back on price increases by buying less.
Dividend stocks: A blogger with an interest in dividends on the stocks he’s considering in 2024 for his tax-free savings account.
For millennials and Gen Z: From our Stress Test personal finance podcast, five achievable resolutions for 2024. Here’s another bunch of resolutions for young adults, including something original – use AI to help make good financial decisions. Also, a real-world list of financial milestones to reach by age 30.
Where to invest: A look at what big global investment banks are doing. Also, what to do with stocks, bonds and crypto, and top picks and portfolio advice for 2024 from nine Canadian fund managers. Now for a look at the Canadian stock market, and the attractiveness of bonds.
The debt situation: A detailed look at how much Canadians owe, including data for cities. Put together by the Savvy New Canadians blog, which has been doing a lot of great work lately.
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Ask Rob
Q: With so many of us investing in guaranteed investment certificates at this time, I would like to understand the income tax on various forms of investing. I have a friend who will only invest in high dividend stocks because she believes it is taxed more favourably than say a GIC. I, on the other hand, read that a high dividend stock may be more risky and thought the income tax on a GIC may not be that bad. Could you make an example of say a person earning an income of $75,000, what tax would be on a stock dividend versus a GIC?
A: A handy tool for this type of comparison is the 2023 personal income tax calculator from E&Y. It shows that someone with a $75,000 income would pay a marginal tax rate of between 28.2 per cent and 37.2 per cent on regular income, including interest from guaranteed investment certificates. The marginal tax rate on dividends from publicly traded companies would be between 7.56 and 18.88 per cent. GIC interest is definitely taxed more heavily. As for risks, GIC investments covered by deposit insurance are virtually risk-free, while dividend stocks can fluctuate a lot in price and, in rare cases, cut or suspend their dividend.
Do you have a question for me? Send it my way. Sorry I can't answer every one personally. Questions and answers are edited for length and clarity.
Tools, Explainers, Guides and Charts
The federal Financial Consumer Agency of Canada has created a financial well-being dashboard that documents how people are feeling about money. An attempt is made to balance positives and negatives.
The money-free zone
I spent some time recently looking at best music of 2023 lists and one of the nuggets I found was an album called London Ko, by the Malian musician Fatoumata Diawara. It’s fresh, upbeat music that will set you up well for the year ahead. Diawara plays electric guitar, and she’s mesmerizing. Check out the song Dakan.
Watch This
CreditCardGenius.ca and MoneyGenius.ca produced this video to show their top picks in credit card and other financial products for 2024.
ICYMI
- New year, new policies: what’s changing for personal finance in 2024
- ‘All I’m doing ... is working and paying bills.’ Why some are leaving Canada for more affordable countries
- New tax-filing obligations await many unsuspecting Canadians in 2024
More Rob Carrick and money coverage
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Even more coverage from Rob Carrick:
- 🎧 Catch up on Stress Test: Why millennials and Gen Z are Alberta-bound for a more affordable life • Rising interest rates brought pain for new homeowners – and opportunity for house hunters • Why more Canadians are choosing to be childfree or delay parenthood • Love in the time of inflation: How to manage rising costs when dating • You're not bad at money – you're suffering from money shame • Retirement might look different for Gen Z and millennials. Here's how to plan for it • Recession-beating tips for the job market, housing, investing and the cost of life • Is the middle class dead for millennials and Gen Z?
- ✔️ The housing file: A house isn’t special. Get your head straight about the reality of home ownership • The good, the sad and the unaffordable: Saving for a home downpayment in Canada’s big cities • Property taxes are popping in some cities – how worried should you be about other tax hikes? • Our other real-estate problem – people have too much wealth tied up in houses • Borrowers and savers, here’s how to time the eventual rollback of interest rates
- 📈 Investing: Canada's top digital broker is TD Direct Investing, with an assist from the TD Easy Trade app • 2023 Globe and Mail ETF buyer's guide part one: Canadian equity ETFs • For the ultimate in cheap investing, check out the Freedom .08 ETF Portfolio • Yes, there is risk in Canadian bank deposits for the unwary and complacent • CDIC covers bank deposits, but who protects your investments if your broker goes bust? • Answers to your questions about the low-risk ETF paying almost 5% • Happy fifth birthday to one of the all-time best investing products for everyday people • An investing strategy that wins cleanly over the long term by outperforming in bad years like 2022
- 💰 Your money: Mortgage holders, savers and GIC investors, it’s time to change your thinking on interest rates • How much debt is each generation of Canadians carrying, and how do you compare? • For the sake of their financial futures, young people should leave Toronto and Vancouver • This practical new spin on a savings account might just peel you away from your big bank • Rental fraud grows amid rise in fake, falsified tenant applications • Are Canadians worse off financially now than in the 1980s? • From groceries to auto loans, here’s how much more it costs to live right now • When saving for retirement, should you change your asset mix over the course of your career? • Do retirement income needs always rise alongside inflation? Not necessarily • When the bank suggests you lock in your variable rate mortgage, it has an angle
Rob Carrick