The popular trend in spending this year will be to say no a lot more than we have lately.
Whew, right? If your friends and family cool it on spending, there’s less pressure for you to try and keep pace.
I read reams of economic outlooks for 2023 and one of the common themes was that consumer spending isn’t expected to grow much. For months, financial headlines have documented the growing financial stress on households. But for much of 2022, overall levels of consumer spending levels reflected the exuberance felt as pandemic lockdowns eased.
A drop in spending is not great news for the economy. Fine – let businesses take the lead in spending to support growth. With interest rates expected to remain at elevated levels in 2023 and inflation still a problem, a year of mindful spending would suit many households quite well.
At this point, you’ve likely made a lot of spending cuts and compromises already. A thought for 2023: make a list of all your household’s biggest discretionary expenses and see if there’s a way to hold the line or reduce costs. Consider everything from your week-to-week spending at restaurants to your big yearly vacation. When looking at each expense, bear in mind that households like yours across the country are feeling tapped out and ready to say no a lot more.
I look at few positive trends in personal finance and investing in my first column of 2023. Below, you’ll find a bunch of links to content that can help you prepare for what I think will be another dramatic year in the financial world.
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Rob’s personal finance reading list
- What’s ahead for housing in 2023
- Where could mortgage rates – fixed and variable – head in 2023?
- Six financial shifts to look out for in 2023: Housing, the economy, crypto and more
- Thoughts on where the stock and bonds markets are headed, with advice for investors
- Five responsible investing trends to expect in 2023
- Five ETF investing themes to watch for in 2023
- 10 worthy personal finance resolutions for 2023
- TSX outperformance but more housing market pain and a recession: What a senior BlackRock strategist predicts for 2023
- Top 10 investing apps in Canada – a mix of trading and investing apps and traditional online brokers.
- The 20 best cashback apps – earn cash rewards by buying things from various companies.
- A roundup of changes to federal tax brackets and tax credits.
Ask Rob
Q: Do you sell loser stocks or winner stocks when making a 2023 withdrawal from a registered retirement income fund?
A: Sell the losers if you have little or no confidence of a rebound in the near to medium term. Consider the RRIF withdrawal your excuse to do the deed. Otherwise, taking profits from winning stocks makes sense. This is a good spot for reiterating some basic RRIF management advice: keep enough money to fund two or three years of RRIF withdrawals in a safe parking spot like a guaranteed investment certificate or cash-equivalent exchange-traded fund. You can dip into this money if you don’t want to sell hard-hit stocks or bonds.
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.
Today’s financial tool
A Handy list of tax numbers for 2023. Something here for retirement savers, parents home buyers and more.
The Money-Free Zone
Merry Clayton’s isolated backup vocals for Gimme Shelter by the Rolling Stones, which are epic. Here’s the full version of the song.
Watch this
This TikTok video offers a simple, on-the-money message about investing.
Calling all retirees
Are you a retiree interested in discussing what life is like now that you’ve stopped working? Globe Investor is looking for Canadians to participate in its Tales from the Golden Age feature, which discusses the realities of retirement living. If you’re interested in being interviewed for this feature, and agree to use your full name and have a photo taken, please e-mail us a few details about your retirement life so far at: goldenageglobe@gmail.com
In case you missed these Globe and Mail personal finance-related stories
- Six tips to cut your spending, bust your debt and increase your money in 2023
- The Home Ownership Tax Shelter is unfair to Prairies, Quebec and Atlantic Canada
- Tips for young Canadians finding themselves in debt for the first time
More Rob Carrick and money coverage
Subscribe to Stress Test on Apple podcasts or Spotify. For more money stories, follow me on Instagram and Twitter, and join the discussion on my Facebook page. Millennial readers, join our Gen Y Money Facebook group.
Even more coverage from Rob Carrick: – H6
- 🎧 Catch up on Stress Test: Is the middle class dead for millennials and Gen Z? • Gas prices are soaring. Are electric vehicles an affordable solution? • Crypto is booming, but should you invest? • How are young Canadians dealing with soaring rents? • Inflation is squeezing our finances. What can we do about it? • Is a hot housing market squeezing Canadians out of their small towns?
- ✔️ The housing file: How bad is housing affordability? Even a crash won't help • Sell the family home to lock in profit and then rent? Better not • Why young adults can't afford houses: Hard work got you more in the past than it does now • Five reasons you should not buy a house till you're at least 30 • Now more than ever, owning a house is not a retirement plan
- 📈 Investing: The 2022 ETF buyer's guide: Best Canadian equity funds • The 2022 Globe and Mail digital broker ranking: Does the zero-commission revolution flip the script on who's best? • With bonds sinking, conservative investors are waking up to risks they never saw coming • A five-step plan for dealing with the sad fact that almost every investment is falling lately • The best financial advice in advance of retirement? Work on your marriage • One-year GICs are the best deal in town for safety seekers • What to do if the financial plan you paid thousands for disappoints
- 💰 Your money: Are you prepared for the pandemic wealth boom to blow up in our faces? • This hard-working 24-year-old is nailing it financially. But where’s the happiness? • Who should and shouldn’t worry about the wave of rate increases this year, and what every stressed-out borrower should do right now • Don’t make this potentially costly assumption about the CPP Survivor’s pension
