More Money Podcast - 352 2023 Life Update and Q&A - Jessica Moorhouse

Episode Date: February 2, 2023

I haven't done a solo episode in over a year, so I thought the perfect time to do one would be to help kick off a new season of the podcast. In this episode, I wanted to share how my 2023 got off to an odd start and how that led me to reflect on what I want from 2023 in both terms of my life and my business. I’m also answering lots of questions that were asked over on my Instagram and my email list, including some personal ones like how I feel about my money, especially with a recession looming and interest rates continuing to rise. Other questions include, how to use a money windfall and how to talk to your partner about money in your relationship. Even though we’re in February, it is never too late to set some goals and intentions for the new year, especially when your finances are concerned. I hope this episode helps to give you that post-January boost to keep going so that you can have a great year! For full episode show notes visit: https://jessicamoorhouse.com/352 Learn more about your ad choices. Visit megaphone.fm/adchoices

Hello, Lulu, and welcome back to the More Money Podcast. This is your host, Jessica Morehouse, and this is a solo episode. It's just me this time, and I have not done one of these episodes for a, gosh, very long time, maybe a year, maybe more, I don't know. And I thought it would be a nice thing to do to kick off season 16 of the show to have this special episode where I talk a little bit about, you know, just a little reflection on last year, maybe some things I'm working on this year. But also, most importantly, and this is probably why you're going to be listening to this episode, answering some of your questions. So I sent out an email to my email list. I also put this on Instagram. And

I got a variety of questions. I said, ask me literally anything, and I will answer them in this podcast. And that's exactly what I'm going to do. And I have a, like, it is a jumble of questions. Like, I'm like, it is everywhere. So we're going to get into it. And I'm excited about that. But yeah, to start things, let me share a little bit about me, a little life update. It has been a very interesting start to 2023, if I'm honest. So I think I shared this on my Instagram, but also to if you're an email list subscriber, also on my email list. I was set to, you know, finish season 15 of the podcast end of December and then head on over to Vancouver for Christmas with my family.

And of course, guess what happens? This girl finally, finally gets the Rona, got some COVID. And hey, you know, I'm not mad at it because it was bound to happen. I've been evading it for, I mean, three years, basically. And so it was bound to happen. So that unfortunately meant that I had to, well, I had to change my flights, change my plans. I didn't make it to Vancouver until New Year's Eve. And it was a weird Christmas, if I'm going to be honest. It was definitely a weird Christmas. Basically, I was in Christmas mode and everyone was ready to get back to work and start the new year. So I felt like I was a few weeks delayed starting 2023, which never is a good

feeling, right? I don't know. I like starting the year like, all right, let's do this. I've got, you know, my goals set. Let's, you know, get off to the races. And yeah, it wasn't like that. We returned, I think, after January 10th to Toronto home. And yeah, I just felt like things were like off. Everything was off and it really was weird. But, you know, things are still looking up though. But I don't know about you if you have this. I get this every year and it was definitely delayed a few weeks. But at the end of every year when there is that weird quiet period between like Christmas and New Year's and even a few days after New Year's, I get really low. I don't know about you, but I always get really low probably because, you know, I just realized another year has passed. And, you know,

maybe taking a look at my goals, a lot of goals I didn't achieve and feel kind of, you know, hard on myself, which I really shouldn't be, but I can't help it. It just happens. And just, yeah, I just feel like kind of like, huh, you know, and I also, you know, just the normal existential crisis of what am I doing here? What's the point of life? And why are we on this planet? You know, called my therapist again to get a little tune up and have been reading some really great, interesting, thoughtful books. And I'm honestly changing or I'm hoping to change my mindset going into this year. And what I mean by that is I've been thinking a lot about why, well, yeah, why am I doing all of this? But also specifically, like, what am I working so hard towards?

Like, yeah, I set goals every single year and, you know, I achieve a good amount of them, but not all of them. I don't think there's ever been a year where I've achieved every single thing on my list. But I just had a moment where I'm like, what am I doing? What am I running towards or running from maybe? And it made me realize some internal things that I need to actually work through for like, why do I feel like I need to be at a certain level of success or a certain level of wealth? I mean, it doesn't help that me being in this personal finance sphere, you are constantly

being compared to other people and you constantly compare yourself to others about, you know, they have this and I don't have that. And why don't you have this? They have that. And it just made me think about, okay, as I get older, turning 37 this year, what do I actually really want in life? Because I don't think it's the same as what I wanted in my 20s. And so trying to just reframe really what the heck I want, what I want my life to look like. And honestly, it's less to do about achieving things or accolades or things that, you know, the shiny object that we're all trying to get for some reason, because I should know better by now talking to hundreds of people over the past seven years on

this podcast who have achieved some amazing things. The shiny object, the trophy, the title, whatever it is, is not the thing. I know so many people who you would think they have it all, they must be so happy, and they're not, or they still have other struggles outside of that, or they achieve that thing. And then it's not, you know, then what? You know, you feel good for a minute, but you can't just coast on that amazing feeling of achieving whatever you want to achieve forever. It dissipates, and then you're left with whatever you were running from. So that's some internal stuff that I'm working through that I hope to continue to work through and also just research and learn more about and integrate into the podcast. Really, I think as much as I love talking about the

practical things we can all do to improve our finances and build wealth, I definitely want to have more conversations about kind of the deeper stuff because that is the stuff that's going to make real lasting change and actually motivate you to do some of those practical things. It's not just about hustle, work harder, you're lazy, or do this, don't do that. It's not black and white. And it's a little bit more complex than that. So that's what I've been going through. That's how I started my 2023. So that's a lot of fun. But some other kind of things to share with you. So number one, one other thing that I really worked hard, it took me literally a whole year to do, which is crazy when you think about it.

Finally, I have finally updated all of my budget spreadsheets. So I've had these budget spreadsheets, I developed them many moons ago, I can't remember what year, but I think I started offering them versus just a there's just one as a free download on my website, probably like five years ago, I can't remember. And then I started developing a bunch of others because I kept on getting emails. Hey, do you have one for self employed couples? Do you have one where we're a couple and one person has a self employed business and I'm an employee, all these different scenarios. And so I have created a bunch of spreadsheets for I swear, any kind of scenario that I could think of. And they are finally all done, upgraded better than ever, lots more customization and just easier to use. And I use one of them myself. I actually use the one for a self-employed

and employed couple. I'm the employee because I have a corporation and I'm the employee of my corporation, pay myself a salary, and then my husband is self-employed. So I use it myself. But they are now available on my website at jessicamorehouse.com slash shop. So if you want to take a look, you can check that out. There's also even a cool little quiz that you can take where you can put in your information, answer a few questions, and it will tell you what is the spreadsheet that is the best fit for you. So make sure to check that out.

And also there's video tutorials for every single spreadsheet. So before you download, buy, you can watch the whole walk through to really see what you're going to get. They're also all available on my YouTube channel. And speaking of, that's another thing that I'm going to be really focusing hard on in 2023 is my YouTube channel. So I set a goal for myself at the end of the year. I can't remember if I shared this on the podcast. Maybe I did. I can't remember. But the like November, December of 2022, I actually was participating in this really cool program called, oh gosh, I think it was called just the YouTube Accelerator. It was put on by this organization called Concept in collaboration with YouTube. And I applied

because someone reached out to me to say, you should apply for this. And I applied and then I got in and it was me and a bunch of other Canadian content creators. And it was just to basically teach us how to really how to how to really optimize YouTube. Because even though I know some things, gosh, there was a lot I didn't know. And a lot I got wrong was doing tear like, oh, now I look back my cringe. So really excited to focus on YouTube this year, as well as a podcast. Don't worry, nothing's going to change with the podcast. But I'm also going to really double down on YouTube because I realized I really like it. And also, it is more me just, you know, I could it's a solo episode kind of every time where I can kind of explore a specific topic or answer a specific question or show you

how to do something. So make sure to check that out youtube.com. Actually, I don't know if it's like slash Jessica Morehouse. You can just Google Jessica Morehouse YouTube, it'll be in there or Or no, it's JessicaMorehouse.com slash YouTube. That's where you can get directed right there. But I think I'm the only Jessica Morehouse on YouTube that I know of that I found. So you can check me out there. But my goal that I set at the beginning of this year is to put out at least one video every single week. So far, I've done that. So that means I'm going to be putting out at the minimum 52 videos this year, which is a lot because I love this podcast, but it is a well-oiled machine. I've got some people to help me with it. My podcast editor and my sister who

does some of the podcast show notes and a bunch of other things to help me. It is pretty easy to do this podcast now. But also it's like, you know, it's almost eight years old. So yeah, it should be. YouTube is another beast. It is. It's a lot of work, man. It is a lot of work to put together those videos. But I'm excited. So make sure to subscribe, check it out. And yeah, see how things grow. We're hoping to keep on increasing our subscribers. And by we, I mean me. I don't know why I said we, it's just me. But yeah, you can check that out. I'm excited about that. But I feel like those are kind of, it's such, we're so early into the year, there's not a lot I can really share besides some of those

things that I just shared with you. So I feel like now is probably a good point where I can shift and start answering some of the questions that I got because, gosh, I've been getting more questions than ever because it's a weird time. 2022 was rough for a lot of us. And you know, we're I think a lot of people are concerned about what's happening this year. We keep on hearing the word recession, layoffs, inflation, high interest rates. We've got some concerns, and we've got some questions, and I want to answer as many as I can. So I've got a bunch that were submitted. Some are very specific. Some are a bit more general. So I'm just going to work my way through as many as I can and see where we end up. I'm going to answer, I'm going to start off with some easy ones.

Because, you know, let's just start off with some easy ones. I asked people to submit questions that were either about like general money questions, or personal questions. And I only got like two sort of personal questions. Like, I guess you guys just don't really care. And that's fine. That is totally fine. But I thought I'd get a little bit more personal questions. But, you know, I don't share a lot about my personal life. So maybe it's hard to ask me a question when you don't even know where to start. But I mean, to be fair, there's just nothing much to share. Like, it's not a crazy life I'm living over here. It's very, it's very boring. But hey, who cares? Anyways, so let's start off with some softballs for me. One question that I actually really like this question,

how do you feel about your money? And I feel like that's a question I ask a lot like people, and I don't know if anyone's ever asked me that. So thanks for that question. In general, I will say I feel really good about my money. And I can say that confidently because for pretty much all of my 20s, I felt terrible about it. I felt bad because I was definitely stuck in that mode of comparing myself to others and some of the benchmarks they were able to meet. And I wasn't. I was not earning much throughout my 20s. It's high cost of living. And I just didn't, you know, I felt like that kind

of life checklist were given by our parents, you know, buy a house, start a family, get married. I wasn't doing any of that. And I felt kind of, you know, crappy about that, that it was taking me longer than my parents. Now we know that it's because, you know, everything was kind of, you know, crappy about that, that it was taking me longer than my parents. Now we know that it's because, you know, everything was kind of stacked against us. And it's not, it's not easy to reach all of those goals and, you know, benchmarks. But I, yeah, had, I think, a kind of not healthy relationship with money. And I put a lot of pressure on myself to live really frugally and earn more and, you know, just do more. And I definitely burnt myself out a few times. But now that I'm in my, can I still say my mid 30s? I'm 36. Why not? I feel really good. And I think part of it is that money is something that you can change

how it affects your life. You know, I've done a lot of research about, you know, psychology and behavior when it comes to money. And I think that's really important because it affirms some things that you're like, oh, I thought that, but I wasn't sure if it was just me. But no, like money is complex. And we all have our different kind of, yeah, relationships with money that luckily you can change and it can evolve over time. And so I've worked really hard over the past few years to try to have a healthier, better relationship with money. And so part of that is like not putting so much pressure on myself for achieving some of these crazy things that you see online. Yeah, I don't. I didn't reach million dollar status by 30. Sorry, I didn't do that. And you know what, it actually doesn't matter. That's cool that other people can do that. I wasn't able to do that. That shouldn't have any

relevance because that doesn't mean that I'm not happy and I didn't achieve some other things that were important to me. So I've really learned to focus more on me and what I want and what makes me feel good. And what makes me feel good is making my own plan, having my own budget, tracking my number so we know where everything is. And when things shift, like, hey, interest rates are up and we have a variable rate mortgage and our mortgage is more expensive, we can make a plan for that. We can shift some things around. Me and my husband could have a conversation about, okay, what's our strategy? And it just makes you feel more empowered and more in control. So to answer your question, I feel really good about my money right now. All right. So another question sort of along the same lines, and I kind of like this,

what do you most like to spend your money on? Well, I do know the answer because I track my spending, so I know where every dollar goes. And it looks like I love to spend my money on food. I love food. It makes me happy going to a restaurant or doing takeout. And that is what brings me instant joy is food or things for my kitchen. One of the things that I always dreamed of, and I bought myself, it was on sale last year when I bought my house was a KitchenAid mixer because I always wanted to be I just I always wanted it. I'm a big fan of British Bake Off. And so I wanted to get the ones that they you know that you see on that show all the time. And yeah, I love buying kitchen appliances and kitchen

cookbooks and food. That is where that was. That's what brings me joy. Sometimes I like buying makeup. But honestly, like, I don't wear makeup unless I have to be on TV or do some speaking or do social media where my face is there. Otherwise, it's there's no makeup going on. So it's not really a thing that I just like, love to do is something it's more like I have to do. And clothes I just don't care about. Honestly, I just I love to look good when the time you know, I when I have to, but in general, I'd rather be comfortable. So sweatpants it is and pajamas and that's what I'm doing. So food is the answer to that question. All right, here's a really good question. I feel like I'm able to shed some light not only because I have worked with a number of clients over the

years as a financial counselor, but also because I've been in a relationship for a very long time. It's come into 15 or 16 years. It's going to be your 10-year wedding anniversary this spring anyway. But the question is, what is the best way to initiate a conversation about money? And maybe that could be for your partner or your friend. Those are very different scenarios. It's never easy, number one. So I always kind of feel like instead of building it up in your head to have this big formal conversation about money, because I certainly did not do that. You can bring up money in natural ways and just casual conversation. Like basically, you can bring up a scenario and ask your friend or your partner, what are your thoughts on this? Or you can talk about yourself like, hey, FYI, I was thinking about paying off my credit card or something like, I don't know, be like, have you ever had an experience like that?

Or do you have some advice for that? If you bring it up kind of slowly in bits and pieces, then when you do have maybe a more kind of longer, deeper conversation about money, it won't necessarily seem totally out of the blue because you've never talked about money before. So I always think bringing up in like little bits is easy. But then also when you do have that big conversation, the thing that I learned that I was not good at at the beginning, because I talk about money all the time, I think I had my like financial counselor hat on or educator hat on when I had some big conversations with my husband once we got married. And that's not helpful because then it feels like you're

the teacher and they're the student. No one wants to feel like that kind of power dynamic. You want to come at it from a place of you two are equals. You are initiating the conversation. I think also maybe having an agenda is kind of good, like a few questions or things that you definitely want to touch on. But the job for you is really to ask some questions. Actually listen, don't just want to stop them so you can share your advice, or your opinion, or this is what I do. Don't come at it from the place that you think you're right and they're wrong. Just remember, you both are coming from so different situations. You have learned about money, experienced money in probably different ways. So it's important to understand where your partner or your friend is coming from and be open. Non-judgmental is the best thing. And really the best way to not be judgmental is sometimes just

not sharing your opinion if it's just not necessary. Like it's, it's tricky when, especially you are more, you know, financially literate, maybe have more experience, you see, oh my gosh, if they just did this, this would help them so much. Remember, that is not your role is really about creating that safe space where they can trust you to share. And then over time, as you build that trust, you can have more conversations about maybe solutions. But again, they have to be open to it. And again, it depends on the situation. If it's just a friend, I mean, you've got to wait for them to ask for advice. Don't be that annoying friend that's like, oh, if you just did it this way, it would be great. Believe me, I have done that. And sometimes I still catch myself doing that.

No one likes that. So don't do it. But when it's your partner, if it's their personal money, really respect that. But if it's something to do with you together, like you're saving for a trip together, and you're trying to figure out how should we do that? Should we open up a joint checking account or whatever? Then again, still come from that place of non-judgment and understanding where they're coming from and really just have that, you know, just like make it so they feel really safe sharing with you. No one wants to feel judged or feel like they're the one in the wrong or they're doing it wrong. No one wants to feel like that. And that's going to just make them shut down and end the conversation. So I'd say really come from a place of openness, kindness,

honesty, but not brutal honesty, and just creating that safe space so they feel comfortable with you because then you can, you know, easily have more conversations down the road. Now along the same lines, I've got a question about how to nicely get your partner to be better with their money and be a saver. So this is when you recognize maybe some of the not so good money behaviors your partner has. How can you help them change that? Well, first, they have to want to change that for themselves. And so again, that's why open dialogue where there's no judgment and just understanding really comes in. But I think, especially when it comes to like your joint money, having conversations focused on what our values are, our shared values, hopefully, and also what are our goals. So instead of being like,

you should save more, which sounds judgmental, talk about it in the way of like, hey, so I was looking at our budget, maybe we could look at it together and have a conversation with how our spending and always kind of don't, you know, say your spending habits just be like ours, like say, you know, because you're not perfect. Maybe it's also a bit of you. How our spending decisions are really kind of affecting the timeline for, you know, we want to reach some of these financial goals, like that trip or down payment, maybe we can talk about, you know, what we can change in the future so we can really hit those marks. Always put it in like more of a positive lens.

Like, hey, what can we do a bit differently moving forward so we can reach those things that we talked about that really got us excited? Instead of saying, you spend too much, your expenses are too high, blah, blah, blah, blah, blah. Never good. If you can frame it and really always bring it back to our goals and what we want to achieve and our values and the things that get us excited for life, I found that to be more effective than just berating my partner about what they spent. But then also, I think that's why it's important for both of you. I mean, again, this depends on every couple. But what I found helpful for me and my

husband is to have our joint, you know, finances or joint goals and stuff like that. And then have our own personal money where again, we still, you know, make sure we abide by a budget and try to not to go over. But basically, he can do whatever he wants with that personal money, I can do whatever I want with my personal money. And then we cannot judge each other for our choices. So I won't judge him if he wants to spend a ton of money on coffee, and he won't judge me for spending a lot of money on, I don't know, makeup or something like that. It's nice to have that separation and still feel like an individual and also just to be like, hey, it's my money. I can do what I want. That's what's helped me and my husband for a number of years. All right. So I've got more of a scenario question. It's probably a specific question

this person has, but they kind of made it more general for me to answer. You received an inheritance. You have no debt outside your mortgage. What now? I've actually had a few friends that have been in that situation. And it sounds, you know, when you hear it, like, oh, wow, we got an inheritance. That's so awesome. It's actually really daunting and can cause a lot of anxiety. There's a lot of pressure to do the right thing because it's this windfall that you may never get again. You want to make the right choice. So first and foremost, it really comes down to taking a look at what's going on in your current financial situation. Where's the money going? What are some areas that maybe we should focus on? And what are, again,

our goals? What do we want to do? So in this scenario, you have no debt outside of your mortgage. So you don't need to put some money on your credit card or your line of credit. You just have your mortgage. So really, it sounds like, okay, you've got your mortgage, you've got, you know, likely you're retiring or you're investing for retirement. Do you have any other financial goals? You know, maybe you can top up your travel fund if you have a trip coming up, or, you know, maybe you have a family or you have some kids, maybe you can, you know, use some of that money for their RESPs. I don't know, it really comes down to

what are your goals and what are their priorities. So when you write down all of your different goals, and we actually talk about this in my Wealth Building Blueprint for Canadians course, when you outline all of your different saving and investing goals, you also need to prioritize them, which one is number one priority, number two, three, four, because then we when you are in a situation where you do get an inheritance or a bonus or even a tax refund, and you're like, three, four, because then we when you are in a situation where you do get an inheritance or a bonus or even a tax refund, and you're like, gosh, what do we do with this money? You can take a look at that list and be like, well, my number one priority actually above everything else is retirement. So I'm going to put it into my RRSP or my TFSA. Or maybe, you know,

because, you know, maybe you have a variable rate like me and the mortgage and, you know, um, using some of that inheritance money to put down on your mortgage could really ease your cashflow because your payments went, uh, right up. So that might be, you know, something to look at as well. But honestly, if you still feel like really overwhelmed, that is where I highly recommend working with a fee only financial planner. They can take a look at your entire financial picture. They can have that conversation with you because sometimes it's nice talking to a third party about what you want in life and your goals, and they can help you outline all of that for you. So that's kind of what I would suggest for that.

All right, next question. Investing is someone who has a defined benefit pension? I get questions like this pretty much all the time. And hey, if you've got a DB pension, good for you. Those are nice and they're rare. I don't know too many people who have them besides people who work for the government or healthcare. And so I think one kind of misconception is that if you have a defined benefit pension, then you're good. You don't need to invest. Your retirement is set. But it's actually really important to see how much will you potentially get from that pension when you decide to retire. Again, it depends on so many variables, such as what age you're actually going to retire

and that particular pension and all that kind of stuff. But you can find all that information through your employer. But the really important thing to keep in mind is it may not actually be enough to afford you the lifestyle that you want in retirement. And so it is likely really important for you to invest in your own. But I feel like even if it does cover all the things that you can think of when you're retired, I still think you should be investing. And this here's why. Okay, so number one, there's a term called golden handcuffs. And that's a term basically, if you have defined benefit pension from your work, it's amazing to have that pension, but also feel kind of locked in. Because if you leave, then you no longer get the amount that you would if you were to participate in that pension until retirement. So that's where the golden handcuffs kind of comes in. It's like it's a great benefit,

but also you feel like you can't leave. And I know a lot of people stay in careers that they don't love because of this pension, which is not in careers that they don't love because of this pension, which is not worth it. I don't think there's other ways to build wealth. Don't feel stuck in a career for like the next 20 or 30 years just because of this pension. Very well, you can find another job with a pension. Or again, just invest on your own through a TFSA or RSP or mix of both to afford the retirement that you want. But let's say you're happy with your job, you're going to get that pension, that full pension, which is great. Here's why I think you should still invest on your own. First, this may, you know, building up your savings on your

own or your investment portfolio and that wealth on your own just gives you options. It gives you the option to maybe retire early and take a lower pension because you're retiring maybe 10 years earlier than, you know, is kind of the average. But also, what if you want, you have maybe other goals besides just retirement? You can use your RRSP and your TFSA for other goals, such as your RRSP. You can use it for the, you know, first time homebuyers plan or the lifelong learning plan um your tfsa you can do whatever the heck you want with that money and so really think outside of the box in terms of like what does investing mean investing doesn't always mean just retirement it means building wealth to use that money for some future goal which could be retirement or something totally different. So if you have a defined benefit pension, absolutely invest on your own. It gives you options. It gives you flexibility. The next question is a very specific question, especially for us Canadians. It's asking how does the interim candidatal benefit work? And so if you're unaware of this,

let me share a little bit of info about it. I'm actually just on the government's website right now. So the interim Canada dental benefit is to help lower dental costs for families that earn less than $90,000 per year. So parents and guardians can apply for this benefit for their child and the child has to be under 12 years old and does not have any access to a private dental insurance plan. Now, depending on your adjusted family net income, a tax-free payment of $260, $390, or $650 is available for each eligible child. And this interim dental benefit is only available for two periods. And you can get a maximum of two payments for each eligible child. And so the first benefit period is for children under 12 as of December 1st, 2022, who received dental care between October 1st, 2022 and June 30th, 2023.

The second period is from July 1st, 2023 to June 30th, 2024. Now to see if you were eligible, there's actually a great little eligibility checklist on the Canada.ca website. So honestly, if you just Google interim Canada dental benefit, it'll pop right up and you can kind of take a look at this checklist to see if you are eligible to take advantage of this benefit. Now speaking of government and benefits, though this isn't really a benefit. I have been getting a lot of questions about this new tax free first home savings account, which I think people are using the acronym FHSA. It is the worst name. It is too

long. It is dumb. I'm not a big fan of it. There's some great I mean, it's it's great that it's going to happen. But I wish they just, I don't know, did something better to make another account that is super confusing for people like just like up the TFSA or RSP limit. I don't know do something different. But hey, it's the government and I'm not involved in that. It is what it is. But I can explain how the FHSA works. So it does not exist yet. I think a lot of people are getting confused. It does not exist in Canada yet. It is set to be launched in the spring, specifically April 1st. But I think the bill still has has to be passed but it's likely going to be passed and so I will absolutely be making a video about it when that happens because you never know maybe they're going to change something but if they don't this is what they've proposed for what you're going to get what the the basics are and your eligibility and all that kind of stuff so

basically how it works is it's going to help first-time homebuyers to save $40,000 tax-free. So similar to an RRSP, whenever you make a contribution to your FHSA, that contribution is tax deductible. Also similar to a TFSA, any income such as interest or dividends that you earn or capital gains that you earn in your FHSA, any income such as interest or dividends that you earn or capital gains that you earn in your FHSA, that is tax-free if you make a withdrawal. So if you put $10,000 in there and then it grows to $12,000, you make a withdrawal of all of the money in that account, no taxes, tax-free. Now, in order to be eligible, you have to be a Canadian resident. You have to be 18 years old or older and, of course, have to be a first-time home buyer. Also, some extra things to take note of. So the account can stay open for 15 years or until the end of the year you turn 71 or at the end of the year following the year in which you make a qualifying withdrawal from your FHSA

for the first home purchase, whichever comes first. That is a mouthful and I don't like it. All right, some other important things to take note of. So you can contribute a total of $40,000 to your FHSA. That is your lifetime contribution limit. However, you were only allowed to contribute $8,000 annually. So that's fun to keep track of. But any unused contribution room can carry forward to the following year up to a maximum of $8,000. Now you may be wondering, hey, what if I contribute to this account and then I actually don't buy a home? Am I screwed? Because like that's one of the nice things about using your RRSP and the first time homebuyers plan. You can decide easily if you want to use the money that's

in your RRSP for that plan or not. You can change your mind and don't have to do anything, right? But for this, it's like you're kind of making the decision, this money is for my home purchase, because that is what the account is for, right? So if you're in a situation where you've been contributing to your FHSA, and then you don't want to buy a home anymore, what can you do? The good news is you have some options. So really kind of the best option would be to transfer that money to your RRSP or RRIF. And you can do this on a non-taxable basis. So if you make that transfer, you don't get dinged taxes. The only way you will be subject to taxes is if instead of transferring that money, you just make a withdrawal, then obviously you have to pay taxes on that money. Basically the exact same rules that apply

when you have an RRSP and you want to make a withdrawal from that RRSP. So those are the kind of main points about the FHSA. But again, it will launch April 1st, and I will definitely make a video all about it on my YouTube channel. Okay, I've got one very specific question, but you never know. Maybe you have the same question. Should I buy back into my work's pension after my

maternity leave? My employer does match my contributions? Or should I keep my money and invest it instead into my TFSA? So well, first, I guess it depends on it always depends, doesn't it? You know, what is this money for? Are you okay for it being locked in into your pension and not having access to that money until retirement? Or do you want to invest in your TFSA for a specific purpose? Maybe you just want to have that money a little bit more accessible. Maybe you want to take it out in the near future. But let's say, no, you're cool. You want the money just to be for retirement. In my mind, if I were in that situation, yeah, I would buy back into my pension so I can eventually just make up that lost time because of the employer match. You are earning free money. Let's pretend it's a dollar for dollar match. That is 100% return on your contribution. So to me, that makes the most logical sense. But again, it really comes down to did you want to invest in your TFSA for a different purpose? Or maybe you want to invest in

totally different securities than you can, you know, in your pension, because your pension is obviously very strict. And again, it depends on if it's a defined contribution or defined benefit pension, what it's invested in. So you know, a few things you need to ask yourself. But in general, buying back into that pension to get that employer match could be a good decision. All right, I've got another question that seems pretty specific, but let's see where this goes. So I've got $235,000 sitting in my savings account. Should I save for a house or invest? Well, first off, I feel like whenever I get these questions, I feel like most people are really looking like, should I do this or this? Why does it have to be either? Why can't it be both? Why can't you use some of it for a house and some of it to invest for your future? I think you could

probably do both. That's a good chunk of change depending on where you live and the cost of housing and things like that. But let's pretend. Well, first, first, what I would suggest is go back to that list that I told you to make. And you know, look at your goals and your priorities and see what is your priority. Is your priority to buy a house, especially now, you know, housing is going a bit down here in Canada, maybe this is a good opportunity, then maybe you want to use that home on buying that house, that down payment and closing costs and all that kind of stuff. And if that is the case, then you're going to want to keep that money in your savings account. You don't want to invest it because it could decrease in

value if the stock market continues to go down. So if that's the case, keep it in cash and then buy your house. But maybe this house idea is really just, I don't know if I want to buy a house. I'm just thinking about it, but I'm not really serious about it. If you don't know, invest that money. I mean, there's only a few savings accounts I know of that are offering interest that is above 3%. So if you still want something conservative, you can look for a GIC. There are some GICs that have some decent interest rates right now. So you're still keeping it relatively liquid, depending on what kind of GIC. You may have to pay a penalty or things like that. But again, you could earn a little bit more than a savings account. Or if you're like, no, I want to take on some risk and I'm okay with the ups and

downs and invest it. But again, when you're making a decision on what security or what product I'm okay with the ups and downs and invest it. But again, when you're making a decision on what security or what product I'm going to buy with this money, it always comes down to what is this money going to be for? If you invest in something high risk, like a portfolio of 90% stocks and 10% bonds or 100% stocks, well, there's gonna be a lot more volatility. And really, that portfolio only makes sense for someone who has a high risk tolerance and has the time to manage those ups and downs of the market. So you can just let those waves ride out and wait for that recovery of the stock market. But if you're like, no, I actually, I don't have the risk tolerance for that. And oh, no, I don't want to invest that money and regret investing it because

now I do I do want to buy a house now I am really serious with it and then you see oh your your portfolio is actually only worth $200,000 you lost $35,000 in the market would you kick yourself so that's kind of my answer to that you can do one or the other or you can do both maybe but you know set some of it aside in your savings account or in some GICs for a future home purchase, and then put some of it aside in your RRSP or TFSA to invest for your future. Okay, one question that is pretty specific, but I love it. Would love to hear your opinion on transferring funds from a TFSA to an RRSP to lower taxes. So first, let me explain how that would logistically happen. So you can actually make a TFSA to RRSP securities transfer, you actually have to

sell the securities inside your TFSA. And then you've got cash in your TFSA. And then you would transfer that cash to your RRSP. And then once it's inside your RRSP, you would use that cash to buy the securities. You can do a TFSA to TFSA securities transfer or RRSP to RRSP securities transfer. For example, I did something similar when I had a discount brokerage account with TV Direct Investing at an RRSP. And I wanted to move those securities over to Questrade. So I did a plan to plan transfer with that account and kept those securities. But you can't do that if you're moving securities from a TFSA to an RRSP. So just so you know how that works. But the question is, you know, what's my opinion? Should you do that to lower your taxes? Well, number one, and I'm sure I've

mentioned this on the podcast a few times, when it comes to investing, taxes are a secondary consideration. They should not be the front focus. Too many people I've seen have made really dumb decisions with their money because they're so focused on lowering their taxes instead of actually answering some really important questions about, well, what are we doing with our investments? Is that decision counterintuitive to your investment plan and all these other factors? So first off, you absolutely can do this, your TFSA to your RRSP. But the first thing that you should actually be mindful of is if you withdraw money from your TFSA, let's say it's $10,000, and you want to move that money to your RRSP. Well, because an RRSP is not a tax-free account like a TFSA, it is a tax-deferred account, which means, yes, you get

that tax deduction on that contribution, which is great. But when in the future you want to pull out that money, you pay tax. You pay tax at your full marginal tax rate. So an RSP only makes sense if you truly believe that right now you're in a high tax bracket, but in retirement, you're going to be in a significantly lower tax bracket. If you're in the exact same tax bracket now and then in retirement, it doesn't make sense. You're going to be paying more tax than if you were to just keep that money to grow in your TFSA tax-free. The other thing to consider besides how much you'll end up with after you transfer that money in your RRSP and then make a withdrawal in the future and have

to pay taxes on that money is, well, what you're giving up by putting that money into your RRSP. Once it's in that RRSP, it's kind of stuck there. Of course, yeah, you can make withdrawal, but there's some things to deter you from doing that. For example, if you make an early withdrawal from your RRSP, you do get a withholding tax, so you pay tax on that money that you withdraw, but also you lose that RRSP room forever. With the TFSA, it's so much more flexible and easy to use. You can contribute money. You can withdraw money. Of course, you've got to keep in check with your contributions and withdrawals to make sure you don't accidentally over-contribute, but it's very flexible. You are not taxed when you make a withdrawal and you get that room back the next year. So if you make a withdrawal of $10,000 in 2022, you get that $10,000 contribution

room back in 2023, plus the TFSA dollar limit for that year, which is $6,500. With an RRSP, sorry, you make a withdrawal, you never get that room back ever again. So you are kind of stuck. It's very much more strict in an RRSP. You get a lot more flexibility in your TFSA. So I think when you're considering doing this, you really need to think about more than just the taxes. Also, are you cool just locking up your money inside that RRSP? But there's so many different variables when it comes to something like this. And I don't know whoever submitted this question what your tax situation is, but highly recommend talking to your tax accountant, do some scenarios or even a financial planner who can do some tax scenarios for you to see if it makes sense. But

in my personal opinion, for most people, this probably doesn't make sense. And for me, I love a T of a say because I love the idea of building up that T of a say. So it's a really big, chunky amount in retirement. And then I can withdraw that money. It doesn't affect my marginal tax rate or my tax bracket. And I don't pay tax on any of those withdrawals. It's beautiful. It's a beautiful thing. So that's my opinion on that. All right. And the last question I'm going to answer is, how do you recover from a bad real estate decision? Well, again, it depends on what real estate situation we're talking about. Is this a rental property that you bought to, you know,

build equity and get some cash flow? Or is this your principal residence? Definitely depends. But I guess no matter what it is, you need to, yeah, kind of figure out, well, what's the problem here? Let's talk about rental properties first. Now, I don't own a rental property, but I have had a number of guests on the show that have talked about it. So make sure to check some of those episodes out. For me, I like the idea of owning a rental property maybe one day. I don't know if this will actually ever happen because it does seem very high risk. And why I say it's high risk is because you typically have to put quite a bit

of your own personal capital into this investment. Whereas if you want to start investing in the stock market, buy some ETFs, you can start with like 100 bucks or $1,000. You know, you don't have to put that much money on the line. Whereas for real estate property, you're going to be putting tens, if not hundreds of thousands of dollars on the line. And so if you bought a property that you thought, oh, this is going to not only increase in value because real estate rates are up, it's exciting. And then I'm going to try to cash flow it. And then you buy it.

And then interest rates increase. and you can't find tenants. And also you realize that there's a bunch of things that you need to fix that weren't in maybe the initial home inspection. I mean, these things happen all the time. These are real risks that you can experience. And I guess really the same can kind of be for buying a principal residence. You buy, you know, a very expensive home, but you're like, oh, everything's, you know, going up. This is just how much, you know, homes are. And then you get in and then you have a variable rate, you know, mortgage, and then your mortgage payments go significantly up, meaning that maybe you have to cut back elsewhere, or maybe there's nowhere else to cut back. And so you're really feeling the pinch. And then yeah, maybe the roof needs done or something, all these things can happen. And

it can be very expensive and costly. And so really, ultimately, you need to figure out, is there a way that I can, you know, make these home improvements that I need to in order to be able to live in this home or find tenants? Can I afford this? Can I afford to take out a loan and then also afford to make those payments so I can pay back what i borrow um and you know is it you know can i cash flow this rental property can i find tenants once all that's done and actually pay all of my expenses and hopefully have a profit um or you know or if you're living in the residence can i afford you know these renovations and fixes so i can live in this house and also make my mortgage payments and all my other, you know, necessities? Now, if ultimately the answer is no, I can't afford all this. I mean, your options are to borrow and get further into

debt, which isn't a really good long-term solution. That's a short-term solution. Earn more income elsewhere so you can afford all that kind of shortfall. Or we can find, of course, if you own your own residence, you can find a roommate or some way to make some extra income. Again, if it's a rental property, you can find some tenants and you're kind of limited in terms of how much you can charge for rent. But yeah, you've got kind of limited options. And ultimately, you may be in a situation where you have to sell at a loss. And that's never a fun situation to be in. But what I will say is, you know what happens? And it's not the be all end all. You're not a failure. It's a situation that a lot of Canadians find themselves in.

But before making any action, again, I know I've been saying this a lot throughout this episode, definitely talk to a financial planner so you can get some specific advice. They may have some other suggestions and find some other streams of income that you may not have tapped into. So definitely do that. But don't feel bad about making a bad real estate decision. People make them all the time. Real estate can be complex and it's not as, you know, flashy and easy as HDTV makes it seem like or all those YouTubers that are all about, you know, house hacking and whatever the hell. It's not quite like that in the reality of things. So not sure if I was really helpful with that. But I, you know, just letting

you know, these things happen. It's not the end of the world. There will be some sort of solution. And hopefully, you know, you will have learned through this experience what to do and what not to do next time. Okay, I'm going to leave it right there. So thank you so much for listening to this very long solo episode. I really appreciate it. Thanks for, you know, supporting the podcast. I've gotten so many, you know, what I love to hear is people telling me, hey, I just started listening the past few months. It's really exciting for me because I've had this show this June. It will be eight years since I first launched this show. It is so exciting to hear that new people are still discovering the show. But for all of my loyal listeners who've been around for a long time,

I also really love you. And thank you so much for supporting the podcast all of these years. It really, really does mean a lot to me. I mean, I have a career, a new career in content creation and personal finance because of you. So I really appreciate it. So that's it for me. Thank you so much for listening to this special solo episode. A big shout out to my podcast editor, Matt Rideout for editing this episode, which was a bit of a messy rant that you had to piece together. And I will see you back here next Wednesday for a fresh new episode of the More Money Podcast. This podcast is distributed by the Women in Media Podcast Network. Find out more at womeninmedia.network.