Borrowing – Worthfy Financial Literacy Counselling

Is inflation good for the banks?

It depends on how fast is the inflation. When interest rate is too low, it is hard for banks to charge more on loans. However, if the interest rate is raised too fast too high to fight inflation, it pushed a lot of potential customers out of the borrowing market. For example, mortgage rate isContinue reading “Is inflation good for the banks?”

High-interest loans

60% is the legally allowed maximum interest rate for personal loan in Canada. How did they arrive at this number? I can’t help but wonder. 59% is totally fine but 61% is criminal. How ironic! It might help to look into who are those that have to use high-cost loans. Today, BNN Bloomberg reported thatContinue reading “High-interest loans”

Borrow to contribute to RRSP?

Tax season is just around the corner. Heard a financial expert on TV suggested to borrow to contribute to RRSP. The rationale is that there will be tax refund since RRSP reduces the taxable income. I am not quite sure. If a person has to borrow to contribute to RRSP and he or she hasContinue reading “Borrow to contribute to RRSP?”

Dementia and financial mismanagement

Population aging will naturally increase the number of dementias. It can easily lead to financial mismanagement for those seniors who suffer from dementias. For example, they might miss simple tasks such as paying credit card bills and making mortgage payment. Furthermore, they can be easily exploited by scams. I heard this case. An elderly ladyContinue reading “Dementia and financial mismanagement”

Half of Canadians have little rainy day fund

Our oven can’t heat a week ago. It took $435 to fix it. Last year, we spent $350 to fix our laundry dryer when it didn’t dry. Fortunately we have emergency fund set aside for those home repairs. I read an article that 40% of American don’t have $400 for emergency fund. That is veryContinue reading “Half of Canadians have little rainy day fund”

Teach kids financial literacy

Here are a few good programs by Junior Achievement to teach grade school and high school students financial literacy. They offered both in-person and online presentation delivered by volunteers. It covers very essential and wide range of topics such as inflation, credit card, exchange rate, currency, budgeting, online shopping investing, etc. It aims to buildContinue reading “Teach kids financial literacy”

Need to pay off these three types of loans before retirement?

Just read an article saying that we should not retire until these three types of loans are fully paid off. They are student loans, car loans and credit card debts/personal line of credits. We all know that public pension is not enough for retirement. Most people do not have a generous pension from their employers.Continue reading “Need to pay off these three types of loans before retirement?”

Financial challenges from separation

Separation or divorce is very hard. I don’t wish it on anyone. The financial challenge that comes with it can very overwhelming. Here is one scenario. A couple with a young daughter bought a big house in a very nice neighborhood more than a year ago. Now, they have to divorce because the marriage doesn’tContinue reading “Financial challenges from separation”

Stop saving temporarily?

First, just to share a piece of statistics. Canadian consumer credit card debt in Q3 2022 increased by around 22% from the pre-pandemic level per according to Equifax Canada’s latest credit trends report. Second, let’s put things into perspective. Usually, the credit card annual interest rate is around 20%. It only takes 4 years forContinue reading “Stop saving temporarily?”

US 30-year fixed mortgage rate recent drop

As of December 1, 2022, Mortgage rates fell for a third straight week, notching their biggest three-week decline in 14 years. Over the last month, that rate has dropped from 7.16% to 6.4%, according to the Mortgage Bankers Association. Federal Reserve has been raising federal fund target rates. Should the mortgage rate continue to increase too?Continue reading “US 30-year fixed mortgage rate recent drop”