Goodbye Student Loan!

Today is the day I have been waiting for since June 2002. My Graduation day from Carleton University was rainy and cold and I'd been locked out of my house an hour before the ceremony with fancy hair but grubby clothes. I made it in time to file into the auditorium, have my name mispronounced and butchered (it's so long it didn't fit on the little cue card they read it from) and get that piece of paper I'd work so hard for. My degree reads: Bachelor of Arts/Honours/Mass Communication/Minor in Business. Phew! All those accounting and journalism classes were finished forever! (Well, at least until I decided to do my Certified Financial Planning designation, but that's another story).

My $20,000 four-year party had come to an end. But what was just beginning was my nine-year loan-repayment journey.

Thanks to attending school out-of-province and an exchange year in England, I graduated with about $25,000 of student loan debt. The government graciously gives you 6-months grace period when you graduate to find a job and start repaying. This meant that in November 2002, my repayment amount was over $25,000. In fact, I didn't get back to the original debt amount I'd graduated with until February 2003.

The hit list:

  • Government Canada Student loan (direct through Gov't) $11,000
  • Canada Student loan (via the bank) $7,000
  • Provincial student loan $1,000
  • Bank student line of credit $6,000

After graduation I chose not to consolidate my loans into one single debt with one interest rate and one payment. This worked out best for me in the long run as it allowed me to pay off loans individually (the last one having a variable rate). However, consolidation may be the right option for your loans, read more here: Office of Consumer Affairs.

Because of varying interest rates and payments, it's hard to use a calculator (like CNN's money one) to determine the exact interest I paid on my loans. However, from old statements, tax returns and payments my best estimation is that I paid over $12,000 in interest over the past nine years. That means I paid back over $37,000 total - or more than $4,000/year.

That same $4,000/year (or $340 monthly, on average) in my pocket would have done wonders for my RRSP. If I'd put that same $4,000 into my RRSP instead of repaying the loan, I would have about $47,000 by now (assuming a modest 5% growth overall to account for the recession, etc.).

The bottom line is that loans are very costly and should be avoided if possible. Even after working summers (and three jobs in fourth year), scholarships and bursaries, I still needed to borrow money to go to school and I paid the price in repayment. My goal was to have my loans paid off by 30 (I'm still 30!) so I'm happy. I understand parents who are dead-set on making sure their children don't go through the same thing some of us did - $35,000 can make a big difference when you're buying a house and starting your own family.

Some quick Do's and Don'ts for loans (and student loans):

  • DO negotiate the best interest rate available (this could mean using your mortgage lender or your parents) - this can be done during the repayment period as well; it never hurts to ask
  • DO make higher than minimum payments and lump sum deposits when possible (I'd be paying my loan for at least another 8 years if I'd only made minimum payments)
  • DO work towards your goal before borrowing (I started saving for University in Grade 11)
  • DON'T take the maximum amount the lenders will give you
  • DON'T go into default - if you can't make a payment at the scheduled time, contact the lender immediately
  • DON'T borrow more or spend more just because you have access to the money

Happy saving, everyone!

Cupcake Conversations!

Every Thursday in March we'll be at Crumsby's in Oak Bay. Meet Financial Planner Alyx Gilgunn, Realtor Patricia Kilshaw and Mortgage Broker Liz Prins between 1:30-2:30 and ask any questions you may have! Questions like "Why is the Sky Blue?" welcome!

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Can you read your credit card contract?

Whining about your credit card debt is not a plan asked some lawyers, professors and grad student  to try and decipher a typical credit card contract. If these people can't figure it out, how do you think the average North American fares?

Some credit card agreements require a 15 grade reading level (third year university level) while the average American reads at a ninth grade reading level.

How does your contract stack up? Have you read it? Do you know what your minimum payment is and how it is calculated? Do you understand how the finance charges are calculated and what your grace period is? What happens if you go over your limit? Most importantly, what is your interest rate and is that the lowest it can be?

Canada's Economic Action Plan is working to help Canadians help themselves. Check out this link for more information.

Pharmacy fees & BC Fair Pharmacare

Did you know that the dispensing fee for prescription drugs is different at each pharmacy? Did you know that the government pays a portion of your drug costs when they reach a certain level? Victoria dispensing fees - April 2012

For comparison: November 2010

BC's Fair Pharmacare is a government program that assists residents with their drug costs. After your family drug costs exceed a certain level (about 2-3% of income), 70% of your drug costs will be covered. After drug costs exceed the next level (about 3-4% of income), 100% will be covered. You are likely already registered for this program; visit Fair Pharmacare for more information.


A registered disability savings plan can help parents of a child with a disability save for care of their child in the future.

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Tax-Free Savings Accounts (TFSAs) were introduced starting January 2009 by the Canadian government to help Canadians save more.

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A Registered Education Savings Plan is similar to an RRSP in that it uses "registered" savings to tax-defer the growth in the plan. An RESP is often used for children to save for their post-secondary education, but can be used for anyone planning to attend a qualifying program.

For children's RESPs, the governement also contributes between 20-40% (to a maximum) through the Canada Education Savings Grant (CESG). As with the RRSP, the earlier you open an RESP, the longer your savings have to grow.

While it's not crucial that you use an RESP to save for education costs, it is important to plan how and who will be covering the cost. As The Globe and Mail shows, the cost of a post-secondary degree is climbing and with inflation, it's a whopping big number.

For more information, visit:
Government of Canada Guide to RESPs


A Registered Retirement Savings Plan (RRSP) is a tax-sheltered vehicle designed to save for retirement. You or your spouse (or common-law partner) can contribute to your RRSP each year up to a maximum of 18% of your earned income or $20,000 (2008) - whichever is less. Any savings in your RRSP is allowed to grow, without taxation, until the money is withdrawn. As of 2007, you can contribute to your RRSP until December 31st of the year you turn 71.

Setting up an RRSP is easy and we can help you do it. You can even set up a monthly transfer to your RRSP, such as $50 per month. Once your RRSP is established, you need to decide what investments you want. Common investments include mutual funds, segregated funds, stocks, bonds and GICs.

For more information, visit: Canada Revenue Agency Guide to RRSPs

Turning 30

It’s time to get serious and have a plan, folks!

This month I celebrated the big 3-0. Like your sweet sixteen, turning 25, turning 4-0 or 5-0 (over the hill?), turning 30 is a major milestone. Unlike turning 16 (have I been kissed yet?) or 25 (do I have a job?), 30 brought on a host of other reflections. Bad memories of grade 12 came flooding back: I had imagined my life 10 years in the future (to my age 27) and saw it on a tree-lined street in Oak Bay, two BMWs in the driveway and a couple kids, adorable like my husband and our puppy. I can assure you that my life on my 30th birthday did not resemble that vision at all. Sparing you the details, the reality is that I live in Victoria –the most beautiful and least affordable city my parents encouraged me to come back to after jetting around the world (oh, so that’s what I was doing in my 20s instead of fulfilling my vision). I don’t regret anything I’ve done up to this point although I could have done some things differently for sure.
Others have given advice when faced with the same conundrum: I’ve turned 30…what do I do? Such as “Consider your car nothing but the rapidly depreciating lifestyle appliance it is.”

Here are some things I would recommend to help meet your vision:
Teen years:

  • Get a part-time job (full-time in the summer) and pay for as much university/college/tradeschool tuition as possible.
  • At age 18, start contributing to an RRSP (tax-wise, it doesn’t matter but getting in the habit does). If you need every penny for school in the next year, contribute to a TSFA.
  • Go to school as soon as you’re ready (this may not be age 18); have the money available. You can borrow up to $20,000 from your RRSP to pay for school.


  • Go to school to learn a skill, not just for the letters after your name.
  • Get a credit card ($500 limit) and pay it off in full every month.
  • If you have the means, buy real estate (this is much easier if you’ve been saving since age 18…you can borrow up to $25,000 from your RRSP as a first-time homebuyer).
  • Travel: this doesn’t need to be extravagant but the act of saving for this goal is important (so is the reward!).
  • Maintain a good credit rating: get a credit card (and pay it in full), pay your bills (even if you really dislike your cell phone provider), don’t apply for credit cards at events just for the free stuff (multiple hits affect your score), don’t go over your limit.
  • Look into permanent life insurance and health insurance and buy what you can afford.

Thirties (time to do the stuff you should have done 5 years ago):

  • Buy or upgrade your home
  • Buy life/health insurance
  • Pay off your debts by setting up automatic payments
  • Make a plan for saving for retirement
  • When you have kids, set up savings plans for them (hint, hint gradparents!)

It’s never too late to start! I am thankful to live in this wonderful city surrounded by family and friends with a roof over my head and a career I love. Here’s to my 1st anniversary of my 29th birthday!


Welcome to Apple a Day financial. We are a Victoria-based company helping young families and professionals reach their financial potential.

Contact us to arrange a meeting to review your financial goals.

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August – vacation time!

Many of you will be away for the long weekend camping, hiking or visiting family or friends. For those of you staying closer to home, many cities have festivals and events to keep you and your family entertained. For the rest of the month, whether you’re lounging at the cabin or jetting off every weekend for mini-vacations, be sure to take some time for yourself and achieve any goals not yet reached for 2010.

  • Be inspired – to choose your career, pay off debt, and more!
  • Read a good book on vacation.  A few easy and entertaining reads include Sway: The irresistible pull or irrational behavior/ Ori & Rom Brafman (a fascinating look at why the decisions we make in life, business, relationships and finance are not logical). Freakonomics/Steven Levitt and Stephen Dubner (another look at why and how seemingly unrelated concepts are related >like Guinness and the Great Depression). Stay tuned later for a full posting on book reviews.
  • Get out and enjoy the sunshine and all the free events your city has to offer! In Victoria, check out the City of Victoria’s page. For all of BC, search here.
  • Take a coupon with you. Next time you’re heading out, grab a coupon to help you save money. Be sure that you’re using coupons for places you were going to anyway (or an alternative) and not shopping or dining because you have the coupon – the idea is to save money, not make excuses to spend more! In Victoria, the Savvy Squirrel Coupon book is great for anyone, not just parents or families. The Entertainment Book (various regions) has many deals including oil changes and grocery discounts. You can even trade online for coupons you won’t use for those you need!

July – Happy Canada Day!

Happy Canada Day to all my fellow Canadians!

During the rest of the summer, many of us will be going on vacation. Here are a few financial tips to help make your trip planning easier!

  • Travel insurance: check your group benefit booklet to find out the amount of coverage and how long you are covered for. If you need more, buy it online here.
  • Travel budget calculator online
  • Heading to a major city? Check out these handy guides for places like London and New York City.
  • Driving? Check out the distance calculator and the fuel cost estimator.
  • Finally, always ask for a discount when booking the hotel. And ask again when checking in for a room upgrade, discount, etc. If inquiring for three nights, ask about two nights and if there is a discount for booking for three.

Happy travels!

June To-Do: School’s out for the summer!

Ready for the end of school?

  • Summertime and the weather is good enough for outdoor BBQs! Save money on eating out by making a dish and bringing some meat to a friend’s place to grill.
  • School’s out but there’s more to learn! 15 money rules kids should learn.
  • It’s wedding season! For those of you getting married or planning a wedding for next year, Dream Weddings on a Budget has some great ideas and, of course, a Wedding Budget is crucial.

Have a great summer!