Archive for January 2016

How I simplify my charitable donations and get a bigger tax return

Charitable donations are just that: it is a way for people to donate from their money to help those in need. That is how it should be treated and not a

Charitable donations: How to help others while getting a much needed tax credit.

Charitable donations: How to help others while getting a much needed tax credit.

way to get a tax advantage. However, and having said that, the government does make it possible to get a tax credit in exchange for your charitable donations. So you are shooting two birds with one stone: helping those in need as well as getting a tax break.

But there are a lot of charities out there and the first step is to decide which ones you are going to help. I have a list of about 3 charities that I help, in addition to my own church. All of these are registered charities, so I do get that tax advantage from the government. And you should check for the same thing too when choosing where your charity donations will go: that your charity of choice is registered with the CRA so you can get the tax credit for charity donations.

Here are the steps I follow to simplify my charitable donations, which makes my income tax filing easier too:


  1. Decide how much you want to contribute annually: personally, I have a set amount per year. Some just donate when they can. It is up to you. For me,setting a fixed amount ensures that I am always contributing and not only when I remember to. It also ensures that I set that amount on a side. In fact, ‘donations’ is now a fixed category in my personal budget!

  2. To whom? as mentioned above, it is good idea to decide who your favorite charities are. Good idea to limit to 3 or less.  Doesn’t mean you only give to those and no other ones. You certainly can, as long as it is within your donation budget amount.

  3. Once you have set your annual amount and charities of choice, it is now time to organize your donation schedule: either by preparing post0dated checks to each, on a specific date of the month. Or if you like to keep things simpler and do it all online, simply sign up for online donations. For example, let us say you have two charities that you like to donate to. Let us also assume that your annual donations budget is $500. You would then divide that amount between the two (50/50 , 60/40 or however you like) and then do the math to determine how much you need to donate per month to each one .

  4. Once you have automated it all, you can relax and forget about it.

At the end of the year, you will get tax receipts of your donations for the full year which you will use when filing your taxes.

To make matters simpler, CRA has come up with an online donations calculator, where you can put the amount you have (or plan to donate) and get an idea of what you will get back in total tax credits (provincial + federal) .  The cool thing about this calculator is that it can help you input numbers and instantly tell you how much you can get back in tax credits. This help with better tax planning.

Again, we should look at charitable donations as a way to help others first and not as a way to get a tax advantage. But, since the government does give you that tax credit in exchange for your donations, you certainly can take advantage of it. Helping others. Helping yourself. Both can be done with the simple act of donations.

The shocking truth about your new year’s resolution: if you make it through January, it is a success

Is it time they renamed ‘New Year’s Resolution’ to ‘January’s Resolution’? Let me explain…

The easy secret to succeeding at your new year's resolution

The easy secret to succeeding at your new year’s resolution

Increasingly, less and less people are making any new year’s resolutions. The reason is simple: before January is even over, they will have declared it a failure and just move on without their resolution for the rest of the year. Whether it is to restrict their caloric intake for weight loss or saving 10% or more of every paycheck, people give up on their resolutions too fast.

But here is the shocking good news! What you do in the first few days and weeks of your resolution is what matters, even if you end up quitting. The effort you put towards keeping your resolution in the first 4-8 weeks is the most important part. That is when you build the fundamentals for long term success. More specifically, think of it as a ‘January’ rather than a ‘full year’ resolution. The psychology behind this is simple? it is much better for your brain to tackle one month than to have to cope with doing something for 12 months. In other words, take it month by month, starting from January.

I am not crazy about new year resolutions but I have made some in the last 5 years. Some were resounding success, well into the late stages of the year. While others didn’t last beyond January or February. But here is the shocker: for all the resolutions that I thought were failures, they actually weren’t after all. Upon closer look, and months after I had abandoned my resolutions, I realized that I was still practicing what I had started doing. I just hadn’t realized it. For example, my last year’s (2015) resolution was driving-related. I had vowed to ‘simply press lighter on the gas pedal’ in hopes of saving more money on gas. I started applying this obvious money-saving method for the first few weeks, well into mid February. Then I completely forgot about or stopped thinking of it as a resolution. When I remembered it late in the winter, I thought it was a failure since I was no longer applying it. But the fact of the matter is, ever since, I have noticed that I do apply my foot very lightly to the gas pedal. It is something I do subconsciously without even realizing or thinking about. That is explained in part by the initial and conscious effort I exerted in the first few weeks of my resolution. After that, my brain made it a habit and kept it with me, without me even realizing that I was still applying my energy to make my 2014 resolution a success. The important thing was to put the hard work in January at least, and then let your brain (subconscious) take over from there.

Another example comes from a previous year’s resolution. It was another simple resolution-the simpler the more chance of it being a success-to eat only once or none at all, at fast food restaurants per week. At first, it was a great success. In fact, there was a stretch in late January to early February where I didn’t eat from a fast food restaurant in over two weeks. But by late February, my resolution was starting to fall and I was eating at fast food places more than once or even twice a week. By April of that year, I had completely forgotten about this resolution and was eating fast food an average of 1-2 times a week. However, months and even years later, I now find myself eating junk food an average of once a week, if not at all per week. In other words, the effort I put in the short term back then, is paying off now in the long term.

As you can see from the two personal examples above, the work you put in the first month is what sets the stage for long term success. Even if you end up going back to your old habits, in the long term, you probably have set the wheels of change in motion. You go back to old habits after one or two months only briefly. After that, and without even realizing it, you will start applying the principles that set your resolutions in motion. The key is to start January 1st in hopes of making this a lifelong change. And don’t make it too hard for yourself. Make it a fun journey, one that will last you a lifetime.

Just remember, don’t start your resolution in hopes of concluding it by Jan 31 and expecting that to be enough to make your new behavior last for good. Rather, you should start your resolution with no end date in sight. If you go long enough without breaking your resolution-at least for a 6 weeks or more-then you will have likely conditioned your brain to pick the habit and keep it for good. And since this is a financial blog, starting January 1st will give you more than enough time to achieve your goals, be it to save money, eliminate debt or get better at stock trading.