How To Pay Yourself When You’re Self-Employed

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In 2015, I left my full-time job to devote all of my efforts to building Money After Graduation. I’d like to say I was organized and top of things right from the get go, but in reality it took me more than 12 months to really get my business working, particularly my business finances. Believe it or not, one of the things I struggled with most was paying myself. How much should you pay yourself when you’re self-employed? A good rule of thumb that I wish I learned in my first year of business is: For up to $250,000 in gross revenue, you should pay yourself 50% of what your online business earns. So if your business is earning $3,000 per month, $1,500 should be going straight into your pocket as net personal income, and $1,500 should remain in the business to help it grow. This suggestion comes from the […]

Should You Start Investing If You Have Debt?

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Many people are eager to get started in the stock market, but other financial obligations are holding them back. You can (and should) start investing even if you have debt Paying off debt and building wealth doesn’t have to be an either-or decision. You can do both at the same time, and will likely come out further ahead with this strategy rather than focusing on one above the other. However, there are circumstances in which investing while you have debt is not a good idea. Namely, when your debt balance is very large or at a high interest rate. Likewise, the savings side of your budget determines if you can afford to invest at all. Is your debt balance greater than $25,000? Even at low interest rates, large debt balances are expensive. If your debt balance rivals your annual salary, you want to get it below the threshold of $25,000 before you […]

CDIC Deposit Protection For Your Child’s RESP

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One of my first tasks as a new mom is setting up an account to save and invest for my daughter’s post-secondary education. When I attended university, I couldn’t afford to pay my tuition without borrowing tens of thousands of dollars of student loans. This left me deeply in debt at graduation, and paying those loans off got in the way of saving for other financial goals like travel, retirement, and home ownership. What is the RESP? The Registered Education Savings Plan or RESP is yet another awesome tax-advantaged savings vehicle available to Canadians, much like the Tax-Free Savings Account (TFSA) or Registered Retirement Savings Plan (RRSP). The RESP is designed to help and encourage parents to save for their child’s post-secondary education. One of the biggest advantages of the RESP is the eligibility for government grants that match up 20% of your contributions, to a maximum of $500 per […]

How to Get Help Repaying Your Student Loans

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Many of us are annoyed by our student loan balances. It’s frustrating to spend hundreds of dollars each month on old debt for a degree you may or may not be using when you would much rather spend or save that money for something else. We forget that being able to afford our student loan payments is a luxury – many graduates cannot. In the US, more than 40% of government student loan borrowers are not making payments. This means they are either in default, delinquency or have postponed their payments, usually due to financial hardship. In Canada, 13% of borrowers default on their student loans – but a default only happens after the loan has been in arrears for nine months, which means there’s probably plenty more that are a few months behind but not in trouble yet. What happens if you can’t make your student loan payments? Your […]

The $20 Emergency Fund

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You might think the title of this post is too good to be true, but I promise: this is the easiest hack to building a real Emergency Fund on a tight budget. You can build an Emergency Fund with $20. When I decimated my Emergency Fund in 2016 and immediately added to my state of financial crisis with an unplanned pregnancy, I knew I had to get my finances in order fast. But how on earth was I going to rebuild my savings while still trying to build my company and buy baby stuff? Starting is the most important step When I get anxious emails from people trying to get a handle on their finances, usually it’s equal parts overwhelm and failure. I have nothing saved, how can I possibly get to $X? Well, you start by opening an account and putting a dollar in it. If you have $0 […]