Why fluctuating income is alright

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Be responsible, not naïve

By Elliot Chan, Opinions Editor
Formerly published by The Other Press. April 7, 2015

Take a look at your finances: do they look the like the peaks and valleys of North Vancouver? Probably, right? Many of us dream of a consistent cash flow where we can buy what we need and still have extra money to get what we want. However, for most of us in college, university, or simply pursuing a volatile career, we cannot always bet that funds will be there when we need them. So does that mean we are destined for a life of uncertainty?

Now, I’m not going to guarantee your success. Living on a fluctuating income is anything but a guarantee, so I’m not going to sugarcoat it. There will be days where paycheques are bursting from your wallet and other days where you are certain bankruptcy is just around the corner. The highs will be high and the lows will be horrendous. The key for living with inconsistency is to even out the peaks and valleys so there is some certainty.

When you do have an influx of money, don’t spend it immediately on something frivolous. Pocket it. Prepare for those downhill moments when a few extra dollars can make a big difference. Break it down to what you must have and what you could have, the leftover bits can then be set aside for indulgences like a night out, a new piece of technology, or a trip somewhere exotic—the choice is yours.

Think of your income as a whole entity and then break it up into various parts performing different duties for you. Determine an amount for savings and investments. I’m not the biggest believer in savings, because I enjoy living for the moment. The thing is I don’t want to be hungry and living on the street. If work dries up or an accident happens, make sure you have a bit of a cushion. Tax-free savings tend to be a good option for students and post-graduates because of the low-risk money saving attributes. You won’t get rich, but it might save you from being broke. Then determine what you have for survival: rent, food, fuel, and social life.

Don’t be naïve. It’s true that in the end everything will probably be alright—after all, we live in a society where nobody starves. Alright might mean returning home to your parents. Alright might mean being in debt for a few decades more than expected. Alright might mean job-hunting for several more seasons. Alright can mean different things to different people. You don’t want to be alright, you want to be well-off. So with something like inconsistent income, it’s critical to be responsible and resist lifestyle inflation until you have established some balance. Peaks and valleys are great for a rollercoaster, but it’s sure exhausting on a daily basis.

When your budget won’t budge

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There is a time to budget for a better life

By Elliot Chan, Opinions Editor
Formerly published in The Other Press. March 10, 2015

There is nothing more sobering than dealing with finance. Now that we have accepted the fact that it sucks, let’s figure out how we can make it better, or at least bearable.

When we are budgeting it’s important to consider the reasons why we are saving money. What are our objectives? Without a clear goal, a budget is only a low fence that we can easily jump over with no dire consequences. Consider what you want to do after the budget is established: pay off debt, save up for a vacation, or buy something expensive.

It’s never preferable working paycheque to paycheque. If you find yourself stuck in this vicious circle it’s time to budget your cash flow. We are all dealing with different circumstances so there isn’t one easy solution, but like all goals, it’s better to work in smaller sprints than longer marathons.

Start by preparing a 90-day plan. Calculate your income and expenses and see what the difference is. If the number is wildly under your expectations it’s time to prioritize your needs. Here is where it hurts: for 90 days, you’ll have to be frugal. Spend only on necessities.

Social life can derail your financial plans pretty quickly, so you need to be careful of that too. Schedule your nights out ahead of time. If something comes up without at least a two-week notice (approximately the same time as your paycheque is issued), respectfully decline the invitation. Being spontaneous can be addictive and often it’ll take you two steps back in your plan. If you want to hang out with people, invite them over to your place. Creating a BYOB event and having friends over is much cheaper than a night at the bar.

Don’t think of a budget as a life-long barrier. That attitude can bury your self-worth and confidence pretty quickly. Instead consider a budget as a way to establish some running room for the future. In order to get a better job or pay off some debts you’ll need some help. Like studying for an exam, the result will not be instantaneous. You’ll really need to commit to it, and 90 days is not that long.

After the first quarter of saving, what do you do after? Go back to your opulent lifestyle? No. It’s time to reevaluate your situation. Three months may lead to a lot of changes or none at all and it never hurts to revisit your goals. Are you still burdened with debt or are you further along in the green? Are you closer to affording your vacation? How many semesters of school do you still have?

Once again, everyone’s life is different. The key is to keep in mind that there is a goal to reach. There is a deadline to meet. There will be obstacles and other people will try to tempt and influence you, but you must stay the course. Budgeting is the price you pay for a better life.

The test of time


Longer life expectancy means less financial stability in the latter years

By Elliot Chan, Opinions Editor

For those still in their roaring 20s, let’s think longterm for a moment—say, 40 years from now. The world has changed and so have you. You have a family, a mortgage, car payments, a stable job, ailing parents, credit card debt, medical bills, and multiple other financial responsibilities to worry about, yet retirement is around the corner. You ask yourself, “Am I ready for it? Have I saved enough? Or will the next 20 years be as gruelling as the first?”

Don’t act so surprised when I tell you that most millennials aren’t thinking about retirement—not because they don’t want to, but because they might not get one. We have been crippled by so many different factors, including increased taxes and cost of living, disappearing pensions, high educational debt, and a competitive job market. At this point, it’s hard to imagine life as a 40-year-old, let alone a 70-year-old.

It’s rare to see people hang up their work clothes at 55 nowadays. According to Statistics Canada, the average retirement age in 2011 was 63.2 for men and 61.4 for women. There are simply too many financial burdens, so every extra year of work adds a buffer to the savings account. If baby boomers are having such difficulty retiring, what about the millennials?

I’m not saying that we should call for a crisis or have the government hold our hands through this lifelong ordeal, but what would benefit us is a bit of systematic assistance. I suggest a mandatory test every decade to help with the retirement mathematics. The test would examine multiple factors, including financial stability, health, and family status. Although privacy is important, it’s critical that we learn to take care of ourselves, lest we become burdens on our family, friends, and society. This will break our fears and reluctance of taking out the “retirement calculators” and finding out how many dreadful zeros we’ll need in order to survive.

Retirement funds aren’t a problem we millennials can solve now. What we can do is stay the course, and even if there aren’t any implemented tests to assess our stability, we can still manage that ourselves. Don’t waste your youth worrying, but it never hurts to consider the necessities of your long life. A survey done by Pentegra Retirement Services found that 62 per cent of 18 to 34-year-olds think $500,000 is enough for their retirement. The consensus is that number is too low. According to Statistics Canada, the current annual spending cost of a couple over 65 is $51,000, but for an enjoyable retirement they’ll need as much as $60,000 a year. The price will undoubtedly increase for us.

It might seem completely bleak at the moment, but allow us to go back to the short-term; we’re still young and we have full control of our lives. We’re packed with potential and opportunities are still knocking. If we don’t want to be eating peanut butter and jelly everyday in our old age, we can change that. Now is the time to get the upper hand. Rainy days and debts are inevitable, but hey, there’s a silver lining to those looming golden years.

FinanceIt Launches New iPad App Enabling Businesses to Offer Consumer Finance

FinanceIt celebrated the fourth of July not with fireworks, but by launching their new iPad app, which will be available to the public in early August. For those who are tired of fussing over finance, the app is worth the wait even though access at first will be limited due to its first-come, first-served registration basis.

By using the iPad camera to scan a photo ID for an instant loan approval, FinanceIt’s mobile app will allow businesses to reduce the consumer funding process to less than five minutes and is completely paperless.

Businesses in retail, healthcare and home improvement will be the first to utilize the new app. Some other businesses that the app will be initially available for are furniture and electronic stores, dental practices, home renovation contractors and other retail businesses.

FinanceIt launched in 2011 and since then they have enabled over 2,300 retail, home improvement, health and vehicle businesses to process over $380 million in loans.

“We provide small and medium sized businesses with the tools they need to compete with big box retailers,” said FinanceIt COO, Casper Wong. “By taking advantage of marketing programs like ‘0% financing’ or ‘don’t pay for 12 months’ these businesses can gain a significant competitive advantage at no additional cost.”

FinanceIt’s mobile app is expected to cause some disruption in the retail credit card industry with 80% loan approval rates and no cost to merchants. The app provides instant point of sale financing for loans under $5,000 with a simple scan of a driver’s license.

FinanceIt is planning to release the second version of the app in Fall 2013; the new features will include the vehicle program and maximum loan amount of up to $60,000—features that are currently available on the web platform.