Personal Finance

Seven interesting money tips for happiness

Creative thinking inspires ideas. Ideas inspire change.” – Barbara Januszkiewicz

January’s edition of “MoneySense” magazine featured a section dedicated to getting into shape financially, which offered 21 suggestions for improving your financial fitness levels. While some were tried and tested strategies such as tracking your spending, renegotiating interest rates and ditching subscriptions to things you’re not actually using, other suggestions were more unusual. For this week’s post, I thought I’d share seven money tips that gave me food for thought.

Return to the priority pyramid

Created by Moneysense contributing editor, Bruce Sellery, the Priority Pyramid helps you make sure that the basics are taken care of before you start focussing your energy on loftier money goals. The pyramid has six levels and the idea is that by working through each one, you create a more stable financial situation for yourself. Seller’s six levels are:

  1. Cash Flow: make sure that your income exceeds your expenses
  2. Debt: eliminate consumer debt to save yourself from hefty interest payments
  3. Savings: save at least 10% of your gross earnings.
  4. Taxes: take full advantage of tax savings vehicles such as RRSPs, TFSAs, RESPs, RDSPs, etc.
  5. Investment Performance: make sure that your investments are matching the performance of their benchmark over time
  6. Optimize Returns: investigate other investment strategies you could use to meet (or exceed) your goals? Examples include investing in real estate or specific sectors.

Related article: Financial planning: A road map to success

Make a charitable giving plan

Many of us give to charity on a regular basis but I really like the idea of making a plan for giving, in terms of how much you want to commit on an annual basis and also deciding which particular causes you want to take part in your regular giving. I also liked the suggestion to give 50% of your annual donation amount to charities “no-one asked you to give to”. This means groups that need funds but lack the advertising budget to ask for them such as shelters, school groups, grass-roots organizations, etc. If you’re not sure which causes to support, then is a good place to start; it provides a description of every charity in Canada along with key revenue and spending figures.

Related article: Develop a charitable giving strategy

Set a money date

Money is a leading cause of conflict in relationships and credited with being a significant factor in many divorces so, while we might not like talking about money, if we can find a way to do it without it turning into a full-scale fight then we’re likely to significantly improve our relationship in the process. A money date is an opportunity to talk about money in a neutral environment, set some goals and review your spending (without fighting or allocating blame). A good starting point is for each partner to identify which money situation concerns them the most, that’s likely to provoke some good discussion and lead to some positive goals that you can work on together.

Related article: Couples need to talk about money

Ask a key question before spending money

In an age of easy credit and impulse purchases, it’s easy to get carried away with our spending. However, asking one key question might help you spend more consciously and keep more money in your pocket: “what else could I buy if I spent only half as much money on this?” It’s clever because it appeals to our desire to spend while encouraging us to consider spending less and it also makes the decision to spend less a choice rather than a restriction which is a lot more effective.

Related article: Develop a disciplined spending plan

Make a plan for the equity in your home

Many people look forward to a time when they’re mortgage-free but not as many people make a plan for what they will do with the equity that they’ve worked so hard to accumulate. While some people might plan to stay in their home for as long as possible or pass on the value as an inheritance, others might prefer to sell their home soon after retirement and use the equity as a means to fund their retirement lifestyle. However you intend to use your home equity, it makes sense to have a plan.

Cash-out your emergency fund

This one unsettled me and I’m not sure if I agree with it but it definitely made me think so that’s why I thought I’d share it! The idea is that, if you’re in a financially stable household and you have several month’s worths of living expenses saved in a cash account for emergencies then you’re better off either investing that money or paying down your mortgage and opening a line of credit that you can draw on in an emergency. I can see the mathematical sense in taking money that’s generating a tiny amount of interest and either applying it to a higher interest debt or investing it somewhere that’s likely to generate a higher rate of return. However, I’m wary of relying on credit as an emergency fund because borrowing money from a lender is always more expensive than borrowing from yourself and also, taking on debt when you’re in a difficult financial situation, can make a stressful time even more stressful. I’d be interested to hear your perspectives on this one…

Invest in a vacation

There’s something to be said for investing in experiences as well as tangible assets. While I’m not advocating trading financial independence for a lifetime of adventures, it is just as important to strike a balance between saving and spending as it is to balance out work and play. All too often we hear stories of people who worked, saved and sacrificed through their working lives only to be struck with illness or death before they could enjoy the fruits of their labors. On the other end of the scale, you find the people who justified their excesses with “life is short, I could get hit by a bus tomorrow” only to find themselves, decades later, healthily entering their retirement years with little or no savings.

Related article: Can money buy happiness?

For me, certain experiences such as weekends away or trips home to England are integrated into my spending plan in the same way as other bills. Others, such as the dream trip to Hawaii we took last year and the trip to Machu Picchu that’s on our bucket list for 2018, become part of a larger savings goal. One thing I know for sure is that it doesn’t take big money to create great memories; it just takes a clear intention and a willingness to create the opportunity to make that intention a reality.

As I mentioned earlier, some of these suggestions inspired me, some of them made me think and some just reinforced ideas I’ve already incorporated into my financial life. I hope they gave you food for thought too!


  1. Sarah De Diego

    For the past 11 years, my husband and I have spent 5 years (broken up over that time) travelling. Six years ago, we added two kids to the mix and of course our two dogs and a cat. Everyone told us we couldn’t do it but we didn’t listen to them, fortunately for us.

    This year, my husband will retire with only CPP as a “guaranteed” form of revenue. The rest of our income will be made from our savings. While we aren’t rich, based on our financial plan, we should have enough to live the lifestyle we have right now for the rest of our lives, however long that may be.

    While I understand that life is probably too long for people who haven’t saved enough money in retirement, I doubt that many people profess on their death bed that they “should have worked more” or “not taken that vacation”.

    Life is short, and you only have one shot at it. Try your best and enjoy.

    Besos Sarah
    Blogger at Journeys of The Zoo

  2. Don E

    I am all for cashing in your emergency fund – it is money not being utilized in the best way possible for future wealth. When you do this it does take some discipline to not use you line of credit for everyday expenses. If you have that discipline I would suggest you utilize your money to first get out of debt rather than have an emergency fund. During this period it is still important to pay yourself first as well. It doesn’t have to be a huge amounts of money. A technique I used was to save 50% of any increase in salary to pay yourself first so you also get into the habit for saving as you do I paying your bills.

  3. Claude Mayrand


    Another “make me think” article.

    About “Cash Out Your Emergency Fund”. Since the advent of the TFiA, I don’t think anyone needs a specific “Emergency Fund” account.

    Because it’s an emergency, the event can’t be planned as to timing nor size. But money in a TFiA can be made to work while waiting for the emergency. Since there are only 2 rules and an exception governing TFiA and zero fees to withdraw funds from a TFiA, the funds are as liquid as one needs within 24 hours.

    Since 2009, I’ve deposited $36,500 in my TFiA and it generates $501 per month in cash in 2016. In past years I’ve re-invested the earnings. So my initial investment is paying me $6,000 a year – income tax free – on deposits of $36,500, or 16%. That’ll take care of my emergencies; I can handle them at a rate of $501 a month or, in an emergency, liquidate something for an immediate large withdrawal.

    In today’s markets, the classic Emergency Fund of cash sitting idle is nonsense. When I was working, every other month was an emergency and clean/current credit cards were my strategy, then. By the way, in the 50 years since I started working, no emergency ever showed up, other than never having enough cash.

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