Reader Question: Homemade or Store Bought~ Which is Cheaper?

Mr. CBB has paid me the compliment of inviting me to help answer a reader’s question: A question I would love to have feedback on from you and your fans is: How do you know when it’s less expensive to make homemade baked goods or buy it pre-made at the store? I’m on a tight budget and I hesitate to try recipes only to find out it’s more expensive with the ingredients and electricity amongst other things. I am sure it’s more nutritious to make my own but right now it’s financial. The short answer is that bakery goods have among the highest mark up in the grocery store, so home baking is almost always more affordable than an equivalent purchase from the store. In reality, though, there are some factors that need to be considered, especially if you’re on a tight budget. If you are not already a baker, you’ll need to have some basic equipment on hand to bake and you’ll also need the ingredients called for in the recipe. My advice? Do bake at home and make homemade. You’ll recoup your initial investment in ingredients and equipment very quickly. Tips on getting started with home baking inexpensively Keep your […]

Reader Question: Is It Savvy To Cash In My RRSP’s To Pay Off Debt?

ONE OF THE HARDEST FINANCIAL DECISIONS OF YOUR LIFE MIGHT BE WORTH IT   A reader question about whether it was savvy to cash in an RRSP to pay off Debt was submitted to Mr.CBB. He forwarded it to me to share my opinion on this topic with all of you. My short answer is that it depends.   Cashing your RRSP’s   There are several factors to consider if you are thinking about cashing your RRSP’s. The age of the person The withholding tax on the funds withdrawn on the RRSP The amount of debt and its’ interest rate The type of investment held in the RRSP The opportunity cost of the withdrawal To keep things simple let me say if you are doing this and are under 30 then it might not be a bad thing. At older ages you have a shorter accumulation period and time and the magic of compound interest work against you. I have always maintained that paying off debt is one of the best investments someone can make. Let’s say you’re carrying a credit-card balance of $1,000 with 18 percent simple annual interest. That’s $180 a year in charges. Pay off that debt […]

Straight Talk About Fees and Penalties on Mutual Funds

Mr. Canadian Budget Binder received a question from one of his readers and asked me to craft a guest post to answer it. Question: Can you explain MER Fees and Penalties regarding investments?  What Does MER stand for? MER means Management Expense Ratio. There are a variety of expenses that make up MER. Some are: The fee paid to the fund managers for managing and investing your money Legal and audit fees of the fund Advisor sales compensation and trailer fees (ongoing service fees) Advertising expenses that promote the fund The cost of buying and selling the stocks the fund holds How does this impact my investing return? All published returns for a fund are net returns, after the MER has been deducted. In simple terms Fund A has a return of 10%. Its MER is 2.5%. The net return to the investor is 7.5% Fund B has the same 10% return but has an MER of 2%. The net is now 8%. The lesson we can learn from this is that lower MER’s usually mean more money for the investor all other things being equal. Some investors have focused exclusively on buying investments with the lowest cost. There are investments […]

Reader Question: Meal Planning For The Budget

Meal planning and budgets go hand in hand but not everyone takes the time to do them. Although meal planning is a weekly chore the more you do it the easier it will get for you. For people who want to stick to a grocery budget creating a simple meal plan helps them to be creative in the kitchen while saving money in their wallets. This week’s reader question pertains to my nightly “What’s For Dinner” post on my Facebook fan page. If you follow the blog regularly you know that we have a Grocery Budget of $190 a month. We work with this number to create healthy, quick, frugal meals whilst trying to get the best bang for our buck. We often have people ask us how to grocery shop because they want to learn how to save money in their budget. It all starts with a commitment otherwise you may make it through the first week and return to your old ways. You also know that we like to use coupons but only on items that we know we will use in our meals. We have gone back to basics and have saved so much just by cutting out the “wants” and […]