Finance

With millions of mortgages coming due, finance minister expects banks ‘to work with’ Canadians | CBC News

Published

1 year ago

November 26, 2023

With millions of mortgages coming due, finance minister expects banks ‘to work with’ Canadians | CBC News

Finance Minister Chrystia Freeland expects banks will follow a new series of rules and guidelines designed to protect Canadian homeowners, millions of whom are set to renegotiate loans at potentially higher rates.

“The thing that I hear the most right now is people are concerned about interest rates, especially people who have mortgages and are concerned about the renewal of their mortgages,” Freeland said in an interview airing Sunday on Rosemary Barton Live.

“And I think that is very understandable,” she told CBC’s chief political correspondent Rosemary Barton.

A report released by Royal LePage suggests over three million Canadians are facing mortgage renewals in the next 18 months. Many can expect significantly higher monthly payments as a result.

That’s causing anxiety among homeowners, some of whom told CBC News they expect to make significant lifestyle changes to accommodate the higher cost.

WATCH | Rosemary Barton’s interview with Chrystia Freeland:

Despite gloomy fall economic update, Freeland has a ‘glass-half-full perspective’

Featured VideoCBC’s chief political correspondent Rosemary Barton speaks with Chrystia Freeland, Canada’s deputy prime minister and minister of finance, about the new Canada Mortgage Charter and whether it will help Canadians in need.

Bikramdeep Singh told CBC News in Vancouver that he expects his mortgage payments to rise by 30 to 40 per cent when it is renewed next year.

“That’s going to be a significant chunk of money I’m spending every month,” the homeowner said earlier this week. “That’s going to affect definitely my lifestyle. I’m going to make adjustments.”

In Surrey, B.C., Kevin Larkin is facing renewal in January.

“I’ve been running the numbers, and I don’t see how I’m going to be able to renew and afford this,” he said. “And it’s unfortunate. I’m a professional. I work. I’m trying to support a family.”

As part of the fall economic statement released on Tuesday, Freeland introduced a Canadian Mortgage Charter, a non-binding set of guidance and expectations Ottawa has laid out for the banks in relation to mortgages.

The charter — which does not have the force of law — includes measures including the ability to temporarily extend amortization periods, ending a stress test when switching lenders at the time of renewal, and waiving some fees.

Asked whether banks could be trusted to follow the guidelines without a clear enforcement mechanism, Freeland said she believed the interests of the government, banks and everyday Canadians are aligned on this issue.

“It is my hope — but also really my belief — that the banks are going to work with us, the government, and work with Canadians to act on these commitments.”

WATCH | Breaking down the state of Canada’s books:

At Issue | Canada’s gloomy fall economic update

Featured VideoFinance Minister Chrystia Freeland presented a trimmed-down economic update aimed at avoiding a recession and trying to spur affordable housing development, but is it enough to help struggling Canadians?

“It’s a serious thing for the finance minister to publish — in black-and-white, in both official languages — our expectations for how the banks will be supporting their customers. That in and of itself is a big deal,” she said.

Freeland noted that it was important for Canadian homeowners to be aware of the rules and know what to expect when they speak to their banks.

“Canadians need to know about it, that’s why I emphasize it so much,” she said.

Focus on interest rates

Freeland also didn’t rule out additional measures in a spring budget.

“We’re going to watch it like a hawk — like a bunch of hawks, at finance — and definitely, we’re prepared to do more as needed.”

Freeland, who is also deputy prime minister, said her other focus is for broad improvement of the state of the economy, such that the Bank of Canada feels comfortable lowering rates without fear of renewed inflation.

“Because that really is the best outcome for everybody,” she said.

Inflation has fallen in Canada from a high of 8.1 per cent in June 2022 to 3.1 per cent last month.

Meanwhile, the Bank of Canada’s benchmark interest rate has risen to five per cent, and bank governor Tiff Macklem hinted this week that might be enough to wrangle rising prices.

Freeland emphasized that it was important Canada has so far been able to pull off a “soft landing” from the disruption of the COVID-19 pandemic and avoid an intense recession.

WATCH | The federal government’s fall fiscal update:

How much federal debt is too much for Canada? | About That

Featured VideoCanada’s deficit is expected to grow to $1.4 trillion in the next five years. Andrew Chang explains that, while high national debt differs from personal debt, experts say it does come with a price.

Conservative Leader Pierre Poilievre harshly criticized the government’s approach when it was released earlier in the week.

“With this $20 billion of costly new spending, this update can be summed up very simply: prices are up, rent up, debt up, taxes up, time’s up,” he said.

“Common-sense Conservatives will vote no confidence on this disgusting scheme. After eight years of this prime minister, he is not worth the cost. And today he’s adding another $20 billion to inflation, which will put pressure on interest rates.”

WATCH | The Conservative response to the fall economic update:

Poilievre calls fall economic statement ‘disgusting scheme’

Featured VideoConservative Leader Pierre Poilievre criticizes the more than $20 billion in new spending promised in the federal government’s fall fiscal update.

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Finance

Former Finance Manager of Historic Sotterley Charged with Embezzlement of $15,000

Published

1 hour ago

December 26, 2024

Press Room

Former Finance Manager of Historic Sotterley Charged with Embezzlement of ,000

Angela Marie Hanson, 52, of California, Maryland, has been indicted on charges of embezzlement and theft following allegations of financial misconduct during her tenure as Finance Manager for Historic Sotterley, Inc. According to court documents, Hanson is accused of stealing nearly $15,000 over a five-month period from October 31, 2023, to April 15, 2024.

Hanson, who oversaw financial operations at the historic property, is scheduled for her initial court appearance in the Circuit Court for St. Mary’s County on January 13, 2025. She faces a felony charge of theft scheme involving $1,500 to $25,000, a misdemeanor embezzlement charge, 50 counts of theft between $100 and $1,500, and 17 counts of theft under $100.

Authorities allege that Hanson misappropriated funds using a debit card linked to Historic Sotterley’s “Museum Shop” account. Over 50 ATM withdrawals and several unauthorized purchases were reportedly made at local businesses, including gas stations and convenience stores.

Court filings claim Hanson also transferred funds between Historic Sotterley’s accounts to conceal her activities. Investigators allege that Hanson continued these actions even after her employment ended in February 2024.

The St. Mary’s County Sheriff’s Office led the investigation, which included reviewing banking records, witness testimony, and surveillance footage. Historic Sotterley’s Executive Director identified Hanson as the only individual with access to financial systems and administrative rights during the period in question.

Investigators state that surveillance footage shows Hanson conducting ATM withdrawals using the organization’s debit card. When questioned by law enforcement, Hanson acknowledged managing Historic Sotterley’s finances but denied any intent to defraud.

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Finance

The Secret to Making Successful Financial New Year’s Resolutions – NerdWallet

Published

13 hours ago

December 25, 2024

Press Room

The Secret to Making Successful Financial New Year’s Resolutions – NerdWallet

The investing information provided on this page is for educational purposes only. NerdWallet, Inc. does not offer advisory or brokerage services, nor does it recommend or advise investors to buy or sell particular stocks, securities or other investments.

The start of a new year can bring a surge of motivation around setting new goals, including financial resolutions.

One way to help those goals become reality, financial experts say, is to make them as specific as possible. Then, track your progress, while allowing flexibility for unexpected challenges.

“It’s easier to track progress when we know where we are going,” says Sylvie Scowcroft, a certified financial planner and founder of The Financial Grove in Cambridge, Massachusetts.

That’s why she encourages her clients to set clearly defined goals, often related to paying off a specific debt, saving a certain amount per month or improving their credit score.

Here are more tips from financial experts about crafting 2025 financial goals:

Pick your top priorities

Trying to accomplish too much can feel overwhelming. Instead, pick your priorities, says Cathleen Tobin, CFP and owner of Moonbridge Financial Design in Rhinebeck, New York.

She suggests focusing on those big, often emotionally-driven goals to find motivation.

“It’s more compelling than just a number,” she says. For example, do you want to make sure you’re on track for retirement or save money for a house? “Start there.”

Be as specific as possible

Scowcroft says she sees clients get tripped up by selecting overly broad goals, such as “get better with money.” Instead, she encourages people to select specific action items, such as “sign up for a budgeting tool and set aside time each month to learn where my money is going.”

That level of specificity provides direction so you know what steps to take next, she adds. For example, if your top priority is to become debt-free, then your specific goal might be to pay off an extra $200 of your debt balance each month.

Tobin says labeling savings accounts so they correspond with goals can also help. An emergency fund could be named something like “Peace of mind in 2025,” so you remember why you’re saving every time you make a transfer.

“It’s more motivating than just ‘emergency fund,’” Tobin says.

Get more financial clarity with NerdWallet

Monitor your credit, track your spending and see all of your finances together in a single place.

Track your progress

Measuring your progress as the year unfolds is also a critical component of successful goal setting, Tobin says.

She compares it to weight loss. If you want to lose 20 pounds by June, then you need to lose about a pound a week for the first six months of the year. Similarly, she says it helps to break savings goals into microsteps that specify what you need to do each week.

Schedule a weekly or monthly check-in with yourself to make sure you are meeting those smaller goals along the way. You might want to review your debt payoff progress or check your credit score, for example.

“Being able to break it down into steps that can be done each week or twice a month really helps,” Tobin says.

Automate where you can

If your goal is to save more money, then setting up an automatic transfer each month can help turn that goal into reality, as long as you know you have the money in your checking account to spare.

“It reduces the mental load,” says Mike Hunsberger, CFP and owner of Next Mission Financial Planning in St. Charles, Missouri, where he primarily supports veterans and current members of the military.

He recommends starting small to ease into the change.

“I wouldn’t jump to double what you’re currently saving,” he says. For example, when it comes to saving in a retirement account, if you’re starting with a 3% contribution, you might want to bump it up to 4%, then slowly increase it from there.

“My number one piece of advice is to start small, but make sure you scale over time,” Hunsberger adds. “Because it’s gradual, you probably won’t notice it impacting your lifestyle.”

Adjust as needed

“Stay flexible,” Scowcroft says. “Part of it is just being kind to yourself and not being too rigid.”

When unexpected challenges come up, such as a big unplanned expense, you might have to pause making progress on your goal and reset.

You might even need to change your goal. Scowcroft says that doesn’t mean you “failed,” just that life changed your plans. Dwelling on any negativity won’t help your forward progress.

Team up with a friend

Sharing your goals with a friend can also make it easier to reach them, Scowcroft says.

“It really helps to have an accountability buddy,” she says.

She suggests putting a regular “money date” with your friend on the calendar so you can ask each other how you’re doing, brainstorm any challenges or even budget together side-by-side.

“It’s a fun excuse to meet up with a friend.”

Get more financial clarity with NerdWallet

Monitor your credit, track your spending and see all of your finances together in a single place.

Finance

I’m not financially literate. Here’s how I could be. – The Boston Globe

Published

21 hours ago

December 25, 2024

Press Room

I’m not financially literate. Here’s how I could be. – The Boston Globe

If you asked me what the process for setting up a Roth IRA looked like, I doubt I could offer you a thorough response. The same goes for mortgages and loans and interest. When I had to fill out my first W-9 form, I was admittedly more than a bit confused.

In short, financial literacy isn’t my forte. And that’s because, like many Massachusetts public school students, I’ve never had to take any sort of personal finance class.

Indeed, throughout the debates over eliminating MCAS as a graduation requirement for high schoolers, we heard quite a bit about the state’s educational gold standard. So is it not the least bit shameful, or at least embarrassing, that our state does not require high school students to take a financial literacy class when a majority of states do?

Absolutely. And it needs to change.

Twenty-six states, including Rhode Island, New Hampshire, and Connecticut, have passed legislation making a personal finance course mandatory for high school students. Meanwhile, Massachusetts received an “F” from the Champlain College Center for Financial Literacy, which released a report card in 2023 evaluating how each “state delivers personal finance education in its public high schools.” In addition, a 2023 report card(link?) from the American Public Education Foundation gave the state a “C” for its financial literacy requirements — a score worse than or equal to all but six states.

Meanwhile, across the state, credit card and student loan debt have spiked to eye-popping levels. As of the second quarter of this year, the average Massachusetts resident had a credit card balance of $8,556 and $33,710.38 in student loan debt. The latter is particularly troubling for young people like myself. For the next four years, countless high school seniors throughout the Commonwealth will be attending college, paying tens of thousands of dollars on top of day-to-day expenses.

The need for personal finance courses in Massachusetts is tremendous — a need that, as per a 2021 report from the state’s Office of Economic Empowerment, is recognized almost universally among teachers and, importantly, students.

Yet, as a result of being taught next to nothing about personal finances, many of us are left ill-prepared for these new circumstances. Our understanding of credit cards is limited to, as State Treasurer Deb Goldberg so eloquently articulated to GBH, “The parent puts a plastic card into the wallet and boom: out comes money.” And so the cycle of taking out loans, accumulating massive debt, and working for years before being able to pay it off persists.

Why perpetuate the cycle when it is so clear that these classes work? According to a 2021 Ramsey Solutions survey, among the teenagers who have completed a personal finance class, nearly 80 percent said that they’ve created a monthly budget for themselves, 94 percent felt confident about saving money, and 87 percent understood how to pay income taxes. And, as noted in the OEE’s report, personal finance courses are tools that “increase social mobility for low-income or immigrant students.” Requiring such classes really couldn’t make much more sense.

At my own high school, Brookline High School, financial literacy is offered in the form of a popular elective, “The World of Money: Practical Studies in Finance and Investment,” which “integrates the basic principles of economics, money management, investing, and technology,” according to the course catalog. Every spring, as course selection rolls around, hundreds of students eye this semester-long course, but with only so many spots, most cannot take it — and, consequently, miss out on an opportunity to learn about financial literacy.

Recognizing the imminent need to educate ourselves on matters of taxes, loans, investments, and more, several members of Brookline High School’s Student Council, including myself, have proposed amendments to our student handbook that would incorporate a financial literacy component in our graduation requirements and incorporate personal finance lessons into our weekly advisory classes. Our work would ensure that such important life skills are accessible to all students, not merely for those lucky enough to find a place in the class.

But while such efforts are certainly a step in the right direction on this issue, they are not enough. Financial literacy should not be a privilege for schools with a proactive student body; it is a fundamental aspect of our lives, and our state’s education system must begin reflecting that. The state must require personal finance courses for graduation — it’s the smartest investment we can make.

Ravin Bhatia is a senior at Brookline High School.