FORT MCMURRAY EMERGENCY ASSISTANCE FINANCIAL DISCRIMINATION FOR SINGLES AND SINGLE PARENT FAMILIES

Posted on May 11, 2016 by ffswpadmin

FORT MCMURRAY FIRE EMERGENCY ASSISTANCE FINANCIAL DISCRIMINATION FOR SINGLES AND SINGLE PARENT FAMILIES

These thoughts are purely the blunt, no nonsense personal opinions of the author and are not intended to provide personal or financial advice.

Announcements from the province for Fort McMurray Fire Emergency Assistance state each adult will receive $1250 and each child $500.

Singles and once again have been financially short changed. Common sense, lowest common denominator critical thinking shows $1250 is not enough. Amount for divorced or separated parent with children is also in question.

Amount for singles on month of expenses means they would get temporary assistance for $1300 one bedroom apartment rent, but have no money left for $250 food, gas or other necessities.. A divorced or separated parent with two children would get $2250. Parent could rent two bedroom apartment, have money for food, but nothing left for gas and other necessities. A married couple who at present time have no children would get $2500. They would possibly get temporary assistance for $1300 one bedroom apartment rent, $500 for food with some money left for gas and other necessities. A family with two children would receive $3500. They could rent a two bedroom apartment, have $1000 for food and also have money left for gas and other necessities.

If singles follow married persons mantra that they can always go live with someone, two bedroom apartment rent would put them on same financial level as married couple without children, but they would also face the additional psychological stress of not only the consequences of the fire, but also all the adjustments it takes to live with a new person in new surroundings, etc.

Single parent with two children gets less financial assistance than married and coupled family unit without children.

This disaster will put additional stress on what is already an unaffordable housing market. Singles will face greater negative consequences of this disaster in housing than families since landlords tend to rent to families before they rent to singles.

How many times can it be said that it costs more for singles to live than families? Year after year, singles of all ages provide untold financial benefits to their country and families through taxes, volunteer efforts, etc., but never financially get back what they put into financial coffers. Financial intelligence and fair financial formulation requires analysis to be based on not just a person to person basis, but also what it costs each individual family unit to live (single, single parent and two parent family units). One family unit does not deserve more financial benefits than another in a disaster. In a just, humane society singles and single parent families deserve same financial, psychological and social dignity and respect in emergency situations as married and coupled persons and families.

This blog is of a general nature about financial discrimination of individuals/singles. It is not intended to provide personal or financial advice.

FEE SCHEDULES WHERE FAMILIES PAY MUCH LESS AND FINANCIALLY DISCRIMINATE AGAINST SINGLES

Posted on April 27, 2016 by ffswpadmin

FEE SCHEDULES WHERE FAMILIES PAY MUCH LESS AND FINANCIALLY DISCRIMINATE AGAINST SINGLES

These thoughts are purely the blunt, no nonsense personal opinions of the author and are not intended to provide personal or financial advice.

This post is a reproduction of an article that was put together in 2009. Even though the examples are several years old, nothing has changed where singles are consistently forced to pay more than families. Many more examples can be found to replace these examples.

EXAMPLE A:

Fee Schedule

Standard Plan: Individual $65 Family $85
Premium Plan: Individual $100 Family $130
(Family is defined as two or more people and includes all members of a household)

Does this look like a fair plan? The following information shows that this fee schedule is for a patient registration form from a local family doctor. The fee schedule was put into place to cover uninsured services not covered by the provincial medical plan.. The uninsured services included:

telephone consultations
prescription renewals over the phone
completion of insurance forms, sick notes
medical supplies,
completion of school/camp forms, daycare notes
faxing/photocopying and transfer of medical records
pre-employment certificate of fitness
driver’s medical and physical examination form
citizen and immigration report
disability tax credit form
travel cancellation form
referral form for chiropractor and physiotherapy
referral note chiropody and massage
wart removal

The pay for service fee for any of these items ranged from low of $20.00 to high of $125.00. The Standard Plan fee covered partial services of sick note, faxing and photocopying of medical records, back to work note, pre-employment certificate of fitness, referral note for chiropractor and physiotherapy and referral note for chiropody and massage. The Premium fee covered all listed services.

THIS FEE SCHEDULE WAS RECOMMENDED BY THE PROVINCIAL MEDICAL ASSOCIATION

QUESTION: Why are singles paying more than families in adult to adult person comparison? (note: assumption being made is that kids are FREE)

QUESTION: Who will be using more services such as school/camp forms, daycare notes, sick notes (by virtue of fact there are more members who will be using these forms in a family? ANSWER: Families will be using more of these services, so why are singles paying more in proportion than families?

QUESTION: Who will be using more of all of the services listed? ANSWER: Families will be using more of the services since there are more members in the family unit. So, why are singles paying more in proportion adult to adult in the family unit?

QUESTION: Why are couples without kids and alternative lifestyle couples without kids (included under family category, not single category) allowed to benefit (pay less) over singles? They usually have two incomes, while singles only have one income.

SUGGESTION FOR A FEE SCHEDULE THAT PROMOTES EQUALITY AMONG ALL MEMBERS OF SOCIETY – form a plan that bases the fee on number of adults (kids would be free).

Individual $65 – change to $50 for one adult (singles are one unit, only have one income)
Family $100 – leave as $100. (This would ensure each adult in whatever family unit – husband/wife with kids and two incomes, husband/wife with no kids and usually two incomes, alternative lifestyle couples with/without kids and usually two incomes – would all be paying an equal amount per adult. All kids would be FREE. Singles would not be subsidizing families.
Single Parent $50 – add new category (EVEN SINGLE PARENTS WITH KIDS ARE SUBSIDIZING FAMILIES WITH/WITHOUT KIDS AND ALTERNATIVE LIFESTYLE COUPLES WITH/WITHOUT KIDS. Charging for the adult only would ensure that single parents who usually only have one income would not be subsidizing members of any type of family unit. SINGLE PARENTS WITH KIDS AND ONE INCOME SHOULD NOT BE PLACED IN SAME CATEGORY AS FAMILY UNITS WITH MORE THAN ONE INCOME!

EXAMPLE B:

Local family sports center fee for yearly membership fee is :

Family – $500 per year
Single – $300 per year

Once again singles/single parents with kids and one income are subsidizing all types of family units as described above who usually have two incomes.

A more appropriate schedule would be to charge per adult:

Family – $500 per year
Individual – $250 per year
Single parent with kids – $250 per year

EXAMPLE C:

Local library fee schedule for yearly membership is:

Family – $20
Adults (18+) – $15

A more appropriate schedule would be:

Family – $20
Individual – $10
Single parent with kids $10

Many more examples can be given where singles/single parents with children are at a disadvantage compared to families. (I.e., weekly Superstore coupon worth $25 is given when $250 is spent. How can a single/single parent with kids even begin to spend $250 each week on one income?)

Above examples (just a few!! Out of many) show how the rich keep getting richer and how lower and middle income families benefit the most while individuals/single parents with kids and single incomes are the financial losers!!

The above recalculation of fee schedules did not take rocket science. It appears government and decision makers won’t or can’t use financial intelligence and simple mathematical statistical formulas to promote the financial rights and privileges for equality of all citizens regardless of marital status.

The irony of this recalculation is that the fee schedules based on adults may bring in slightly less revenue, and in some cases would even bring in more revenue while promoting financial equality.

This blog is of a general nature about financial discrimination of individuals/singles. It is not intended to provide personal or financial advice.

FINANCIAL GURUS FINANCIALLY ILLITERATE ABOUT SINGLES’ FINANCES

Posted on January 27, 2016 by ffswpadmin

FINANCIAL GURUS FINANCIALLY ILLITERATE ABOUT SINGLES’ FINANCES

(These thoughts are purely the blunt, no nonsense personal opinions of the author and are not intended to be used as personal or financial advice.)

In the definition of family, for example Canada Revenue Agency, ‘ever’ singles and early in life divorced/separated persons are included in the definition of family, but in financial discussions by financial gurus they are often ‘kicked out’ of the family.

Financial gurus are often financially illiterate and discriminatory in the financial affairs of singles. The most often egregious examples of this is the exclusion of ‘ever’ singles and early in life divorced/separated persons from their blogs and studies. The following three examples are used as a basis for this post.

Example #1

(false-assumptions-four-ways-seniors-singles-lose) The December 2, 2015 post “False Assumptions of Article ‘Four Ways Senior Singles Lose Out’” talks about false assumptions and false categorization of singles by Ted Rechtshaffen’s October 13, 2012 article “Four Ways Senior Singles Lose Out”. In this article he states how widowed persons financially lose out in tens of thousands of dollars because they are no longer part of a couple. He suggests that tax systems should be made fairer for only widowed and later in life divorced/separated persons. ‘Ever’ singles and early in life divorced/separated persons were left out by exclusion because definition of single status was incorrectly used. (Ted Rechtshaffen is president and wealth advisor at TriDelta Financial, a boutique wealth management and planning firm) (http://www.tridelta.ca/)

Example #2

(thebluntbeancounter) The Blunt Bean Counter blog by Mark Goodfield article “The Burden of Singledom” May 6, 2014 is a response to a single person who stated his blog series on retirement was no help and was indeed obscene (this was stated in his blog) to her as a single person. He is a Chartered Professional Accountant who readily admits that his blog is for everyone, but in particular high net worth individuals and owners of private corporations. He states that the target audience was not singles or low income Canadians for the retirement series. There is no problem with this statement; however, he asked Rona Birenbaum to do a guest post, a well-known and often quoted financial planner who also typically deals with high net worth clients. Her article, ‘The Burden of Singledom’ again gave no meaningful advice beyond what is already known by singles.

Example #3

Dr. Jack Mintz is the President’s Fellow of the School of Public Policy at the University of Calgary. Jack Mintz and Philip Bazel published an article in February 2014 called “Income Adequacy among Canadian Seniors: Helping Singles Most” (policyschool.ucalgary)

In the article the following statements are made:

‘Policies should be directed at these most vulnerable single seniors, such as enhancements to the GIS top-up program targeted at those seniors with the lowest incomes, and increased survivor-benefit rates under the Canada Pension Plan.’

’When the income inadequacy of singles and married couples is evaluated using LICO (Low Income Cut-Off), we find a significantly higher incidence of elderly singles with income under $20,000 below the LICO threshold (52.6 percent) when compared with the LICO incidence of elderly households containing a married couple below $40,000 (15.7 per cent for households containing a couple with one elderly, and 6.3 per cent for households containing a couple with two elderly)’.

Such a statement shows financial illiteracy to the finances realities of senior singles as it costs them 70 per cent of what it costs a married/couple persons to live as a single unit. A better alternative would be to forget the marital manna benefits directed to survivors or widowed persons and treat all senior singles whether they are ‘ever’ singles, divorced/separated or widowed persons as equals with top-ups equal to 70 percent of married/coupled person units. The 52.6 per cent for singles versus 15.7 and 6.3 per cent for married persons mentioned in above quote shows an enormous spread between the two and is proof of this. Financially, while in a coupled state, widowed persons appear to have a pretty good quality of life while singles below LICO appear to never have an equivalent quality of life.

(Many low income singles do not have close family members to live with and when they are forced to cohabitate in non-family situations, they often live in undesirable situations such as other household members stealing food, etc., “Social Housing Waitlists and the One Person Households in Ontario”) (to-rent-or-own-affordable-housing-that-is-the-question)

Seniors living with family is an expense to the family unit. However, senior singles living on their own have to incur not only 100% of the living costs, but also 70% of the costs of married/coupled persons as a single unit.

Financial gurus state that 70 per cent replacement of pre-retirement income is the standard norm for retirement. Statistics Canada analysis has found that gross replacement rates vary by income but typically is about 70 percent. People in the lowest 20 percent income quintile have replacement rates of 100 percent, implying their real standard of living actually rises after retirement. However, the real truth common sense evaluation of these findings show that married/coupled people financially benefit more than singles and divorced/separated persons. A higher income level for the low income single person is still a low level income. Financial gurus seem to think that when Canadians have an equal or greater income during retirement than while they are working, that is okay. Try telling that to low income Canadian ‘ever’ singles and early in life divorced/separate persons who have not received the same benefits and are unable to save at the same rate as families or married/coupled persons during their working lives and, therefore, have lower retirement income.

(senior-singles-pay-more-part-4-of-4-response-to-reader-letters) An example of retired ‘ever’ singles and early in life divorced/separated singles receiving less is the December 22, 2015 blog “Senior Singles Pay More, Part 4 of 4” showing that in a targeted tax relief program single seniors pay no tax on up $20,360 income, while married/coupled seniors pay no tax on up to $40,720 income. (It costs more for singles to live person to person that it does for married/coupled persons. This program barely covers the rent for a senior single, but allows married/couple senior to live a much better financial lifestyle). A further example is the 10 per cent increase of the GIS (Guaranteed Income Supplement) for low income single seniors in the 2015 budget. One person has indicated that this has amounted to an increase of only $17 per month.

Conclusion

Financial gurus like Chartered Professional Accountants, writers of blogs, members of think tanks and financial planners need to educate themselves and include all singles in their discussions, not just widowed persons and later in life divorced/separated singles.
Financial gurus need to insure singles of all types are given fair and equal financial status in financial formulas and decision making.
Financial gurus need to become educated on what it truly costs ‘ever’ singles and early in life divorced/separated persons to live. It costs these persons 70 percent of what it costs married/coupled persons to live as a unit. These extra living costs need to be included in financial formulas and financial decision making.

The blog posted here is of a general nature about financial discrimination of individuals/singles. It is not intended to provide personal or financial advice.

ARE FAMILIES REALLY MORE FINANCIALLY INTELLIGENT IN MANAGING FINANCES?

Posted on January 24, 2016 by ffswpadmin

ARE FAMILIES REALLY MORE FINANCIALLY INTELLIGENT IN MANAGING FINANCES?

These thoughts are purely the blunt, no nonsense personal opinions of the author and are not intended to provide personal or financial advice.

Financial Post personal finance profile “Put Cash Toward the Kids’ Education” and in Calgary Herald on January 16, 2016 (financialpost)

The following is a condensed version of the financial profile of Harry 39, and Wendy 38, a British Columbia couple with two children ages two and a few months old. (Question: Did they marry later in life resulting in a low net worth at this time in their life because it is more difficult to accumulate net worth while single than as married/coupled persons?)

Their take home pay is $9,100 a month plus $240 take home universal child care benefits put into place this year by the federal government for total annual take home pay of $112,000. They both have defined benefit retirement pension plans, so it should be noted that contributions to their plans have already been deducted before take home pay total.

Their expenses include real estate mortgage, property tax, and home repair $3,489, car costs $550, food and cleaning supplies $1,200, clothes/grooming $150, charity/gifts $200, child care $850, entertainment $120, restaurant $280, travel $150, miscellaneous $626, utilities $350, phone/cable/internet $200, home and car insurance $325.

For savings they contribute $800 to TFSA (Tax Free Savings Account), and $50 to RESP (Registered Education Savings Program).

Their assets include house $500,000, cars $20,000, savings including RRSP Registered Retirement Savings Plan), RESP, TFSA (Tax Free Savings Account) and cash $40,700.

Their net worth equals $150,700.

What they want:

retire at age 55
buy a condo for the children’s grandparents to use when they are in town and to rent out at other times

Financial Planner Analysis

they haven’t made wills or appointed guardians for their children
they have no term life insurance
they can’t retire at age 55, but they can retire at age 59
they can’t afford to buy a condo as they don’t have the money for down payment
they should fully contribute to their children’s education plan into order to get the government benefit

Retirement plan

if they retire at age 59 assuming they remain with their present employers, their total income would be $96,732 plus Harry’s $9,570 CPP(Canadian Pension Plan) and Wendy’s $12,060 CPP.
At age 65, with the addition of OAS (Old Age Security), their total income will be $111,146 before income tax. There will be no clawback on OAS and with pension splitting, they will pay only 14% income tax and have a monthly take home income of $7,965 to spend.

Other Financial Analysis By Blog Author

they want to retire at age 55, but their children will only be ages 15 and 16, and their mortgage won’t be paid off until Harry is age 63. How financially intelligent is this?
they are not taking advantage of ‘free’ government benefits of $500 per child by not maximizing children’s RESP.
Harry is an immigrant who came to Canada at age 30 (nine years ago), and he wants to retire at age 55. He will have contributed to Canadian financial coffers for only 25 years. If he retires at age 59 he will also get what could be a 15% tax reduction with pension splitting at age 65. Canadian born singles and single immigrants do not get these same benefits and are subsidizing married/coupled immigrants who in many cases have taken more from the Canadian financial coffers than they have put into it.
with pension splitting and no clawback on OAS, they will only pay 14% income tax. Singles with equivalent pension income pay a lot more income tax. (It is stated elsewhere in the article that Wendy’s tax rate at present time while working is 29%).
their food and restaurant (including some cleaning supplies) budget is over $1400 a month for two adults and two very young children (does not include entertainment budget of $180 month). Their restaurant budget is $280 alone and yet many families think singles should live on only $200 a month for food.

Lessons Learned

married/coupled persons and families receive marital manna benefits while they are parents and while they are retired. One could say the only persons who contribute fully to the Canadian tax system while getting less benefits are singles.
married/coupled persons and families are not any more financially intelligent at managing their finances than single persons.
married/coupled persons and families all want to retire at the age of 55 regardless of their financial circumstances. Most singles do not have this option. Why should families bringing in $9,000 a month after tax income get $240 after tax child benefits and child education benefits and, then when they retire early at age 59, also get what is probably a 15% pension splitting tax reduction resulting in take home income of $8,000 at age 65 when their children are grown up? This is a very rich retirement income that most singles cannot aspire to.
Families, governments and decision makers all talk about expensive it is to raise children. For one Canadian child, the cost is about $250,000. So if cost is spread over 25 years of the child, cost per year is $10,000 per year, or in the case of this family $20,000 per year for two children. Their total after tax income is almost $10,000 per month, so approximately two out of twelve months income will be spent raising their children. The remaining income is for themselves. Add in another month of income for the children’s education ($10,000 times 20 years equals $200,000 not including government top up) and that still leaves them with nine month of income for themselves. So again, how expensive is it to raise children when this family has over $80,000 a year to spend on themselves?
When families (including married later in life) in top 40% Canadian income levels can retire at age 55 and 59, they spread the family financial myths and lie to singles, low income families, themselves, the world and God about how expensive it is to raise children and why they need income splitting and pension splitting. Low and middle class families are paying more and getting less for government programs. Singles of all income levels are paying even more and getting less (singles are considered to be in the upper 20% quintile of the Canadian rich with before tax income of only $55,000 and up. Wow, that is really rich).
singles know that they are paying more taxes and getting less in benefits. They also know they are subsidizing families when they work 35, 40 years without using mom/baby hospital resources,don’t use EI benefits at same level as families for parental leave, and don’t get marital manna benefits during retirement.
singles know they have been financially discriminated against by being left out of government financial formulas and are not seen as financial equals to married/coupled persons.

This blog is of a general nature about financial discrimination of individuals/singles. It is not intended to provide personal or financial advice.

MARRYING FOR MONEY PAYS OFF

Posted on January 17, 2016 by ffswpadmin

MARRYING FOR MONEY PAYS OFF

These thoughts are purely the blunt, no nonsense personal opinions of the author and are not intended to provide personal or financial advice.

This Washington Associated Press article appeared in the Calgary Herald on January 19, 2006. Since it may be difficult to find online, it is reproduced in full here, and is followed by the author’s comments.

‘Marrying for money, it turns out, works.

A study by an Ohio State University researcher shows a person who married – and stays married – accumulates nearly twice as much personal wealth as a person who is single or divorced.

And for those who divorce, it’s a bit more expensive than giving up half of everything they own. They lose, on average, three-fourths of their personal net worth.

“Getting married for a few years and then getting divorced is clearly not the path to financial independence,” says Jay Zagorsky, whose study divided married couples’ assets so they could be compared with singles.

Zagorsky, a research scientist at OSU’S Centre for Human Resource Research, tracked the wealth and marital status of 9,055 people from 1985 to 2000. Those people have been participating in the National Longitudinal Survey of Youth, which has repeatedly interviewed them about various aspects of their lives since 1979. The participants are now 41 to 49 years old, making them the youngest of the baby boomers.

Zagorsky cautioned results could be different for older and younger Americans, who have faced different attitudes about marriage, divorce and living together without marriage.

Zagorsky’s study, published in the current issue of the Journal of Sociology, defines wealth as assets, such as real estate, stocks and bank accounts, minus liabilities, such as mortgages.

A big reason married people accumulate more wealth than others is simple economies of scale – one house is cheaper to maintain than two, he said. Divorce reverses those benefits, Zagorsky said.

“Divorce looks like one of the fastest ways to destroy your wealth,” he said.

David Popenoe, co-director of the National Marriage Project at Rutgers University, said people become more economically productive after they marry.

“They work harder, they advance further in a job, they save more money and maybe invest more wisely,” Popenoe said. “That’s because, one can speculate, they are now working for something larger than themselves. They are working for a family.”

Zagorsky showed singles slowly accumulated wealth during the study. Married people accumulated wealth much faster, accumulating 93 per cent more than single or divorced people over the life of the study, Zagorsky said.’

Further discussion on this article by Ohio State University “DIVORCE DROPS A PERSON’S WEALTH BY 77 PERCENT, STUDY FINDS” states: (researchnews.osu)

‘…The data in this study can’t say why marriage is so helpful in building wealth, and why divorce so devastating, Zagorsky said. But sociological research offers some potential clues: Married people can benefit because two people can live more cheaply than they could separately. In addition, because two spouses can share household responsibilities, they can each produce more than if they were single.

Divorced people have a variety of costs associated with the divorce, which increases how much they spend and decreases how much they can save, he said.

“We can’t tell from these data the reasons why divorced people have so much less wealth than those who are married, but the results are clear, Zagorsky said…..’

Blog Author’s Comments

No matter how the pie is sliced, families are generally wealthier than singles. In this study after 15 years, married persons (who stay married) accumulate nearly twice as much personal financial wealth as a person who is single or divorced, even though many have had the expense of raising children.

So what does a family have in wealth after 30 years and again after 45 years – three, four and five times the wealth? The answer is ‘yes’. Fast forward to year 2009 and see MoneySense, October 2009 (all-canadian-wealth-test). The table “Are You Rich Yet?” shows that if one examines the upper middle class 20% net worth quintile, the worth of unattached individuals is $81,001 to $270,000 compared to the worth of families of two or more which is $358,600 to $697,000. The gap is even wider between unattached individuals and families of two or more because single parents with children are included in the family of two or more statistics. (To portray a more accurate picture, single and divorced/separated, especially at a younger age, parents with children must be pulled out of the family of two or more column and put into their own column).

The All-Canadian Wealth Test, January 2015 (based on Statistics Canada 2011 data) (all-canadian-wealth-test-2015) shows for upper-middle 20% net worth quintile the wealth for unattached individuals is $128,088 to $455,876 and families of two or more $589,687 to $1,139,488. Again, the statistics are skewed because single parents with children are included in this category).

It should also be noted that middle class family net worth is not disappearing. Review of statistics from the All Canadian Wealth Tests show that in just two years net worth has substantially increased. The richest of the rich net worth has increased the most, while the net worth of the poorest of the poor has proportionately the least (added January 20, 2016).

The “Marrying for money pays off” article also states that ‘…people become more economically productive after they marry. They work harder, they advance further in their job, they sae more money and maybe invest more wisely…that’s because, one can speculate, they are now working for something larger than themselves. They are working for a family…’

Really??? Participants at the end of the study were 41 to 49 years of age. So what is being said is that somehow at the age of 41 to 49, married people have managed to become brilliantly smart at accumulating wealth while singles have remained brilliantly stupid at accumulating wealth. Yet in the same article, it clearly states ‘a big reason married people accumulate more wealth than others is simple economics of scale – one household is cheaper than two.

The Ohio State University State article states: ‘The data in this study can’t say why marriage is so helpful in building wealth, and why divorce so devastating, Zagorsky said. But sociological research offers some potential clues: Married people can benefit because two people can live more cheaply than they could separately. In addition, because two spouses can share household responsibilities, they can each produce more than if they were single.’

They can’t say why marriage is so helpful in building wealth??? Reference to “Six Reasons Why Married/Coupled Persons able to Achieve more Wealth than Singles” (six-reasons) gives six clear reasons why married/coupled persons do so much better financially than singles or divorced/separated persons.

Just another study where society continues to denigrate singles, and considers them to be less financially intellectual than families. Reasons why married/coupled persons are able to accumulate more wealth is because of marital manna benefits, not because of financial intelligence or that they are more dedicated to financial well-being because they are family.

This blog is of a general nature about financial discrimination of individuals/singles. It is not intended to provide personal or financial advice.

MARITAL STATUS DOES NOT DEFINE FINANCIAL INTELLIGENCE

Posted on December 24, 2015 by ffswpadmin

MARITAL STATUS DOES NOT DEFINE FINANCIAL INTELLIGENCE

These thoughts are purely the blunt, no nonsense personal opinions of the author and are not intended to provide personal or financial advice.

In the last four posts, financial discrimination of senior singles was discussed. In addition, two reader letters and response to letters addressing assumptions of married people that singles can live with someone if they lack financial resources, and that financial problems of singles are because their lifestyles are too extravagant was discussed.

It is mind boggling as to why married/coupled people always seem to think that because they are married/coupled they have more financial intelligence and are able to manage their money better than single and divorced/separated persons. They also almost can never put themselves into the financial shoes of single and divorced /separated persons.

Singles are one the fastest growing demographics in the country, yet they are left out of financial formulas and discussions.

WHEN OUR POLITICAL LEADERS MAKE IT SOUND LIKE THE FAMILY FROM ‘LEAVE IT TO BEAVER’ IS STILL THE CANADIAN NORM, THERE ARE CONSEQUENCES FOR THE REST OF THE COUNTRY, SAY SINGLE VOTERS (quote from example #3 article).

In this post, the issue of marital status not defining financial intelligence will be discussed by reviewing three examples.

Example #1 and #2 show married/coupled persons are not any better at managing money than single and divorced/separated persons. Example #3 talks about financial misconceptions about singles.

(Financial profiles from the Financial Post are an interesting study in how persons perceive wealth. Anyone can submit an email requesting a free family finance analysis. It is interesting to note that most of the married/coupled requests for financial analysis are from relatively wealthy persons. These same requests always are requesting financial help because of worry that they will not have enough money to live and retire.)

Example #1, a financial profile of a married couple is as follows:

Calgary Herald, December 12, 2015 Financial Post “Oil Crash Forces Fix for Couple” – (this profile can be viewed in full online)

This summary is about Gary, 60 and Wendy, 67, an Alberta couple who grew prosperous with Gary’s work as a petrochemical engineer often earning as much as $200,000 a year doing consulting. However, his work is now history as a casualty of collapsed oil prices. Wendy worked as an administrative assistant earning $24,000 a year before she retired in 1990. Their income at the present time is $2,175 a month and is $3,240 less than their total monthly expenses of $5,415. They say they need to know if they can survive. The article does mention one child who is renting one of their rental properties.

Their net worth is $1,867,238. Their assets include residence $550,000, rental property #1, $460,000, and rental property #2 $430,000. Their investments include Registered Retirement Savings Plan $132,616, USA 401K in Canadian dollars $250,000, Tax Free Savings Account $39,334, non-registered savings/GICs $174,288 and two cars $17,000. Their total liabilities are two mortgages of $186,000 on rental properties.

The financial planner makes the statement:

“When Gary generated an income of $200,000 a year or more, they could afford to ignore investments, rent properties below market value and spend freely”.

The financial planner’s recommendation is get rid of money losing rental property, cut expenses and reallocate assets to cut investment costs. If they follow the planner’s advice, they should have a before tax income of about $74,000 per year. With splits of pension income and application of age and pension income splitting credits, they would pay 13 percent tax and have $5,345 a month or $64,140 annual income to spend. Compare that to reader letter#2, December 12, 215 post that suggested singles with rent or mortgage expenses can live comfortably on a middle class income of $27,000 a year.

It is interesting to note that their food budget for two people is $1,120 per month and expenses for entertainment are $220 per month. The financial planner suggests they cut their food budget by $400 and their entertainment budget by $100 per month.

Simple logic without seeking financial planner advice would imply that in order to increase their income they could sell one rental property, live on the proceeds, then sell the next rental property and live on those proceeds, and finally start taking income from their investments. They would still have their residence as collateral. With all their wealth this couple still feel they need to seek financial advice.

If one compares this example to the suggestion from the recent posts that singles can live on $27,000 per year and $200 a month for food, one wonders why this couple would have any financial worries with the wealth that they have. Also, reducing their food budget by $400 still allows them to have a food budget of $350 per person.

Example #2 is taken from a published article “Beyond the Blue Line” by the Canadian Scholarship Trust (CST).

“The report showed that approximately 66 per cent of Canadian parents have, or know someone who has, borrowed money or used retirement savings to put their children through extracurricular activities.

In contrast, 48 percent of parents have invested in a Canadian RESP (Registered Education Savings Plan).

CST reported that 43 per cent of parents said they’d borrowed money on a credit card, line of credit, personal or family loan for extracurriculars like hockey. The remaining 23 per cent deferred their retirement or used their retirement savings for extracurriculars.

More than half of Canadian parents (57 percent) said they feel every child should have the chance to play hockey if they want to, ‘because it’s part of growing up in Canada,’ CST said. The percentage represents a drop of more than 10 per cent from last year, when 69 percent said all children should be able to play hockey.

Despite the high rate of borrowing for extracurriculars, nearly half of parents said they knew someone pulling their kids out due to the cost. Thirty per cent said they, or someone they knew, regret the amount of money spent on activities like sports.”

Parents will play financial roulette with their money even though there is less than one per cent chance of their children becoming professional hockey players.

Example #3

This example is taken from the National Post June 12, 2015, : “ They are one of Canada’s fastest growing demographics, so why are politicians ignoring the single voter?” by Claire Brownell, (article is available online).

This article first talks about:

“Marcel Watier, a single 39 year old, who lives on his own in a rented basement apartment. He earns a good salary, thanks to a full time job and a part-time job on the side. He says people think he must be spending his money on stereotypical urban luxuries – dinners out, craft cocktails, a condominium with a pool and a rock-climbing wall – since he doesn’t have a partner or children. ‘They just see a single guy working two jobs and think I must be rolling in money. If I was rolling in money, would I be working two jobs?’

In addition to supporting himself, he helps his two sisters, who have eight children between them and a ninth on the way. (The article does not state why he has to do this.)

If those were his children and Walter were married, he would be eligible for a long list of tax breaks, benefits and programs. As a single person, he’s on his own. He states: It drives me up the wall to hear the whole ‘selfish single’ term.”

The word single is hardly ever used by politicians.

“The phrase ‘Canadian families’ has been spoken 5,669 times in the House of Commons since 1994″, according to OpenParliament.ca, with Conservatives (Party) accounting for almost half of those mentions.

If Canada’s singles were to get up tomorrow and decide it’s high time they stood up for themselves, they would form a formidable voting bloc. Maybe it’s time to try.”

Conclusion

The above examples show that marital status does not define financial intelligence; rather it is the belief systems, moral values, and financial values instilled throughout lifetime that define how money will be spent and saved.

It is time that singles be included in financial formulas, not just families. Instead of politicians promising things to only certain groups of citizens, they should be thinking about how to improve society as a whole.

This blog is of a general nature about financial discrimination of individuals/singles. It is not intended to provide personal or financial advice.