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A Personal Finance Coach On How Much Of Your Paycheck You Should Spend vs. Save

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Sometimes it can be difficult to figure out the best way to make your monthly paycheck go the distance, yet when you’re trying to mindfully manage your money this is one of the most important questions you an ask yourself. As a personal financial coach, I’ve seen that many of my clients have trouble divvying these up so that they end each month in the black (on budget) and not in the red (ouch, overbudget).

The key to paychecks: Do the hard thing first.

You’ve probably heard productivity experts suggest that the key to success is “eating the frog” each morning, which essentially means doing the hardest thing on your to-do list first to get it off your plate and help the rest of your day progress more smoothly. Well that doesn’t apply just to your to-do list; it can also apply to your wallet.

We’ve all been there: You get your paycheck (cha-ching!) and all of a sudden, your spending trigger finger gets itchy. “First round of kombucha is on me!” or “Tickets to Tulum, finally!”…right?

I’m not saying to make these things off-limits entirely, but starting the month off with them isn’t the best idea. In the end, it means you’re more likely to dip into your savings to make sure you can cover your monthly bills. 

So when you get your paycheck, start by eating the frog. That means pay your bills first. This will give you a better idea of what you can actually afford and what you can’t. Plus, it will ensure that you’re not going to submit a late payment (or miss a payment), which will help keep your credit score from being dinged.

It sounds obvious, but many people don’t do it! The best way to stay on top of it is to set up automatic monthly payments from a deposit account. It adds discipline to the process without you having to think about it. 

From there, think of the 70-30 rule.

These bills play into the 70 percent of your monthly paycheck that should be going toward your “essentials”—all those living expenses, such as your mortgage/rent, utilities, insurance, food, and other literal needs (soap! toilet paper!). I also recommend putting 5 percent of this pool into your emergency fund each month, in case your car dies or laptop refuses to start.

Then, break it down further into 15-15.

Fifteen percent of your paycheck should be going to your “endgame,” aka things for your future like savings accounts, investment accounts, and retirement accounts. Don’t frame it as a burden to have a 15 percent “bill” every month. Think of the endgame as being the lovely stuff you get down the line from this 15 percent. I promise you that “future you” will thank “present you” for it.

Now comes the fun part, because building some wiggle room into your budget is a must if you want to stay on track. Allowing yourself indulgences here is essential to keeping your budget on track so that you don’t get “money hangry” and end up splurging on something that’ll leave your wallet hurting.

The remaining 15 percent of that monthly paycheck is for the “extras,” meaning, whatever does it for you. First round on you at happy hour? That comes outta this 15 percent. Those concert tickets you’ve been eyeing? That also comes out of this 15 percent. You can spend this money freely and confidently, knowing that you’re not dipping into any other categories to drum it up.

By doing the hard thing first and paying your bills before you start spending on additional shopping, dining out, or entertainment, you’re ensuring that bills are paid on time, and you’re not dipping into your savings to make sure your insurance premium is paid.

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Ottawa announces new funding to combat online child abuse

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Ottawa has announced $22 million in funding to fight online child abuse.

Noting that police-reported incidents of child pornography in Canada increased by 288 per cent between 2010 and 2017, Public Safety Minister Ralph Goodale made the announcement Tuesday.

It follows a London meeting last week that focused on the exploitation of children between Goodale and his counterparts from the United States, Britain, Australia and New Zealand, collectively known as the Five Eyes intelligence group.

Major internet companies, including Facebook, Google and Microsoft, were also at the meeting and agreed to a set of rules the members of the group proposed to remove child pornography from the internet quicker.

On Tuesday, Goodale warned internet companies they had to be better, faster and more open when in comes to fighting child abuse on line.

In this Friday, Jan. 12, 2018 photo, detectives use the Cellebrite system to extract information from cellphones at the State Police facility in Hamilton Township, N.J. “Operation Safety Net,” the results of which were announced in December, netted 79 people suspected of exploiting children. (Thomas P. Costello/Asbury Park Press/Canadian Press)

“If human harm is done, if a child is terrorized for the rest of their life because of what happened to them on the internet, if there are other damages and costs, then maybe the platform that made that possible should bear the financial consequences,” Goodale said.

The government plan includes $2.1 million to intensify engagement with digital industry to develop new tools online and support effective operating principles, $4.9 million for research, public engagement, awareness and collaboration with non-governmental organizations and $15.25 million to internet child exploitation units in provincial and municipal police forces across the country.

Goodale said the strategy recognizes that technology is “increasingly facilitating the easy borderless access to vast volumes of abhorrent images.”

That, he said, makes investigations increasingly complex,

“This is a race where the course is always getting longer and more complicated and advancing into brand new areas that hadn’t been anticipated five years ago or a year ago or even a week ago,” Goodale said.

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Gas prices expected to dip in Ottawa

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If you can wait an extra day to fill up the gas tank, your bank account might thank you.

Roger McKnight of Enpro is predicting a five cent dip in gas prices Wednesday night at midnight.

This comes after a four cent drop this past Friday, just ahead of the August long weekend.

McKnight said the reason for the drop, both last week and this week, is due to comments made by US President Donald Trump. 

He says after the drop, the price will be, on average, 118.9 cents/litre in the Ottawa region.

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Oka asks Ottawa to freeze Mohawk land deal, send RCMP to Kanesatake

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The town of Oka is asking the federal and provincial governments to slap a moratorium on a proposed land grant to the local Mohawk community in Kanesatake and to establish an RCMP detachment on the First Nations territory to deal with illegal cannabis sales outlets.

The requests were contained in two resolutions adopted Tuesday night by the Oka town council.

The administration of Oka Mayor Pascal Quevillon held its first public meeting since the start of the controversy that pitted the town council against the Kanesatake band council over a decision by a local promoter to give local lands to the Mohawk community.

The three resolutions are addressed to Prime Minister Justin Trudeau’s government, Quebec Premier François Legault’s government and the Kanesatake band council led by Grand Chief Serge Otsi Simon.

As each resolution was read into the record, Quevillon stressed that the town of Oka was only looking to live in peaceful cohabitation with the Mohawk community.

The town also called upon Ottawa to establish a consultation process that would take into account the concerns of residents in Oka and  Kanesatake.

Quevillon’s administration also wants access to the plans detailing what lands are at the centre of negotiations between the federal government and the Mohawk community for purchase, suggesting the talks are simply a disguised form of expropriation.

“They’re giving money to (the Mohawks) to buy our land and annex it to their territory,” Quevillon said.

Despite its demands, the Oka council adopted an official statement addressed to the Kanesatake band council saying the town’s population wanted dialogue and peaceful cohabitation, with Quevillon citing the 300 years of close links between the two communities.

During the council meeting’s question period, some residents suggested that the council deal with other groups that say they are speaking for Kanesatake, including Mohawk traditionalists. Mayor Quevillon replied that the town would only deal with the band council and did so out of respect for Grand Chief Simon.

The mayor also argued that the RCMP, a federal police force, was best suited to be deployed in Kanesatake, where it would ensure the law would be respected, particularly on the issue of illegal cannabis shops.

Quevillon contended such a deployment was the only way for both communities to work together toward their mutual economic development.

Meanwhile, the apology Grand Chief Simon has said he is expecting from Quevillon for remarks he made earlier this summer about the Mohawk community in Kanesatake does not appear to be coming any time soon.

Asked by a resident if he would apologize, Quevillon left the answer to those citizens who attended the meeting, the vast majority of whom replied, “no.”

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