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Carrick on Money

Rob Carrick pulls together the best personal finance ideas of the week

Entry archive:

Bury Canada Savings Bonds? Pass me a shovel

Rob Carrick

What could possibly be holding the federal government back from killing Canada Savings Bonds? Is it sentimentality over a 70-year-old program that has turned utterly irrelevant? Fear of alienating people who won’t adapt to the better options now available? Whatever the reason, it’s insufficient. CSBs today are a waste of time.

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Why are so many university students anxious to buy houses?

Rob Carrick

I’m just back from a trip to five East Coast universities with my colleague Roma Luciw, the Globe’s personal finance editor. We talked with students about money – how to minimize debt, budget, save, invest and avoid fees as much as possible. It’s the fourth year we’ve done these sessions, and we now have a pretty good idea of the financial literacy level of Canadian college and university students. Here are some observations:

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How not to waste time and money at the supermarket

Rob Carrick

Editor's note: We apologize as the previous issue of the newsletter distributed earlier Friday was sent in error. Here is today's newsletter. Enjoy!
 

If you’re like me and believe that time is money, you’ll want to hear all about how to pick the fastest lane at the supermarket checkout. One rule is to never go into the line I’m in. I put a lot of thought into line selection, but I’m pretty much always wrong. Any thoughts on which stores have the slowest checkout lines? E-mail me at rcarrick@globeandmail.com, and I’ll put together a list in a future newsletter if I get enough responses.

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Will Air Miles step up and do the right thing?

Rob Carrick

Personal finance blogger Robb Engen has written an open letter to Air Miles and, wow, is it ever meticulous in how it documents the takeaways that members have experienced over the years. What prompted his letter is the plan at Air Miles to have points older than five years start expiring at the end of this year. “By allowing reward miles to expire, you’re potentially alienating millions of Air Miles collectors…,” Mr. Engen writes.

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Why the steady buzz of complaints about condo living?

Rob Carrick

Several people my wife and I know live happily in high-rise condos. But in my job, I hear a steady buzz of complaints about condos. That’s why this blog post caught my eye. It’s a diatribe about how crummy condos can be. Their tininess, their weird layouts, their unsuitability for families. In summary, condos are described as glorified hotel rooms.

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Buying a home? Prepare to be judged

Rob Carrick

Personal finance blogger Barry Choi and his wife recently bought a condo in Toronto and, as far as I call tell, they made a sound financial decision. But, wow, have they ever been judged by the people they know.

When you buy a home, everyone’s a critic. Mr. Choi reports being told that he’d have saved money if he rented, that the condo is too small, that he paid too much and that the condo won’t appreciate as much as a house. He says he bought a home that fits his lifestyle and his budget. In a live-and-let-live world, that would be good enough for all the critics.

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Inside the bedrooms of twentysomethings living at home

Rob Carrick

Get over your stereotypes of millennials living at home as basement-dwelling video game addicts. Here’s a profile of five 20-somethings who are living at home, each pictured in their bedroom. What I like about this article is the way it captures how normal these kids are.

Trevor, 23, is volunteering at a startup and has been told by his parents to stay at home as long as he can because of the money he’ll save. Shanella, 21, explains that young adults don’t typically move out in her culture unless they’re taking a job far away or getting married. It’s all very matter of fact and free of judgement.

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Buy your kids a postsecondary education, not a house

Rob Carrick

Presenting one of my all-time favourite commercials as a lesson on how much more complicated and expensive it is for kids to head back to school these days. It’s a Staples spot in which a giddy dad buys school supplies with two dejected kids in tow. The soundtrack is the Christmas song, It’s the Most Wonderful Time of the Year.

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How to stay in great shape without spending a lot

Rob Carrick

I reject all budget-related excuses for not staying fit. You don’t need a lot of money.

Confession: I pay full freight for a YMCA membership every year. But you don’t have to spend nearly that much. There’s a lot of cheap exercise equipment you can buy to use at home, including balance balls, jump ropes and something called a Bulgarian bag. You can also try making your own weights (full water bottles and juice jugs) and scooping up equipment at garage sales.

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The worst reason ever to borrow money is…

Rob Carrick

I will not keep you in suspense. It’s for a wedding. I felt this needed to be said after reading a blog post that mentioned something called a wedding loan. Lenders don’t market anything called a wedding loan, but it’s certainly possible to borrow money through a loan or credit line to pay for a wedding.

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How to figure out the best age to start getting CPP and OAS

Rob Carrick

There’s been some talk lately about the cost of the Liberal government’s decision to shelve plans to gradually increase the age of eligibility for Old Age Security to 67 from the current age of 65. The previous Conservative government announced that change in the 2012 budget, along with another measure that is still in effect. You can delay receiving OAS benefits for up to five years past age 65 and receive a higher monthly payment.

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In this hot housing market, should you rent?

Rob Carrick

High home prices mean a lot of young adults are going to have to accept the idea of either buying in the distant suburbs, moving to a more affordable city or choosing a condo instead of a house. Oh, right – there’s also renting.

The idea of being a long-term renter makes a lot of people squirrely. I know that from my many columns about the benefits of renting. Some people just won’t buy the argument that you save a lot of money by renting instead of owning and, if you invest it diligently, you can generate comparable wealth to home owners.

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‘The housing market is the bad guy’

Rob Carrick

Hot housing rewards some people and crushes others like Trevor Wilkie, a single father of two who is renting a Surrey, B.C., townhouse that is being sold. He’s worried he’ll have to pay $600 or more per month to find a comparable place to rent.

Mr. Wilkie’s landlord is limited in how much he can raise rents. But if he sells in today’s hot market, he can make a significant profit. And so, the house is up for sale. The landlords who continue to rent in markets like Vancouver and Toronto have a lot of power these days because there’s so much demand from people who can’t afford to buy.

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Reader-tested ideas for using your Air Miles before they expire

Rob Carrick

A few weeks ago, I asked for your help in figuring out what to do with my Air Miles points before they start to expire at year’s end. The response was tremendous – more than 100 people e-mailed to suggest ideas for using my points, and to vent a little at Air Miles for not letting them keep their points indefinitely.

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Have you embraced the 20 per cent restaurant tip yet?

Rob Carrick

For a good meal well served, 20 per cent is becoming the standard tip. That’s my sense after doing a lot of reading online about tipping expectations in larger Canadian and U.S. cities, and it’s a guideline my wife and I use. But what’s the custom across the country? Data from a recent Angus Reid Institute poll offers some answers.

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New Canada Child Benefit payments start this week — how much will you get?

Rob Carrick

The first payment under the federal government’s new Canada Child Benefit will be made on Wednesday. For families with kids under 18 years of age, this is a big deal. In the election campaign last fall, the Liberals promised that 90 per cent of families would be better off under this program. The average amount of extra money over previous programs was estimated at $2,300 per year.

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Here’s the home reno that really adds value

Rob Carrick

July has been especially hot and dry here in Ottawa, where I live, and our neighbours are getting a lot of use out of their swimming pools. Pools can be a blast from a lifestyle point of view, especially if you have young kids. The problem with pools? Not everyone likes them, or wants to put in the work to maintain them. For these reasons, pools top this list of renovations that don’t add value to homes.

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Millennials might never retire, but that's not necessarily a bad thing

Rob Carrick

Is living to 100 years old a good thing? The co-author of a new book called The 100-Year Life has a reassuring answer. “It’s not that you’re old for longer; it’s that you’re young for longer,” Lynda Gratton, a management professor at the London Business School, said in a recent interview.

The negative take on long lives can be seen in this headline: “Retirement is making people more miserable than ever before.” The 100-Year Life argues that we should think of our extra years as additional time spread throughout our lifetimes, and not just a 35-year retirement. You might, for example, go back to school in your 50s and work well into your 70s. In fact, some Nordic countries are debating the idea of sending senior citizens back to school to keep up with the times.

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What are you doing to enjoy your Air Miles before they expire?

Rob Carrick

The friendly folks at Air Miles sent me an anniversary note this week by e-mail. It was 23 years ago that I joined up for this popular customer loyalty program. How time flies when you’re earning air miles at a rate of, wait for it, 174.2 per year.

Yup, my personal total after all this time is 4,007. It’s not much, so I’m keen to maximize the full benefit before my points start expiring at year’s end. I’ve played around with flight options, but struck out. Couldn’t get where I wanted to go without making unappealing connections or stopovers. What do you suggest as an alternative – gas, groceries hotel rooms? E-mail me your thoughts at rcarrick@globeandmail.com.

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Can we finally bury the image of the lazy, entitled millennial?

Rob Carrick

I began looking at the financial challenges faced by millennials in a column on how young adults have it harder than I did when I was their age. Four years after that column was written, we finally seem to be making some headway in recognizing the troubles that people in their 20s and 30s are having in achieving financial independence.

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Fix your savings habits, not the CPP

Rob Carrick

I’m 100 per cent in favour of enhancing the Canada Pension Plan, and I believe the higher benefits that will be paid out in the future are a win for future retirees. But there are others who believe it’s unfair to have everyone pay more in CPP premiums to help certain groups save more for retirement.

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The haters are all over this young dynamo of a saver

By Rob Carrick

I’ve seen this before. A young person is profiled for working hard to earn and save money and then savaged by critics. That’s the deal with Anthony Molinaro, a 20-year-old full-time student and full-time employee earning $50,000 per year.

Molinaro’s drive is stunning. But instead of acknowledging this, a lot of people are criticizing. Some dismiss his achievements because he lives at home and doesn’t have to pay his own expenses. Others say he’s depriving himself of a full life, or killing himself to get ahead. I’m reminded of the story of Sean Cooper, a 30-year-old who got the hate treatment after he paid off the mortgage on his Toronto house in three years.

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The new grandparenting: 'All I open is my wallet'

Rob Carrick

One of my jobs in producing this newsletter is to be a trend spotter. This Maclean’s article about the changing role of grandparents is right on the money. It explains how grandparents are increasingly being called upon to provide childcare and financial assistance to their adult children, even while their wisdom about child rearing is being discounted. In one conversation mentioned here, a grandmother says, “I almost never open my mouth to criticize. All I open is my wallet.” Why ask your parents how to handle your child’s behaviour when Dr. Google is there to consult?

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Why are you paying so much for your phone plan?

By Rob Carrick

I hate bargaining for stuff, but it works. In fact, it’s almost negligence to buy certain products and services without asking for a better deal. Which ones, specifically? Check out this blog post, where various personal finance writers describe the most memorable deals they received just by asking.

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Did these people just have a bad day, or did Costco make them crazy?

By Rob Carrick

My wife and I have been Costco clients for a long time, but we recently let our membership slide. I kind of decided for us that we’d keep our distance from Costco after driving into a local store and encountering your basic parking nightmare of tense drivers competing for just a few empty parking spots. I decided no bargain was worth this and headed for the exit.

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Horror on Carrick Avenue: Does your house have a sordid past?

By Rob Carrick

If you’d asked me a week ago about the due diligence you should do before buying a house, I would have talked at length about affordability. And then I came across a website called Housecreep, which is an online database of properties where crimes of all types have been committed. Supernatural presences are also noted.

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Vacation rental nightmare: Cupboard cockroaches and broken toilets

By Rob Carrick

The Victoria Day long weekend is just ahead, and that means summer is almost here. Got your travel plans set? Even if you do, you’ll find the tips in this edition of Carrick on Money useful. I’ve gathered up ideas for cottagers, young families and people taking longer trips abroad.

Summer trips are all about relaxing and recharging, so it’s important to minimize aggravations like vacation rentals that turn sour. My family has rented apartments and homes in multiple countries, and our experiences have all been good. But there are nightmare stories, including this one about a Thornhill, Ont., family that spent $10,000 (U.S.) to rent a derelict, roach-infested villa in the Bahamas.

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The smart money is renting stuff, not buying it

By Rob Carrick

Admit it – there’s a fancy power tool, kitchen implement, article of clothing or something expensive that you bought on a whim and used once or twice. This type of money-wasting is easy to stop in today’s sharing economy. In Toronto, for example, there are “libraries” where you can borrow tools, formal gowns, kitchen gear, camping equipment and more. The latest version of the sharing economy? Restaurants in private homes.

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What the Fort McMurray fires can teach you about home insurance

By Rob Carrick

When assessing your home insurance policy, start by checking your coverage for water damage from a sewer backup or flood. That’s the most likely claim for many Canadians. Still, as the situation in Fort McMurray reminds us, fire’s also a risk. If you have a standard home insurance policy, you’ll be covered for the cost of rebuilding a home of the same size.

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Should 18-year-olds be saving for home ownership or travel?

By Rob Carrick

Here’s how crazy the housing market is in some Canadian cities these days. A 26-year-old who just bought a home with her husband in Toronto is recommending that people start saving for a house in their teens. Otherwise, she says, you’ll have to ask your parents for money or not live in Toronto.

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An exclusive guide to getting the most from your Air Miles before they expire

By Rob Carrick

Long-time Air Miles collectors like me have some work to do in the remainder of 2016. As of year’s end, Air Miles older than five years will start expiring. That means we either use the points we’ve gathered over the long term (23 years for me), or lose them. How can we make best use of our points? For answers, I consulted Patrick Sojka, CEO and founder of RewardsCanada.ca, a website devoted to travel rewards. His answers to my questions are reserved just for subscribers to this newsletter and globeandmail.com subscribers.

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Investing: A lot of you are doing it wrong

By Rob Carrick

The hazards of picking individual stocks as an investor are bluntly summed up in a video interview with Harold Pollack, the co-author of a new book called The Index Card: Why Personal Finance Doesn’t Have to Be Complicated. He says that in trying to pick winning stocks, investors are chasing shiny objects and making bad choices. Pollack argues that investors would be better off with low-cost index funds, which give you exposure to all the stocks in major stock indexes like the S&P/TSX composite and S&P 500.

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How to teach your kids about life: Don’t help them buy a house

By Rob Carrick

You may know the name Sean Cooper – he’s the guy who paid off his Toronto mortgage in just three years, by age 30. Now, he’s a personal finance blogger with some strong views on how his fellow millennials are affording their own homes. He says a lot of young adults expect to get help from their parents, and that this has to stop.

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Want to save more? Stop wasting money on getting wasted

By Rob Carrick

A gutsy personal finance blogger has tallied up her cost of drinking through high school, university and beyond, and the grand total was something like $35,712, or $2,463 annually for 14.5 years. She didn’t quit drinking to save money, but she does see some lessons in her story about mindless spending.

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Your parents likely made a mint off housing, but you won’t

By Rob Carrick

Housing prices in some cities have risen way above incomes for years, and the result is a market that is increasingly unaffordable for first-time buyers. The housing-industrial complex — banks, realtors and such — must be getting nervous about this. In the past few days, I’ve seen a number of media releases trying to pump up the market for millennial home buying.

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Barking mad about vet bills? Check out this retirement home for dogs

By Rob Carrick

Pets are great, but the bills for veterinary care and boarding when you’re on vacation can be shocking. Our cat wouldn’t co-operate with his exam one year and the vet suggested sedating him for $400. For years, we couldn’t get our dog through an annual exam without the vet trying to sell us on various treatments and tests. Now, new financial challenges for “pet parents” are emerging in the form of complex and costly medical treatments for animals. There’s even a retirement home for senior dogs in Japan.

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Is the Panama Papers scandal an attack on the wealthy?

By Rob Carrick

There’s a widely held view that we should be angry about the Panama Papers, the name given to 11.5 million leaked documents disclosing how rich and powerful people around the world are using tax havens. Now for the contrary view – that we should worry less about legal things the wealthy do for estate planning purposes and focus more on fighting corruption.

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Living on $1.8-million is harder than you think

By Rob Carrick

A Gen Y personal finance blogger has calculated that you’ll earn roughly $1.8-million in your lifetime if you have a bachelor’s degree. Subtract about $360,000 from that for taxes, and you’re down to something like $1.5-million to pay for everything from houses to kids, cars and food. Good luck with that. Without a plan to control spending and diligently save and invest, you may be doomed to financial futility.

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Allow me to vent about the many ways cable TV is lame

By Rob Carrick

Bit by bit, we get closer at our house to cutting our cable TV. We’re not quite there yet, although many others are, but I’m paying close attention to articles like this one, a complete guide on how to get free TV over the Internet.

What’s to complain about with cable? For one thing, our already substantial rates just went up about 3.5 per cent for cable and Internet combined, roughly double the rate of inflation. Anger over cable TV bills prompted the Canadian Radio-television and Telecommunications Commission to order cable companies to come up with a $25 a month “skinny basic” package of channels, which they did earlier this month. Now, the CRTC is getting a lot of complaints about the new cheaper option. Turns out they’re not so cheap after all. One critic even calls these new packages a slap in the CRTC’s face.

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Have the Liberals made you a tax winner or a tax loser?

By Rob Carrick

The signature personal finance-related move by the Liberal government so far was arguably to lower income taxes for the middle class and increase for them for high earners. Other moves may have a bigger dollar impact on some individuals, but re-jigging the tax rates speaks to a willingness to re-distribute income by taxing some people more and others less. This calculator will help you see whether you’re on track to pay more or less tax in 2016 than you did in 2015.

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Attention, parents: You could be in for a tax hit when filing this year

Rob Carick

By Rob Carrick

There’s a federal budget coming Tuesday and it will be watched closely to see how the Liberals deliver on their election promises. On Thursday, they pledged to restore Old Age Security eligibility back to 65. For young families, there’s the Canada Child Tax Benefit, which was a key part of the party’s platform in the election last fall. This program replaces the Enhanced Universal Child Care Benefit, which parents will have to account for on their 2015 tax returns. A tax expert looks here at how reporting enhanced UCCB benefits may, in combination with another tax change, result in parents paying more tax than they expected, or getting less of a refund.

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The war on millennials: Why they really do have it harder than you did

By Rob Carrick

This country, and maybe the world, has an empathy problem with regards to young people. There’s a striking reluctance to believe that the young adults known as millennials or Generation Y are facing economic challenges that are any different from previous generations. A well-researched investigation by The Guardian, a respected British newspaper, sets us straight. It documents how millennials have been put at a disadvantage by debt, unemployment and high house prices. Compared to seniors, young people are falling behind in income growth.

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Warning: Your Air Miles could soon start expiring

Rob Carrick

This is the Globe’s Carrick on Money personal finance newsletter. Sign up here to get it by e-mail.

By Rob Carrick

I’ve been a member of the Air Miles customer loyalty program for 23 years, nearly as long as I’ve been married. My wife and I are happy together. Air Miles and me? It’s complicated. Unless I use my points by year’s end, they’ll start expiring.

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$2,000 a month is plenty to retire on in these countries

Rob Carrick

This is the Globe’s Carrick on Money personal finance newsletter. Sign up here to get it by e-mail.

By Rob Carrick

This article on cheap places to live around the world caught my eye because here in Ottawa, where I live, we just had a 15-cm snowfall to cap a few weeks of utterly foul winter weather. Five countries with low living costs are highlighted, and they’re all in warm climates. What links them is the fact that you can live on $1,500 (U.S.) per month or less. In Canadian dollars, that’s about $2,000.

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This is what millennials have been reduced to, and it’s just gross

Rob Carrick

This is the Globe’s Carrick on Money personal finance newsletter. Sign up here to get it by e-mail.

By Rob Carrick

Millennials, young adults in their 20s and early 30s, are ripping each other apart over who is truly suffering in today’s economy. It all started with this blog post, an open letter from a young woman to her boss about how she’s not making enough money to afford the high rents in the city where she lives, San Francisco.

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A viral blog post about female financial independence

Rob Carrick

This is the Globe’s Carrick on Money personal finance newsletter. Sign up here to get it by e-mail.

By Rob Carrick

Here’s a viral blog post based on the idea that women can empower themselves and enhance their financial independence by having an emergency fund. That’s what I call it, anyway. In this blog post, it’s called an f–--off fund. Obviously, a foul language warning applies here.

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Why retirees should suck it up and buy stocks

Rob Carrick

By Rob Carrick

Bear markets like we’ve seen recently are the precise reason why you’re supposed to increase your exposure to bonds at the expense of stocks as you get older. When stocks tank, bonds rise. This helps investors feel comfortable it the short term, but it may cost them over time in terms of foregone returns. That’s the thinking behind a pair of columns that appeared recently in the New York Times.

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What the heck should I do with my RRSP this year?

Rob Carrick

This is the Globe’s Carrick on Money personal finance newsletter. Sign up to get it by e-mail on Wednesday and Friday.

A basic rule of investing success is to make regular, automatic contributions to your retirement account every time you get paid. What, you didn’t get that memo? Then let’s hear some thoughts on what to do with a last-minute contribution to your registered retirement savings plan before this year’s Feb. 29th deadline. What we want to avoid is you reacting to the current stock market nastiness by doing nothing.

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Baby, I love your hot credit score

Rob Carrick

This is the Globe’s Carrick on Money personal finance newsletter. Sign up to get it by e-mail on Wednesday and Friday.

By Rob Carrick

Valentine’s Day is coming up on Sunday. Men, that reminder is for you. Don’t blow it by forgetting. Now, onto business inspired by this annual rite of love and devotion. New research suggests that the higher your credit score when you start a serious relationship, the less your chances of breaking up after the first few years. Mismatched credit scores suggest a breakup within five years. How do you find your date’s credit score? I’m open to ideas.

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A realist’s guide to buying vs. renting

Rob Carrick

This is the Globe’s Carrick on Money personal finance newsletter. Sign up to get it by e-mail on Wednesday and Friday.

By Rob Carrick

It’s about time someone had some fun with the debate over owning a home versus renting. Okay, I’ve certainly had fun challenging stale, status-quo thinking about renting being a waste of money. Now, it’s the turn of the satirical magazine The Onion to weigh in. Here’s The Onion’s Owning Vs. Renting comparison. It’s funny, balanced and quite truthful.

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