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Carrick on money

Is your mortgage killing you? Here’s how to find out if you’re house poor Add to ...

I wonder how well Canadians are doing in handling their mortgages. I’m not too worried about defaults – only soaring unemployment or rising rates would increase the number of people who can’t pay what they owe on their homes. What concerns me are more subtle issues: Whether hefty mortgages are preventing people from saving enough and causing them to take on further debts.

To find out, we created this online calculator to help people find their Real Life Ratio. The RLR is a measure of how well you can afford your home and manage other everyday costs such as car loans, daycare and savings. Please try the calculator to see where you stand. You’ll also be helping us build a database on how well people across the country are doing with their mortgages. We plan to gather a national Real Life Ratio number and write about it. We’ll also show RLR numbers for millennials and other demographic groups.

If you’re finding it tough to juggle your mortgage and other costs, let’s talk about it. We’re looking for people who are willing to be interviewed and have their real name used. The ones we choose will get a financial checkup from an accredited financial planner. You can reach me at rcarrick@globeandmail.com.

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Why you should get married on a Wednesday in January
Everyone wants to have their ceremony and reception on a Saturday during a warm season. Do the opposite, save bigtime.

Read this if you’re bugged by low interest rates
A smart critique of the low interest rate policies followed by central banks around the world since the last recession. Ten serious drawbacks to low rates are listed here, and they’re right on the money.

Learning to live with stocks
A blogger makes a good point here: that with interest rates expected to stay low, people are going to need more exposure to stocks to meet their financial goals. I still think people need some bonds, though. They’re a hedge against recession and stock market crashes, and that’s important. People need something in their portfolio to be working in volatile times.

From the department of wasteful spending…
Here’s a list of the most expensive running shoes being sold these days. A little over $1,700 (U.S.) buys you the Adidas NMD R1 Red Apple.

Top four money challenges for women
Smart framing for this list: “Women’s rights, economic and otherwise, have come a long way, but the cultural baggage of a male-dominated financial system hasn’t completely left us.”

How good is your credit card’s medical insurance coverage?
This review of more than 30 travel reward cards will be of particular interest to people 65 and older. Some cards offer no emergency travel medical coverage in this age bracket, while others do. You’ll find regular updates about travel rewards on the Rewards Canada weekly roundup podcast.

Today’s featured financial tool
Retirees and soon-to-be-retirees will find this interesting; it’s a How Long Will the Money Last calculator.

Ask Rob
The question:
“My mother is 62 and will need to retire soon for medical reasons. Her real wealth is tied up in her house – current market value is approx. $650,000 with a mortgage of approx. $130,000. So the question is: Does she sell and then rent at a reasonable rate moving forward, assuming she lives for another 20 years? Would a reverse mortgage make sense?”

My reply: Selling and then renting can make sense, but you need to be sure your mother can afford rent and other living expenses without depleting her savings. You don’t say anything about your mom’s health, but planning for 20 years may not be enough if she’s doing well. She could be paying rent for 25 to even 30 years. Can’t see a role for a reverse mortgage here. They’re best used by people who need to unlock some of the equity in their home for a short period of time before they move.

Featured Video
I talk to Lisa Taylor of the Challenge Factory about the virtues of working to age 75 and beyond. There’s more to it than just money.

More Carrick and money coverage
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