As part of a guest Q&A for this newsletter, I asked personal finance reporter Erica Alini of Global News recently about her biggest surprise in the pandemic. Her answer: How many people are selling homes in the city and moving to the suburbs. Read more from Ms. Alini in this edited transcript of a Q&A we did via e-mail recently:
Q: What has surprised you most in covering the pandemic as a personal finance journalist?
A: How quickly many people have been to sell their pricey big-city properties to buy bigger homes in smaller towns. I completely understand the desire to have your own studio when you’re working from home instead of sharing the kitchen table with your kids and household pets (believe me, I know). But I would have expected homeowners to wait a little longer to see, for example, how companies would treat remote work after the pandemic. Relocating is a big decision!
Q: If you could improve a single point of financial literacy in Canada or change a single behaviour, what would it be?
A: Any 101 course in personal finance should include a class called “Expect the Unexpected.”
Everyone needs a rainy day fund – for big emergencies like a job loss or a busted boiler – but also a built-in buffer in their everyday budget for smaller surprises like a parking ticket or your kid going through three shoe sizes in six months.
Q: What questions do you get asked most often, and how do you answer those personal questions seeking advice?
A: Without a doubt, the personal finance question I get most frequently is: When saving for retirement, should I use an RRSP or a TFSA? Another popular one: Where I can get help managing my debt? As a reporter, I don’t address readers' queries myself. I either find a financial expert I trust to answer the question in my weekly newsletter, Money123, or I point readers to articles I’ve written that might help them figure out the answer.
Q: There’s a shrinking pool of mainstream journalists covering personal finance – how did you get into this beat?
A: My first real job in journalism was a paid internship at the economics desk of the Wall Street Journal in New York. It was the summer of 2009, in the middle of the financial crisis, and I spent a great deal of time looking for real-life stories that would illustrate the big economic trends senior reporters were hearing about from academics. I’ve always been really interested in economics, but it tends to offer a top-down view of what’s happening. Personal finance allows you to zero in on the concrete effects that big changes have on people’s lives and money decisions. I like the ground view.
Q: Do you feel personal finance is male-dominated and needs more female voices for balance and perspective?
A: I definitely used to feel that way when I started out, despite some very influential writers and advisors like Ellen Roseman, Rona Birenbaum and Alexandra Macqueen. But I think we’ve come a long way in the past 10 years with lots of new female voices like Shannon Lee Simmons, Rubina Ahmed-Haq, Bridget Casey and Jessica Moorhouse, to name just a few. Where I think personal finance has a long way to go is racial diversity. We need to see and hear from financial advisors from diverse backgrounds and more coverage of the specific financial challenges faced by racialized groups.
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Rob’s personal finance reading list
Too many people overlook this when mortgage shopping
We all know the importance of getting the lowest possible mortgage rate, but too many people don’t ask questions about the penalties that would apply if they needed to get out of their mortgage before the term ends. Here’s a thorough primer on mortgage penalties from one the country’s most experienced personal finance voices, Ellen Roseman.
Millennials take their revenge
All about a global investment firm’s research note about a coming “age of disorder,” where have-not millennials redistribute wealth from old to young. “Such a shift in the balance of power could include a harsher inheritance tax regime, less income protection for pensioners, more property taxes, along with greater income and corporates taxes … and all-round more redistributive policies.”
How to cut your water – and soap – bill
The author of a new book called Clean: The New Science of Skin on the benefits of showering less. Much less.
This is what worries people in the pension sector
Worth a look if you’re trying to understand the risks in the near and longer term for financial markets. One of the people quoted uses the term “surreal” to describe the market rally of the past five or so months.
Globe and Mail personal finance-related stories
- Attention millennial investors of the pandemic: It’s time to sell your tech stock winners
- Savers stashed $127-billion in 2020 – it may just rescue the economy
- Four things to do right now if you fear a fall stock market crash (for Globe Unlimited subscribers)
Today’s financial tool
Here’s a handy website for keeping track of the year’s top-performing stocks in various U.S. benchmark indexes.
The money-free zone
The resumption of professional sports has reminded me how much I like reading The Athletic, a subscription-based website featuring what I think is the best sports journalism available anywhere. They do a great job of covering Canadian pro teams.
More Rob Carrick and money coverage
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Even more coverage from Rob Carrick:
- 🎧 Catch up on Stress Test: How to survive the gig economy • How to get out of debt • Is now the right time to buy a house? • Crisis-proof your finances • Does investing change during a pandemic? • Can you afford to live downtown? • The cost of kids • Should you move back in with your parents?
- ✔️ A 10-point pandemic personal finance checklist: Create a “wartime” family budget; stop worrying about bank deposits; clean out your big-bank savings account; get relief on car payments; get preapproved for a mortgage; WFH? Save $1,000 a month; save, save, save; build resilience by not anxiety-buying; consider the cost of mortgage deferrals; get ready for the second wave of financial distress.
- 📈 Investing: The case for a tight portfolio of big blue chips dividend stocks; robo-advisers beat human advisors (and they’re thriving), why online banks that are better than the branch; is it time to invest your 2020 TFSA; don’t get your mortgage at a bank; why it’s so hard to invest in preferred shares; stock up on stocks to retire early; and are you following the 10-year rule with your investments?
- 💰 Saving: Food waste is wasted money; why you might regret that SUV and find out if CAA is worth it; juice your PC Optimum points; how an ex-Bay Street lawyer got out of debt; blindly easy tweak to your retirement investments to survive economic downturn; should you buy that latte?