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We need to do something about emergency funds.
They’re bedrock personal finance – this has been proven in the pandemic. Having some cash kept safely in a high interest savings account protects your financial and emotional health if you lose a job, have your income cut or run into unexpected big expenses.
But the term emergency fund has got to go. It’s too tired, too vague and too closely associated with an old school personal finance approach that was based on nagging people to do the right thing. We need better branding.
In a newsletter last September, a financial planner suggested using the term ‘contingency and opportunity fund,’ which I like. Now, let’s see what ideas you have. We’re brainstorming here, so don’t worry about nailing it. I will present some finalist names in an upcoming newsletter and readers will vote on a winner.
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Rob’s personal finance reading list
Smartphones, laptops and tablets – which brands break down most?
CBC asked its readers about the reliability of their electronics. Also, a discussion of how hard it is to get broken devices repaired at a reasonable cost.
This travel reward card needs an overhaul
A deep dive into the RBC Avion Visa Infinite Card, a popular card that appears to be falling behind competitors in the travel reward category.
And end-of-life planning guide
Reader’s Digest put together this excellent guide to wills, funerals, assisted dying and more.
How Reddit can improve your finances
A helpful guide to using the online forum Reddit to find answers to your questions about money. I’m a Reddit fan. Smart people asking and answering good questions. Globe personal finance editor Roma Luciw and I just did this Reddit AMA (ask me anything) on how to be a financially successful renter. We were promoting the Globe and Mail’s Stress Test personal finance podcast for Gen Z and millennials.
Ask Rob
Q: Has the Canada Revenue Agency indicated whether it will again lower the minimum RRIF withdrawal by 25 per cent for 2021? Last year I was aced out of this benefit because all my funds are needed in January and there was no provision to enable one to re-contribute the 25 per cent to one’s account.
A: As background, the federal government lowered the minimum withdrawal from registered retirement incomes for 2020 by 25 per cent back in the spring. Stocks were crashing, but they subsequently rallied. That’s why it’s highly unlikely the government will again provide relief on RRIF withdrawals in 2021.
Do you have a question for me? Send it my way. Sorry I can’t answer every one personally. Questions and answers are edited for length and clarity.
Today’s financial tool
A ranking of credit cards in 26 categories, including best for cash back, best no fee card, best for Air Miles collectors and more.
The money-free zone
Lilly Hiatt’s record Walking Proof was on at least one best albums of 2020 list. I’m enjoying this song, Some Kind of Drug.
In case you missed these Globe and Mail personal finance-related stories
- How to decide which model of used car to buy
- Can this Alberta couple minimize their tax exposure in retirement?
- Consider capital gains planning to save tax
More Rob Carrick and money coverage
Subscribe to Stress Test on Apple podcasts or Spotify. For more money stories, follow me on Instagram and Twitter, and join the discussion on my Facebook page. Millennial readers, join our Gen Y Money Facebook group.
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?
Are you reading this newsletter on the web or did someone forward the e-mail version to you? If so, you can sign up for Carrick on Money here.