Did you know that about 25% of gift cards go unredeemed each year? Or how about the fact that there’s about $25 MILLION in unclaimed tax refunds. How can we say we don’t have any money when there’s over $112 million in unredeemed Canada Savings Bonds?

And then there’s all the money people leave behind in their chequing and savings accounts. Hey folks, this is taking the “hide it so you don’t spend it approach” a little to far, dontcha think?

When there’s been no activity on an account for 10 years, and FI fails to contact the owner, the balance is sent to the Bank of Canada, which acts as custodian on behalf of the owner.

The Bank of Canada has an online database that you can search to see if you’re one of the silly buggers who has left money lying around. I put in my many names and came back blank, so that’s not my money. But it could be yours. So take a second to pop over and put in your name. If you’ve had multiple names, as I have, make sure you check ‘em all.

It may be that you moved and forgot an account you’d been having money debited to every month. Or perhaps it was a just-in-case savings account you lost track of. Or maybe, after you thought you closed an investment account, dividends were paid and are just waiting for you to come and collect them.

According to the Bank of Canada site, “At the end of December 2009, approximately 1,122,000 unclaimed balances, worth some $395 million, were on the Bank’s books. Over 93.4% of these were under $1,000.00, representing 30.82% of the total value outstanding.”

If any of that money is yours, wouldn’t you feel like a right fool not taking the 10 minutes to check?

1. Carrying a credit card balance:
If you have one of the over 68 million credit cards in Canada and you’re carrying a balance, you’re pouring money down the drain. While credit cards carry a variety of interest rates, depending on your credit history and how good a customer you’ve been, most come in at double digits, which is far more than you should be paying. Transfer your credit card balance to a line of credit and save a ton in interest payments so you can get that balance paid off faster and get busy building a nest egg sooner.

2. Using overdraft:
Once upon a time, going into overdraft was a sign that you couldn’t manage your cash flow worth a damn. Now people live in overdraft, barely making it into the black when their paycheques hit the bank. They pay a monthly fee for this service, and they pay interest on top of that fee. It’s worse if you don’t have overdraft protection because bouncing a cheque can cost you upwards of $40. To avoid overdraft, get yourself a notebook at start keeping track of what you’re spending. Then move $1,000 of your emergency fund into your chequing account to act as overdraft protection. Every time you use any of this money, you must make the $1000 float whole again before you can buy yourself so much as a single cup of coffee.

3. Using another bank’s ATM:
There are people who use ATMs like a wallet, paying $1.50 in fees for a $20 withdrawal. Some people pay more: $1.50 to their bank and another $1.50 to the ATM they are using. To avoid the ATM Fee Blues, only make withdrawals twice a month and make those withdrawals last. If you run out of cash, too bad! You’ll have to shuffle through your pockets and the couch cushions until your next scheduled withdrawal. Eventually you’ll get tired of having no cash and you’ll learn to manage it more efficiently.

Analysts agree that aging parents are seldom versed on the full consequence of adding an adult child to their account. They warn pensioners considering this option to consult a lawyer, document their intentions and provide copies of this documentation to multiple trusted individuals.

Two key things to note if a joint account is unavoidable: prevent the joint account holder from setting up a line of credit, and make sure there are no overdrafts on the account.

Seniors should be aware that adding adult children to their bank accounts simply to assist with frequent banking operations such as bill payments and account management means both party’s lives are now legally entangled.

Adding another person to their account could result in seniors legally signing away their savings.

]]> http://www.moneysense.ca/2011/03/25/perils-and-pitfalls-of-joint-accounts/feed/ 46 http://www.moneysense.ca/2010/04/26/banks-chasing-immigrant-dollars/ http://www.moneysense.ca/2010/04/26/banks-chasing-immigrant-dollars/#comments Mon, 26 Apr 2010 16:24:03 +0000 MoneySense staff http://www.moneysense.ca/?p=4257 A Scotiabank website aimed at immigrants is now available in eight languages, according to Investment Executive. Like other major banks, Scotia is trying to tap into the large market of immigrants, and is even targeting people who are in the process of migrating but who haven’t come to Canada yet.

Scotiabank’s site offers information to landed immigrants, international students, foreign workers and immigrant investors.

Individuals between the ages of 18 to 35 cited a desire to be self-sufficient and differing financial needs as the main motivations behind holding separate bank accounts. However, with 50% of these couples wanting to have a child within the next five years, and 41% wanting to buy a home, experts are urging like-minded pairs to start discussing joint financial planning.

RBC says talking openly with your partner, deciding on key issues as a team, and reviewing your financial arrangements together are all positive ways to improve planning.

A joint account is a big step on the journey from two separate lives to living as one. Getting one shows you are committed and trust each other. Practically speaking, it can simplify paying expenses and help you accumulate money for common goals. Plus, if one person passes away, an account set up with right of survivorship means the surviving partner can access the funds without going through probate. But giving up sole control of your finances can be tough to do. So before you move forward, you should have some serious discussions with your mate.

First, you should make sure you and your partner see eye-to-eye about your overall financial goals, says Karin Mizgala, a fee-only financial planner who sees couples in British Columbia. “Often the woman wants to get a plan in place for kids and a house, but the man hasn’t been terribly on top of his finances. She tries to initiate some conversations, and there’s resistance. Those are alarm bells that a lot of women just ignore.”

If you find you really don’t trust your partner, it may be a sign of a deeper problem. “You have to take a chance in any relationship,” says financial consultant and author Ruth Hayden, “but if you’re worried about protecting yourself from your partner, for goodness sake, don’t make a commitment yet. Something’s off.” If that’s the case, you may want to slow down, and address the underlying trust issues first.

If you decide to go forward, it’s fine to ease into it. Couples can start by using the joint account for smaller expenses, such as restaurant meals and groceries, then gradually expand its use to include all of the common expenses, including rent or mortgage payments.

The best strategy is for each person to keep their individual bank accounts in addition to one common joint account. Mizgala recommends that couples have their paycheques deposited into the joint account, and determine a fixed amount — say $500 a month — that will be automatically transferred into each partner’s personal account to spend as they like.

“That’s your money and your husband or wife can’t make any comments about what you spend it on,” Mizgala says. “If she wants to spend it on spas and magazines, he has no say. If he wants to buy a colour TV or something she may not approve of, she can’t say anything. There’s no guilt.”

In the end, Claire and Darrell Filafilo found that having a joint account worked out just fine. “I knew exactly when money was coming in, and I was able to have better control of everything through the central account,” says Claire. Today, 14 years after they got married, they still share the same account.