Most Canadians throughout the country will at some point in their life will apply for a mortgage. As with any other financial transactions, it is a good idea to do your homework and understand the complexities of your mortgage. Having a solid understanding of your finances as well as the different mortgage products available can help you make the best choice. Your mortgage will probably be the most important debt of your lifetime; making a well informed decision will benefit you for years to come.

You must determine how much you are able to afford to spend when buying a home. This includes not only the purchase price of the home, but all of your other financial obligations. Do not assume that the maximum amount you are pre-approved for is an amount you can actually afford. Figure out what your monthly expenses are, including car payments, insurance, groceries, cable, telephone, etc. You may want to track these expenses for a few months in order to get an accurate total of your monthly expenditures. It's also a good idea to set aside money for emergencies, i.e. car repairs, house maintenance, etc. Subtracting the amount of the monthly expenses (including savings) from your monthly income will give you an estimate of how much you can afford for a mortgage payment. The general rule is to not exceed 32% of your gross monthly income for housing costs, and no more than 40% on monthly debt payments.

Once you've decided on the amount you can afford, you will need to shop around for a lender. Banks, mortgage companies, insurance companies, trust and loan companies as well as credit unions can all offer mortgages. Different companies will offer different prices as well as conditions; talk to several different lenders, as well as types of lenders in order to get the best product for your specific needs. You may also want to consider using a mortgage broker. A mortgage broker does not directly lend money, but rather finds a lender best suited for your needs. Because mortgage brokers have access to a wide range of lenders you will usually have more choices regarding products and terms. If you choose to use a mortgage broker, remember that not all brokers have the same access to financial institutions so you may want to consider consulting with more than one broker.

When shopping for a mortgage, obtain the information you will need in order to compare products. In Canada it is federally regulated that all banks, insurance companies and trust and loan companies must provide you with the following information before you sign a mortgage agreement. If you are shopping for a fixed-rate mortgage you must be provided with:

• The amount being lent
• The term of the loan as well as the amortization period
• Total amount of payments at the end of the term, as well as how much of that total you will have paid in interest
• Annual interest rate, including the real annual percentage rate which includes any and all extra charges (APR)
• The actual date on which interest will begin to be charged
• The amount of the payment and the due date
• If your payments are first applied to cover the interest and other applicable charges, and then to the outstanding principal
• Any optional services, i.e. disability or life insurance, that you have accepted, as well as the cost and the penalties, rebates and/or charges that will be applied if you decide later to cancel these services
• Any default charges that will be applied if your mortgage is in default
• Description of any property that is being provided as security for the loan
• Any broker fees that are paid by the lender to a broker that are included in the amount being lent
• The fee you will have to pay to discharge the mortgage after it has been paid off
• Any other charges that may apply, including the type of charge and the amount

If you are applying for a variable-rate mortgage you must be provided with:

• The annual interest rate of your mortgage as of the date of the disclosure statement
• How and when the annual interest rate is calculated
• How much your payments are based on the annual interest rate
• What your total payments will be at the end of the term based on the annual interest rate
• If the interest rate variations are linked to a public index you must be provided at least once a year with a disclosure statement that contains the annual interest rate and outstanding balance and the beginning and end of the period covered by the statement. You must also be provided with the amount of each payment and when it is due based on the annual interest rate that is applied at the end of the period

If you are applying for a variable-rate mortgage and the amount of your payment is not automatically adjusted to reflect changes in the annual interest rate you must also be provided with:

• The annual interest rate above which your payments will not be sufficient to cover the interest due on your loan for the period
• You must be made aware that negative amortization can happen. This occurs when your outstanding balance increases even when payments are made in full

Federal law also prohibits the financial institution from unduly pressuring you to buy their other products as a condition for accepting your mortgage application. For instance, the institution cannot deny your mortgage application because you choose not to buy your mortgage life insurance from them. You have the right to shop around for not only your mortgage, but for any other financial products that you may need for your new home. It's wise to always compare different products from different institutions, lenders and/or brokers in order to assemble the best package for your personal needs.

Having a budget that actually works for you can be a great tool to help achieve your financial goals. By having a spending plan that accurately reflects your goals, you can truly understand how and where you spend your money. Making a budget can also show you where you are unnecessarily spending money that instead could be going towards a more important purpose.

The first step in making a budget is to gather up all your financial statements. This includes bank statements, credit card bills, utility bills, etc. Also include items that may be paid on a yearly basis, i.e. car insurance, life insurance, property taxes, etc. The more information you have on your expenses, as well as income (i.e. bonuses), the more accurately you can define your spending and saving habits.

Calculate the amount of all sources of income. When using the amount of your paycheck, record the net amount (the amount after taxes).

Once you have all your documents together, create a list of monthly expenses. Items that are paid on a yearly, semi-annually or other non-monthly basis should be divided by 12 in order to figure out the monthly cost. Include this cost in your monthly expenses, as it is the amount you should be saving for that specific expense. Also include in this such financial items as retirement savings, RRSP contributions, etc.

Divide your expenses into 2 categories: fixed and variable. Your fixed expenses are the expenses that stay relatively the same each month. These include such items as phone, cable, electric bills, etc. as well as credit card payments. While these may change slightly, they will not increase or decrease dramatically throughout the year. For items such as car and life insurance, property taxes, etc. divide the total amount by 12 in order to find out the monthly amount of money that should be put away for that expense. This ensures that you are not stuck with a large bill that you have not budgeted for.

Your variable expenses are your expenses that tend to fluctuate more throughout the year, i.e. groceries, entertainment, clothing. This is also the category where you will be able to have more control over where to cut expenditures if necessary in order to reach your goals. This also gives you a more comprehensive understanding of your daily spending habits. You may be surprised to actually see how much, for instance, you spend on buying take-out coffee everyday when you see the weekly or monthly total.

People tend to only factor in the major expenses and bills. However, by keeping a daily log of how and where you spend your money, you will have a greater understanding of where exactly your money goes. By doing this for a week, you can have an accurate record of your daily spending habits. This is usually a category where spending habits can be changed in order to free up more money for either other expenses or for savings.

Once your expenses as well as sources of income are calculated and accurately identified, total the amount from each category. If your income is higher than your expenses, then you can prioritize this excess to such areas as retirement savings, paying more on credit card debt, etc. However, if your expenses are higher than your income, you will need to make changes in your expenditures.

Remember to review your budget on a monthly or bi-monthly basis. This will give you the opportunity to review your spending habits, as well as how well you stuck to your budget. You will always need to revise your budget for any financial changes, i.e. raise in pay, major expense (new car, etc) as your budget will have to be re-worked to reflect the changes.

While Canadian parents may be striving to achieve financial freedom as well as the "good things in life", we may be forgetting about what we are teaching our children. New studies are showing the correlation between a parents' attitude towards money and how this impacts the child's spending habits when they become adults.

A recent study out of the United States has reported that while 80% of parents described themselves as positive role models regarding money issues, only 19% had actually discussed issues such as budgeting with their children. As well, 48% had discussed the difference between 'wants' and 'needs', 36% revealed that they had never discussed any financial issues with their children.

While children will ultimately make their own decisions (and mistakes!) parents can help instill some sound financial ideals in their children. By simply being aware of some of the basic financial pitfalls, they can make better choices earlier on in life, and hopefully avoid those that quickly lead to large debt. It's also a great opportunity to help your child develop a healthy attitude about money, i.e. money doesn't buy happiness. It's natural to want to buy our children things that maybe we didn't have as children, but we also want our children to have respect for money and not be "spoiled".

The following tips are a guideline for not only discussing financial responsibility with your children, but also for parents to understand how their child may view the family’s financial patterns.

• Credit Cards: We are all bombarded with television advertisements and mailers regarding "low or zero interest rate" credit cards. Very few teenagers or young adults understand that this is a "teaser" rate and generally will rise to up to a 20% interest rate. At the appropriate age, you may want to get your child their "own" credit card on your account, with a low spending limit; this way you can monitor their expenditures, and help teach them how to responsible with credit. As most college/university students will obtain credit cards, this will offer your child the experience beforehand of being able to manage credit and not get into debt that they cannot afford to pay off.
• Being able to discuss money: Most teenagers will "tune out" if their parent(s) is yelling at them about their spending habits. Talking to them in a normal voice, and explaining where they made a mistake, instead of berating or using guilt, will usually accomplish a more positive result. Realize that mistakes will be made; by calmly explaining what happened, and what a better alternative would have been, will allow your child not only to learn more, but it will foster a more positive environment where your child can feel comfortable talking to you about money.
• Bribing your child(ren) with gifts: It's normal for parents to buy their child a gift or give them money as a special reward for an achievement, but beware of using this method every time. You cannot expect a child to understand the "value of a dollar" if they grow up with the expectation that every time they do something well, they get something. A better alternative is to discuss the price of the specific item they want, and then agree on what the appropriate amount of chores is required in order to earn it. This method allows your child to learn early on to associate the monetary worth of the items they want.
• Lead by example: Whether you intend to or not, your child will mimic your spending habits. For instance, you cannot expect a child to be responsible with credit cards if he/she has grown up in an environment where parents are constantly complaining about how high their bills are. This also applies to saving habits and budgeting. If you don't already have one, make a household budget, and discuss it with your child.
• Shopping is NOT entertainment: Teenagers especially can have the tendency to view shopping as a social event. While "hanging out at the mall" is not a problem, having your child view having to spend money in order to have fun can be a problem later on in life. Try to expose your teen to other forms of "fun events" that don't require them to spend money.
• Budgeting: This is a skill that will last your child a lifetime. Even with young children, giving them an allowance, and showing them how to keep track of their spending, can teach them this basic concept. As they grow older, you can help them introduce items such as savings, etc. If your teenage child gets a job, sit down with them and help devise a budget that gives them a savings component, as well as budgeting for clothing, entertainment, etc.

By talking to your children about finances you can give them the tools they need later on in life. Also include financial mistakes you have made; this will allow them to see that no one is perfect, and hopefully they will learn to avoid the errors you have made. By ensuring an environment where your child can easily and comfortably talk to you about money, they will be better prepared for when they are independent and have to be in control of their own financial destiny.

For many retiring Canadians, living outside of the country either full-time or part-time can be an attractive option. Whether choosing to winter in a warmer climate, or altogether moving to a different country, you need to be aware of the financial issues surrounding these decisions. Canadians can reside in another country without having to give up their Canadian citizenship; however you will still be subject to Canadian taxation laws. It's important to understand the taxation and financial regulations of either living abroad.

There are many things to consider when deciding where to spend your retirement years. If you are planning on living outside of Canada, you should do some research on the country where you plan on moving to. You will need to research that particular country's immigration regulations, as these vary greatly depending on the country chosen. You should also familiarize yourself with that country's laws, as well as political climate. Realize that countries you've enjoyed vacationing in may not offer the type of lifestyle you are accustomed to when it comes to actually residing there.

Financial and taxation issues are very important as well when contemplating to live outside of Canada. Some developing countries may seem to offer a lower cost of living; however many lack the resources to collect taxes on foreign sourced income, and instead will impose high consumption taxes and/or import duties. Especially for those who will be living on a fixed income and/or budget, you will need to thoroughly understand the financial implications of the country you are considering. You should also factor in the costs of traveling back to Canada as well as items such as larger phone bills to maintain contact with your friends/family.

Another major financial consideration will be health care and insurance. As Canada offers a very high standard of medical care, some countries may be considered inadequate by our terms. If you have specific health problems, i.e. diabetes, heart condition, you will need to ensure that your country of choice has medical facilities as well as physicians that are capable of giving you quality care. You will also need to obtain full health coverage as you will no longer be entitled to your Canadian provincial health care benefits.  Be aware that even if you have supplemental health insurance (to supplement your provincial healthcare plan), this will not be enough coverage when leaving Canada. If you are planning on living abroad only part time, remember that your provincial healthcare only provides limited coverage for up to only 3 months. Your level of provincial benefits will probably not be enough to fully cover any medical expenses that you may incur; it is advisable to have your own health insurance even when leaving Canada on a temporary basis. Depending on the length of your absence from Canada, you may also have to wait for your provincial health plan to be reinstated, which will temporarily leave you without health insurance coverage.

If you are planning on leaving Canada to live in another country (either full or part time) you will need to ensure that your passport is valid, and doesn't expire while you are out of the country. You will also need to open a bank account in your new country; it is a good idea beforehand to research their banking regulations. You may also want to have a safety deposit box in order to safeguard copies of your documents, i.e. birth certificate, identification which bears your photo, etc. You should also have the numbers of the Canadian consulate on hand should you require these in an emergency. As well, have a copy of your visa (if it is required).

If you are planning on permanently residing in another country, you will need to establish a legal status there, i.e. permanent residency or citizenship status. Requirements for legal status vary greatly from country to country, but usually will be based on principles such as employment status, investment status, and/or family connections. Some countries may recognize people such as retirees with a guaranteed minimum income as potential immigrants. Many countries will require proof of guaranteed income in order to establish sufficient support for the retiree and any dependents. You will need to provide financial documentation supporting your claim that you meet these requirements; have copies of bank statements, investments, RRSP’s, etc ready in order for submission.

You can still receive your Canadian Public Pensions while living abroad, provided that you still qualify for the benefit. Old Age Security (OAS) requires that you lived in Canada for at least 20 years after the age of 18; as this benefit is subject to an income test, you will need to file an annual tax return which reports your worldwide income. Canada does impose a withholding tax on "passive" income paid to nonresidents from Canadian sources. This includes interest, dividends, RRSP income, rental income, RRIF income as well as pension income. This rate is usually 25%; but may be reduced depending on the terms of any tax treaties that exist between Canada and your new country of residence. You will also be required to file tax returns in Canada if you are still receiving income that originates in Canada, i.e. income from a business in Canada, the sale of taxable property, or any income that is earned. However, you may also be entitled to a tax refund on such items as rental income and/or pension income if your taxable income is low enough to qualify.

If you are planning on retiring and living outside of Canada, you may want to obtain advice regarding the financial and taxation issues. Do your own research about any potential countries you are interested in, either on a part or full time basis, so you can better plan ahead. Remember, the earlier you start planning, the better prepared you will be when you actually retire.

The majority of working Canadians have Employment Insurance (EI) deducted from their wages. This insurance is intended to provide temporary financial assistance to those who are unemployed and looking for work and/or upgrading their skills. EI also provides financial assistance for other reasons though; such as maternity leave, work absence due to illness, caring for a new child, as well as short-term help for those who need to care for a family member who is seriously ill with a significant risk of death.

Compassionate Care Benefits are intended to help those who are employed, but who need a short leave of absence in order to care for a relative that is gravely ill and at risk of dying within 26 weeks. People who are collecting EI at the time can also ask for this benefit. This benefit is payable up to a maximum of 6 weeks; however, it can be shared among eligible family members (i.e. 3 siblings can each claim 2 weeks to be used in succession.)

In order to be eligible for Compassionate Care benefits, you must be able to prove that your regular weekly earnings have decreased by more than 40%. As well, you must have accumulated 600 insured hours within the last 52 week period, or since the start of your last claim. This is known as the qualifying period. There is a 2 week waiting period; however if the 6 week period is shared by family members, only the first person will serve the waiting period.

EI recognizes family members as either your blood relative or a blood relative of your spouse (if common law spouse, you must have resided together for at least one year). These relatives include:

• Your child or the child of your spouse
• Your wife/husband or common-law partner
• Your parent or the parent of your spouse
• Step-parent or common-law partner of a blood parent
• Sibling or step-sibling, as well as sibling or step-sibling of your spouse
• Father or mother in law, either married or common-law
• Son or daughter in law, or your spouse's son or daughter in law
• Uncles and aunts, as well as their partner; or your spouse's uncle or aunt, or their partner
• Nephew and nieces; also a nephew or niece of your spouse
• Current or former foster parent; current or former foster parent of your spouse
• Current or former foster child as well as their partner
• Current or former ward; current or former ward of your spouse
• Current or former guardian or their partners

There is also a provision for someone who although they are not "related" they do consider you as a family member, i.e. friend or neighbor. In this case, a Compassionate Care Benefits Attestation is required from the person who is gravely ill and requesting your help. Care/support is defined as providing psychological/emotional support, arranging care through a third party, and/or directly providing or participating in care.

When applying for Compassionate Care benefits, you will be required to provide documentation proving that the ill family member is in need of care/support, as well as being at risk of dying within 26 weeks. 2 forms will be required to be submitted:

• Authorization to Release a Medical Certificate which is completed and signed by the ill relative or their legal representative
• Medical certificate for Employment Insurance Compassionate Care Benefits which is completed and signed by the ill relative's medical doctor to confirm the significant risk of death within the prescribed 26 weeks

These forms must be submitted at the same time; as well, the applicant assumes the cost of any fees charged by the doctor/legal representative. Only one Medical Certificate is required even if several family members are sharing the 6 weeks leave. If more than one is submitted, the first one submitted will determine the beginning and end of the 6 week period. Compassionate Care benefits end when either the 6 weeks have been paid up and the time period has expired, you have exhausted the maximum payable benefits allowed for your claim, or if the family member dies or no longer requires care and support. If the family member dies while you are receiving this benefit, it is your responsibility to immediately inform the administrator of your benefits in order to prevent EI overpayments.

For more information regarding eligibility as well as the complete list of requirements regarding this benefit, please visit the Service Canada website.