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I Forgot! Last Minute Holiday Gifts That Won’t Spoil Your Budget



At the start of the month, I shared an article with a bunch of frugal gift ideas for the holiday season. The big message behind that article is this: a little bit of thoughtfulness and homework goes a long way. If you spend just a bit of time doing the homework on people that you might be buying gifts for, you can get a low cost gift they’ll actually like.

But what if that falls through? What if you’re realizing just a day or two before a gift-giving event that you need to have a gift for someone and you completely spaced it off? What if someone reminds you as you’re leaving work that there’s a white elephant exchange at the holiday party tomorrow night? What if you thought you got someone a gift and then realized when you were going through the presents that you accidentally left someone out?

Here’s what to do.

If you have time, brainstorm two or three things that you know the person likes.

Rather than panicking and heading to some generic gift list on some website and clicking “buy” on whatever will get shipped in time or running to the store and looking at the shelves hoping that something will pop in your head, take a breather.

Instead of starting with the gift, start with the person. Take five minutes and ask yourself what exactly you know about the recipient and what they like. This doesn’t have to be a long intense process. Here are some questions to prompt you.

  • What foods does this person like? Does this person have a sweet tooth? Do they like salty or savory snacks? What have you noticed before?
  • What beverages does this person like? Do they like to drink wine or beer? What have you observed in the past when spending time with them?
  • What hobbies does this person have?

Often, just answering these questions will get you close to a gift idea for that person. From there, just look for an inexpensive but popular item in that specific niche — almost every hobby and type of food will have specific lists online that will help you with exactly this.

If you have a mutual friend or family member who might know specifics better than you, send a text immediately. Just say, “I’m going through my holiday gift list and still need something for [INSERT NAME HERE]. Do you have any ideas?” They’ll often be able to point you at least in the direction of something.

OK, you’ve mined those avenues and you’ve still got nothing. Now what?

If you have a meaningful memory with someone, use that as inspiration.

This is a really good strategy for a last-minute gift that the person will actually appreciate.

Just try to think of the most meaningful moments you’ve ever shared with this person. What were you doing together? What happened? Where were you at?

Now, take that memory and see if it immediately translates into a gift.

Was there a food item or a beverage or a hobby item involved in that memory? Give that as a gift. You can likely find whatever that item is fairly quickly and inexpensively.

What if the memory is associated with a particular place or activity? Give a gift card related to that activity or place.

You can make that gift extra meaningful by simply including a photograph or, even better, a quick note regarding your shared memory. You can write a note like…

Remember that time we stayed up all night in your sister’s apartment watching horror movies and drinking those awful alcoholic seltzers? We need to do that again sometime… maybe with better seltzers. Here’s a six-pack of good ones to get us started.

If you don’t want to write a note, just remind them of that shared memory right as they open the gift.

If you don’t know anything about the recipient, give something consumable and shareable.

Food or beverage items are almost always a great default choice when you’re in a white elephant exchange or you know little about the recipient for some reason.

Consumable items are a gift that everyone can relate to — we all eat and drink, after all. At the very least, if it’s not up their alley, they can easily share it with their friends who would like it.

It might not be the most personal gift idea, but it’s one that will at least be appreciated and valued by the recipient.

Ask someone that knows.

If you have a good general idea for a gift — like, say, a bottle of wine or some good chocolate — your best approach for getting something worthwhile and getting it done quickly is to stop at a specialty shop and explain your situation. Know your exact budget in advance before you stop in, as that will help the person there make a reasonable suggestion.

For example, if you stop at a hobby store and tell the person working there that you have $15 to spend and you need a small gift for someone who is into that hobby, they will almost always find something that’s perfect.

Avoid gift cards unless they’re going to be easy for that person to use.

Gift cards are kind of default “I couldn’t think of anything” gift that at least has some appeal to the recipient. In general, however, it’s good to keep the recipient in mind when choosing one, at least a little.

The biggest sticking point is to make sure that the gift card can be used in their normal life. Is that card usable where they live? Obviously, this isn’t a concern with cards that can be redeemed online, but if you’re giving someone a restaurant gift card, make sure that the restaurant is in the area where they live.

Thus, you should avoid giving gift cards for local businesses unless the recipient is local, too. While a gift card to a local business can be a nice gift, it’s a pretty bad gift if the recipient doesn’t live near that business.

Need something more specific? Here are 10 specific ideas that might work perfectly for your gift-giving.

You ran through those other suggestions quickly and you’re still empty-handed. What can you do?

Here are 10 inexpensive gifts that I believe have widespread appeal, provide a lot of value for the dollar in most cases, and should be easy to acquire at a moment’s notice as the holidays approach. All of these items are either consumable or very small.

For each one, I’m simply listing a general type of gift, then providing a couple specific examples of that gift, along with some notes as to who might like it.

A copy of a book that changed your life
If you have time to order online: Abe Books or Amazon
If you need it immediately: Visit an independent bookstore near you, and if they don’t have it, check Barnes and Noble

It can be really hard to pick out a book for someone when you don’t know them well, so a different approach is to give someone a book that you really loved or that changed your life. Unless you’re fairly confident about the recipient, try to choose something that will have some level of general appeal. It’s a really good idea to put a handwritten note in the book talking about what the book meant to you and inviting the person to talk about the book with you when they finish it, perhaps suggesting going out for coffee or something at that point. (If I were giving this gift, I’d probably give a copy of Your Money or Your Life or Middlesex.)

If you have time to order online: Heart Coffee, Tandem Coffee (I can vouch for both, and they ship directly)
If you need it immediately: Visit an upscale food store

If you have a coffee lover in your life, a bag of good coffee beans can be a great gift for them. If you’re not sure that they have their own coffee grinder, you can get ground coffee to be safe, though if you’re really wanting to splurge for them, a small burr grinder can be found inexpensively at most department stores.

A nice candle
If you have time to order online: KarmaLit “Favorite Hoodie” Soy Candle, Homesick “Long Island” Candle
If you need it immediately: A local Yankee Candle, Hallmark or a gift shop

Many households like to burn a candle in the evening to provide a bit of accent light and to add a nice aroma to the air. We often have a large candle as a centerpiece on our dining room table, for example, as we sometimes receive them as gifts and quite happily use them. There are infinite aromas out there, so find one that suits you.

Craft beer
If you need it immediately: Visit a local craft beer store or liquor store and ask for suggestions

A six-pack of distinctive craft beer is a gift that many will love, especially that person who seems to always bring something unusual to events. If you’re buying craft beer as a gift for someone, you’re better off sticking to something from a brewery local to you, and thus a specific recommendation really does come best from someone at a local craft beer store or liquor store. They’ll know what’s local and what’s good.

A classy notebook and pen
If you have time to order online: For the notebook, pick up a three-pack of Field Notes; for the pen, a Parker Jotter is a very classy and portable pen for a low price
If you need it immediately: Visit a local stationery store or, if there isn’t one, an office supply store

My wife and I, my parents and several of our friends use little notebooks constantly for jotting things down, so a “starter kit” for this is a good idea, particularly for busy people with lots of interests and hobbies. I use mine several times a day; my wife uses hers a bit less frequently, but still manages to finish one every few weeks.

Hot sauce
If you have time to order online: Weak Knees Gochujang Sriracha, Mike’s Hot Honey, Secret Aardvark Habanero Sauce
If you need it immediately: stop by an upscale grocery store

If you have a family member or friend who dumps hot sauce on their food or gravitates toward spicy foods, an unusual bottle of hot sauce is going to be a guaranteed hit as a gift for them. I will personally vouch for all three of the items above; the two sauces are amazing, and the honey is surprisingly good on lots of things and makes a great gift with a bit of “novelty” to it.

If you need it immediately: stop by a local jeweler

My belief is that an expensive piece of jewelry shouldn’t be a last-minute gift and should instead be well considered, but a small jewelry item can often be a really nice gift. A simple pair of earrings, for example, can be very meaningful, as can a simple necklace with the birthstone of a child, both of which are relatively inexpensive options as jewelry goes.

A portable cell phone charger
If you have time to buy online: Anker PowerCore Fusion 5000, HAME Super Slim
If you need it immediately: stop by an electronics store

Portable device chargers are a useful gift for almost anyone. You can charge one up and toss it in your purse or in the glove compartment along with a small cable and when your phone is low on batteries, you can just get some juice wherever you’re at. Both of these are small and super portable; I particularly like the Anker one because it has a foldable plug built right in, so you can just plug it in whenever you want. This is a great practical gift that most people will find useful.

If you have time to order online: Dr. Squatch Cedar Citrus, Bali Soap Variety Pack
If you need it immediately: Stop by a health food store or a beauty store

A good bar of soap with a nice aroma is a pleasing gift that almost everyone will use and will be appreciated by almost anyone that takes care of their skin and body. It rides a nice line between personal but not too personal and there are basically infinite varieties to choose from.

If you need it immediately: stop by a local winery; if none, stop by a wine shop

As with beer, ordering wine online can be tricky, so you’re better off stopping by a local winery to grab a bottle or, failing that, stopping by a local wine shop for a recommendation. For low-cost wine that’s consistently good, I am a fan of Columbia Crest wines, as it’s been consistently tasty for the price.

Whatever you give, supplement it with some time and attention and conversation.

When you’re at a gift-giving occasion, you can make that gift far more meaningful if you supplement it with some time and attention and conversation with the recipient. Take the time to sit down with that person, ask them how they’re doing and listen to what they say — don’t just sit there trying to think of your next conversational point. If you don’t know what to say, ask a question about them and listen. Give them the gift of your attention and focus for a while; it will mean a lot.

If you’re at a larger group event, especially one where you don’t know for sure who will receive your gift due to a white elephant exchange, take some time to go around to as many people in the room as you can and have a meaningful conversation with them. Ask them how they’re doing, what they’re up to and, again, listen to them. If you don’t have something more to say but don’t yet want to walk away, ask another question and listen to their answer.

Simply giving someone real focus and attention is a seemingly small thing, but it’s an incredibly powerful way to make someone feel valued and perhaps deepen the connection you share, just a little. Best of all, it’s something you can give for free.

Good luck!

The post I Forgot! Last Minute Holiday Gifts That Won’t Spoil Your Budget appeared first on The Simple Dollar.

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PenFed Checking And Savings Review: Full Service And Solid Rates



If you’ve been looking to join a credit union instead of a bank or want to add a credit union account for your checking and savings, PenFed is worth checking out. 

While they don’t have the highest checking and savings APYs, they are reasonable and competitive for a full-service credit union. In fact, PenFed made our list of the top 5 credit unions nationwide of 2020.

PenFed’s mobile app allows you to do all of your banking online or on the go through their mobile app, no matter where you are in the U.S. and even some locations outside of the U.S. In this article, we’ll review PenFed’s checking and savings products.

PenFed Logo

Quick Summary

  • Competive interest rates
  • Large nationwide ATM network
  • Minimum balance required to avoid checking account fees

PenFed Checking And Savings Details

Product Name

PenFed Credit Union

Account Types

Checking, Savings, Money Market, Certificates


0.05% to 0.90% APY

Min Deposit




Who Is PenFed?

Pentagon Federal Credit Union is a full-service credit union. They were created in 1935 and have $25 billion in assets. PenFed is headquartered in McLean, Virginia. They used to restrict membership to a relationship with the military or federal government but have recently opened up to everyone. 

PenFed services all 50 states, including the District of Columbia, Guam, Puerto Rico, and Okinawa (Japan). They are federally insured by NCUA and are an Equal Opportunity Lender. In addition to PenFed checking and savings accounts, members can also access home, car, credit card, and student loan products.

See our review of PendFed’s student loan refinancing product.

What Do They Offer?

PenFed has one checking account and four savings products. They have a network of 68,000+ ATMs. You can bank online or through their mobile app. PenFed has nearly 50 branches across 16 states and the District of Columbia, Guam, Puerto Rico, and Okinawa.

The PenFed website shows its accounts earn interest (APY) and dividends. The terminology can make it sound as though you get the APY plus dividends. That isn’t the case. Dividends are simply being used interchangeably with interest (APY).

Access America Checking Account

You’ll need to deposit $25 to open a checking account with PenFed. PenFed checking accounts do earn a little interest — 0.20% to 0.50% depending on account size as shown below.

  • 0.20% APY on a daily balance of less than $20K
  • 0.50% APY on a daily balance of $20K or more up to $50K

In addition to the listed APYs, you can also earn dividends with a monthly direct deposit of $500 or more. As well, to avoid the $10 monthly fee, you’ll need a daily balance or monthly direct deposit of $500 or more. Overdraft protection is available but is subject to approval.

Premium Online Savings Account

The Premium Online Savings Account pays 0.90% APY on balances up to $250,000 and only requires a $5 deposit. There are no monthly fees. However, there also is no ATM access.

Be aware that savings accounts have more restrictions than checking accounts. Due to federal law, you can only withdraw money from your account up to six times per month. You’re allowed up to $10,000 per day in deposits and a total of $50,000 for the month.

Regular Savings Account

The Regular Savings Account pays only 0.05% APY on all balances. But in exchange for giving up that interest, you gain ATM access. However, if you can get by with transferring money to your checking account before making a withdrawal, the Premium Savings Account is clearly the way to go.

Money Market Savings Account

The Money Market Savings Account requires $25 to open and doesn’t lose ATM access. There are no monthly fees and you get free checks upon request. The account pays interest through several tiers that are dependent on your balance:

  • 0.05% APY — $10,000 or less
  • 0.10% APY — between $10,000 and $99,999
  • 0.15% APY — $100,000 or more

See how this compares to the top money market accounts here >>

Money Market Certificates

You’ve probably heard of a certificate of deposit (CD). Credit unions call these simply “certificates,” but they are basically the same. 

PenFed has several certificates to choose from. All require a $1,000 deposit to open. Just like a CD, your money must remain in the certificate until maturity or you’ll pay an early withdrawal penalty. Dividends are compounded daily and paid monthly.

The following certificates are available:

  • 6 Month — 0.40%
  • 12 Month — 0.70%
  • 15 Month — 0.70%
  • 18 Month — 0.70%
  • 2 Year — 0.75%
  • 3 Year — 0.80%
  • 4 Year — 0.85%
  • 5 Year — 1.00%
  • 7 Year — 1.05%

Mobile App

The mobile app for PenFed checking and savings includes all of the features you’d expect from full-service credit unions. You get instant check deposits, bill pay, ability to send money to almost anyone, account management, and the ability to transfer funds between your PenFed accounts.

Are There Any Fees?

The majority of PenFed’s accounts don’t come with fees. However, its Access America Checking Account has a $10 month fee if certain minimums are not met. To avoid the fee, you’ll need to keep a minimum balance of $500 or set up a $500 monthly direct deposit.

How Do I Open An Account?

You can visit or a local branch if you have one near you to apply for membership. If approved, you’ll need to deposit at least $5 to open an account.

Is My Money Safe?

Yes, money deposited with PenFed is federally insured by the NCUA. Like FDIC insurance for banks, NCAU insurance protects up to $250,000 of credit union member deposits per account.

Is It Worth It?

If you’re looking to open a checking or savings account with a credit union, PenFed is a full-service credit union that pays up to 0.50% on checking account deposits and up to 1.00% on savings. It has about 50 branches in 13 states, plus a few outside of the U.S. and includes NCUA protection. For those reasons, PenFed checking and savings is certainly worth considering.

But if you won’t be able to meet the requirements for waiving PenFed’s monthly checking account fees, you might want to look at these free checking accounts instead. And if you’re comfortable with managing your checking or savings accounts with minimal support, you might be able to earn higher rates with an online bank. These are our favorite online banks for 2020.

PenFed Checking And Savings Features

Account Types

Checking, Savings, Money Market, Certificates

Minimum Deposit

  • Checking: $25
  • Savings: $5
  • Money Market: $25



  • 0.20% APY on a daily balance of less than $20K
  • 0.50% APY on a daily balance of $20K or more up to $50K

Regular Savings: 0.05% APY

Premium Online Savings: 1.00% APY

Money Market Savings

  • 0.05% APY — $10,000 or less
  • 0.10% APY — between $10,000 and $99,999
  • 0.15% APY — $100,000 or more


  • 6 Month — 0.40%
  • 12 Month — 0.70%
  • 15 Month — 0.70%
  • 18 Month — 0.70%
  • 2 Year — 0.75%
  • 3 Year — 0.80%
  • 4 Year — 0.85%
  • 5 Year — 1.00%
  • 7 Year — 1.05%

Maintenance Fees

  • Checking: $10 (waived with $500 minimum balance or $500 monthly direct deposit
  • Savings: None
  • Money market: None
  • Certificates: None


~50 across 13 states

ATM Availability

68,000+ fee-free ATM network

Customer Service Number


Customer Service Hours

  • Mon-Fri: 7:00 am-11:00 pm (EST)
  • Saturday: 8:00 am-1:00 pm (EST) Saturday
  • Sunday: 9:00 am-5:30 pm (EST)

Mobile App Availability

iOS and Android

Bill Pay


NCUA Charter Number




The post PenFed Checking And Savings Review: Full Service And Solid Rates appeared first on The College Investor.

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The Sweet Spot



“Success can get you to the top of a beautiful cliff,

but then propel you right over the edge of it.”

As a Mustachian, there’s a good chance that you are a bit of an overachiever. 

Maybe you fought hard to get exceptional grades in school, or perhaps you have always dominated in your career or your Ultramarathon habit or your hobbies - or maybe all of the above. 

In the big picture, this usually leads to having a “successful” life, because of this basic math:

Traditional Success
How much work you do
How much society happens to value your work

The Nitty Gritty of Traditional Success

Now, lest the Internet Privilege Police head straight to Twitter to start writing out citations, Traditional Success is not a measure of your worthiness as a human being. We’re just talking about the old-fashioned, Smiling 1950s Man definition of success.

 And since we’re all scientists here, we could break the “Work” side of it down a bit further:

And thus, you could say that on average, doing more stuff produces more traditional success. 

But then what?

This is the point where a lot of  smart, driven, born-lucky people drive themselves up the Winding Road of Challenge and then right off the edge of the Cliff of Success. 

If you’re still on the way up, or stuck at the bottom, it is difficult to even imagine the idea of “too much success”. But it’s a real thing, and it happens much more quickly than the modern overachiever would like to admit. Observe the following cautionary tale:

Diana is the director of engineering in a Silicon Valley tech startup. The work is intense, but they are almost over the hump - the company went public last month, and she owns shares that are worth over $10 million at today’s share price. They will vest over the next five years, so she just needs to grind this out and then she will be set for life.

Sounds great, right?

Except this is Diana’s third smashing success. She was already set for life after the second company was acquired, and even before that, her first decade as a rising star at a large company had already left her with over $2 million of investments and a paid-off house in hella expensive Cupertino, California. She had more than enough to retire, twenty years ago!

To many people who are less fortunate, the present situation would still sound like great fortune, and in some ways, it is. Becoming a Director of Engineering is (usually) far better than a punch in the face.

But Diana is now 52 years old, with a collection of increasingly severe back and neck problems and a few medical prescriptions piling up. She has two grown children in their twenties, but wishes she had been able to spend more time with them as they grew up. She has all the money in the world, but still almost no free time, and this next five years is starting to look like an eternity.

What happened here?

Diana is in good company, because many of our hardest-working people fall into this same trap. They have the talent and the great work habits figured out, but they are still missing one last concept - the idea of the sweet spot.

Fig. 1: What is the ideal length of a high-end career?

Diana could have stopped after the first company, or the second, but her career success took on a momentum of its own, so she kept doubling down without stopping to consider why she was doing it - and what she was giving up in exchange.

Once you learn to see the phenomenon of the sweet spot, you will start noticing it everywhere. And it is an amazingly useful thing to start watching and fine-tuning to get the most out of your own life.

Fig.2: What is the ideal amount of Anything?

The Sweet Spot of Physical Training

When a non-runner starts running, they will see immediate benefits. In the process of going from being unable to jog across a parking lot, to being able to easily jog a brisk mile, your entire body will transform for the better. Muscles and bones get stronger, heart and lungs expand and reach out to give your body a healthy embrace, brain functioning and mood and hormones smooth out and normalize. 

Training your way up to become a two mile runner still brings great benefits - just slightly smaller. The fifth through twentieth mile turn you into a hyper efficient machine, but some people start seeing joint injuries as they rise through the ranks.

And by the time you reach the fringe world of 100-mile runners, serious injuries and surgeries are completely normal - as well as unexpected organ failures in otherwise young, healthy people. The sweet spot for daily running for maximum health is somewhere the middle.

All around us, seemingly unrelated things follow this same pattern, from career work to physical exertion to parenting strategy.

Fame and Fortune - be careful what you wish for

Fame definitely has a sweet spot. Building up a good reputation in your community can open the door to better friendships, jobs, relationships, and more fun in general.

But as that reputation expands outwards to become fame, you get the “reward” of constant coverage in gossip magazines and waking up to find photographers and news reporters on your front lawn. At the extreme end, you need to mobilize a team of armored vehicles and line your route with snipers every time you leave your well-guarded compound.

Even money, our humble and ever-willing servant is subject to this phenomenon. It certainly helps us meet our basic needs, but there is a certain point at which Mo Money can become Mo Problems. 

The first bit of monetary surplus can be fun as you can afford a nice house and good food. Then the next chunk seems fun but also causes distractions as you rack up second and third houses and ever-more elaborate possessions and vacations that take a lot of energy to keep track of.

And from there it goes downhill as tabloids start keeping track of your wealth and scrutinizing your choices, hundreds of people mail in pleas for your generosity, and you end up with a full-time job just making sure that the surplus goes to good use. This life arrangement can still be enjoyable for some people, but I would definitely not wish it upon myself.

On and on this pattern goes. A curve with a sweet spot in the middle. The optimal amount of calories to consume in a day. The volume at which you will enjoy your music most. The right brightness of light to illuminate a room. The number of friends with whom you can have a meaningful relationship.

 Why does it occur in so many places? I believe it is because this is how our brains are wired in the first place

Humans are a ridiculously adaptable creature, but we do still come with limits.

And when you respect those limits and fine-tune your life within the sweet spot for all of the main pillars for happy living, you end up with the best possible chance at living a happy, prosperous life.

A Mid-Roll Advertisement:

Interest rates are still at WTF-low levels, so if you haven’t already done so, I recommend checking your current home mortgage and student loan rates. Either at your local credit union, or online via a service like Credible.

Click Here to open that up in a new tab, and keep reading.

Note: This is an affiliate link, to learn why I use these even when I am supposedly retired, read this.

The Curse Of the Overachievers - Revisited

So now you see the problem - overachievers like us tend to get really good at a few things like a career or an athletic pursuit often specializing so much that we neglect other things like overall health or personal relationships.

And our society notices and rewards us for the success, which just reinforces the behavior, so we take things to even higher extremes, often without stopping to think about the reason behind it.

Okay, So What Now?

Once you see the pattern of the sweet spot,  it is impossible to un-see it. So it becomes pretty easy to float up and look at your entire life from above, like an outside observer.

And from up there, you can see the areas where you have enough, and places where you may have already gone overboard, and the corresponding things that you have left neglected as the price of that success. 

Over the past year I’ve been looking at my own life from this perspective, coming up with quite a few of my own diagnoses:

Money: enough. Additional windfalls don’t seem to bring me any lasting joy, but I also don’t have so much money that it makes me nervous. It’s enough to feel safe and empowered, and that’s all I need. Meanwhile, giving away money has brought me lasting happiness, without creating a feeling of shortage or regret.

Career Success (blog): It Varies. When I was really working on this MMM job in the mid-2010s, it started to take over too much of my life. Emails, opportunities, travel and public attention all reached levels where I actually started to have less fun. So I tried dialing it back, as any long-term readers will have noticed. And sure enough, life improved. But then I went too far and started feeling a loss from letting this valued hobby slip away. I’ve been trying to get back into the groove, which revealed another problem - detailed at the end of this list.

Friendships: Not Enough. I have found myself not being able to keep up with close friends, and had difficulty making or keeping plans, partly out of  feeling overwhelmed with life details in general. Still, the opportunities abound here in my local community, and the people are wonderful. So I have the opportunity to keep working at this.

Health and Fitness: Enough. Since I was about fourteen years old, eating well and getting a lot of varied exercise has always been a kind of non-negotiable pillar for me. Nothing extreme, but just very consistent. I think this has been paying off as I feel healthy every day and have never had any physical or health problems in these 30+ years since.

Parenting and Kids: Enough (an A+!) Since 2005 I made “being a Dad” my primary goal in life, quitting my career to do so. It’s the only thing I can truly say I have done the best I could at, and I’m really proud of that. But part of this success came from only having one kid - both of us parents knew we couldn’t handle any more, given the overall conditions of life back then. So for us, the sweet spot was One Child - and absolutely no regrets in that department.

Personal Projects and Daily Habits: Not Enough. I get great satisfaction from working on challenging things and making progress. But far too often, I just can’t get it together and I squander entire days on accidental distractions. Planning to go out for a day of work can lead to searching for lost sunglasses which can lead to finding a lost to-do list which can lead to opening the computer to look something up and several hours disappearing. On and on these tangents can go, often leading to me not getting my primary, happiness-creating goals for the day accomplished. 

I discovered that I have a pretty severe and textbook case of Adult Attention Deficit Disorder, which gets magnified if there are any sources of stress in my life. So I’m working on that (keeping stress down and also targeting habits, diet, exercise and even trying some medication), which will hopefully improve all other areas of life as well.

What am I missing? I’m still working on thinking it all through, so this list will surely grow.

Your Turn

Your life surely has a completely different array of surpluses, shortages and sweet spots than mine. Your assignment is therefore to write them all out tonight, and see where you stand in each area, and decide what to change. Many of the changes are quite easy to make, and yet the results are nothing short of life-changing.

In the comments: what are your own areas of surplus and shortage? And what’s your plan to help restore balance to your life?

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Woman in TFSA overcontribution fight with CRA has penalties cut from $17,000 to just $300



While most of us use our TFSAs as general purpose, tax-free savings or investment vehicles, the

Canada Revenue Agency has been cracking down

on perceived misuse of the accounts by assessing some taxpayers with an overcontribution tax, and others

for falling afoul of the “advantage rules” for registered plans

. Two separate tax cases, out last month, dealt with TFSA penalty taxes.

Non-resident TFSA contributions

The first case involved TFSA overcontributions. If you overcontribute, the penalty tax is one per cent per month for each month your TFSA is in an overcontribution position. But there’s a separate, additional penalty tax of one per cent per month if a non-resident contributes to their TFSA, which is what happened in the first case.

In August 2006, the taxpayer left Canada to begin her medical studies in the U.K. While in the U.K. as a student, and, on the advice her Canadian investment adviser, she made contributions to her TFSA in 2009 ($5,000), 2010 ($1,500) and 2012 ($494). She completed her studies in June 2011 and then commenced two years of residency training in family medicine. In November 2012, she registered with the Canadian Residency Matching Service as a fully licensed U.K. doctor, to obtain a residency position in Canada. Finally, in April 2016, she obtained a residency position at a Vancouver hospital and in June 2016, returned back to Canada.

Much to her surprise, in 2018 the taxpayer received Notices of Reassessment from the CRA for 2009 to 2016, assessing her a total of $17,006 of TFSA penalty tax and arrears interest, asserting that she was a non-resident of Canada when she contributed to her TFSA. Indeed, to be able to contribute to a TFSA (and to accumulate the annual TFSA contribution room), you must be a resident of Canada for tax purposes.

An individual’s residency status is determined on a case-by-case basis, taking into account many factors. The most important consideration is whether or not the individual maintains residential ties with Canada. Significant residential ties to Canada include: a home in Canada, a spouse or common-law partner in Canada and dependants in Canada. Secondary residential ties include: personal property, such as a car or furniture, in Canada; social ties in Canada, such as memberships in Canadian recreational or religious organizations; economic ties in Canada, such as Canadian bank accounts or credit cards; a Canadian driver’s license, a Canadian passport, and provincial health insurance.

The taxpayer argued that during the period that she was in the UK, she maintained a room in her parents’ home and always regarded the space in her parents’ home as her permanent home. She kept many of her possessions there until August 2016, when she moved to Vancouver.

While studying in the U.K., she kept strong secondary ties to Canada, including funding her medical school fees and expenses with annual loans from a student line of credit from a Canadian bank, as well as through various federal and Ontario student loan programs. She retained and renewed her Canadian passport, and obtained Canadian citizenship for her two daughters who were born abroad. She kept and renewed her Ontario Driver’s licence, her Canadian bank accounts and credit cards, and maintained her Ontario Health Insurance as an overseas student. She continued to be listed as an occasional driver on her parents’ vehicle insurance and returned to Canada nearly every year from 2006 to 2012 to maintain her ties to Canada. Lastly, she filed Canadian income-tax returns as a resident of Canada that were always assessed as filed.

In other words, although the taxpayer was physically absent from Canada during her years abroad, she argued that she maintained significant ties to Canada during her period of her absence and “intended to return to Canada upon completion of her medical studies and has, in fact, returned to Canada.”

In a consent to judgment issued last month, the CRA conceded that the taxpayer was a resident of Canada until June 30, 2020. This was a negotiated date that was selected by the CRA, as it was the date the taxpayer had completed her medical degree and could have returned to Canada, in theory, to complete her residency/licensing training. The taxpayer became a non-resident on July 1, 2020 and resumed Canadian residence on June 6, 2020, when she began her medical residency position in Canada.

The result, therefore, was that only the 2012 TFSA contribution of $494 was subject to non-resident penalty tax and interest, which totalled approximately $300, a far cry from the initial TFSA reassessments totaling over $17,000.


Advantage rules 100 per cent penalty tax

The second recent case involving TFSA penalty tax was at the Federal Court of Appeal and concerned the

“advantage rules,” which are a series of anti-avoidance rules

in the

Income Tax Act

designed to prevent abuse and manipulation of all registered plans, including TFSAs. If you find yourself offside these rules, you could face a 100 per cent penalty tax on the fair market value of any “advantage” that you receive that is related to a registered plan.

The taxpayer was appealing a 2018 decision of the Tax Court in which he was reassessed nearly $125,000 in penalty tax applicable to the advantage the CRA says he received in connection with the transfer of private company shares to his TFSA.

The taxpayer went to court to challenge the constitutionality of the 100 per cent advantage tax. He argued that since the CRA has the discretion to reduce the 100 per cent advantage tax to zero, Parliament “improperly delegated the rate-setting element of (tax) … to the (CRA)” in contravention of the Constitution Act.”

Not surprisingly, the Tax Court, and now, the appellate court, dismissed the taxpayer’s appeal, concluding that Parliament, via the explicit wording found in the Income Tax Act, “has prescribed the liability for the tax, the persons on whom it is imposed, the conditions on which a person becomes liable for it, and criteria by which the amount of tax can be determined. (It) delegates nothing to the (CRA).”

The Court did find that there was a wider issue to be considered as to whether the CRA’s power granted under the Income Tax Act to reduce or cancel the tax constitutes “an invalid delegation of taxation power to the (CRA).” But, due to a “lack (of) adequate submissions and fully developed reasons from the Tax Court,” the appellate court refused to weigh in, concluding: “We should leave the broader issue for another day.”

[email protected]

Jamie Golombek, CPA, CA, CFP, CLU, TEP is the Managing Director, Tax & Estate Planning with CIBC Private Wealth Management in Toronto.

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