How to make room for unexpected expenses Surging inflation and rising interest rates have most Canadians putting off big-ticket purchases, according to the Angus Reid Institute (ARI). Some 75 per cent of respondents to a recent ARI poll said they didn’t think it was a good time to make major purchases. But cars don’t break down when it’s convenient. Global News spoke to personal finance experts about how to make room in an already tight budget to absorb those unexpected costs. Rubina Ahmed-Haq says going “cheap and cheerful” could be the right stopgap to get you through an economic downturn, and that a more affordable but reliable vehicle could be a better option than a dream car in such circumstances. She warns against the attractiveness of “buy now, pay later” plans, as while they can help lower major upfront costs, they can breed bad habits that quickly become “unmanageable.” Read more from Global News reporter Craig Lord.  The double-double settlement Tim Hortons has baked up a possible settlement for a number of class-action lawsuits alleging the company’s app violated users’ privacy. The coffee and doughnut chain is offering affected customers a free hot beverage and a baked good, The Canadian Press reports. The proposed settlement comes after an investigation by privacy watchdogs found Tims’ mobile ordering app violated the law by collecting vast amounts of location information from customers. According to court documents, Tim Hortons says the retail value of a free hot beverage is $6.19 while the value of a baked good is $2.39, plus taxes. Courts have yet to sign off on the proposal. Read more on the proposed settlement here.  Shopify layoffs and digital retail’s future A slowing economy and a missed bet on the future of retail are hurting Canadian tech darling Shopify, which this week cut 10 per cent of its staff and said operating losses are still to come this year. But Shopify’s failed bet — that e-commerce adoption would continue its rapid pace post-pandemic — could be telling for the future of how we shop. Retail analyst Bruce Winder told Global News that e-commerce has “fallen to earth” as physical shopping makes a comeback. But he and other experts argue that the tech conveniences we got used to during the pandemic will likely stick around, even as we enjoy a renaissance of brick and mortar. "E-commerce is not going away. It's not retreating. It's not going back into its shell. It's just going to probably grow at more of a normal rate,” he says. But this week saw Shopify and mega-retailer Walmart both flag inflation as a major headwind for the industry in the months to come. Find out here what that means for your shopping plans this year. ________________________ – THE QUESTION – “My 16-year-old son got a job this summer. He was so disappointed when he saw the deductions on his first paycheque (rude awakening)! To avoid any future surprises, what is the best way for lower-income earners to maximize their return in their first years of filing?“ — A Money123 reader “Like many young earners, your son may have experienced shock when he looked at his first paycheque, thinking, ‘Where did it all go?!’ The answer is that some of it went to source deductions, the difference between gross and net pay. Gross pay is your hourly wage or salary before deductions. Net pay is the amount that you take home after your employer has deducted the necessary ‘withholdings.’ These are amounts they're obligated to send directly to the Canada Revenue Agency on your behalf. This money gets ‘deducted at source,’ which means you never see it before it’s sent off. What amounts are typically deducted from gross pay? 1. Employment Insurance (EI) — EI pays out benefits to Canadians who are laid off or are unable to work due to specific life circumstances. 2. Canada Pension Plan (CPP) — CPP pays pension benefits to Canadians over the age of 65. 3. Income tax — Every taxpayer in Canada can earn up to $14,398 (in 2022) before paying any federal tax. This is called the Basic Personal Amount. Assuming your son is earning $15 per hour, he would have to work nearly 960 hours in order to make enough money to be taxable, which is unlikely at a summer job. So in the future, he can fill out the Canada Revenue Agency’s form TD1 (and the provincial equivalent, e.g. TD1ON in Ontario) and most likely, no tax will be withheld at source. But if tax is withheld unnecessarily, he can claim any refund he's entitled to by filing a tax return next April. Look for tax filing software to get him started; some options are free for adults under 25.” -Robin Taub, CPA, CA, author of The Wisest Investment: Teaching Your Kids to Be Responsible, Independent and Money-Smart for Life ___________________________ Want your money question answered by an expert? Get in touch! | 
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