“To achieve this family’s goals without going into debt requires vigorous prioritization. Joan and Tom need to rate the items on their wish list and start ticking them off one by one. But the most important item on that first list has to be preparing for Joan to re-enter the workforce. Paying for the right courses to help her move smoothly back into the workforce when the family is ready will do more for this couple’s bottom line than all the penny-pinching in the world. The big tax refund that Tom will receive this year and the increased cash flow on his paycheque each month should go toward Joan’s courses. They will have to consider the cost of day care while Joan takes her courses, but there may be subsidized day care available through her educational institution.

“As for the rest of the wish list, Joan and Tom are going to have to get creative if they don’t want to take on any debt or have Tom working 60-hour weeks. They should do the three-month exercise of recording all their purchases and analysing where they might save small amounts of money. When couples do this, they often find that as much as 30 per cent of their expenses are discretionary. Joan and Tom might prefer to spend less on gifts or holidays, for example, and more on a new sofa.

“This couple can also get creative in other ways. For example, they want to replace one of their cars, but they live in an area that’s served by one of the new car-borrowing organizations, which are cheaper than renting a car and certainly cheaper than owning. This might work for the next few years. Can they use the library for their computer needs? If neither of them is handy, do they know someone who will lay the front walkway for them at cost in exchange for a service that they can provide? In other words, perhaps they can beg or borrow (but not steal!) some items on their list without big cash outlays.

“It’s important to start saving for the kids’ education, but that should come after Joan’s education needs are taken care of; then that money can be redirected toward RESPs. As for retirement savings, they’ve made a start with a commitment of $2,000 a year, and the company pension is in place. Again, once Joan is making an income in a few years, they can ratchet up the retirement savings.

“Even though this couple hates having debt, they should at least have a line of credit, say $25,000, as an emergency fund in case of a setback, such as Tom losing his job. They’ve shown that they won’t abuse it, and it’s something they should apply for while they’re in good financial shape. No one will give them a loan if they’re in trouble.”

Meet the Remicks. While they’ve paid off their mortgage (!), they have no furniture in their living room. Two experts give them two very different solutions. Will one work for you, too?

Joan and Tom Remick* have a wish list: dining room furniture, adult furniture for the living room (it’s now a makeshift playroom), a personal computer and a newer car (their 1986 Ford Mustang has little life left in it). Extravagant? Not by a long shot, and yet, like so many other families, they don’t know how they’re going to get the money together to turn that wish list into reality.

While Joan and Tom are miles ahead of other couples (they are mortgage-free at the age of 31!), it is an achievement that has cost them in many ways, they say. “I have aged a lot to come to this point,” says Joan. “We have exhausted all our resources and are starting from scratch.” Achieving the amazing goal of paying off their mortgage early has left them in a financial crunch: they have a lot of priorities and little cash. More importantly, perhaps, Joan wants to “start living.”

She and Tom have two children ?ldquo; Annie, 5, and Ryan, 3 ?ldquo; a home in Mississauga, Ont., and two cars. Married six years, they were able to take their first-ever vacation this past summer after the mortgage was paid: they rented a cottage for a week in Muskoka, Ont. But, like most people, they don’t really keep track of where their money goes. “I always know how much we have in our chequing account,” says Tom, “so I can head Joan off before her debit card gets rejected at the checkout line.” Still, says Joan, “Even though we’re both very good with our money, I don’t want to live my life like a stickler, having to count every penny.”

When Joan says she and Tom are very good with their money, she isn’t kidding. They met as teenagers working at a local grocery store and, unlike so many of their friends, both tucked away their money, put themselves through school and built up a healthy down payment for their first home, which they bought at age 25.

In fact, their first mortgage was just $80,000. They recently paid off the $50,000 mortgage they took out on their second home, thanks in part to Tom, who works in the transportation industry, taking on extra shifts at work ?ldquo; and some good luck. While all of the sacrifices they made over the years helped them get where they are ?ldquo; making do with no living room or dining room furniture, no major outings, no eating out with friends and no shiny new cars ?ldquo; they also happened to be in the right house at the right time. “We were able to sell our first home at a huge profit, pocket $65,000 and put that toward this house,” says Tom. “The market was hot, and we came out ahead.”

Although they have leapt over a huge hurdle, Joan and Tom feel that their finances are strained. “We have a car that’s on its last legs, so it will have to be replaced,” says a frustrated Joan. “I just spent $1,000 on root canals. I want to put the kids into different activities. It all adds up.” Tom is now the sole provider for the family, pulling in $54,000 a year.

The first year they were married, both worked full time and earned a combined income of more than $100,000. Once Annie was born, however, Joan made the decision to stay home ?ldquo; a decision that was not in the game plan. “I planned to go back and had booked my nursing shifts, but the night before I broke down and called in to say I wouldn’t be returning,” says Joan. That meant they had to make do on one income. “I took every shift I could get,” says Tom. While Joan plans to return to the workforce within the next three years, she doesn’t want to go back to nursing. “I’m not sure what I want to do yet but, whatever it is, I know I will have to go to school for some sort of training,” she says. Cha-ching, cha-ching.

But Joan and Tom got a nice surprise this year when they filed their income tax. Due to a clerical error, Tom had been taxed as a single individual rather than as someone who supported a family; this has been adjusted, and this year his income

tax will drop, so they will get about $200 extra to keep each month. As well, he’ll have a sizable tax refund when he files his income tax return next year.

Joan and Tom have very specific goals, but they’re not quite sure how to achieve them, so we asked two financial advisers who deal with these situations every day for their expert advice on how to turn their wish list into reality.

It’s a big choice for many developing families, newlyweds and young people.

When you think urban, images of the “big city,” like busy downtown streets lined with shops, restaurants, bars and towering high rises may fill your mind. All of these images are actually quite accurate. Many urban cities do look like this, especially the big metropolitan ones in North America, places like New York City and Toronto.

In contrast, the suburbs can be defined as a district lying immediately outside a city or town. To stereotype “suburbia,” visualize white picket fences, Stepford wives and happy nuclear families. It has been hyped for the benefit of more space, less traffic and a safer environment to raise children. The idea of suburban life came around when urban planning models shifted to low density housing. Development began outside of the city and the housing was built with larger spaces between houses, affording each home a lawn or garden.

It will ultimately boil down to lifestyle preferences when deciding between the two, but understanding the true cost of both is important to factor into your decision of where to live.

A Roof Over Head

If you are looking for a roof over your head in the downtown area, you should expect to pay more. A condo of equal square footage on the outskirts of the city is likely to be significantly cheaper and as you get further from the city, the price will drop even more. Rental rates can also be higher in urban areas.

Many say that you get more for your money in the suburbs. This is quite accurate, as one can buy a two-storey house with a garden and backyard in the suburbs for nearly the same price as a condominium in a sought after urban area.

Paying The Bills

The cost of water and electricity should be considered when purchasing housing or considering rental accommodations. Although rates may be comparable in the city and the suburbs, it would probably take more energy to heat and upkeep a larger home than a smaller condominium.

Many of the older houses, townhouses and apartment building in downtown areas are not energy efficient. Newer houses built in the suburbs may have energy-saving systems, which could cut the cost of your utility bills.

The Tax Man

You ultimately pay more for suburban infrastructure development and maintenance, since you have to build more of it to serve fewer people. Your tax dollars won’t go as far in the suburbs as they do in urban neighborhoods, so although a house in the suburbs may be less expensive on the market, it may actually cost more to support when it comes to public services and infrastructure. Because there is less tax money, some social and civil services may be lacking. The city on the other hand, has the tax money of a bigger population to draw on.

Getting To And From

In urban areas, everything is quite compact, so you can easily travel from place to place by walking or accessing public transit. Taking the bus or subway can be quite cheap. The cost of one bus fare in many Canadian cities can range between two to three dollars. If you are a frequenter of the transit system, you can buy weekly or monthly passes and enjoy unlimited travel to save money.

For those living in suburban areas, there may be many hidden costs in transportation that you may not have considered. A study of 27 American metropolitan areas by the Centre for Housing Policy found that the cost of commuting cancels any savings on lower-priced suburban homes. Those who own cars know the pain of the skyrocketing gas prices experienced by many Canadian cities. Workers that have to drive into the city for their day jobs can shell out immense amounts of gas money, not to mention the insane prices for parking downtown.

For those that do not have access to a car, getting around in the suburbs can be quite a challenge. If a transit system does exist, it may not be as well serviced as one in an urban area. Routes may be limited and service infrequent. You may have to resort to taking a taxi and that can hit your wallet hard.

Things To Do, People To See

It is not just a myth that the cost of many goods and services is generally higher in an urban setting when compared to prices in the suburbs. If you are looking for a haircut in a trendy downtown salon, expect to pay more than you would in the suburbs. Prices for clothing can also be hiked up in chic urban boutiques, even for the same products or brands that you can find cheaper at a lower profile store in the suburbs. Even prices at the same chain restaurant can fluctuate between urban and suburban franchise locations.

The people that I know who live downtown are also more likely to access these goods and services. Since everything is “right at your doorstep”, you may find yourself going out more often to restaurants and bars. Since cites are more dense, they can support more museums, theatres and galleries. Your proximity to the entertainment may make you more inclined to pay for a visit.

Suburban Home Or Urban Condo?

One is clearly not better than the other and it is a personal decision you must make. As you contemplate your options, I hope some of these financial considerations help you tally up a cost comparison for the area and market you are looking in.

OTTAWA - Finance Minister Jim Flaherty is proposing a code of conduct for credit-and debit-card companies that he says will “level the playing field” for consumers and small businesses alike - but not before the Christmas shopping season.

The code, intended to promote fair business practices and ensure merchants and consumers clearly understand the costs and benefits of credit and debit cards, won’t be finalized before early next year.

It aims to provide merchants with more pricing flexibility so consumers can choose the best payment option, Flaherty said, and it would allow merchants to choose which payment options they accept.

“The proposed code is based on ongoing discussions with merchant and consumer associations, debit-and credit-card networks, payment processors and credit-card issuers across Canada,” Flaherty said Thursday.

“The proposed code would encourage choice and competition in the credit and debit market for the benefit of consumers and merchants. It would help ensure accountability and prevent unfair practices.”

Flaherty is putting the draft proposal out for input from stakeholders over the next 60 days and he said he expects the code will be made final early in the New Year.

Among other elements of the code:

-It would require credit-and debit-card companies to give merchants at least 90-days’ notice of changes to transaction fees.

-It would allow merchants to cancel contracts with card issuers without penalty after notification of fee changes.

“We have been consulting on this for some months and these are not simple issues relating to debit and credit cards,” Flaherty said.

“They’re very important issues for consumers in Canada; they’re very important issues for business in Canada - particularly small merchants as we go into the Christmas shopping season.”

He said the government will make final revisions and additions to the code based on the feedback it receives, “then quickly move to bring the code into force as soon as possible early in the new year.”

Recently released regulations also protect credit-card users by making clearer and more transparent information available to them, he added.