Are you a gold bug?

I must admit, I have always had a fascination with gold, and gold stocks in particular. Goes back to my early days as a stockbroker when ripples in the price of gold would send shockwaves through the gold stocks - Lac Minerals I recall, was particularly kind to me and my clients.

In the past few years, gold has finally started to deliver on all the promises made by soothsaying goldbugs - and the price of gold is now in the mid thirteen hundreds. (USD)

I do own some gold stocks (I am not about to tout which ones - that's not the point, nor am I licensed to do so), and I am wondering when the stock market is going to wake up to the expected bonanza major gold producers are about to enjoy.

Yesterday was a very interesting article in The Globe and Mail business section - entitled "Gold miners ride new infatuation with metal to higher profits"

I like the article, and consider it recommended reading for all of you. Here it is:

October 28, 2010

Gold miners ride new infatuation to higher profits

By David Ebner
From Friday's Globe and Mail

Barrick, Goldcorp make big gains as investor faith in fiat currencies fades

Gold's price GC-FT surge is beginning to shine on the world's top producers as they report massive profits, while experts predict the cash torrent is just getting going.

Toronto-based Barrick Gold Corp., ABX-T the world's biggest gold producer, reported a record quarterly profit, while Goldcorp Inc. G-T quadrupled its profit and doubled its dividend. Shares of both companies shot up Thursday as results impressed investors and gold prices resumed their upward climb.

Gold, at about $1,342 (U.S.) an ounce, has risen about 30 per cent in the past year and remains near its all-time high of $1,387 reached earlier this month. The increase comes amid new predictions from mainstream investment banks such as RBC Capital Markets that if gold's rally turned into a full-blown investment bubble, prices could run to nearly $4,000 an ounce, well beyond the precious metal's inflation-adjusted peak of about $2,400 in 1980. Most analysts, however, see more limited gains ahead, and some say gold prices could stage an abrupt turn lower, especially if the U.S. dollar overcomes its recent weakness.

Gold "does have significant room to go," said Chuck Jeannes, chief executive officer of Goldcorp.

Underpinning the gains in gold, Mr. Jeannes and other supporters believe, is a fading faith in fiat currencies, the paper money issued by central banks in ever-greater quantities. The spectre of so-called currency wars has bolstered this view, and gold bulls argue the commodity provides a store of wealth whether the flood of global currency liquidity leads to inflation or fails to revive stalled economies.

In a report this week entitled "Bonfire of the Currencies," longtime gold supporter Sprott Asset Management LP insisted gold producers have more healthy earnings gains ahead. "If you haven't participated in gold's recent rise, don't fret, because the fun has only just begun," the Sprott report said.

" The real fireworks might still be several quarters away. "- Myles Zyblock, RBC

 "It's all about earnings. ... Investors seek out earnings growth wherever they can find it and we can't think of a single equity sector that exhibits better year-over-year earnings growth potential than the gold producers. ... As countries decide to burn their currencies in the devaluation race, gold has responded, and now it's the producers turn to perform. We'll gladly take the earnings," the report said.

Institutional strategist Myles Zyblock at RBC added: "The real fireworks might still be several quarters away."

Gold's climb to record heights hasn't drawn the widespread interest of investors to the biggest names in the industry. The hot spot for gold equities has been the smaller producers, mid-tier companies and juniors. Big investments in such companies as Osisko Mining have propelled the $1-billion (Canadian) Dynamic Precious Metals fund up 72 per cent in the past year.

Before trading Thursday, Barrick's shares had risen about 20 per cent in the last year- which made it just a median performer in the 234-member S&P/TSX index. Goldcorp badly lagged, with its return of 8 per cent ranking 191 out of 234 names.

" The share prices of Barrick and Goldcorp should be much higher, and they're not. "- Sheryl Purdy, Leede Financial Markets Inc. 

But soaring earnings among the biggest producers is rekindling interest.

"People have ignored the big-cap companies to some degree, unfairly," said Robert Cohen, the fund manager for Goodman & Co. "They'll probably be more interested in them now."

On Thursday, Goldcorp's stock jumped 4.6 per cent as Barrick gained 2.4 per cent.

Barrick's profit in the third quarter was a record $839-million (U.S.). On an adjusted basis it was $829-million, up three-quarters from $473-million a year ago. (The adjusted basis was presented for comparison purposes and strips out massive losses Barrick took last year associated with its hedge book.)

Goldcorp, which reported results late Wednesday, made $464-million in the third quarter, more than quadruple the $114-million of a year earlier. The company doubled its dividend, paid monthly, to 36 cents a year- though the yield on the stock is less than 1 per cent.

Skepticism about gold still abounds, with critics wondering how a metal that has little industrial use can keep rising. It isn't a crucial component in any product in high demand. Even if the world entered severe distress, critics wonder whether gold could actually be used as a currency and medium of exchange, since gold quantities are relatively small.

Sheryl Purdy, a vice-president at Leede Financial Markets Inc. in Calgary, is among the skeptics. The stockbroker works at a Vancouver-Calgary firm that is full of gold bulls and has made significant money among mid-tier/junior names. Still, Ms. Purdy pointed to the relative underperformance of the big names Barrick and Goldcorp as an indication that there are more skeptics than believers.

"The share prices of Barrick and Goldcorp should be much higher and they're not," said Ms. Purdy. On the seeming inexorable rise in the price of gold, Ms. Purdy said: "I'm sitting on one side, saying, 'I don't get it, it's too far overdone.'"

______

GOLDEN NUMBERS

$839-million (U.S.)

Barrick's third-quarter profit, a record

$464-million

Goldcorp's third-quarter profit, more than quadruple a year ago

$1,342

The price of an ounce of gold on Thursday

Who is watching your back?

In our zeal to qualify for a mortgage, we strive to meet the debt service ratios used by all major mortgage lenders. The rule of thumb the lenders use is your mortgage payments, property taxes and heating bills should be less than 32% of your gross monthly household income. 

They also consider other monthly obligations like car payments and credit card payments, and decree your total housing costs and debt payments should be less than 40% of your gross monthly household income. 

It always seems to me the standard calculation of household expenses is out of date and does not reflect reality. Every household I encounter in my business has a monthly hydro and water bill for example. They also have cable costs, internet costs, cell phones and often land line phones. 

And almost all houses need to be maintained. Who cuts the grass and ploughs the snow? Who fixes things when they break down? And then there are unforeseen major expenses like roof repairs, leaking basements, termite flare ups, ant infestations etc. And if you have a pool, that’s almost $1,000 just to open and close the pool each year, plus weekly cleanings and chemical treatments, and the extra heating and hydro pools while the pool is open. 

And what about your children and your pets? Or the aging parent who may live with you? The lenders don’t ask if your teenage son plays hockey five days a week at an annual cost of more than $15,000 after tax dollars! They don’t (at least not obviously) care if you have one child or four – but we all know the monthly financial burden of raising children is not cheap. 

They don’t stop to consider whether or not you plan to contribute towards your kids' post secondary education, or the increased costs of medication and care for your elderly parent. 

No, the harsh reality is the only person who cares about all this stuff is you. 

But we are conditioned to buy as much house as we can possibly afford – using metrics and approaches that are hopelessly out of date and not reflective of life’s realities. 

Most home buyers we meet in our business stretch their budgets to the max to get into their ‘dream home’. They have no back up plan, no savings, and are often only one or two hiccups away from financial chaos. 

These hiccups inevitably lead to the use of readily available credit such as lines of credit or credit cards. Balances accumulate, often at high interest rates, and a further monthly minimum payment obligation is slapped on top of an already over worked monthly budget. 

Ah, budget. Yes, we all talk about “the budget”, but very few households actually have a set budget and even fewer live within the means of that budget. 

I am sure that’s why we are seeing record levels of financial stress in Canadian homes – and that is with interest rates at all time low levels. God help us all when they pop higher in the years ahead. 

Do yourself a favour, and take an honest hard look at the totality of your monthly obligations, and make sure you are not setting yourselves up for stress and failure. Some enlightened industry experts argue your household expenses should in fact be no more than 25% of your total household income – and they have a valid point. 

Every one of our mortgage or credit counselling clients are given a detailed budget and financial framework to work with for going forward. Our concern is not just with fixing the problem of the day, but more importantly, making sure we set you up for success and happiness. 

If you don’t take these considerations into account, no one else will. The lenders are protecting their behinds with their outdated approach to assessing your ability to make the mortgage payment – who is watching your back?

Life can be cruel

You never know what's around the corner. Met a couple last week who retired early at 53, with guaranteed pension income of $74,000 between the two of them. And when they hit 65 (earlier for CPP if they so choose) their OAS and CPP will also kick in.

They had a $400,000 home bought and paid for - no mortgage. Savings in their RSP's. The epitome of fiscally responsible Canadian Citizens.

Then she got sick, diagnosed eventually with Leukemia. They have scoured the world for cures and treatments that will retard the insidious development of this killer disease. Last year, they paid $250,000 to a medical facility in the USA for a radical treatment - however, nothing changed.

They have now refinanced their house twice; depleted their savings completely, and are desparate for money in their quest for a medical miracle.

If there is in fact no cure, it will all be for naught - and the husband will be left with a boatload of grief and a mountain of debt.

Could they have avoided this?

Medically, I am not qualified to answer that question.

Financially, they may have had options with their life insurance policies - some companies will pay out an early death benefit while the insured still lives, if the illness is truly terminal.

Or, they may have chosen not to chase the Hail Mary cure - and at least left all the fruits of their hard work intact.

Who is to say what is right and what is wrong - until you've walked in those shoes (and let's hope none of us ever do), who knows what lengths we will go to to save the life of a loved one.

Another couple I know well were devastated to learn last June that the husband (also a youngish man of 50 or so) had advanced lung cancer. (It had already metastised to his vital organs when the diagnosis was made)

There was an initial flurry of similar activity as they sought alternative medicine treatments in Middle Europe, but after a month or so of this program, they subsided back to the reality of their circumstances. Now they are fighting the illness with chemotherapy, lots of love, prayer and positive thinking. My prayers are with them.

In the meantime, the ill husband has gone to great lengths to restructure his finances to ensure he leaves behind the most optimal situation possible for his wife and two children. We all hope these precautions won't be necessary.

Life is a bitch sometimes. Enjoy each and every day with the ones you love - value your health and happiness above all else, and pray that tragedy never darkens your family's doorstep.

MLS system heading for a total revamp

The winds of change were blowing outside a St. John’s hotel Sunday afternoon, as representatives of the country’s 101 real estate boards voted 97 per cent in favour of a deal that some warned could mean the end of the Canadian Real Estate Association.

At the very least, it will change the current face of the Multiple Listing Service (MLS).

The controversy began earlier this year when Competition Bureau Commissioner Melanie Aitkin announced she was investigating complaints of anticompetitive behaviour, including concerns CREA kept its members from offering services that would lower costs for consumers.

Some of the biggest complaints involved the popular MLS system, with complaints agents were charging full commission just to post a listing. If clients didn’t use an agent, they couldn’t list their property on MLS.

That sparked intense negotiations between CREA and the Competition Bureau in the months leading up to Sunday’s vote. And if CREA members didn’t vote in favour of the deal, there were looming threats of a court battle next spring with the federal government.

CREA president Georges Pahud said he welcomed the decision to ratify the agreement and end the Competition Bureau battle.

“We are pleased that after careful consideration and reflection, real estate boards and (local real estate) associations from across Canada have endorsed the agreement.”

“The commissioner and CREA have agreed that its rules as well as those of members should not deny or discriminate against realtors wishing to offer mere posting services. CREA does not believe that such rules exist today, but if they do, they must be repealed or boards will lose their license to operate under the MLS trademarks” Pahud said in a statement.

Reaction from Canada’s estimated 100,000 agents was swift.

“If this vote goes through, it’s time for the full time real estate sales people to leave the CREA,” Greg Chiang, of ReMax Omega in Newmarket, Ontario, wrote in an email prior to the vote.

“We will pull all our listing(s) from the MLS system. Let all the FSBOs start their own MLS system …It takes money to build up a great real estate system, (and) that is why most discount systems fail. The FSBOs want to take a free ride on our backs …use the system that we as full time realtors have paid for many years to develop and make what it is today.”

Others questioned why the Competition Bureau was even getting involved.

“I don't understand why the brokerage community has been targeted, and why
the system we have built up with our fees over the years should be treated
like public property,” Steve Glogowski, an associate vice-president of Royal LePage Signature Realty in Toronto, said in another email.

“Brokers do not have a monopoly on selling property. Everyone is free to advertise and negotiate their sale in the newspapers or on the web and not use the MLS,” he added.

Glogowski suggested instead of “caving in”, CREA should disband and hand over the MLS system to its members. “How can a system with dozens of owners be considered a monopoly?” he asked. “If people think they will save a few bucks by selling on their own, they are sadly mistaken.”

The deal with the Competition Bureau could result in buyers listing at an unrealistic price and not getting serious offers, not negotiating effectively based on experience and having a have increased chance of fraud, he said.

As rumours of the deal filtered out in advance of the vote, some entrepreneurial realtors saw opportunity. Details emerged late last week that the largest of those private sale companies, Moncton, N.B.-based PropertyGuys.com, had signed a deal with Harvey Real Estate Co. Ltd, a tiny brokerage in Hamilton, Ont.

The arrangement would see Harvey listing PropertyGuys.com client’s properties in Ontario on the MLS site for a fee, if the client wishes. The MLS profile would then link to a client’s customized PropertyGuys.com profile.

The broker has been posting PropertyGuys.com listings for a week now and there is still a backlog, according to a report in the local New Brunswick Business Journal. It added PropertyGuys.com expects the overall opening of the marketplace to boost their listings by 30 to 40 per cent in the next year alone.

Household debt to outpace income says TD Bank

When interest rates rise, 10 per cent of Canadian households could be in financial trouble, according to a TD Economics study.

 

TD chief economist Craig Alexander said household debt, which includes mortgages, has become excessive as Canadians get more accustomed to easy borrowing.

 

“One in 10 is a high ratio,” Alexander told CBC News. “It looks to us that Canadians’ personal finances have gotten stretched.”

 

Alexander also expects those debt levels to increase more rapidly than income growth.

 

The TD study said that even if the Bank of Canada’s overnight rate only rises to 3.5 per cent by 2013, family debt might still rise five per cent annually. That should be a concern, the report said, given its prediction that incomes will likely grow only by four per cent a year.

Before you travel - change your cell phone plan !

In the past two weeks, I have had several callers with a recurring ugly theme. They, or their kid, or their spouse travelled to the USA and started using their cell phone exactly the same way they usually do.

Case I - daughter is a chronic texter - the bill three weeks later was over $2,400 !

Case II - husband was on a driving holiday through the Mid West - thought his Canadian long distance plan worked in the States. The bill was $1,350 !

Case III - lady and her fiancee were on holiday in Washington and they both like to do separate things - so one did the museum thing and the other did monuments etc. They stayed in constant touch with each other via cell phone calls and texting. The bill was $875 !

Case IV - Another guy co signed for his 17 year old son's cell phone plan the year before, and forgot he was "involved" with the account. A four day school trip to Chicago resulted in a $1,600 surprise bill. The son could not pay, and if dad did not cover the bill, BOTH their credit histories would get wrecked.

Worse, none of these people could afford to pay these bills - they ended up unpaid; forced into collection status, and their credit histories were wrecked, and still are.

All it takes is a five minute phone call to your cell phone provider BEFORE you leave, and for $20 or so, you can protect yourself. Even if you forget till you get to your destination, it's never too late.

How to avoid mortgage fraud

October 18, 2010

Six suggestions for avoiding mortgage fraud

By DIANNE NICE
Globe and Mail Update

Don't be talked into a deal that's too good to be true

Whenever the housing market starts to heat up, so does mortgage and real estate fraud. Buyers rush through deals to avoid losing out, but can end up being scammed if they're not careful.

While there are no statistics on these types of fraud in Canada, in the United States, it is estimated to cost victims between $4-billion and $6-billion (U.S.) a year.

"Mortgage scams are carried out in all different forms and involve a multitude of people, some who don't even know they're being taken advantage of," says Diane Scott, president of the Calgary Real Estate Board.

Ms. Scott says at least two types of mortgage fraud have occurred in Calgary this year. One is property flipping, in which a dishonest seller artificially inflates the value of a property using a phony appraisal and then sells it for a large profit. The phony appraisal often remains with the property through multiple transactions, making it difficult to determine the property's true worth, and the end buyer is left paying for a mortgage that is much higher than the home's value.

The other involves "straw buyers," who are offered money to lend their identity and good credit record for use on fraudulent mortgage applications. The fraudster uses the information to apply for a loan, then disappears with the money, leaving the straw buyer on the hook for the mortgage payments.

Other types of real estate scams include title fraud, where your identity is stolen and used to assume the title of your property, which can then be used to sell your home or get a new mortgage. The criminal takes the mortgage money and runs. You may not even find out about the fraud until the lender contacts you or someone pulls up in a moving van, claiming to be the new owner of the house.

And there's also foreclosure fraud, in which a homeowner having trouble paying a mortgage is offered a loan in exchange for up-front fees and an agreement to transfer the property title to the scammer, who is then able to take the victim's loan payments, sell the house or remortgage it and leave with the money.

While a lawyer, realtor or licensed mortgage broker can help ensure all legal precautions are taken, it's still important to do your homework before you buy, Ms. Scott says. Here's her advice on how to avoid becoming a victim of fraud:

1. Beware of unusual offers. Never lend your identity to anyone or sign documents you do not fully understand. "If it sounds too good to be true, then it probably is," Ms. Scott says.

2. Do the math. Look at the listing history on the property and do a comparative market analysis. Check the number of sales and price ranges for the community. If the home's listing price is much higher than the average value of neighbouring homes, it could mean someone is flipping the property or has had it fraudulently appraised.

3. Don't assume the seller is honest. Get your own realtor or independent representation for your purchase. If the seller objects, something is wrong.

4. Do a land title search. This will show the name of the property owner, any mortgages or liens registered on the title, as well as previous sales and transfers. You can also buy title insurance to protect against title fraud.

5. Get your own appraisal. You may want to include, as part of your offer to purchase, the option to have the property appraised by a member of the Appraisal Institute of Canada [http://www.aicanada.ca].

6. Secure your deposit. Make sure your money is being held in a real estate trust account by a realtor or lawyer. This will ensure your money is safe until the deal closes.

Housing price correction looming?

The current high buy/rent ratio may indicate a vulnerable housing market said Desjardins Securities, but others aren’t placing too much weight on the measurement.

 

Canadian house prices rebounded from the recession, hitting a new record in May and bringing the buy/rent ratio to about 1.85x. This means mortgages are increasingly difficult to afford compared to rent, as house prices increase and rents remain stable.

 

So, excluding major factors such as taxes and maintenance, homeowners pay about twice what renters pay.

 

“This is precipitously close to the 2.3x level reached in December 2007 and the 2.5x level reached in 1988, which preceded house price corrections of 13 per cent and 10 per cent, respectively,” Ed Sollbach and Deep Jaitly of Desjardins wrote in a research note.

 

They added that when the buy/rent ratio hit an “unsustainable” 3.6x in Toronto in 1989, it was followed by a 29-per-cent decline in house prices.

 

However, at that time unemployment was also rising and a spike in interest rates to 14 per cent forced many homeowners to sell.

 

The problem with the rent/own ratio is that half of the provinces employ rent control, so prices can’t rise with the broader housing market. For example, house prices in some Toronto neighbourhoods have gained 30 per cent in the last year but Ontario limits rent increases to 2.1 per cent.

 

“Maybe that’s just telling us that rents are just too low,” said Gregory Klump, the chief economist at the Canadian Real Estate Association in a recent interview with The Globe and Mail. “I’m not a fan of the price-to-rent ratio because it’s so skewed by the fact that rents are subject to rent control.”

So many tough stories out there

For the past few weeks, I have been advertising my credit counselling services in Toronto's major newspapers. The phone has been ringing off the hook. Interestingly, very few people call hoping to enter into a consumer proposal or even bankruptcy. Most want to borrow MORE MONEY, as a way to solve their financial problems.

No wonder some surveys say that six out of ten Canadians would be in financial trouble if their paycheque was as little as a week late.

Here are some types of people who have called for help.

The strong but illogical

These people are home owners and often have equity in their homes. But they have one or two car payments; several credit card debts (typically $20,000 to $30,000) and some new financial emergency to deal with.

They want to borrow money (typically $10,000 to $20,000) on an unsecured basis at a very low interest rate. Usually, their credit score or their debt servicing (relative to their income) will mean they would not qualify for such a loan.

But when I point out their cheapest source of capital is the equity in their home (either consider a refinance of their first mortgage; or increase their existing HELOC; or maybe a second mortgage even), their eyes glaze over and they stop listening.

The hopeless

They invariably have damaged or bad credit (or simply no credit history); and no one will lend them money. They are in a bind - they just need (typically $1,000 to $5,000) for a short while, and by the way can they pick it up this afternoon? Their income is sometimes very high; often marginal - but with a poor credit history - most doors will be closed to these people.

I hate to hear of people who got into payday loans = these seem to be the financial equivalent of crack cocaine = and just as damaging. It's a bus that once you get on it's very hard to get off.

I always tell people "banks love to lend money; the trick is to look like you don't really need it - that's when they will be most generous"

Want to float a business

Either it's a new business venture; or an existing business fallen on hard times; but another $30,000 to $50,000 would solve everything !! (One lady wanted $500,000 on spec - just in case she came across a good opportunity!

Most small(ish) businesses will need the owner's personal guarantee when it comes time to borrow money. So not only must the business make sense and be financially viable; the owner should ideally have a healthy net worth, a good income, and an excellent personal credit rating. Most callers go quiet when they hear that short list.

The unrealistic

Often people are already in debt over their heads ($40,ooo to $100,000 in unsecured debts) and they are looking for either a consolidation loan (a practical thought but much harder to do than people think) or even more unsecured credit.

These people should be instead considering a consumer proposal. One combined payment; debts reduced by more than 50% usually, and no interest payments.

The last word

For the most part, if borrowing money at this time really does make sense for your circumstances - you gotta have a squeaky clean credit history to have any chance. I want to educate thousands in the years ahead about the better way to live.

And if borrowing money at this time does not make sense for your circumstances, then something else does. Talk to us - chances are we can help you figure that out.

When one of you is a spender, & the other is a saver

This article in the October 05, 2010 Globe and Mail, written by Noreen Rasbach, hit home on a point that many couples grapple with.

Bridging the spender-saver divide

By NOREEN RASBACH
Globe and Mail Update

Many couples fight about money - here's what experts say you can do to find middle ground

A few years back, Valentina Naranjo Velasquez and her husband Gary Verrinder found themselves in a place that is probably very familiar to a vast majority of Canadian couples: They began to fight about money.

Their story, as told by Ms. Velasquez, is common: The Kitchener, Ont., couple, who together earn about $130,000 a year, was constantly short of cash. "I felt for me it was always, 'Well, where's the money?' or 'Where did the money go?'

"It was very stressful."

Ms. Velasquez, 29, and Mr. Verrinder, 42, also had different attitudes toward money: He was a spender, she was more of a saver.

"And when he spends, he spends big," she says.

Theirs is the story with which many Canadian couples can identify. A national survey by Credit Canada and Capital One Canada last year found that 86 per cent of couples say they argue about money and 48 per cent say they don't believe their spouses have the same philosophy when it comes to managing money.

Opposites attract: So say therapists and personal-finance experts, who see the saver-spender divides in a large number of couples. These couples have opposite approaches to money, and can develop strong frustration and resentment toward their spouses.

"I deal with a lot of women across the country, and the perfect emotional financial storm happens when there's misalignment, there's a lack of trust and there are differing financial values," says Patricia Lovett-Reid, senior vice-president with TD Waterhouse Canada Inc.

"I have seen many couples who actually don't understand each other's spending or saving personalities until a year or two into the relationship and then - wow - fireworks," says Alison Griffiths, a personal-finance author and host of television show Maxed Out.

"But I don't believe that finances are like leopards and spots. I do believe that people can alter their financial personalities."

That begins by having a conversation about money, experts say, preferably with a third party who can cut through the intense emotions. "When those conversations start, there is a floodgate of emotions that get unleashed," says Karin Mizgala, a financial planner who also is co-founder of the Women's Financial Learning Centre in Vancouver.

"Typically when the conversation happens, it's a fight. There are pent-up fears and insecurities on the part of the saver, who sees that his or her financial well-being may be jeopardized by their partner. On the spender's part, there can be a real sense that they don't want to be told what to do, that they're tired of having every move being watched."

Those conversations should also touch on how each spouse was raised and what influenced their attitudes about money, says Ed Santana, a psychotherapist and executive-director for the Ontario Association for Marriage and Family Therapy.

"When they understand where the other person is coming from and when they [learn] some of their choices about money, [their fight] becomes less personal," he says.

Mr. Santana and financial experts also agree on some of the ways to bring together spenders and savers to find the middle ground.

The first step: Figure out exactly how much the household spends and what the money goes toward.

The next: Find common goals and let each other know individual goals. Whether it's getting out of debt, or saving for a house, a car or a vacation - setting up a budget and a financial plan to meet those goals can help couples stay on the right path.

It's what Devon Beaton and Kristin Campbell of Calgary did. The couple - she's 20 and he's 22 - are engaged and had planned to get married this past summer. But first they had to sort out their financial differences - he was a saver and she was a spender.

The difference has caused friction at times, she says, but they have learned not to fight and to talk it out.

"I think we've both kind of rubbed off on each other," Ms. Campbell says. "We've both grown to accept each other. He tries to not be a penny pincher and I try not to spend as much. It's a compromise."

The couple talks regularly about what they can and can't afford. In the "can't" category: the summer wedding. When they realized they would have to go into debt for it, Ms. Campbell says, they decided to postpone it.

Ms. Lovett-Reid advises that couples also rotate financial responsibilities, so that each has an intimate knowledge of the household finances.

"If there's a dominant person in the family that handles the money, then switch it for six months, and the other will get a far better appreciation and understanding of how much money is coming in and where it is being spent," she says.

In the case of Ms. Velasquez, getting involved with the family's finances was a huge breakthrough. The couple may have had different attitudes toward money, but she says that she wasn't really taking any responsibility for the finances.

"Things are really good now. I'm more involved. We keep track of everything we spend. We probably talk about [household finances] every week.

"We definitely talk about it more without fighting about it."

The couple followed a lot of the experts' advice - they went to a third party, the Meridian Credit Union, where financial consultant Amie Daminato worked with the couple to come up with a budget plan, a savings plan and a financial wish list.

Ms. Velasquez says having financial goals - such as saving for retirement and their child's education - has made the couple focus on what's really important.

And a few months ago, when the couple's car broke down, they realized just how far they have come.

"It wasn't, 'Oh my God, how are we going to pay for that.' It was, 'Oh, we have money in savings.' It wasn't stressful at all."