5 common money mistakes new parents make + MORE Mar 23rd

Couch Potato index investors have done well (Getty Images / Andrew Bret Wallis)
One way to bring some perspective to your investments is to go back and read financial articles from a few years ago. I thought about this recently as I calculated the returns of the Global Couch Potato since 2009. This simple balanced portfolio includes 40% bonds and 60% stocks (with equal parts Canada, U.S. and international) and you can build it with index mutual funds or ETFs. The version using TD e-Series funds enjoyed a return of 9.1% annually during the six years ending in 2014, which turned a $1,000 investment into $1,687. Pretty impressive numbers, and enough to make indexers out of many former stock pickers and other active investors.
But flip through some back issues of MoneySense and you’ll read a different tale. In one of my first Index Investor columns back in June 2011, I found myself on the defensive. The e-Series funds had recently celebrated their 10th anniversary, and let’s just say the numbers were discouraging: the Global Couch Potato returned just under 4% annually during the decade ending in 2010…

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(Getty Images / Paul Bradbury)
You may be a rookie at this whole parenting thing, but you can be a bit smarter about your money with these easy fixes for common financial faux pas.
1. Overspending on gear
I have a confession: Our daughter Abby slept in a bassinet insert in a used Pack ’N Play in our room until she was ready for her hand-me-down crib. Low glam, to be sure, but cheap. A lot of parents drop big bucks outfitting the nursery with things they want, only to find out later how little they actually need, or how quickly their kid grows out of them. Choose a few items you really covet—my splurge was a new running stroller—then borrow the other basics, request them as gifts, or buy them cheap.
2. Ignoring the drop in income
Parents face many new expenses, but even worse is feeling surprised when your income takes a hit. Maternity and paternity leaves rarely top up your salary to 100 percent, and your partner will have less availability to work overtime, so you’ll almost inevitably feel the cash-flow pinch…

Start this week by looking east.
This morning, Canada becomes the latest offshore trading hub for the Chinese yuan (also called the renminbi), as officials from both countries sign an agreement to help the currency flow more freely. The move mirrors clearing arrangements in London and other European cities, as financial hubs compete to be centres for Chinese business.
It’s not the only sign this week of shifting political winds. Last week, the U.S. was caught in a diplomatic snafu as European countries signed on to the Asian Infrastructure Investment Bank, often seen as a Chinese rival to the D.C.-based World Bank. More on that below.
Last week was dominated by the diverging paths of the U.S. dollar, which was strengthening in the lead-up to the Fed’s latest interest rate announcement, and the weakening of the euro after the ECB began their massive asset-buying program designed to ease lending. The end of the week saw markets also hitting new heights, with the tech-heavy Nasdaq hitting a 15-year record, and the industrial-heavy FTSE 100 hitting an all-time record…

FCAC Commissioner Lucie Tedesco (The Canadian Press)
OTTAWA – The woman who is proud to be called the country’s consumer-protection czar remembers her first encounter years ago with the questionable actions of a debt-collection agency.
Lucie Tedesco, a law student at the time, received a phone call from the debt collector after she missed a minimum payment on a retailer’s credit card. They threatened, she recalled, to garnish her wages if she didn’t pay up.
But thanks to her studies, Tedesco said she knew full well they needed a court order to pluck cash from her paycheque. So she called their bluff.
The experience also opened her eyes.
“That really made me angry and I saw that there were perhaps practices out there that were not benefiting consumers,” said Tedesco, who became commissioner of the Financial Consumer Agency of Canada in September 2013.
Not only is the agency a key piece of the Harper government’s consumer agenda, Tedesco’s already-powerful office could become even stronger once the Conservatives introduce a long-promised comprehensive financial consumer code that would replace the existing patchwork of legislation and regulations…