Does Consumer Obsession Lead Us to Over

creditaid-overspendingThe desire to “keep up with the Jones’s” has become more than a social status issue for many people.

Also, it is effortless to get caught up in a holiday season.

It has become a catalyst for overspending that has consumers running to banks and other lenders looking for ways to finance their purchases.

This issue also has countless consumers loaded up with credit card debt so steep it may take them a lifetime to get out of it.

Give your financial literacy a good double-check, and if you are not already practicing the following financial practices, now is a great time to start today:

Pay bills on time and balance your cheque book each month. You can’t know how much you can afford to spend if you don’t know how much you currently have to spend.

Stop buying on impulse. If you want something, rather than charging it on your credit card and paying interest, save for the next few month and buy it when you have the money.

Always pay more than your minimum balance on credit cards: Get rid of them as soon as possible. You will save money on interest and have more to save for the future.

Vow to maintain only “good” debt. This is the type of debt that will increase your net worth: A mortgage on an affordable home, a car loan, or college debt. These will either improve your creditworthiness or make you more employable, so you can earn more and keep debt to a minimum.

Always include some savings in your budget. Many short-sighted people are unable to see their needs after retirement and don’t save. This results in financial difficulty during their declining years.

Find out what you don’t know about finances—and learn it. Despite the flood of information on financial management, people don’t take the time to learn.

Finally, in order to put a stop to this financial madness keep in mind, the media pull for spending and don’t be drawn into the hype. By being savvy shoppers and savers, the overspending and debt can stop.

 

 

New Couples and Money

As published in the January/February 2017 issue of Balance, a Manitoba Teachers’ Society publication.

Balance Jan Feb 2017 - New Couples and Money

You’ve just moved in with your current love or maybe you’ve just got engaged. This is a happy, exciting time in your life. The two of you may have discussed where to go on a honeymoon, whether or not to have children, how many or where your dream house will be. But have you had a conversation with each other with regard to your finances? Everything listed above costs money and both of you need to be honest with each other regarding your finances in order to have those things.

As you begin a new, permanent relationship, it is time to set your financial goals as a couple and to be honest about your money values.

Here are things you need to discuss.

  1. How are you going to manage your day to day expenses? Some couples close their individual accounts and open a joint bank account. All their money gets deposited and withdrawn by either person from this bank account. It sounds like the most convenient way to handle expenses but for some it can cause problems. Who is depositing the money and who is withdrawing the money? And for what reason? This strategy works the best for couples who both manage their money well. So before you decide how you are going to handle your banking, it would be wise to write up a monthly budget then decide who will be responsible for paying for what. Some couples maintain separate banking for their entire relationship. Each is responsible for paying some of the joint bills. For example, one pays for the groceries and the other pays the rent. Some couples use a hybrid of both methods in which each maintain a separate bank account and pay their own individual expenses but both deposit a set amount to a joint bank account and joint expenses are paid from it. But how much should each contribute to the joint bank account? Some couples each deposit the same amount of money, for example, $2000 per month. Other couples each contribute a percentage of their income. Once you have come to an agreement, talk about what will happen if one spouse’s income is reduced because of, a job loss, reduced hours or maternity leave?
  2. What is your net worth? This is a list of your current assets and liabilities. An asset is an item that you could sell and receive money for. For most of us this means real estate, cash in our bank accounts, RRSP’s and vehicles. Liabilities are your debts. Ideally your assets should be higher than your liabilities. If so, you have a positive net worth. As you get older your net worth should increase. How do each of your net worth statements compare? Are you both in agreement concerning your net worth goals? This is important because your net worth can determine when you will be able to buy that dream home, afford to have children or when you can retire.
  3. What are your short and long term goals? This is important to establish early in a relationship because you may discover you have radically different financial goals. If one of you is happy to rent forever and basically spend every dime on travelling or entertainment, but the other spouse wants to save up for a house and early retirement – the relationship will be challenged. You need to be honest with yourself and each other as to what is important to you and where you see yourself financially in 5, 10 or 20 years. If your goals differ, determine if you are both willing to compromise. Staying in a committed relationship is hard work and can be stressful. When your goals and dreams are aligned you can look forward to long term happiness and peace in the household.

Supporting St. Amant Party: Camp for 100

St. Amant logo 122x99Creditaid is proud to support various community initiatives and is privileged to have been a long time supporter of St. Amant, a comprehensive resource for Manitobans with developmental disabilities and autism.

Creditaid CEO Brian Denysuik, recently chaired the inaugural St. Amant Party, and was honoured to be among other individuals and organizations who so graciously donated their time and resources for the cause.

St. Amant Party: Camp for 100 raised over $60,000 to support experiences in nature or at camp for 100 children and adults with developmental disabilities, autism, and acquired brain injury.

We are happy to be part of the St. Amant family, and videos like this one makes us even bigger fans!

Financial Wellness of our Seniors

As published in the December 2016 issue of Balance, a Manitoba Teachers’ Society publication.

By 2021, 22.8% of Canadians will be 65 years of age and older. Do we feel prepared as children and grand-children to help guide and protect them and their finances through their later years of life?

Senior woman meeting with agentThrough the busyness of our own lives, we need to keep in mind that managing finances will become increasingly difficult for our parents and grandparents as they age. When a person ages they can easily lose sight of how to handle money, and even a financially astute person can quickly move to a state of being unable to cope with their finances. If this isn’t recognized it can be very stressful and costly for the elder.

Older adults who have recently experienced a loss of a spouse, and are lonely, can be vulnerable. In many situations they had previously had a partner to review and discuss money matters, to protect each other, and to make good common sense decisions. Alone they can be easily victimized.

It may be hard to believe, but it is most often those close to the elder who take advantage of them financially. It could be a multitude of people in the individual’s life: a child who feels they have been unfairly treated and want their fair share sooner than later, a grandchild needing money to support a habit, a neighbor who is struggling with their finances, or even a care provider. The concern is that it can be anyone.

Once we are aware of just how vulnerable a senior can be, we need to put some checks and balances in place.

The starting point is to have a family member who can act as the point person or “go to person”. The senior needs to feel comfortable to divert calls from sales people etc. to the point person to respond. This provides the senior with a simple, stress free way to pass on the situation without being pressured into quick decisions that can be difficult to reverse with costly consequences.

Personally, I have seen just how many calls a widowed spouse gets after her husband’s obituary is posted in the newspaper, and how a nephew can easily swindle $100,000 out of an elderly uncle who was once very astute with his finances.

Another key check and balance that should be considered is a monthly or quarterly review of the elder’s finances. This can include reviewing their bank statement, credit card statements, etc. If they are apprehensive you may have to simply say that you are looking for errors to ensure that none of their money has gone missing, and to ensure that all the purchases on credit belong to them.

It is also very important to put together a Will and Power of Attorney while the elder is still competent. Our ultimate goal is to help our parents and grandparents feel safe in all aspects of their life, including their finances.

Budgeting Tips for Holiday Shopping

This week’s first snowfall is a good reminder that most of us have to start planning for the holiday season! Our November temperatures had been positively balmy up to this point, but now there’s no denying it, only a few paycheques remain until the holidays are upon us.

With a little bit of planning, you can maneuver successfully through the holiday season without having to increase your debt. Visit our Budgeting page to download our Holiday Gift Giving Planner, and then watch the video below for tips on how to make it through the festivities with positive cash flow still intact.

2017 Financial Literacy Calendar

Financial success is rooted in conscious planning and decision making.
It’s important to learn about tools, tips, tricks, and reminders on a daily basis that help to support our financial goals.

For a fourth year, Creditaid is once again a proud sponsor of the Financial Literacy Calendar published by the Manitoba Financial Literacy Forum. (See April 2017 for our tip!) The Manitoba Financial Literacy Forum is a coalition of organizations and individuals working together to promote lifelong financial education and skills to Manitobans. Being financially literate means having the knowledge, skills and confidence to make responsible financial decisions – which are important resources to have at any age.

At Creditaid, we understand that each individual has their own unique life situations. We offer many different debt solutions in order to find the best solution for each individual and circumstance. Instead of applying a “band aid solution” to your current financial state, we want to help you become financially literate with skills to take you successfully through the rest of your life.

We have been helping Manitobans be debt free since 1992, and our product and service offerings continue to grow and expand to best serve our valued clients.

Click on the images below to download the calendar in your preferred language – English or French.

2017 Money Matters English

 

 

2017 Money Matters French

The Life Cycles of Financial Planning

As published in the September 2016 issue of Balance, a Manitoba Teachers’ Society publication.

I am asked by individuals of all ages, “What should I be doing at this stage of my life with my finances? I am feeling stressed about what I need to be thinking about.”

Most of us will go through a series of phases in our lifetimes with respect to financial management. They can be referred as follows:

(a) Getting started (to mid-thirties)
(b) Building up assets (mid-thirties to fifties)
(c) Investing (fifties to retirement)
(d) Retirement

Expect your financial plans to change as you move through the life cycles and other impactful life events. The five steps defined below are key components required at all four phases of our financial life. The five steps in the financial planning process are:

1. Identify goals & set priorities.
2. Assess resources.
3. Balance future cash flow.
4. Develop implementation and control strategies.
5. Evaluate progress.

17419757_s_Painting the road with roller brushGoal setting is the starting point. The fundamental building blocks of financial planning and goal setting are: knowing where you want to go, when you want to get there, and how much it will cost you.

Once you are clear about your goals and priorities, the next step is to take an inventory of your resources (what you currently have, or can expect to have) that can be used to achieve these goals. A net worth statement and an income statement are the two key pieces to the resource assessment. The net worth statement shows your assets and liabilities at a specific time.

Net worth = Total Assets – Total Liabilities (Your net worth should continually increase year over year as you work towards retirement.)

An income statement is a flow or resources over a period of time. The flow consists of money coming in and money going out on a monthly basis. I call this “The Spending Plan”!

Balancing future cash flow is really an extension of your monthly income statement to include five years of planning forward. This includes what your projected income will be over the five years, and expenses. It is very important that you include a savings component which will consist of both short and long term savings.

How you implement and control your plan will define success. Some key points about controlling your financial plan include:

(a) All those handling the money share a commitment to the plan;
(b) The control system is compatible with an individual’s personality and habits;
(c) Controlling a plan requires that someone know where the money is going;
(d) The funds for major groups of expenditures are segregated in some way to prevent over spending.

Evaluating your progress is the final point in the financial planning process. This is where you review the results, and adjust both the plan and what you need to change to make your financial goals a reality.

Very few people in life plan for the future. Making and using a financial plan requires motivation, knowledge, time, effort, self-discipline, and persistence.

The rewards of planning will be huge! You will continue to see your net worth increase year over year. As you experience this growth, you will be entering the next stage in life where you will want to have a good financial advisor.

Here are a few key points to help you choose a financial advisor for your asset building, investing, and retirement stages of life:

(a) Find out how they are paid. Is his or her income based on fees, fees and commission, or only on commission?
(b) Ask about their qualifications. What educational background and experience do they have? Are they licensed?
(c) What areas do they specialize in?
(d) What planning do they offer and at what cost?
(e) Request references so you can speak to them.
(f) How successful have they been with their personal plan?

Stay focused on your goals and keep your financial stress in check as you continue through the life cycles of financial planning!

Proud to Support 3rd Annual Winnipeg International Salsa Festival

2016 Winnipeg International Salsa Festival

Creditaid is proud to once again be a sponsor of the Winnipeg International Salsa Festival, being held in Winnipeg’s beautiful Exchange District from September 9-11, 2016.

This is the 3rd annual Salsa Festival in Winnipeg and it’s sure to include something for everyone! Presented by 2015 Bachata Cabaret World Champions Harold Rancano and Regan Hirose, along with the RHR Latin Dance Company, the festival features workshops, performances, competitions, and night life parties with world renowned artists.

The RHR Latin Dance Company proudly presents the inclusion of “Heart of the Country” dance competitions at this year’s festival. Competitions are open to the public and will be divided into Amateur and Pro-Am divisions, so register now and put your dancing skills to the test!

Workshops take place all weekend long and offer something for all ages and abilities.

Creditaid believes that financial wellness and physical wellness go hand-in-hand and encourages everyone to get out there and CHA CHA!

Canadians are Postponing Retirement to Help Their Adult Children

Couple-postponing-retirementHalf of Canadians surveyed are willing to postpone retirement for their children according to a study by BMO Wealth Management. Even more worrying is that 24 per cent said they’d be willing to go into debt to help their children succeed. Ironically, one of the top reasons parents cited for their financial concern about their children is that they will incur debt that they can’t manage.

According to Statistics Canada, today’s youth are more educated, staying at home longer and putting off their entry into a treacherous labour market where unemployment rates for young adults are twice the national average. This is daunting information but not insurmountable. Parents and their children can find a way through the morass by learning about how to manage their money better.

Parents who have spent a lifetime developing a good credit rating should not be threatening their own retirement in order to protect their children’s debt, when passing on their financial know-how is a better way to secure their children’s future. Parents who have poor credit also need to lead by example by learning how to develop good credit for themselves. And adult children can also benefit from a good financial education.

Credit counselling and education can be the answer to the future security of children and prevent parents from making unnecessary sacrifices. Services such as Creditaid’s Build Learn Save program offers that kind of education as well as one-on-one counselling for anyone needing help with debt management.

Financial Literacy; It’s Never Too Early To Learn

With increasing debt loads affecting youth, and unemployment rates double the national average, understanding how money and credit ratings work is paramount and a part of their educational needs.

kids_money_little_girl_piggy_bankStarting with their allowance, children can learn about how to manage their finances. The key is thinking about how much money you have and where you want to spend it. Children and adults alike are often driven by impulse and don’t think before acting. An environment where youth are responsible for identifying only their wants and not their essential needs is a dangerous precedent that can affect them throughout their lives. It’s simply too easy to spend freely and then find out you don’t have enough left, forcing you into debt.

It all begins with a budget. When giving money to your children in the form of an allowance, or when they get their first job, take the time to create a budget with your child to make them aware of how much they have and where they want to spend it. Encourage them to do research to find out the price of the items they want and price shop to get the maximum reach for their dollars.

Finally, parents lead by example, so if you need help with debt management, creating a budget, or rebuilding your credit, have a conversation with us – we know that we can help.