Summertime Staycation Planning & Budgeting

Staycation Budgeting

Parents can’t wait until the days of no more alarms or harping on kids about homework, but then there’s all the free time summer creates. Without schedules and structure, it can feel overwhelming and if you aren’t careful, you may forget about budgeting and spend money just to keep your kids occupied.

Rather than throwing all caution to the wind this summer, plan a staycation. This way you’ll have fun planned for your family without the expenses of a vacation and the rest of the summer won’t feel as unstructured.

Before you plan a staycation, though, learn the top budgeting techniques to make it affordable.

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Are Fear and Embarrassment Holding You Back from Consolidating Your Debt?

If you’re in over your head in debt, you may hold back from doing anything about it. Is it fear? Is it embarrassment or a bit of both? In a world where we broadcast just about every aspect of our lives online, debt is one area we don’t speak about even in person.

We look on as we think others are ‘successful’ not knowing the truth behind the perfectly chosen pictures. The fact is the average consumer has $23,800 in consumer debt, not including the mortgage.

If you’re ready to do something about your debt, but worry about fear and embarrassment holding you back, read on.

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How CERB May Affect your Tax Return

Millions of Canadians found themselves financially distraught amid the COVID-19 pandemic. Fortunately, the Canadian government came through in a big way with the Canadian Emergency Response Benefit.

CERB provided the financial relief consumers needed, but come tax time, you may owe more money than you thought because of the benefit. Depending on your financial situation, you may even have to pay back CERB, or a portion of it.

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Preparing for Tax Season When you Don’t get a Refund

Tax time can be exciting or overwhelming, depending on whether or not you get a refund. If you get a refund, you feel like you’re on top of the world. If you owe money, it can send your budget into a tailspin.

Relying on a refund is not the right choice. Everyone should be prepared to NOT receive a refund, by planning and budgeting throughout the year.

At Creditaid, we want our clients to be prepared for the tax season financially, rather than letting it derail their finances and cause financial destruction. It’s not as hard as it seems. You just need to budget and plan long before tax season begins.

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Distinguish Between Needs vs. Wants

A proper budget makes room for needs and wants. Sometimes, though, it’s hard to differentiate between the two. It can be subjective, but certain things are clear-cut and easy to determine.

So how do you tell? Let’s look at the basic definition of each.

What are Needs?

Needs are items you must have to survive. Clothes, food, proper healthcare, and transportation – those are needs. You can’t live without them, and these apply to everyone.

Other needs may be more individualized. For example, one person may NEED dental insurance because they have extensive dental issues, while another person may only go to the dentist for routine cleanings twice a year and may not consider dental insurance a need.

Write down the things you NEED in your life. If you didn’t have one, it would make it hard to survive or cause financial destruction.

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Why you Need to Record your Spending

Does tracking your spending sound about as fun as going to the dentist? We get it. But just like the dentist is important for your oral health, tracking your spending is important for your financial health.

Obviously recording your spending identifies where you overspend, but there are plenty of other reasons too.

Creates Accountability

You can say you want to save for specific goals all you want, but if you don’t do it, you’ll never reach your goals.

Recording your spending provides visualization of where your money goes. You can see ‘gosh I spent $50 eating out and now I can’t save for my XYZ goal.’ That accountability is HUGE when you’re trying to meet financial goals.

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2020 Tax Season Tips

Goodbye, 2020! It was a strange and challenging year for many of us for several reasons. 
 
This 2020 tax year will be unlike any other, with many individuals collecting CERB without any tax withholdings. However, this income is taxable, which means that individuals receiving CERB will owe tax on the funds they received, which can seriously impact your 2020 tax return. Those who typically expect a refund might owe money for tax in the current year or significantly reduce their refund. 
 
At Creditaid we want to ensure our clients are prepared financially to assure continued success in our program and beyond. We have provided several tax tips below, some of which may apply to the current year. These are beneficial tax tips and suggestions that can benefit you and your family for years to come!
 
If you have any questions or wish to set up a tax planning session, please give us a call at 204 987 6890.

Working From Home Office Expenses
Employees who worked from home more than 50% of the time over a period of a least four consecutive weeks in 2020 due to COVID-19 will now be eligible to claim the home office expenses deduction for 2020. The use of a shorter qualifying period will ensure that more employees can claim the deduction than would otherwise have been possible under longstanding practice.

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Have you heard about Government of Canada’s New COVID-19 Benefits

Many Canadian workers have missed work and pay due to COVID-19 can now apply for three new benefits from the Canadian Government. 

Families and individuals who are facing financial difficulty can now get support through the following benefits that are available through Canada Revenue Agency (CRA):

  • Canada Recovery Sickness Benefit (CRSB) 
  • Canada Recovery Caregiving Benefit (CRCB).
  • Canada Recovery Benefit (CRB)

Applications for CRSB, CRCB, and CRB applications are now open.

Canada Recovery Sickness Benefit (CRSB)

Workers who are sick or must self-isolate for COVID-19-related reasons, or have underlying conditions that make them more susceptible to COVID-19 can apply for CRSB.

If you are eligible for the CRSB, you can receive $500 ($450 after taxes withheld) for each 1-week period. Check your eligibility here – https://www.canada.ca/en/revenue-agency/services/benefits/recovery-sickness-benefit/crsb-who-apply.html

Canada Recovery Caregiver Benefit (CRCB)

Caregivers who need to care for a child(ren) under 12 years old who is affected by the illness or if their school, regular program, or facility is closed or unavailable due to COVID-19 is eligible for CRB. This also applies to other family members requiring supervised care, who cannot attend regular care facilities because of COVID-19, can apply for CRSB.

If you’re eligible for the CRCB, your household can receive $500 ($450 after taxes withheld) for each 1-week period. Check eligibility here Read more here https://www.canada.ca/en/revenue-agency/services/benefits/recovery-caregiving-benefit.html

Canada Recovery Benefit (CRB)

There is also assistance for self-employed workers who are not eligible for Employment Insurance (EI) and still require income support. These workers must be available and looking for work and accept work when it is reasonable to do so.

If you are eligible for the CRB, you can receive $1,000 ($900 after taxes withheld) for a 2-week period. Check eligibility here https://www.canada.ca/en/revenue-agency/services/benefits/recovery-benefit.html

Canadians can apply for these benefits online through CRA’s My Account or call 1-800-959-8281.

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How to Prepare for the end of Debt Holiday

The pandemic made it tough for thousands of Canadians to keep up with their bills, especially the high-interest consumer debt. A debt holiday was put in place on consumer debt and mortgages helping Canadians handle the daily cost of living without worrying about excessive debts.

Now that the country and even the world are coming back together and things are opening up, the debt holiday is nearing its ends. This means many bills will be due again – but how do you prepare for such a change in your finances?

Check out the tips below.

Negotiate a Payment Plan

Before your deferment plans end, contact your creditors. Don’t wait until the plan expires and then try to work something out. At that point it’s too late, your payments will be due and if you don’t pay them, it will hurt your credit.

Call your creditors long before it ends and ask about your options. Let them know your financial situation, whether you’re furloughed, not working, or working but trying to catch up. Most creditors will work with you, helping you figure out an affordable plan. Creditors would rather make a plan and receive the full payment than put you at risk of defaulting altogether.

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How to Budget Single Family Income

Has the pandemic brought your family down to a single income? With more than a million jobs lost in Canada, many families are in the same boat. Whether you were laid off or were required to stay home with your children who couldn’t go to school or daycare, it’s important to know how to budget your single family income.
 
Even if you collect unemployment, for now, it may not last. Just in case, consider the following ways to budget your single family income.
 
Make Cuts
 
It’s not a pleasant thought, but you must cut expenses. Get creative here. For example, if you cut cable, can you afford to replace it with a streaming service? Netflix, for example, costs a fraction of standard cable services. See if you can work it into your budget so you don’t feel like you’re sacrificing too much.
 
Think of other places you can cut, such as:
 
·       Eating out
·       Entertainment
·       Grocery store (shop sales and clip coupons)
·       Household goods (shop sales or comparison shop online)
 
Redo your Budget
 
Take an honest look at your budget. Where do you spend? If you can’t cut in certain categories, where does that leave you each month?
 
Think about saving for an emergency fund and retirement. Both should remain line items on your budget even when you’ve gone down to one income.
 

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