Author: Creditaid

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Financial Blues – Spending Hangover


There is nothing like a spending hangover to take the wind out of a good spending spree. Once you are done congratulating yourself on the great gifts that you purchased for friends and family, the reality begins to set in. You have stretched your budget beyond all recognition, and have no idea how you are going to pay for all this. It is time to stop thinking in the moment and start planning ahead.

When you look at it, most of what you spend can be anticipated. Holidays, birthdays and seasoning spending are good examples of constants in every person’s life. So why wait until the last minute to generate the income that you need for special occasions? Instead, save throughout the year so that you have disposable income set aside for gifts, holidays and clothes.

Take advantage of sales throughout the year, too. Just because a birthday is a few months away, it doesn’t mean you can’t pick up a great early deal. If you are in a month where you have some spare cash in your budget, take full advantage by getting ahead of the game and purchasing gifts or paying off a holiday early.

You don’t have to spend a fortune every time you take out your credit card or visit an ATM, either. There is much more pleasure to be derived from being creative with your budget. Retro and thrift shores are treasure troths, where you can buy a whole wardrobe of items for the price of two or three. Alternatively, if you have a creative talent you can make your own gifts for little to no cost, which adds a personal touch, too.

It’s the little things that matter, and when it comes to a budget, it’s the little things that often break the bank. You can avoid these last minute expenses by planning carefully for every eventuality. Make sure you don’t end up with a list of things you need to buy, with no room in your budget to pay for them. Make a list for every event, from your daily expense to your next holiday.

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Getting Out from Under, A Personal Story

The following is a letter we recently received from a client who wanted to share their debt story anonymously. They want people to know that you are not alone in your struggle.

If you are interested in sharing your Debt Story, post a comment below or email us at info@creditaid.ca
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When I reached adulthood as dinosaurs continued to walk the earth I could never have imagined that I would some day be a senior citizen with a debt problem. But here I am at 65 years of age, trying to rid myself of credit card balances and a bank line of credit totaling more than $40,000.

We are told that more than 30% of Canadians are in, or have been in a similar boat. Our economy is a house of cards and I am very grateful that there are folks like Creditaid available to help us.

For Baby Boomers like me, a credit problem was much less possible back in the 1960’s. Visa and Mastercard didn’t come along until the 1970’s and most of us were raised on mottos like “pay as you go, and if you can’t pay, don’t go”.

In 1978, at age 31 I got an American Express card. I felt uneasy having it in my wallet, and I used it very sparingly. As the years went by I added both Visa and Mastercard to the collection, but for the most part I paid the outstanding balance in full each month. I was always fully employed and I was never a reckless spender.

If there was a turning point, it was probably around the age of 40. My personal version of a midlife crisis included a marriage breakup, a job change and dealing with aging parents with failing health. Other than that life was still ‘one laugh after another’, and I still invincible in every way, including financially.

My income continued to grow and there was no reason to believe that would change anytime soon. Slowly but surely those cards in the wallet started to have outstanding balances that were carried over from month to month.

My well meaning friendly banker suggested a personal line of credit. That way the credit cards could be kept closer to zero in favour of one larger balance with a substantially lower interest rate. Eventually I found myself on a career path that was shrinking rather than growing, and some bad choices got me where I am today.

“Where will it end?” you wonder at times. But you don’t dwell on the problem. I think it’s called denial and it makes basic functions like sleep possible. You do silly things like buy more lottery tickets and plug coins into VLTs. You believe the old slogan “You can’t win it if you’re not in it”.

But there has to be a day of reckoning for most of us. Finding the right path then becomes the issue. Over the radio you hear the slick pitches with their toll free numbers. You call one or two of them and you know there’s something ‘too good to be true’ about what they’re selling.

I’m very glad to have found Winnipeggers at Creditaid who have been able to help me come up with a plan that works. It’s nice to know that you are not alone.

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Christmas Shopping Is Not All Black and White

Budgeting for the Christmas holidays is always difficult; in fact, it’s the one time that is guaranteed to wreak havoc far into the next financial year. For holidays in general, we would advise incorporating your spending into your monthly budget. However, if you haven’t already, don’t despair, there may be some Christmas cheer for you yet.

Knowing how much money you have for shopping is one thing, being able to allocate where that money goes, when contemplating your holiday shopping is something else.
Click to download our Holiday Gift Giving Planner that can help.

Christmas, as we all know, is in December – which conveniently follows the month of November, and two of the biggest shopping days of the year – Black Friday on November 23rd, closely followed by Cyber Monday on November 26th. Although these two shopping holidays are more popular with our neighbours to the south, an estimated 80% of Canadians took advantage of the deals on offer in the 2011 sales. While you may not wish to fight for this year’s big sellers during these mega sales days, they are ideal for swooping under the radar and picking up deals on gifts for extended family and friends.

Another great idea for holiday budgeting, although a little sneaky, is to invite the whole family around for dinner and subtly find out what they want for Christmas. It will get everyone in the holiday spirit, and you’ll save yourself from that frantic, and often expensive, last minute search for the ideal gift. Make sure to set a limit for each person you buy for and keep track of what you bought for whom and how much you paid.

Remember too, that not everyone is concerned with material gifts. Consider making a donation to charity, or, buying a gift with a conscience, such as a milking goat for a 3rd world family on someone’s behalf. If you really want to go the extra mile, why not accompany them on a food drive or to serve at a soup kitchen over the Christmas holidays?

When the holidays are over, your budgeting tasks are not yet done. Take advantage of the New Year’s sales, where you can make huge savings on clothes, toys, electronics and even gifts for the following Christmas.

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Students Can Create a Better Future by Saving Now

Sometimes saving isn’t easy – especially when you look at it as a luxury – reserved only for
times when you have the cash to spare. The first step to successful savings is, ‘out of sight,
out of mind’. Your savings should be part of your budget, and as such, you should consider
that money spent before it is earned. Where does the money come from for savings in the first
place? You may ask. Well, if you budget smart, you will find a number of sources at your
disposal.

First of all take a look at the monthly services you subscribe to. Do you really need those
extra cable channels? What about that gym membership that you have neglected for over a
year? Your internet and phone service may come with added features; most of which you are
probably not even aware of, but are paying for every month. Cutting those payments, and
reallocating them to savings, is simply making better use of money that you never missed in
the first place.

The money you are left with after loans have been paid is ideal for saving. You have already
resigned yourself to that money being debiting from your account each month, so you won’t
miss it by paying it to your savings account instead. However, be careful when you actually
open a savings account – for example, some banks may charge you fees for falling below a
minimum balance. Check the terms and conditions carefully, and choose the account that best
suits your savings budget.

While it is important to save for your future, ensuring you have good credit is equally
important. The easiest way to have good credit is to pay all you bills on time. For credit
cards you should look for a low, fixed rate card, with no annual fees, and, clear and concise
terms for additional services, late fees, balance transfers and other charges. If you are going
to use a credit card pay off the entire balance each month and make sure you pay it on time!

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Financial Tips for University and College Students

Are you struggling with student debts, paying bills or otherwise making ends meet? Well,
knowing where, when and on what you spend your money is the best way to manage your
student budget. If you live month to month, on the premise that there are good times and bad
times, then you need to take a closer look at your finances.

Never spend all your money, just because it is there. Remember those bad times? That
spare cash would have come in pretty handy, if you still had it. Sit down and take stock of
everything you spend each month. Keep all your receipts and create spending categories
such as food, rent, school costs and clothes. Deduct these costs from your income and you
will begin to get a picture of where your money is going. Next you need to decide which
outgoing costs should take priority, and where you can afford to make cuts. Note: This does
not necessarily mean cutting out complete categories, but rather, streamlining what you spend
on each.

Certain categories, of course, are fixed and need to be paid first. Your rent, and loan
payments are examples of fixed costs, however, in some cases you may be able to negotiate
lower payments if you are struggling. Luxuries, on the other hand, are fair game. Until you
have a working budget in place, it is likely that you will have to cut back completely on the
small pleasures in life. Remember, renting a movie costs significantly less than a trip to the
movies, eating in is the new eating out, and thrift clothing is just another name for retro.

Wherever possible, spend cash and avoid using credit cards. If you have to use credit cards
at all, make sure that you pay off the balance in full each month. When you start to see spare
cash in your budget, do not immediately go on a spending spree. Lastly, save whatever you
can, no matter how small an amount, and look at it as a emergency savings or a nest-egg for
the future.

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November is Financial Literacy Month in Canada

Did you know that the month of November is Financial Literacy Month?

This initiative is a nationwide campaign aimed at helping Canadians increase their financial knowledge so that they can make more informed decisions when it comes to their personal finances. Understanding basic financial principles and practices is an essential ingredient to every household’s financial stability.

At Creditaid, one of our highest priorities is helping families understand how the credit system works and how to manage their finances wisely. Many people fall into financial crisis without being fully aware of how they got there in the first place. We believe a clear understanding of the credit system and available financial tools can help people turn their situations around before they find themselves too far in debt. Financial management is key and we are happy to provide you with the tools and information you need to get there.

Creditaid is committed to helping Canadians and we’re here to help. With the Creditaid Budget Bootcamp, we have taken this commitment one step further. Our Budget Bootcamp will take you step by step through a comprehensive budgeting plan, aided by many of the tools we use to help our clients on a daily basis.

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Help With Your Finances from the Ottawa Government

Here at Creditaid, we believe in giving you the tools that will help you manage your finances.
So when we learned that the Federal government has issued a financial toolkit, we just had to
share the news with you. The Financial Consumer Agency of Canada, the Investor Education
Fund and l’Autorite des marches financiers, teamed up with the government to produce the
toolkit, which aims to help Canadians better understand their daily finances.

The move was sparked bystartling figures, showing that an average household debt of
152 percent of disposable income is pushing many Canadians into the red. An effort to
reinvigorate the economy, through low interest rates, is one of the factors contributing to so
many Canadians suddenly finding themselves in debt. The Bank of Canada, backed by the
finance minister, had also voiced concerns about overspending, leading up to the introduction
of the financial toolkit.

The toolkit itself is available both online and in printed form. Worksheets, quizzes, videos
and questionnaires will help you understand and manage your finances. The skills that you
acquire from using this toolkit will not only help you with your current spending, but will
give you the tools you need to ensure you keep on the right track in your future spending.
This is certainly welcome news in these tough economic times, and we hope you find the
toolkit as useful as we have.

For more info visit – http://www.fcac-acfc.gc.ca/ft-of/home-accueil-eng.html

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Paying Down Debt Is an Increasing Priority According to RBC Survey

There were some very interesting statistics generated from a recent online poll conducted by the Royal Bank of Canada, which made comparisons between the debt carried by Canadian households in 2012 versus 2011. The number of survey respondents who had no personal debt, outside their mortgage, increased from 22% to 26% during the last year; a very positive move towards debt-free living.

In spite of this positive direction, there were still some indicators of concern.

For those respondents which did have personal debt, the average amount of that debt did increase by $84 over last year’s number, instead of going down. Just over half, 51% of the respondents, indicated that they were more concerned with paying down debt than investing in the future. In addition, one in three of the survey’s participants noted that they experienced anxiety over their debt levels, an increase in those statistics over 2011.

Canadians appear to be moving in towards more debt-free living, according to this survey, but there is still work to do, to increase the financial stability of Canadian households in general.

Read More about RBC Debt Poll – http://www.rbc.com/newsroom/2012/1010-debt-poll.html

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Get your Finances in Shape with Budget Bootcamp

Deciding to set up a budget is the easy part of organizing your finances; doing it effectively
is where things begin to get tricky. Every day we hear from clients who say they attempted to
budget, only to find that they were no better off at the end of each month. It is an extremely
frustrating position to find yourself in, and one that seems hopelessly irresolvable. However,
we at Creditaid know from experience that budgeting works, as long as you have the drive,
the right tools and a well executed plan.

Everyone’s circumstances are different, so what works for your friends and family may
not work for you. We have always been conscious of this, which is why we have created a
number of tools to suit every need. With the Creditaid Budget Bootcamp, however, we have
taken the battle against financial hardship to a new level. The strategy we are bringing to you
today will take you step by step through a comprehensive budgeting plan, aided by many of
the tools we use to help our clients on a daily basis.

The Budget Bootcamp consists of a free five day plan, delivered to you by email. At each
stage you will receive tips and advice on creating a budgeting plan and prioritising your
finances, as well as access to tools that will help you along the way. We appreciate that you
may have questions that are not addressed in the plan, but don’t worry, we won’t leave you to
fend for yourself. Each email you receive will contain links to relevant help pages and tools,
along with a link that you can use to contact us by email. Subscribe today and look out for
your introduction email, which will guide you through the first steps on the road to financial
freedom.