Category Archives: Budget Tips

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 All their money gets deposited and withdrawn by either person from this bank account.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.

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.

What Are You Doing With the Money You Are Saving on Gas?

According to National Resources Canada, the average vehicle in Manitoba travels 14,963 km per year, and for every 100 of those kilometers it travels, it consumes 11.2 litres of gasoline.

hand-pumping-gas-into-carToday’s gas price (about 88 cents per litre as of this writing) is far lower than the 2014 high in Winnipeg – $1.33 per litre in June of 2014. At this rate, the average driver is saving about $755 this year, if gas prices stay about the same.

What are you going to do with the money you save?

You could go on a short vacation, or buy a nice toy. Or sock it away for a rainy day. Most people, however, will just absorb the money in to their daily expenditures, and not really notice that it’s there. An extra cup of coffee every day.

At Creditaid, we’ve got a different idea. Knowing how many people struggle with credit card debt, we’d suggest using your windfall from lower gas prices to help reduce the credit card, loan, or line of credit with the least favourable interest terms. You’ll then be putting the money you’re saving on fuel to its best possible use – bettering your financial position now and in the future.

Creditaid is a proudly local solution to debt problems. If you’re finding yourself overwhelmed by debts, make an appointment to speak confidentially to one of our expert credit counselors.

We’ve helped many of our Winnipeg neighbours with customized solutions to eliminate their debt, including debt consolidation and debt management programs. We will help you with your current financial crisis, and give you the tools you need to ensure that you don’t have a recurrence in the future.

Back to the Grind – Tips for the University and College Students

With the unofficial end of summer upon us, this can only mean that once again, it is time to head back to school.

Are you a university or college student heading back to the campus this fall? We know how stressful it can be to manage finances while balancing course work, extra-curricular activities and a part time job.  From tuition to textbooks, all the expenses associated with going to school can quickly add up so that is why we have a few quick tips for you today to help you survive your school year.  Afterall, we believe that developing a budget and managing finances is an important life skill to learn outside of the classroom.

Budgeting for University Students

Develop a Budget

Now is the perfect time to develop a budget of your expenses for the school year.  The budget will help you see how much is coming in from jobs, grants, bursaries or loans and how much will need to go out for bills and other expenses.  Having this understanding will help you plan out your finances so that you can do everything you want to do throughout the school year.

Your Wants vs Needs

As you’re preparing this budget, it is important to distinguish between “needs” and “wants”.  For example, while you need food to live, going out to eat with friends at a restaurant is a ‘want’ that will be a lot of more expensive.  Find a balance between the two so that you can live comfortably without missing out.

Types of Expenses

Break down your expenses so that you have a better idea of what you need each month.  Which of your expenses are one time and which are monthly?  For example –

School Costs – such as tuition, textbooks, course fees you can expect to be once a term

One Time Expenses – trips, gifts, moving costs are one-time expenses and can happen unexpectedly

Monthly Expenses – for food, rent, cell phone, gym memberships, or gas are monthly expenses that will remain mostly the same each month

Understanding how much you will need and when you will need it by will help in your overall planning.

The key is developing a budget that is realistic to your situation.  When you have this understanding of what’s coming in and going out, you can make better and more informed decisions when you are deciding, for example, on whether to go out for dinner or commit to that trip to Toronto during Reading Week.

We wish you a great school year ahead!

New Couples and Money

Couples and Money Management

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 how many kids you want, where to go on a honeymoon or where your dream house will be. But have you been truthful with each other with regard to your finances and credit rating? 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.

I am not suggesting that you open joint bank accounts or sign over your pay check to your spouse. I know many couples that do but I also know many who retain separate banking and finances. Either arrangement is fine as long as you both are happy with it. 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 now.

  1. 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.Do you have a negative net worth because of a student loan? Young people often do.  Student loan debt is considered acceptable if the amount of the debt is in relation to the type of education received. For example, many new doctors and dentists graduate with student loan debt in the $150,000 range. Given the fact that they have the potential for a very high income, this level of debt is reasonable and can be paid off in less than 10 years.
  2. Go online and order a copy of your credit bureau if you have not done so recently. Share it with your partner.  Are your scores and credit patterns similar? Or does one of you buy most things using credit, carry balances each month and pay hundreds of dollars in interest charges? Does the other hate debt (and interest charges) and pay off all their credit cards each month?  If you each have very different credit habits and attitudes toward debt, there could be a real problem in the future. If one spouse has a poor credit history, it could prevent the other from reaching financial goals as a couple, like buying a house.  Spouse A, with the minimal debt and excellent credit history could help Spouse B increase their credit score by co-signing a consolidation loan so that high interest credit cards can be paid off and cancelled. If every loan payment is made on time, Spouse B’s credit score will improve. This in turn will benefit both spouses by way of a lower interest rate if they make a joint purchase like a house or car.
  3. 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 it can cause big 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, the wife pays for the groceries and the husband 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 you have kids. What will happen if one spouse’s income is reduced because of maternity leave?
  4. What are your 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 is doomed to fail. We all hear that ‘opposites attract’. This may be true for a short period of time. For long term happiness and peace in the household your goals and dreams need to be aligned. You need to be honest with yourself and each other as to what is important to you and where you see yourself financially in 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. Having money problems adds even more stress.

Laurie Boudreau is a credit counsellor with Creditaid. Contact her now for help with managing your money and your debt.

Living as a Couple – Time for the Talk

Your relationship is going well, and you take the big step to move in together. However, reality soon comes crashing down. Before you know it, the honeymoon is over, and you’re disagreeing about every little aspect of your lives together.

One of the biggest sticking points for couples is finances. You may find that you each hold completely different views about the importance of budgeting, or when you do budget, you disagree on what is or is not a priority. These are the times that will try your relationship, but the good news is, you can get through it and reach an accord.

First of all, there is no way around it – you need to be honest with each other. Discuss all your assets and debts, so there are no unpleasant surprises. You then need to decide whether to share financial responsibilities and to what degree. One person may be bringing a lot more debt to the relationship, which is why it is important to have this conversation early in the relationship.

Make sure to discuss your individual credit history, too. Your ability to borrow as a couple will be greatly impacted by your past spending. Don’t panic if your partner has taken out a lot of credit in the past; this is your opportunity as a couple to explore options for getting to a place of financial stability. Talk about setting a budget and goals for clearing debt, and decide on a ratio of responsibility for that debt.

While it is important that both of you contribute financially to your budget and the paying off of debts, you should also play to your strengths. The person who is better at managing monthly bills should take care of that side of your finances; however, it is important that both people in the relationship share the overall responsibility of maintaining the budget.

Compromise and communication are key to a strong financial relationship so make sure you discuss and come to an agreement on where your money is going and when. A relationship takes work, but by having this honest conversation early on and staying on track with budgeting and spending, you may find that your relationship is stronger for it.

New Year’s Resolutions for Your Budget

A New Year’s resolution is often about learning from the mistakes you made in the previous year. This is especially true when it comes to budgeting. You can really get ahead of the game; setting yourself up for a debt free year. For a long-term budget, we have some great tips to include in your New Year’s resolution.

Planning Ahead
Don’t get taken by surprise when it comes to your finances. Remember last year when your car broke down, and you had to break into your budget to pay for the emergency repair? Well, to truth is, this coming year isn’t going to be any kinder to you. There will always be some emergency to deal with, so having a safety net is important. Saving a little extra for a rainy day will help you avoid having to pay for emergencies with your credit card!

Think About Your Small Purchases Too
Everyone has their little pleasures in life, but indulging in them doesn’t have to break your budget. If want to splurge on treats, make sure to keep the costs reasonable. If you like to drink coffee in cafés, try finding one that offers a loyalty card or rates. Most businesses today offer discounts, so try to reserve your splurges for occasions when you can get a deal.

Set Goals
Give yourself something to look forward to by setting budgeting or having saving goals. Don’t set your sights unrealistically high; instead take one goal that is achievable within a fixed time scale, and then focus on that. You can save for a car, new furniture, a clear credit card bill, or anything else that will give you a sense of achievement. When you reach your goal, remember to give yourself a pat on the back!

Shopping for Christmas?

For many people, a Christmas shopping budget consists of whatever they can spare in the last months before the holiday. However, to have a truly magnificent Christmas, you really need to budget throughout the year. You will find the holiday season much less stressful, and you will find that you’re able to afford gifts that will bring a smile to everyone’s face. To help you stay within your budget this holiday season, here are a few simple tips:

Incorporate your spending into your monthly budget
By incorporating your Christmas spending into your monthly budget, you are essentially making that money untouchable. Treat it exactly as you would credit card fees; only instead of paying for past spending, you are paying for what you will spend in the future. Before long, your Christmas spending money will just become another part of your monthly budget.

Set aside a budget
Your Christmas budget is a little different than regular payments in that you will have to calculate what you need, given the time you have to save. Be realistic with your budget, and try to aim for saving enough to buy the items you need throughout the year. When you have spare cash that isn’t allocated to your budget, make a point of picking up cheaper items while you can afford to.

Allocate smartly
If you need to buy gifts for ten people, do not work under the assumption that each gift will cost the same. Gifts for smaller children do not cost as much as gifts for teenagers, for instance. Don’t forget that you will need to buy food and drink over the Christmas season, so make sure to incorporate those costs into your budget, too.

Give yourself plenty of time to do your research
There is no point blindly choosing an amount to save each month, only to find that you have woefully under-budgeted. Do your homework, before you sit down to work out your budget, and you will have a realistic monthly figure to aim for. Some clever detective work will help you determine what’s on everyone’s Christmas list.

Don’t forget to download our Holiday Gift Giving Planner to help you through the holiday season.

Christmas Shopping – Tips for Parents for Shopping on a Budget

Christmas is coming around, which means that plenty of parents are scrambling, trying to snatch up those last minute deals. If you are one of the millions of parents whose budget is stretched, don’t panic just yet. There is still time to save Christmas and start budgeting the right way for the year.

Ebay Best Buys – Ebay is a great site to find all your gifts. If you haven’t used the site before, here are a few insider tips to live by. Don’t jump on the first listed item that you see – shop around to see if other sellers have also listed the same item.  Look for sellers who have received great feedback and have verified status so you can take advantage of the best prices for quality items.

Free Shipping Prices – Remember, during the Christmas season big order outlets have a lot of stock to shift. Those items need to sell before the season’s end, so retailers will often offer free shipping as an incentive. Not only that, but you can search for free shipping coupons online for each of your favorite stores. If there are no coupons available, simply try searching “free shipping” on the site, or look for a filter that has free shipping listed as an option.

Family Christmas – Make time this Christmas for fun and games with your family. Break out the board games, watch some Christmas movies, or play your favorite Christmas songs. Sitting around the table together, sharing those special moments is worth a thousand gifts, but it won’t cost you a penny.

Prepare for Next Year – Don’t put off until tomorrow what you can do today. Plan your budget at the start of the New Year, but be realistic. Avoid buying gifts in the early part of the year, if you can. Kids go through phases; so what he liked this year may see a dramatic change by next Christmas. Regardless, the money that you budget should be considered untouchable for other expenditures.

Most of all, remember what Christmas gifting is really about – sharing, loving and appreciating what you already have. If you live it, your children will, too.

Peg City Car Co-op. Fantastic Vehicle Alternative

Photo Credits: Peg City Co-Op

Do you wish you had access to a vehicle anytime you wanted but didn’t have to pay the monthly loan payment, insurance payment, gas and repairs? Imagine being able to drive a car anytime you needed one but also saving thousands a year on car costs? Peg City Car Co-op is here for you. This organization has 9 cars located in and around the downtown area waiting for you to pick and use anytime you need one. You pay a low hourly (plus kilometer) rate with no further charges- not even gas! They have 2 programs available for you to choose from depending on your expected car usage. One of these programs is accessible without a credit card. It’s perfect for anyone in a credit counseling program or someone without access to credit.

To learn more call 204-793-3912 or visit their website at www.pegcitycarcoop.ca.