Pandemic Anxiety – What Should you Do?

Pandemic Financial Outcome

Canadians have many financial worries thanks to the pandemic, of which the largest issue right now is interest rates.

During the heart of the pandemic, we saw the lowest interest rates available in decades. This made it easy for millions to get in over their head in debt. Whether it’s consumer debt (credit cards) or mortgage debt, millions are wondering how they’ll make ends meet.

What caused this?

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Senior Debt Forgiveness – What you Must Know

If you’re a senior with debt, you may feel like you’re up a headed up a creek without a paddle. Living on a fixed income makes it hard to take care of anything except your daily costs of living, but fortunately, there are ways to work out your debt so you have peace of mind and can enjoy your golden years.

Here are the simple steps to take.

Figure out Where you Stand

First, get an honest look at your situation. Don’t sugarcoat it, that won’t get you anywhere. Pull out all bank statements and credit card statements. Categorize your spending and total up your debt.

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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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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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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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Stores are Open – Reign in your Spending

Life is trying to get back to normal. As the COVID-19 numbers drop, more retail stores are reopening, which is a great sign for our economy, but may not be as good for your pocketbook. Try to avoid getting caught up in the excitement of things getting back to ‘normal,’ and be mindful of your spending.

Before you shop, ask yourself the following questions.

Is this an Impulse Buy?

Are you shopping with a list? If you are, is the item you’re holding or that you ‘need to buy’ on your list? If not, it’s an impulse buy. Even if you don’t have a list, but you look at things you don’t need or didn’t intend to buy; it’s an impulse buy.

Rather than buying without thinking, give yourself 48 hours. Leave the store or close your web browser without buying the product. After 48 hours, if you’re still thinking about the item, maybe it’s something worth buying. Chances are though, if it was an impulse buy, you won’t even think about it again.

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Whether you live in Brandon, Carman, Gimli, or Anywhere else in Manitoba, Creditaid can Help You

Canadians are taking on more and more debt. The latest statistics show that, excluding their mortgage, the average adult living in Canada has more than $20,000 of debt hanging over his or her head.

This huge figure is the result of a recently surging economy, which builds confidence among borrowers about their ability to pay back their debt, and record low interest rates, which means that the cost of borrowing those dollars might seem lower than the average.

Map_of_ManitobaAt Creditaid, we see this as a huge problem. The Canadian economy has slowed, especially in Western Canada, where a recent softening of the market for petroleum products has impacted the oil industry and its core of support businesses.

There are a lot of reasons people wind up with debt, and not all of them are irresponsibility. An unforeseen job loss, a sudden expense, or a family member in need can start the slide, and the banks and credit card companies will let you spiral further and further into debt from there, as that helps them maximize their profits.

At Creditaid, we help people get a handle on their debt. We can tell you how to start to climb out of your debt situation, and offer services like debt consolidation when they’re appropriate. We’re credit professionals who are, for once, on your side in your battle against debt.

To have your questions about credit counselling, debt management, and debt consolidation answered, contact Creditaid online or by telephone at (204) 987-6890. We can help you no matter where you live in Manitoba. Our area of service includes but is not limited to Winnipeg, Brandon, Steinbach, Winkler, Stonewall, and Selkirk.

Do I Need Credit Counselling?

Do-I-Need-Credit-Counselling-Apr-1

Isn’t everyone in debt?

Well, in 21st Century Canada, it might seem that way. Canadians owe a greater portion of their earnings to creditors today than ever before, and even with low interest rates are making steep payments every month just to maintain their debts. When seemingly everyone owes money, how do you know it’s time to see a credit counsellor?

First and foremost, if you don’t know your financial situation, you need to see a counsellor. It’s often easier to hide your head in the sand when it comes to debt problems, but it’s certainly not a long-term solution. If you’re ignoring a debt problem, it’s getting worse.

If one or more of your debts has progressed to collections, and you aren’t able to make the payment, you have a debt problem.

If you are borrowing from one source of credit to pay another, you need to see a counsellor.

If your credit payments (not including your mortgage) exceed 20% of your net income, you are in danger.

If you’re not able to save for emergencies, or put money away for retirement, you could benefit from credit counselling.

If you aren’t able to sleep comfortably at night, secure in the knowledge that your household spending is under control and you have a plan to pay your overall debt load, then you need to contact Creditaid.

Creditaid is a licensed and bonded credit counselling agency that has been proudly serving Winnipeg since 1992. If any of the above scenarios apply to your life, contact us today for a free appointment with a credit counsellor, to help you take stock of your situation and access some of the many tools at our disposal to help you on your journey to financial security.