Empowering the Independent Woman: Take Control of your Personal Finances

Gail Vaz- Oxlade has a message for women everywhere – be an “Island” before becoming a “Peninsula”. The tough-talking money expert and host of popular reality TV shows such as Til Debt Do Us Part and Princess maintains that all women should be financially independent , even in marriage rather than expecting a partner to become their financial safety net.

In her latest book, It’s Your Money: Becoming a Woman of Independent Means (HarperCollinsCanada, $21.99), Vaz-Oxlade argues that women have unique challenges when it comes to managing money such as motherhood, divorce, widowhood, disability and caring for the elderly. Instead of relying on others, whether it be a partner, parent or financial planner, women should take action to understand and plan around their unique needs.

The first step of taking control is keeping track of where money is spent. Vaz-Oxlade suggests keeping receipts and entering expenses into a journal or spreadsheet and to distinguish clearly between the wants and the needs. Read the full article from the Winnipeg Free Press on Gail’s financial tips for women here.

Credit Aid is a proud sponsor of “You and Your Money with Gail Vaz-Oxlade” taking place in Winnipeg on February 9th, 2012. Tickets are $45 and can be purchased at www.youandyourdollar.com or by calling 254-2595.

Tips to Help Kids Understand Debt

In order for children to fully understand finances and how money “works,” they have to learn about debt. The age of your child will determine how you define debt so they can understand.

Make sure you use terms and examples that they are already familiar with.

You can begin with the concept of borrowing something such as a toy from a friend. Explain the need to return the toy to its owner. And if the toy can’t be returned in its original condition then it needs to be replaced by a similar item of equal value. Your child should be able to understand that until that item is replaced, paid for, he is in debt to the person who owned the item.

For the “tween” set you can use real money items and examples. Set up a scenario where your child wants something, a new bicycle, for instance. Write down and discuss the amount of money the bike costs, the amount of money your child has, the amount of money he earns through allowance, or anticipates receiving for a gift, etc.

Talk about whether or not he can “afford” the bike right now, and if he can pay it off within a reasonable amount of time. This discussion will include installment payments where instead of paying back the “loan” with all of their allowance each week, they pay smaller amounts so as to keep some money for their usual “living expenses.” It’s important to work financial terms into the conversation as soon as you child is able to understand them.

Then, actually carry out a transaction. Keep it written down; sign a contract, have them make payments and even set up an amortization schedule so they can see how interest works. Going through this process will give your child an excellent opportunity to learn about personal finances.

New Year-New Beginnings – Financial goals

The beginning of a new year is a time to start fresh, make some changes and set some goals.  Now is as good a time as any to evaluate your income, expenses and overall financial health and set some goals.

Here are a few things to look at when it comes to setting financial goals:

Retirement: Depending on your age, retirement can seem like a lifetime away, or it can be right around the corner. No matter your age, now is the time to look at what is available for retirement income, and if it is deemed to be not enough, now is the time to start saving towards that goal.
Insurance: get out your policies, health, life, auto, property, etc. Talk to your agent to see if you are appropriately covered.

Debt Reduction:Consolidate current debt and don’t create more- that means cutting up the credit cards and gaining control of spending.

Savings: Besides controlling spending, you’ll want to amass some savings; typically the interest rate on investments is considerably lower than the interest rate on your line of debt so by saving rather than paying down debt, you’re actually losing money. That’s where you need to strike a balance: you need to invest some, but at the same time reduce the debt.

Additional Income:Think about the possibility of getting a second part time job. If you’re living comfortably on your current income, the income from a second job can go directly on debt or mortgage or into retirement or another fund for education or a trip or an emergency.

Once you set your financial goals, it’s good to revisit them every few months. Six months from you will be motivated to continue your financial plan when you see how well it’s working for you!

Consumer Obsession Leads Us to Over-spending

The desire to “keep up with the Jones’s” has become more than a social status issue for many people.  Also, it is very easy to get caught up in this during the 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 check 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 increase your creditworthiness or make you more employable so you are able to 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.

Is money causing stress in your life?

Is your relationship with money causing stress in your life? If so, then it may be time for some financial therapy. Winnipeg-based psychologist and life coach Dr. Moira Somers specializes in financial psychology, an emerging field that explores people’s relationship with money (and why they may treat it the way that they do).

Dr. Somers maintains that our behaviour towards money may stem from our childhood experiences including exposure to money management beliefs and culture. These beliefs in turn causes many disordered behaviour in our adult lives such as chronic debt, overspending, under-earning and using money as a means (whether consciously or not) to exercise power, control or to fill a void.

You can read more about Dr. Moira Somers in the Winnipeg Free Press article by Carolin Vesely, or visit her website at http://www.moneymindandmeaning.com/.

Finance Minister kicks off Financial Literacy Week

Canada’s Finance Minister was in Toronto last week to kick off the Financial Literacy Week.  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.

Many Canadians have taken advantage of the low interest rates since the recession and the government warns of the dangers of piling on too much debt, and especially at this time.  With a clearer understanding of financial matters and stronger financial literacy, Canadians will have greater control over their own finances and collectively build a more stable economy.

Financial Literacy Week was started in 2009 with that aim in mind.  Many resources are now available online, and events are being held across the country.

Low Monthly Payments = Instant Gratification & Longterm Debt

Retailers have learned how to appeal to our desire for instant purchase power. They can easily sell us on how great it would be to own their newest electronic device, kitchen appliance or piece of furniture. They also know that they need to convince us that we can afford this new luxury item, and low monthly payments through a finance plan is one of their favorite ways to do that.

“This can be yours – TODAY, for ONLY $25.00 a month!”

‘I can afford that,’ we think to ourselves, and we sign up for the monthly payments and take home our brand new purchase. A few months later, we do it with something else. Pretty soon, we have several ‘low monthly payments’ that we need to keep up with and balances that are very slow to decrease.

The trouble with these monthly payment plans is that they take so long to pay off. Because you are paying high interest rates on the principal, you may end up paying two or three times the total value of the item you purchased, just so you could have it NOW. What seemed like a small amount of money, when broken down in installment payments, is making the finance companies lots of revenue, and it’s coming out of your pockets.

Although, it may not be as easy to get out of this situation as it was to get into it, it can be done. At Creditaid, we know the ins and outs of this type of financing. We’ve helped plenty of people dealing with too many monthly payments. We’d be happy talk with you about your own personal situation. Ask for a FREE consultation today.

Unexpected Repair Bills Can Put You in Hot Water

Owning your own home is something that gives a person a sense of independence and accomplishment. You are no longer paying monthly rent payments on property that doesn’t belong to you. You are building equity in your home instead. When you purchase your home, your mortgage company will generally assess your financial situation to determine whether or not you can afford the payments on the home you are purchasing. They know that it is in their best interest to keep you from purchasing a home you cannot afford.

In spite of this careful financial screening by your mortgage company, financial positions can change after you make the purchase. Even when you are able to make your house payments, there may be little, if any, extra cash for repairs and maintenance to the home you own.

Unfortunately, repairs to your home can’t always be planned for. If your furnace dies in the middle of the winter, you have to replace or repair it. If you have water damage that isn’t covered by your insurance, those repair costs will have to paid by you, the homeowner. These types of unexpected expenses can break a family’s budget that is already stretched to its limits.

If you’ve found yourself in this spot and don’t know how you’re going to get out of this downward financial spiral, Creditaid may be able to help. Contact us for your free consultation.