Tag: personal finances

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Canadians Borrowing Cheap in Recession

Mark Carney, Bank of Canada governor issued a warning to Canadians on borrowing low interest rate loans. Our household debt-to-income ratio’s are extremely high which makes Canadians vulnerable.

Meanwhile Stats Canada revealed the ratio of debt to disposable income rose to 148.1 per cent. Canadians now owe $1.48 for every dollar of disposable income.

Low interest rates today does not mean low rates tomorrow. Canadian need to keep in mind that interest rates are likely to go up in the future and they should plan for it accordingly.

 

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Canadians Act on their 2011 Resolutions Early

TD Canada Trust has just released the results of their Holiday Survey.

Here is a glimpse of the resolutions Canadians are doing today.

  • Spend less and avoid buying things I don’t need (53%)
  • Look for better deals (38%)
  • Build up savings to cover at least two months of living expenses (30%)
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Debt Management Tips

The best debt management tip is to not have debt at all, but to be realistic, that is never the case. Whether it’s your mortgage, credit card bills, and monthly expenses, it is hard to avoid debt. So what is important? Here are a few debt management tips to consider.

1.     See where your money is going and how much is coming in.

2.     Be aware of monthly expenses. Keeping track of credit card purchases, utility bills, your mortgage and so on.

3.     Pay off major credit card debit first like bills with appliances, home improvement renovations, and furniture. Before you sign up for another credit card, it is important to see what your options are before you borrow and read the fine print.

4.     Be sure to have a plan. Plan out how much money will go to each expense and payment.

Debt may be hard to avoid, but it can be easy to manage.

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Money Tools

Which is the best credit card for me? How do I find the best mortgage rates? What is the best way to protect myself from credit fraud? Canadians can now find answers to these questions on a website created by the Financial Consumer Agency of Canada. It features great tools such as mortgage calculators, tip sheets and resource links. It’s a great resource for Canadians to learn about financial products and services offered in the marketplace.

Our very own, Brian Denysuik, President & CEO of Creditaid, visited The Financial Consumer Agency of Canada last week in Ottawa and met with Jane Rooney, Director, and Roger Dowdall, Team Leader, Consumer Education, Financial Literacy and Consumer Education. They have developed some excellent material to help inform us of so many different things when it comes to finances. If you want to see some of these tools click here.

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The Wealthy Barber at Credit Education Week

The keynote speaker at the Credit Education Week Professional Day was Mr. David Chilton, Author, The Wealthy Barber.

Mr. Chilton took the stage and talked about one of the biggest challenge consumers face today –  everyone is cheering for you to keep on spending!  He provided numerous insights for us to consider and take action.

We want to share these with you:

  • Always pay yourself first, this is the most important thing you can do.
  • Keep in mind that banks never say, oh we are lending too much and should cut back.  Banks make money lending so why would they stop!
  • Consumers need to restrain themselves from borrowing.
  • A personal line of credit is like getting hooked on drugs.  Canadians treat a line of credit like a second income and forget that they need to pay it back.
  • There are simply too many people carrying too much debt.
  • People have maxed out their borrowing at current interest rates, when rates rise there is going to be lot of problems.
  • When taking on debt for appreciating assets make sure it can and will be retired before you are.
  • When borrowing make sure that your calculations are on after tax dollars, and that the payments will not impact your savings plan and the ability to have fun!
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How to Spend Wisely During the Holidays

Christmas is just around the corner and holiday spending may get in the way of your budget.  It is important not to get carried away with gifts and décor.  It may be helpful to create a holiday budget to keep you on track.

Start by setting an amount you are willing to spend this holiday season for items such as gifts and decorations. Remember, once you have your budget set – stay with it.

Holiday Budget Tips:

  • Try changing it up this year, instead of having a huge party, try having a small dinner with close friends and family. This will help you scale down on spending a lot on entertainment and decorations.
  • Also, on a future note, shop for gifts year round and avoid the holiday rush all throughout the winter months. In addition, search for the deals. Look through your weekly flyers for gifts and compare prices between stores.

Remember,  try not to get caught up in the holiday excitement and spend like crazy.  Always check back to your holiday budget and make sure you are sticking with it.

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On the Path to Successful Budgeting

So you figured out your income and expenses and have started to budget around it, now comes the next step, keeping track of your money and how to maintain a budget month to month.

There are a few things you can do to keep track of the flow of your money and make certain that you are sticking to your budget. Set goals for yourself. This will allow you too feel the satisfaction of accomplishment. If you set a goal to save money for something important like a vacation or a new car, you will be able to save more effectively and carefully. Another tip is to set appointments. You can do this two or three times a month so you can review your budget and make sure you are on the right path. This can be created into family time, get everyone in your household involved as previously mentioned. Begin to pay attention to the areas where spending is most important so you know where your priorities are in your budget and where money is really needed.

You have reviewed your expenses, created a budget journal, and now learned how to keep track of your funds. You are on your way to having a successful budget and a better understanding of where your money goes.

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Money Saving Tips

If things are tight at home, we can adjust our lives so we can save more for what is important in life.

Here are a few money saving tips:
– Pack a lunch to work instead of buying one.
– Take the bus instead of driving.
– Shop for clothes out of season.
– And of course before making a purchase ask yourself – “Do I need it?” “Do I need it now?”

Consider getting everyone in your family involved. They’ll feel included in the overall household choices.  Having children involved helps educate them about money which enables them to make good financial choices for their future.
By reducing your expenses, it will mean more money at the end of the month and improved personal finances.

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Adjust your Spending Plan

After we figure out where our money goes, where we are overspending, and how much money is coming in, it is time to adjust our budget accordingly. We have recognized the importance of our finance and now it is time to figure out where our money is needed most.

Finding practical ways to reduce our spending is one of the most important steps in the budgeting process. Having a budget journal will help us be organized and keep track of our income and expenses. We can categorize our expenses and split them between personal and household expenses. Household expenses may include mortgage, utilities, insurance, car payments, groceries, and so on. Personal expenses may include entertainment, dining out, gifts, etc. We can also consider investing a small percentage of our pay cheques in savings for a rainy day or for the future.

Tomorrow we’ll explore a few thrifty saving ideas!