Create a Personal Budget with These Simple Steps

Create a Personal Budget with These Simple Steps

Create a Personal Budget with These Simple Steps There’s no question, a budget is the best way to gain control over your finances and live a life free of financial stress. Here are the simple steps to achieve this: Step 1: Collect your financial information together. This will include every credit card statement, bank statement and your receipts. Anything that documents your expenses for the last three months needs to be collected. What are you going to do with this information? You’re going to use it to categorize your expenses. What do you spend on your home? What do you spend on your car? Your food? Your health? Entertainment? You’re not tracking your expenses right now, you’re simply coming up with expense categories and sub-categories for your budget. If it makes it easier, begin by drafting the categories and sub-categories you think your expenses will fall into. As you go through your expenses you can verify your category decisions. Step 2: Gather your income statements or profit and loss sheets and determine how much money you really have to budget with. You can use either your net or gross income as your number, just be consistent. Also, if you choose to use your gross income, make sure to account for your taxes on your list of expenses. Step 3: Using the same documents you used to create your budget expense categories and sub-categories, now examine how much you spend each month on each. I highly recommend that you write this number down. It may be an eye-opening exercise, but it will also help you predict how much you will...
What you don’t know can hurt you…and your credit

What you don’t know can hurt you…and your credit

What you don’t know about debt can hurt you…and your credit Financial literacy and education are the biggest areas of opportunity for Canadians when it comes to their debts and managing those debts effectively. Just because you qualify for a line of credit, a loan, or credit card doesn’t mean you should apply for one… and another one… and another one, etc… It’s not only your regular or irregular payments that affect your credit. Other factors are your TDSR, which is your Total Debt Service Ratio, the amount of balance on your card(s), how close you are to your limits, and how much available credit you have at your disposal. In fact, you can have immaculate credit and be up to date on all your minimum payments, but still be declined for a mortgage or additional credit because of things like being at your credit limit or for even having too much credit available to you. The lender has to consider this scenario: IF you were approved for their credit product AND you chose to max out all of your available credit, COULD you still afford your payments to all your credit products, including their credit, as well as your day to day expenses like food, shelter, etc? If not, you’ll likely be declined. Share this:Click to share on Facebook (Opens in new window)Click to share on Twitter (Opens in new window)Click to share on LinkedIn (Opens in new window)Click to share on Google+ (Opens in new window)Click to share on Pinterest (Opens in new window)MoreClick to email this to a friend (Opens in new window)Click to print (Opens...
What if… The Bank of Canada raised interest rates tomorrow?

What if… The Bank of Canada raised interest rates tomorrow?

If the Bank of Canada raised interest rates tomorrow, I believe that there would be a lot of us in a lot of T-R-O-U-B-L-E ! ! ! There is this statement from a CBC article by Pete Evans, Senior Writer at http://CBCNews.ca : “The Bank (of Canada) deciding to stand pat on the (Key Overnight Interest) rate again was exactly what economists were expecting. But at least one said Wednesday the door is open to rate hikes down the line.” Below is the life cycle of the Key Overnight Interest Rate over the last 10 years. It can’t go much lower, which means an increase is on the horizon. And this statement should give us all a wake up call: “Consumer credit health is a concern due to the record household debt levels and … pressure on consumer loan portfolios in oil provinces, which is pushing up delinquencies in auto lending and credit cards,” Fitch Senior Director Doriana Gamboa said in a statement. Consumer insolvencies are indeed on the rise in Canada. Personal bankruptcies are up 6.3 per cent in a year, while “consumer proposals” — an increasingly popular alternative to bankruptcy — jumped by 13.2 per cent. That’s happening as Canadian household debt hit yet another record high, and now sits at $1.65 owed for every dollar of disposable income. Why should I care, you ask? Even a bump of 0.50% or even 0.25% in interest rates would mean a likely spike in bankruptcies and consumer proposals within Saskatchewan as it’s been said that the average Canadian household is only about $200.00/month away from being in serious financial problems. If you notice interest...
Payday Loans and the never-ending debt cycle they can create…

Payday Loans and the never-ending debt cycle they can create…

If you struggle to pay your bills each month, you’ve likely considered taking out one of those payday loans. Don’t. They are micro-loans, typically valued between $100 and $1,500, that many people borrow in order to meet an unexpected obligation or payment. Some even take it out to go the the Queen City Ex when they don’t have the cash on hand. But if you’re short on $$$, a payday loan shouldn’t be your default. Case in point, these loans can be extremely dangerous and addicting if you’re not aware of how they operate. Here are 4 reasons why you shouldn’t consider a payday loan unless there is no other option available to you. It’s Wayyyy Too Easy Become Dependent On Payday Loans What many people don’t realize is that it is incredibly easy to become addicted on payday loans. These loans are very expensive; for example, you may “only” be charged between $23 to borrow $100, which means you’re paying back $123. This is only if you pay back the loan on time. Depending on how much money is borrowed, some individuals need to use their next paycheck in order to pay back the loan, meaning again they are unable to meet basic monthly payments. As these loans are incredibly expensive, it is easy to fall into a situation where you depend on them each payday in order to pay bills. Because of this, PLEASE only use them in an emergency, and only if there are no other options available to you, like borrowing money from family or a friend. Payday Loans Have Ridiculously High Interest Rates You don’t just pay...
Debt: Do you actually know what you are getting yourself into?

Debt: Do you actually know what you are getting yourself into?

Making an informed decision about your debt can be challenging. Interest rates, payment frequency, amortization, pre-payment penalties, etc… It’s a lot to take in. So do we really know what we are getting ourselves into when we apply for a credit card in the mall, or click on that payday loan link on a website? I don’t think we do, or I wouldn’t have a job settling debts for people. I saw a website yesterday that states blatantly on their website that they charge 598% interest rate on your payday loan. Whiskey Tango Foxtrot?!? How is that even moral let alone legal? One of the best ways to combat this unnecessary acquiring of debt is to Educate Yourself. How? Google the company you’re borrowing from. Yes, even the big banks. Find out how they do business. And then ask then about their business practices. See if your banker actually knows what they are offering you. Read the fine print. And I mean all of it. Until your eyes bleed and your brain melts. And if you HATE reading, ask if they have a video explaining the fine print. Don’t necessarily take the 1st offer presented. Ask questions from multiple lenders to get the right debt product for yourself. And do NOT let multiple creditors pull your credit score. You should not need to take this step until you know which debt product you need. Here’s an article encouraging The Bank of Canada to keep lenders accountable: http://www.cbc.ca/news/business/debt-bank-of-canada-poloz-housing-1.3621994  Whether or not The BoC will be taken to task remains to be seen. So do you research and only take consumer debt if...
Debt collection no-no’s

Debt collection no-no’s

Debt Collection no-no’s: Trying to collect a debt without first notifying you in writing or making a reasonable attempt to do so. Recommending or starting legal or court action to collect a debt without first notifying you. Communicating with you or your family such that the communication amounts to harassment, or calling to collect a debt at certain prohibited times (which vary from one province or territory to another). Implying or giving false or misleading information to anyone. Communicating or attempting to communicate with you without identifying themselves, saying who is owed the money and stating the amount owed. Continuing to demand payment from a person who claims not to owe the money, unless the agency first takes all reasonable steps to ensure that the person does, in fact, owe the money. Contacting your friends, employer, relatives or neighbours for information, other than to get your telephone number or address. An exception would be if any of these people have guaranteed the debt or if you have asked the agency to contact them to discuss the debt or, in the case of your employer, to confirm your employment, your job title and your work address. — Source: Canadian Consumer Handbook Share this:Click to share on Facebook (Opens in new window)Click to share on Twitter (Opens in new window)Click to share on LinkedIn (Opens in new window)Click to share on Google+ (Opens in new window)Click to share on Pinterest (Opens in new window)MoreClick to email this to a friend (Opens in new window)Click to print (Opens in new window)Click to share on Tumblr (Opens in new window)Click to share on...
To be forever in someone’s debt.

To be forever in someone’s debt.

“You saved my hide/marriage/life. I’m forever in your debt.” I hear people use this phrase about debt all the time. But how long is forever? The Oxford Dictionary states that “to be in someone’s debt” is to “owe gratitude to someone for a service or favor.” I understand the gratitude I would show someone who has saved me from harm, but how do I show gratitude to someone who has me in “debt bondage”? Do you know what that means? Wikipedia describes it as: Debt bondage (also known as debt slavery or bonded labor) is a person’s pledge of their labour or services as security for the repayment for a debt. The services required to repay the debt may be undefined, and the services’ duration may be undefined. Debt bondage can be passed on from generation to generation. This is not unlike a credit card company. You pledge to make a monthly payment in exchange for the access to a line of credit, which is accessed through a credit card. The minimum payment required to pay down the debt changes every month, as the credit card company states that you need to at least make the minimum monthly payment, which is typically $10 or 3% of the outstanding balance, whichever is greater. Making minimum payments will keep the card in good standing and help protect your credit rating but you will end up paying far more than the cost of your purchase. Regulation has now made credit card companies add a warning to your credit card statement showing how long it will take you to pay off the balance if you...
Managing your debts is like cutting your lawn…

Managing your debts is like cutting your lawn…

You open your garden shed, gas up the lawnmower, and mow your lawn weekly. As a result, it stays nice, trim, and you can control its growth. You use your trimmer to get those stubborn blades of grass along the edge of your property to give it a crisp, clean style. Even when a weed does sprout up, we either grab some Roundup®, or go as far as get down on our hands and knees to pull that stubborn weed, and take care of business. But what happens if your mower breaks down, your lawn trimmer is on the fritz, and a whole army of dandelion seeds land in your yard from the neighbours? Will you get down on your hands and knees with a pair of scissors to cut each blade to keep your lawn nice and trimmed? If you manage to keep your lawn trimmed that way, will you remember to also get those stubborn blades of grass on the edges of your property, not to mention the army of dandelions that just invaded the peace and quiet of your lawn? Some of you will let the lawn go and say “I’ll get around to it when I can afford to pay for a new lawnmower, a new law trimmer, and some Roundup®. And some of you will call a Landscaper to take care of your lawn for you until you can take care of it yourself again. Now imagine your lawn is actually your debts. You open your credit card, increase the limit, and pay it off monthly. As a result, your credit bureau stays nice,...
Dealing with collection calls

Dealing with collection calls

Hello, may I speak to ____­­­___? Nobody wants these Collection calls. You know the one: Kermit: “Hello, is Joel there?” Shelley: “May I ask whose calling?” Kermit: “It’s Kermit the Frog here from ABC Collections calling regarding a financial matter.” Shelley covers the mouthpiece. “It’s for you.” Joel: (instant sweats) “Tell them I’m not here.” Shelley rolls her eyes. “Joel’s not “available”. Can I take a message?” Kermit: “Is there a better time of day I can call him? It’s REALLY important.” Shelley: “All I can say is to try again.” Kermit: “OK. Tell Joel I’ll call back again. Let him know that it’s an important and urgent matter that needs his immediate and full attention. My number is 1-800-555-1212 and my extension is 123. I’ll be expecting his call.” ugh So aside from an annoying phone call, what other things can a creditor do or not do? Well, a collection agent: CANNOT call you between 9:00 PM and 8:00 AM, call you on a Sunday, or call you on a holiday. CANNOT make so many calls that it is deemed harassment (frequency of calls, content of calls, language, etc.) CANNOT share your private financial information with anyone but yourself and only after verifying that you are the right person. CANNOT threaten to give or call your boss with information that could affect your ability to work. CANNOT threaten you or give any false information that may be detrimental to you or your family. CANNOT collect more money than you actually owe. However, a collection agent: CAN call you on a Saturday. CAN tell whoever answers the phone that...

dear stress, let’s break up. <3 me

Breathe in. Breathe Out. Repeat. This is the first step when dealing with the stress involved with debts. It’s weird the relationship we have with debt. We feel that we can’t live with it, and we feel that we can’t live without it. Below are a few steps to take when dealing with stress: Breathe. I know we’ve already established it, but it will help. Just take a breath and breathe. Write down your stress. Collect your “love letters” from the collections agencies and find out where you stand. It will offer some clarity. Say NO! When you see ads for Loans until Pay Day or a Mart to get Money, JUST SAY NO! It will only dig your hole deeper. Exercise. I’m not suggesting buying a membership to the gym, but go for a walk. Get some fresh air. Clear your mind and the rest will follow. Get help coping with your debts. Explore your options and see what is available to help your current situation. If you aren’t sure where to look, my contact information is at the bottom of this blog. If you think nobody cares if you’re alive, try missing a couple of car payments. Flip Wilson Joel Sopp writes blogs from a practical point of view with sometime non-practical ideas. He is also the Client Acquisition and Relationship Manager at Canadian Customer Debt Relief. You can ask him any questions at joel@ccdr.ca or click through to the CCDR website: https://ccdr.ca  Share this:Click to share on Facebook (Opens in new window)Click to share on Twitter (Opens in new window)Click to share on LinkedIn (Opens in new window)Click to...