Category: Debt Consolidation

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Student Loans – Coping with Student Loan Debt

If there is one thing that a student doesn’t need it is the worry of a huge debt hanging over them after graduation. A lot of you are probably thinking, hey, I have a grace period. While it is true that you usually have a grace period of six months after you graduate, on federal and provincial student loans, you are not out of the woods yet. You still have to pay eventually, and your federal loan accrues interest during the grace period.

As difficult as it may seem, you need to get used to making payments on your student loan, right from the offset. Don’t let it stress you too much though; there are ways to ensure you don’t carry that debt for a lifetime. The first thing you need to do, before you can even begin to pay off your debt, is to find a source of disposable income.

Some of you will find yourself employed and in a position to make your student loan payments immediately. For those less fortunate, here are some ideas to help you out.

1. Lower Living Expenses: Remember that time you flew the nest and set out on your own? Well, this may break your heart, but moving back to your parents for a while could help you save the extra cash needed towards paying your loan payments.
2. Revision of Terms: You can ask for a revision of terms; which means you can extend the loan period in order to reduce the monthly payments. Just make sure you keep up with these new lower payments, and as soon as possible, begin paying extra towards the principle.
3. Waiver Period: If you find yourself out of a job, don’t despair. You may be entitled to an interest relief period. During this period the government will pay your interest and you won’t have to make any loan repayments.

Don’t let student debt creep up on you, budget your payments today.

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Control Spending Habits

Controlling your spending doesn’t always mean reducing it; however, more often than not it is the end result. Tracking your spending is the best way to manage your finances, and there are a number of ways to do it. Credit cards and other forms of electronic payment come with the benefit of easy tracking. All your transactions are available on your monthly statement or online. However, a typical credit card purchase, on average, will cost 112% more than if you had used cash.


So is cash better than credit? Well, in a lot of instances it is. Credit cards give you the convenience of on the spot purchases that you can worry about later. With cash, you can only spend what you have. The problem with cash is though, how do you track it? There are plenty of programs out there that are great for tracking your finances; Quicken and MS Money are two that come to mind right away. But do you really have the time or inclination to keep every receipt and meticulously enter them into a tracker?


The good news is you don’t have to track every purchase; you just need to control how much you spend each month. To do this you first need to identify the areas where your spending is not controlled. Usually suspects include groceries, clothing, personal spending and general luxuries. Once you have identified these areas it is time to take control. Withdraw the amount of cash that you think you will need for these purchases and put it in an envelope. Make sure to record the date and amount on the envelope too.


Don’t panic if you find that you run out of money, this exercise is about control, and it takes a few months to show positive results. You will notice that you are becoming conscious of every purchase that you make. Every price tag will represent a percentage of what you have committed to spend, and you will think twice about impulse purchases. Ultimately, you will be surprised by how easy it is to control and reduce your spending when you are parting with real hard cash.

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Saving Commitment – Change Your Habit, Pay Yourself First

Whether you are saving for one big purchase or simply as a means of combating debt, you deserve a reward for your efforts. If you have ever played games on social media sites, where you effectively click buttons for six hours, you will appreciate this article. The developers of those games use psychology to keep you hooked. They are based on an effort and reward system, which keeps the player motivated to continue in order to receive their reward.


Saving is just like those games, except for most of us, it is often a long time before we see a reward. So why not have a little fun with your saving, by setting yourself challenges? It is difficult to appreciate the results of your hard work when the goal is in the distant future. By setting incremental goals, with a reward at the end, you will feel that your efforts are worth it and you will also notice an increase in your motivation.


So, let’s say that you set a target of $5,000 dollars and you reach it within your estimated time frame. Now you can reward yourself. Here’s a tip: create two dates; one is your reward date and the other is your ultimate deadline. If you reach your target by the reward date, you can treat yourself to a night out or a similar luxury. Obviously the reward should reflect the target amount, so if you are aiming to save $100 dollars, don’t splash out on a foreign holiday as your reward or anything else that will eat up a large chunk of the money saved.


This simple idea will make saving fun, rewarding and worth the effort. Get as creative with it as you like, as long as the end results are the same.

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Pay Down Credit Card Debt

It may surprise you to find, that in an article about reducing credit card debt, we are not going to tell you to stop using your credit cards. Responsible spending, using credit, will actually help you keep a healthy credit score. This will make all the difference in the future if you need to take out a large loan for a new home or car. However, you do need to keep your credit card debt down, and to do that you have to keep up with your payments.

Whatever you pay, you need to be realistic about it, so create a budget to track your outgoings. Try to avoid paying the minimum on your credit cards at all costs. It may seem like you are chipping away at your debt, but really, all you are doing is paying interest. The next step is to compare the interest rates on all your credit cards. You want to allocate the highest payment to the cards with the highest rates. You may not have it within your budget to pay more than the minimum on all your cards; however, you can pay off the larger ones while maintaining minimum payments on the others.

A low-rate balance transfer is another option for reducing your debt. You can consolidate all your credit card debt into one easy to manage, lower rate payment. Be careful when choosing this option, and make sure to check the rates and how long they last.

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Results are In for Top 5 – Winnipeg 2012 Debt Resolution

We recently asked you, our Manitoba readers, to share your debt resolution for 2012 for a chance to win an Apple iPad.  Our iPad winner is Janice Margelino! We were very happy to meet and present the prize to Janice. We were extremely impressed by her dedication to good saving practices and determination to pay off her student loans!

Also, here are the Top 5 Resolutions we would like to share, as chosen by the contest participants. The choices are listed in descending order from lowest to highest votes.

Number 5. Commitment to save – By creating a budget and cutting your costs you will put yourself in the best position to save in 2012. You can use those savings in the future so that you don’t find yourself in debt again.

Number 4. Follow your budget – A budget is absolutely essential, if you really want to reduce your debt. The key to success is to make sure that the budget is realistic and to stick to it. If your budget comes in over your monthly income, it is time to start looking at where you can cut costs.

Number 3. Pay off student loans – Those students loans are not going to go away on their own. Commit to making regular payments on student loans as part of your overall budget. If you are struggling to meet your payments, speak to your lender to discuss your options.

Number 2. Pay down credit card debt – Credit cards are a quick and convenient way to pay for the things you want. However, they are also a sure way to increase your debt and put a huge dent in your monthly budget. Pay off your highest card balances first and work your way down.

NUMBER ONE. Cut frivolous spending – The top choice for debt resolution, and rightly so, is to cut frivolous spending. This does not necessarily mean going without. Look for cheaper alternatives to your favorites treats. For instance, retro clothing is fashionable at the moment, so why not check out your local thrift stores?

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Money-Smart Kids

Where are the Money-Smart Kids?

If basic, yet essential, information on budgeting, borrowing, saving and investing isn’t learned early in life, most young people will have a huge deficit in this very important life skill when they leave home to live on their own.

Kids need to know the meaning of credit and debt before they get out into the “real” world and begin signing contracts on cellphones and credit cards without knowing the trouble they could be getting into. Too often they find themselves with an overdue bill and no money to cover it.

Parents and schools need to band together to teach our young people the basics (at least) of money management. According to comedian James Cunningham, who has set up a national financial literacy program that is sponsored by the IEF and the Investment Industry Regulatory Organization, young people need to know how to save, invest and spend their money.

Cunningham uses humor in his program “Funny Money” to give young people the following three tips regarding money management:

1) Know how much money you have and the sources of your income and write it down. Keeping track of your money allows you to see how much money you make, what you can afford and how long it will take you to pay back a loan based on this income.
2) Take control of your money; don’t let your money control you! This means that before you get a credit card and charge a bunch of purchases, make sure you have some income so you can pay that bill off in full every month.
3) Save some money with every paycheck. You will be surprised at how quickly your money grows and you will love the feeling of taking the money you have saved and buying something outright, rather than making payments on it for the next several months.

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You and Your Money with Gail Vaz-Oxlade

Creditaid is pleased to announce that we are a proud sponsor of You and Your Money seminar series with Gail Vaz-Oxlade. Gail Vaz-Oxlade will be in Winnipeg, Thursday, February 9, 2012 at Canad Inns Polo Park.

Also, don’t miss this opportunity to hear some expert financial advice from a variety of seminars from 2 pm-5 pm. Creditaid will be holding seminars on budgeting at 2:00, 2:30, 4:00 and 4:30.

Tickets can be purchased at Sofias Boutique 836 St Mary’s Rd, Winnipeg, Phone Number: 254-2595.

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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.

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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!