Helping Canadians Get Out of Debt
As published in the September 2016 issue of Balance, a Manitoba Teachers’ Society publication.
I am asked by individuals of all ages, “What should I be doing at this stage of my life with my finances? I am feeling stressed about what I need to be thinking about.”
Most people avoid developing a spending plan. It’s just no fun hearing the same things over and over – “be frugal, be thrifty, save every penny you can for a rainy day.”
Unfortunately, failure to develop a spending plan usually results in our money waving goodbye every payday, and when bumps in the road occur and they will, (life being, well, life) you find yourself with very difficult financial challenges.
There’s got to be a happy medium – something between the regimented, enforced frugality that is so often presented as the solution to your life’s financial future and the carefree spending that’s going to land you in trouble. Taking control means that you take back full control and “tell your money where to go”!! No more letting it simply wave good-bye!
Enter the Save-to-Spend concept, a system of budgeting that will have you future-proofing your money, while still allowing you to achieve the things you want, and even giving you some “mad money” for the things you didn’t know you wanted. It is really all about pre-planning by putting your short, medium and long term goals on paper. Once you have them, put down what the costs are for each of them. Then prioritize them and determine the length of time it will take you to save for each of them. A simple example is buying a new big screen television. If the cost is $1200 and you want to have it in one year, start putting $100 away each month for it. This is far different then the buy now pay later program where you forget to pay off the interest free loan and end up paying 30% interest back to the day it was delivered. This is an example of a change from that path of instant gratification to one of delayed gratification!
The concept goes one step further and includes the most important part of any plan and that is building your emergency savings account. These are just a few simple examples of a very old concept that we need to return to.
Of course, you can’t make money from nothing, so there are going to be some sacrifices. They will, however, seem unimportant as you quickly see your bank balances grow with all the individual financial goals you have set.
Just remember you need to keep happy while you work within your Save-to-Spend plan! Like dieting, if you tell yourself you can never enjoy one of the foods you love, you’ll likely cheat. If you allow yourself the occasional treat, you’ll be happier overall and are more likely to get the result you want. Save-to-Spend has been proven to be effective.
If you have questions about Save-to-Spend, budgeting, or any other topic related to debt or personal finance, contact Creditaid anytime online or by telephone at (204) 987-6890.
We often offer advice about taxes here on our blog, but we seldom talk about life’s other certainty. Planning for the funeral of a loved one can be very stressful if you have to do it all while you’re in the process of grieving. There are many things to consider – type of internment, the casket, the service, and the reception. Because of our desire to “just get it done”, and to properly memorialize someone very close to us, we can often overspend when planning a funeral.
At Creditaid, we see the impact that high funeral costs can have. We can offer the following advice to someone who’s planning a funeral:
Take someone with you. Having a trusted friend or family member who isn’t as stricken with grief as you are to help with making the arrangements can assist in keeping a perspective on matters. While the professionals in the funeral industry aren’t trying to take advantage of you, bear in mind that it is a business. Having a “voice of reason” with you could prove to be handy.
Shop around. Funeral services differ in price. While we don’t advocate driving all over town, visit at least two funeral homes to see what options they offer you.
Look at economical alternatives. Instead of a full-blown funeral, you could opt for a “direct disposition”, where the internment is handled in the background, and instead hold a memorial service for friends and family. Cremation is a more economical option than traditional burial in a plot, and has gained popularity in recent decades. It’s now a standard method of burial.
Consider the real wishes of your loved one. Chances are, they wouldn’t want you to put yourself in a position of financial hardship for their funeral. While it’s only natural to want to memorialize someone “properly”, financial realities should always be considered. There are lots of ways to make a fitting memorial without exposing yourself to crushing debt.
Creditaid offers credit counselling and debt management solutions to Manitobans struggling with debt.
‘I’ve always wanted something really cool like this to happen!’ That’s what I excitedly exclaimed to my ‘twenty something’ buddy as we prepared for an emergency landing into the Toronto Airport. We were thrilled to be along for the ride. We were young.
We landed without incident, but what youthful carelessness to actually revel in a dangerous moment.
Proverb says: ‘Be careful what you wish for.’ A lot of folks wish for some kind of change – in their marriage, in their jobs, where they live. When separating, or thinking of separating or negotiating the terms of your separation, be careful. Things can change. And this can apply to the parenting plan you and your ex and the negotiator put together.
Try to stay flexible about the future to enable you to address possible changes in circumstances. Two biggies are changing jobs and moving out of province. For example, a couple might have a legal agreement with a Parenting Plan that states he gets the kids each July at the old family cottage, while she gets them all of August in the city. They live in Brandon, Manitoba and he has just been laid off but accepted a new job at lower pay in Estevan, Saskatchewan, three hours away. His new employer won’t give him that same vacation time he enjoyed before so he doesn’t have the freedom of a month at the cottage with the kids next summer. But she has already made plans for that July, having committed to her own kayaking holiday off Vancouver Island. To further complicate things, the Parenting Plan was based on the expectation of a certain level of spousal and child support. She feels undermined by his change of circumstances – she has already pre-paid for the kayaking holiday and part of her ability to afford it was dependent on the spousal support payments. On the other hand, he didn’t willingly lose his job and hoped to replace it with something even better with even more pay.
People can change their minds and their agreement but it does require consensus. A big ‘but’ is ‘But what if one side insists on the existing agreement? What if she pushes for compensation for her outlay of cash for her holiday? And what about the kids and those two summer months? What happens there?’ I don’t have the answer, but an overly rigid plan can be suffocating. The reality is, they need to compromise. It is likely his spousal support and even child support payments will be adjusted downwards to reflect his lower income. Perhaps he can make some contribution to the pre-paid holiday, which she now can’t afford nor has that time free to go. As to what to do about the summer, not sure I’d want to be in the same room when they discuss it, but one way or the other they will figure it out. [I am letting him off the hook too easily, I know; surely he could have discussed this with her and the kids before committing to the new, not so great job out of province. But maybe he was desperate, maybe he had no choice].
Life is full of changes: some too hot, some too cold, some just right. The Goldilocks zone of being just right is where you want to be, but more often than not, like picking your parents, hard to accomplish. Plans emanating from separation and divorce should not be handcuffs, albeit, many feel the obligations for payments, which are just that, financial payments. If they are ‘court ordered’, well, you’re outside the Goldilocks zone, and unfortunately traditional divorce attracts court orders. A mediated divorce can be more flexible while still leaving the party in greatest need with a leveraging stick if need be. I am not advocating delinquency, but if you both start with a cooperative approach you can better handle inevitable changes in circumstance. And often times it’s the one in greatest financial need that requires the flexibility.
Another big change can be re-marriage or ‘re-partnering’ as I have heard it described. One of the divorcing couples entering a new relationship can send ripples, even waves, across what were reasonably calm waters. The kids too can find themselves rising and falling with the waves. One of the things we caution couples in the midst of the process, is to avoid new relationships and if they are already in one, to keep it more or less to themselves. But once the dust has settled, hearts expand and that leads to dancing and …well you get the picture. And why not? Love makes us happy. In fact, when I have a couple going through the process, I can usually tell which of two have someone else already in their life – they usually smile more – and I know that at least one of these folks is, if not really happy, at least sort of happy, and will therefore be a little more focused on getting the work done. I do feel sorry for the lonely one though – dejected, perhaps feeling still in love with their departing spouse, wondering if the pain will ever go away. There really isn’t a plan that can address re-partnering unless it’s tied to spousal support. For example, they might agree that spousal support ends if the recipient remarries but that’s more to do with financial issues than Parenting. One couple agreed not to introduce a new partner to the kids for at least a year, but outside of that, when your ex finds someone, and especially if it involves your kids in any way, you’ll have to adjust your thinking. The wise one on the mountain says you need to be happy for him/her. That little broken hearted egomaniac on your shoulder will suggest other actions.
The main take-home message about divorce related plans, be they Parenting or otherwise, is: it can cut both ways. An old professional mediator in the investment business told me that he thought a good deal was when neither side was thrilled with the terms. Maybe a bit too dreary but something to keep in mind when dealing with family.
Originally published by Fairway Divorce Solutions.
Divorce is a painful process and the traditional adversarial system can make a painful process even worse. Fairway Divorce Solutions® is changing the way divorce happens by providing families with a safe and comforting environment where they can make well-informed decisions. People leave The Fairway Process™ with A Clear Road to a New Life®. Our job is to bring you and your spouse to resolution. The traditional process of divorce is daunting, expensive and stressful. At Fairway we work with you every step of the way to avoid uncertainty, unnecessary conflict and expensive litigation. Working with both amicable and conflicted couples, Fairway has brought thousands of couples to resolution, helping them move on in a positive and productive way. Reduce cost, reduce stress, preserve assets and protect the kids — contact us today by calling (204) 414-9181 or visit us online at FairwayDivorce.com
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.
Here is a man, Nick Vujicic, who’s attitude towards life is so powerful and awe-inspiring. He shows that through persistence, learning and a positive attitude, how we can tackle life’s challenges no matter how big or small they may be.