Archive for the ‘Money Management’ Category
Do you and your spouse ever talk about… money?
For any couple, richer or poorer, talking about finances can easily create static. The solution? Clear the lines of communication – for love and money.
Sad, but true: statistics show that among couples who separate, money issues are a critical factor up to 90% of the time. And yet, any good psychologist will tell you that most couples would rather talk about anything – even sex problems!– rather than discuss their finances.
The thing is, money tends to highlight the differences between individuals. We each have our own way of planning for the future we envision, and this affects how we spend, save and invest. Are you easy-going about money or do you worry all the time? Do your spouse’s spendthrift (or tightwad) ways drive you crazy? Were you saving for a vacation only to find that your partner decided to buy a new home entertainment system instead? Do the two of you truly share the same financial goals?
These kinds of things come up more often than you might think, and can create tension that eventually leads to financial problems. The solution? Open, ongoing dialogue. Here are a few tips to help make it easier to approach this touchy subject.
• Make time to talk about money – Make “dates” with your spouse to talk about money. Don’t avoid the subject or let yourselves go off on tangents.
• Be prepared – Take it seriously. Beforehand, think about what you want to discuss and assemble the necessary documents: your financial balance sheet (assets, debts), your household budget, a statement of income and expenses, your credit reports, if any. Your financial services professional can recommend some practical tools to help you with this.
• Be honest – Have you secretly always wanted to start a business? Is your number one priority the education of your children – from your previous marriage? Or is it your own retirement? Being specific about your dreams will make it easier to decide how to achieve them. Together. Or at least, at the same time…
• Keep it civil – You might discover differences – and differences of opinion – that you never suspected. Listen to each other and try to be understanding. Have your discussions in an environment where you both feel free to speak frankly and, if necessary, have a neutral third party, such as your financial services professional, on hand to help you look at things objectively.
• Take notes – A written record of what you talked about, along with the associated documents, will help you keep track and measure the progress you make together.
When all is said and done, it isn’t always easy for a couple to talk about money… but with the right attitude, a willingness to compromise and, if necessary, some outside help, it’s not the end of the world, either!
(Guest article provided by Barry Coleman, Financial Advisor with Desjardins Financial Security. barry.coleman@dfsin.ca / www.dfsin.ca)
Gotta love summer! School ends and the Kids are home for 8 weeks. You and your spouse have sacrificed any vacation time all year to cut back on child care costs. So half of the time is covered (assuming you have a spouse and he or she gets vacation). And now you get some much-deserved relaxation. And the reward? Your Kids gleeful cries, “I’m bored!”, “he’s bugging me!”, “shes in my room!”, (insert wine here).
You remind yourself of how much money your saving. I mean how much you love spending time with your kids. [grin]
This summer, we committed ourselves to putting the kids in daycamp for two full weeks. One in July and one in August. We figured they would like the change of scenery and we could have two weeks where we didn’t have to juggle our work schedules to accomodate having one of us home. All was going well until my son announced one morning, while getting ready for camp, that he did not want to go. So here I was, brushing my teeth, thinking that I could either force him to go and deal with the fallout creating a stressful morning routine, or take him to work with me (hardly a desireable choice). So I decided to let him decide. And seeing how I was discovering that he was ‘money motivated’ I thought there might just be a lesson to be learned (hopefully by him, not me). So, I gave him an ultimatum. “You can stay home if you want to pay us the amount we are losing from your missed day at camp”. He thought about it. I wanted to put the cost into perspective, so I said, “you know that $50 bill you have (it was just past his birthday and Grampy was very generous), well, you will have to give that to me. Why don’t you go brush your teeth and let me know what you decide”.
He went to brush his teeth and came back. He obviously thought about it, because he came back and said, “Can I pay for it out of the money in the bank?”. We had just set up a bank account the week before where half of the momey they were given had to go away for ‘Needs” and the other half they got to spend on their ‘Wants’. “No”, I said, “You don’t NEED to stay home”. He got that thinking look again. “Why don’t you go put your sneakers on and think about it and let me know what you decide”, I offered. He came back and I asked, “What did you decide?”. He said, “Well (sad pouty face). I guess I’ll go, but I’m not going to have fun”. Mission accomplished!
He had fun by the way and I got so much more work done without him “helping” me. Oh, and we both learned a valuable lesson that morning.
Its true! Just because we help people find solutions to their financial woes, doesn’t mean we don’t have our own.
I’m sure fitness instructors sometimes have lazy periods, Investment advisors have lost money and great chefs order pizzas. The point is, we are all human and we all make less-than-perfect choices once in awhile. In fact, it is our very mistakes that help us help you. As other has been heard saying, “do as I say. Not as I do”.
So, here’s my confession. I have been suffering from a low credit rating for, oh my, ten years at least. What can I say, life happened – self-employment + two kids – no maternity leave + husband parental leave = dependency on credit / over-extension / drop in credit rating. And we’ve been struggling ever since to get back on track
And get back on track we will! Why? Because we are determined. We are working together. And I am a financial counsellor after all. Which basically means I have the skills, tools, resources to get out of this mess.
It is those skills and experiences that I, and my fellow Dr. Debts, share with you to help you on your financial path of success.
Update (3 months later)…my credit score increased by 50 points +. How you ask? I followed my own advice. More specifically, I did the following:
- talked to someone who knew more than me about repairing credit ratings. ”Use your resources!”
- committed to stop using any new credit for three months. It took some juggling and commitment. “Prepare/review or revise your spending plan”
- Re-arranged my existing credit. I had to obatain new credit at a higher rate of interest and move some of my additional credit to avoid being maxed out. “Never max out your credit limits”
- Stayed on track for three months. “Commit to your plan”
There is no magic solution. The right steps may vary depending upon the circumstances. The common lesson is, don’t give up. Find a way that works for you and commit to it.
How can we help? Ask Dr. Debt today!! (click the link above to the right)
What comes to mind when you hear the word “Consolidation”? Do you envision all of your debts being ‘paid off’ leaving you with the manageable obligation of one monthly payment? If so, you are thinking about a “Consolidation Loan”. A financial institution loans you money by paying off your debt and you pay them back. With interest, of course.
Nowadays, the word “consolidation” is being used in a much more liberal term. Many debt-relief agencies offer to “consolidate your debt”. The process is quite different. Your creditors are approached and offered a settlement. That settlement could be in full or in part (a percentage of what you owe) and could result in an elimination or reduction of interest.
In the Insolvency Restructuring Profession we call this “consolidation” or “settlement” a Consumer Proposal
So, what is the difference between a “consolidation loan” and a “debt consolidation”?
The most important distinction is the effect on your credit rating or score. A consolidation loan will not affect your score in a negative way and may, in fact, improve it. A debt consolidation, on the other hand, WILL impact your score negatively, the extent depends upon your credit score at the time of the ‘consolidation’.
A friend recently asked me if I could recommend a reputable debt consolidation company that will not impact your credit score. My answer was “Nope, they don’t exist!”. If you find one, let me know!!
(Blog submitted by 3rd party) / Author: Robin Williams
[Please note that the poster does not offer any recommendation for sites linked to these articles and cautions readers to use good judgement in contacting a company for assistance wth their finances.]
If you have multiple debts, you may face difficulty in making all your bill payments on time. In such a situation, like everyone, you too will wish to get rid of your bills. You can pay off all your bills by obtaining a consolidation loan. You can also seek help from professional debt consolidation companies. They advise you and offer you services to tackle your debt problems.
How can you benefit by professional debt consolidation advice?
Professional consolidation companies provide you with financial advice and help you combine multiple bills into one. They also offer you other benefits. These are:
* Free counseling: A certified counselor of the company will analyze your monetary situation and will help you determine your financial goals.
* Communicate with creditors: A representative of the consolidation company will effectively communicate with your creditors. Your creditors may stop harassing you with collection calls.
* Negotiate to reduce interest rate: The representative will negotiate with your creditors to reduce the rate of interest on all your bills.
* Eliminate other charges: The company representative will also negotiate with your creditors to help you eliminate or reduce late charges and over limit fees.
* Convenient repayment plan: The consolidation company prepares a repayment plan for you based on your credit needs and gets it approved from your creditors.
* Replace multiple payments with one: Instead of making separate bill payments, you have to make a single reduced monthly payment to the consolidation company and they will disburse it on time to all your creditors.
* Become debt free: With the help of a professional consolidation advice, you can pay off all your debts within 4-6 years.
There are also various non-profit debt relief companies that offer debt consolidation programs. By enrolling in one such program, you can obtain relief services at a lower cost. However, you must remember that there are less reputable companies. So, you must verify the company’s status before seeking consolidation advice from them. You must check its accreditations.
For details on all of your options, and an outline of the benefits and disadvantages of each, contact Dr. Debt (info@drdebt.ca) to arrange free consultation.
Recently, I received a question on this site, asking about our credentials – a very important questions. Given the broad range of “advisers” out there in both the real world and the world-wide web, you never really know who is imparting their knowledge on you, do you?
So, I thought I would take a moment and tell you about us…
As I write most of the posts, I will start with my credentials. I have been working in the Financial Counselling / Bankruptcy industry for 12 years. My training has been a combination of professional training and experience. I obtained my financial counselling certificate from The Association for Financial Counseling and Planning Education (AFCPE) while working in this industry. Nowadays (is that word actually in the dictionary?), the Financial Counselling Program is coordiante by the Office of the Superintendent of Bankruptcy and the Canadian Association of Insulvency Restructuring Professionals. More importantly, I feel that I have personally made most of the financial mitakes I write about.
Enough about me…we are supported by our Trustee, Darryl Haley, who has more than 30 year experience dealing with individuals and businesses in everything from money management to business turn arounds. He hold a CA designation and Trustee in Bankruptcy license.
In addition, we have several staff members with a wealth of training and experiences who talk to people every day about their financial situation and we draw upon other business colleagues and experts in their fields, to bring you relevant advice and experience.
So thank you for asking!
(Do you have a question for Dr. Debt? Click on “Ask Dr. Debt” and watch for a post addressing your question.)
I’m in my car. On my way to work. Listening to the radio. And one commercial catches my attention.
A lady comes home with a shopping bag. Her husbands asks what’s in it and then exclaims, “Don’t you have enough dresses?” (Like that’s actually possible)
She replies, “But honey, they were 70 percent off”. He pauses and then replies, “That’s a lot. ”
The message closing off the commercial is, “Save money. Save on explanations”.
This strikes a chord with me on so many levels. First there are all those dresses in my closet (just kidding. I feel confident I have a reasonable number and I wear them all). What resonates with me is the fact that this is a general perception. If it’s on sale and I’m getting such a great bargain, I should buy this.
Of course we don’t know how much the dresses in the commercial cost before the sale. 70 percent off of a 500 dollar dress is still a good chunk of change.
And did she pay cash or use credit? A sale may be well and good, but if you pay for it on credit, and take several months or years (yikes) to pay for it, the total cost of the use of credit could eat up the savings.
The bottom line is, your budget should dictate what you spend, not the ultimate sale price.
We have a weekly tradition in our household. Every week, assuming they have earned it, we stop at the local convenience store, where my kids get to pick out a movie. We head to the non new-release section. Its a great deal. A 3 day rental for 2.00. The kids get an entire weekend of entertainment (assuming they have time to watch the movies. And if they don’t, it’s only 4 bucks.)
For their birthdays this year, I thought I would take them to the library to get their very own library cards. My 8-year-old daughter is an avid reader and I’m hoping my 6-year-old son will develop a taste for books. We were just getting ready to check out their books when I remember, “the library has movies too”. So off we go.
Two movies. No cost. 7 day rental. Hmmmmm. I think I will change our weekly tradition. That will save us 16.00 a month. With the monthly savings maybe we will go to the movie theatres once in awhile. =)
If you step back and look at your finances, you will find that you are in one of three stages of financial being.
The first stage is “survival mode”. This is where you are just barely getting by. There is just enough cash flow to put a roof over your head, food on the table, gas in the car. But very little room for anything else. This is a dangerous place to be as any life event – big or small – can tip the scales and start you on a downward spiral. Credit is often used as a crutch, with the best of intentions, to balance out the budget.
The next stage is the “breathing room” stage. You are here if you have enough cash flow (not including credit) to survive and to deal with things as they come up. If the car breaks down, you can get it fixed. Maybe not right away, or it may set you back and you will have to adjust to catch up. Credit can be used as a safety net but caution should be stressed to keep the credit use at a minimum and ensure you can manage the payments comfortably.
The third stage, which is where we all strive to be, is the “comfort zone”. In this stage you are surviving, you can deal with irregular expenses as they come up, and you have the flexibility to do some or all of the things you want. Often times, credit is used to “enhance” this position. A dangerous game. You should proceed with caution.
So, what stage are you in? Where do you strive to be? The first step is AWARENESS. The second step is ACTION!
Trimming your budget is a lot like trimming your waistline.
Consumers spend millions of dollars every year looking for that magic solution to losing weight. And businesses increase their bottom line while relatively few consumers decrease their bottoms/middles etc.
The same phenomenon happens in money management. We tend to look for quick fixes – consolidation loans, second mortgages, payday loans.
Neither works for the masses. Why? They do nothing to address the underlying problem – taking in more calories than you burn / spending more monthly dollars than you make.
But alas, there is a magic solution to gain control of your finances! – AWARENESS. Pay attention to the details.
1. Track where your money goes and make decisions to change your habits.
2. Seek expert advice/guidance when needed.
3. Commit to a plan of action.
That’s it. That’s the secret. 