Canadian families will spend an average of $3,073 on summer travel this year, according to a recent study by BMO Financial Group. Ontarians, with average vacation spending set at $3,016, rank second behind British Columbians, who will spend $3,572. Quebecers will spend the least at $1,978. Through September of 2013, 83 per cent of Canadians plan on taking a vacation, the top travel destinations being the U.S., Europe, and Central and South America.

I look to my home province of Ontario for insight into what might happen if, for just this year alone, thanks to proper financial planning families decided to save some money by sticking close to home for a summer break. Would this mean making a huge sacrifice in terms of experiencing much-needed R&R over the summer months? Will spouses and kids fall into deep pits of depression, gloom, and boredom? The answer is not at all if you’ve got a handle on how to plan a “staycation” – otherwise known as taking your summer leisure locally on the cheap.

Just ahead, I’m going to provide some budget tips regarding staycations. But before doing so, let’s return to the $3,073 I earmarked for savings rather than big-time travel. Think of it as a tidy sum for disbursement over the course of a family fiscal year starting after the next Labour Day weekend (the unofficial close of summer). It doesn’t take much imagination to see how a family could spend that money to good effect on things other than travel, and perhaps ease monthly budget concerns a little – or a lot.

Smart debt management over the summer can make a big difference over the whole year, with a view above all to avoiding debt problems.

Think in terms of what more than $3,000 could cover in relation to back-to-school costs alone – new clothes for the kids, school supplies, lunch money, transportation, sports equipment, even college fees. Think of small family pleasures regularly experienced over a longer term; for instance, nights out for dinner, a movie, or a special event. Imagine easing the financial strain of the Christmas season simply with some wise financial coaching. And the list goes on.

Truth is, plenty of Canadians get their summer fun at the high cost of credit card debt. So the R&R that’s designed to relieve stress only adds to it when the bills come due.   Thus, we come to the idea of the staycation, which as a matter of fact is growing in popularity according to recent studies. A growing number of Canadians feel they can’t afford vacations to far-flung destinations and are looking for things to see and do right here at home. Thankfully, we live in a country rife with natural beauty just waiting to be explored again and again. Not to mention, our cities and local communities feature plenty of cultural offerings. Just take the time to learn more about your community and region – wherever you are in Canada – and you’ll soon see what I mean.

With research and a little financial coaching from Credit Canada, a staycation can be both fun and rejuvenating. But you’ve got to get serious about the matter, treating the staycation with the same respect you would give to a vacation to an exotic clime. To begin with, avoid a random approach. Set a start date and an end date for your staycation. Then – with the help of all the resources available through the Internet – plan all that you can see and do during the time period. Otherwise, you could end up spending valuable leisure time on projects like cleaning out the garage, watching TV, cruising Facebook, or simply brooding.

Put yourself in the mindset of a traveller who might be travelling to distant shores. Direct incoming phone calls to your answering machine; put emails on hold; declare a moratorium on Internet communication. Or if that’s too much to ask, then have some fun providing an imaginative online travelogue about your staycation, again treating it as an exotic adventure. The key here is to assume the attitude of a tourist in your own community and region.

Absurd as this might sound, it can actually be a lot of fun. Get the whole family into the swing of acting like tourists, dressing like tourists, and being as curious as tourists. Indeed, challenge family members to come up with ideas for local places to visit and things to see and do. Take lots of photos of everyone having a ball.

Here are some tips for making a staycation memorable and fun:

• Check out local festivals, fairs and free events in your area.

• Visit local or regional museums and historical sites.

• Sign up for www.groupon.com and get 50 to 70 per cent off recreational activities and restaurants in large urban centres. Discounts are also found through www.livingsocial.com, www.teambuy.ca, www.wagjag.com, www.dealfind.com, www.indulgeliving.com.

• Visit interesting parks and wilderness areas within reasonable driving distance from home; look into beaches, campgrounds, and habitat featuring wildlife. Consider day trips involving cycling, hiking, canoeing etc.

• For the more adventurous, try camping free of charge along a lake or river somewhere off the beaten track in your region.

• Purchase “entertainment booklets” for your city (or largest nearby city); the booklets offer all kinds of two-for-one coupons for activities and restaurants.

• Depending on your region, you might create your own wine tasting tour (with a designated driver, of course); or you could spend a day picking fruit, fishing, tracking birds etc.

• Look into what your community offers in terms of recreation programs and consider enrolling in them.

• As part of the staycation, build plans around learning new hobbies or skills – nature tours, photography courses, cooking classes, art courses etc.

• If lakes are accessible by day trip, take full advantage of them as destinations. Swim, rent a boat, explore lakeside trails, enjoy the scenery, or just soak up the sun on a warm beach.

• You and the family can include volunteer work in your staycation plans: identify a cause, festival, or event that you and the kids like and sign up.

• When you find yourself in peaceful surroundings, you might want to have a good book in tow; few soul- nourishing pleasures match reading a good yarn while swinging in a hammock or reclining on a beach on a warm summer day.

• Some old-fashioned fun can be built into your staycation plans: a drive-in movie; a neighbourhood potluck BBQ to launch or close your staycation.

These are just a few idea starters. Above all, remember that if you put your mind to it, you can create your own fun this summer without spending a lot of coin. Also, don’t pass up the opportunity to use credit card or grocery store reward points to fund part of your staycation. Check to see what points you have to put towards things like free movie passes, free restaurant gift cards, or free admission to local or regional attractions.

May the sun – and a pleasing bank balance – guide you this summer.

The post The staycation. Summer’s money saving grace. appeared first on For the Love of Money.

For the scoop on personal bankruptcy in Canada, look no further than what the skilled trustees at Hoyes, Michalos & Associates (HMA) have found in a recent study. It offers ample proof that many Canadians – particularly men entering middle age – ought to take sound debt management, savings, and smart monthly budgeting increasingly to heart.

After reviewing some 7,000 personal insolvency filings from 2011 and 2012, HMA was able to create a good portrait of the typical, bankrupt Canadian: Male, 43 years old, and with unsecured (or non-mortgage) debt of more than $61,000. But that’s just the beginning of the story.

The study looked into average unsecured debt levels in groups involving Canadians from 18 to 60-plus years of age, with remarkable findings. What surprised me most was the average debt level applying to 50-to-59 year olds – it’s more than $84,000 dollars. Who knew that the generation which grew up with those Freedom-55 ads (touting early retirement through smart financial planning) would find itself in such a sorry fiscal state? For younger Canadians, it ought to be a sobering and cautionary tale.

And speaking of younger Canadians, the HMA study determined average unsecured debt levels due to a lack of good debt management are as follows: 18 to 29 years – $32,686; 30 to 39 years – $50,351; 40 to 49 years – $67,180. Meanwhile – quite bruisedly – Canadians 60 years of age and older carry on average $68,776 in unsecured debt. All told, the study showed an average debt-to-income ratio of 215% among all age groups.

Our hearts especially should go out to those who in the evenings of their lives are saddled with a lot of personal debt. As reported by Advisor.ca last week, “the average 50-to-59-year-old is working but is earning less than those aged 40-to-49. One in three of the older group still supports at least one dependant. If they own a home, they still have a substantial mortgage.”

Doug Hoyes, from HMA, told Advisor.ca: “They (the older group) are squeezed from all sides. They are often supporting both older children and aging parents, as well as making debt payments. They may also be dealing with medical expenses for themselves or family members.” He added that, “they’re using credit to make ends meet.”

It’s not hard to imagine how all the financial and personal burdens can easily combine to form a perfect storm for bankruptcy.

Trustees at HMA said that, “Canadians are in denial about their overall debt load. [But] talking to a reputable professional is the first step in eliminating overwhelming debt problems.”

All of us at Credit Canada Debt Solutions could not agree more. We make a point of showing troubled Canadians that there can be light at the end of the debt tunnel through debt management and financial literacy programs such as our Financial Coaching Series. But meanwhile, as Canadians, we might ask why and how our debt has gotten so far out of hand that our own Bank of Canada is raising red flags about the matter.

Some answers are suggested through a recent public opinion survey commissioned by the Certified General Accountants Association of Canada (CGA), which examined the attitudes Canadians hold about wealth accumulation.     Here are a few of the troubling findings (taken selectively):

• “The household savings rate plummeted from its peak of 19.9 per cent in the early 1980s to 3.8 per cent at the end of 2012.

• “Over 70 per cent of households do not view wealth accumulation as very important.

• “Canadian households are reluctant to engage in active savings, even when additional funds may be available.

• “Even when additional funds are available, i.e. due to lower interest rates, Canadians seem to be more likely to use the funds for consumption rather than wealth accumulation.

• “More than one quarter (29 per cent) of households report to have no wealth. Nearly two-thirds (62 per cent) of households with no wealth do not expect to improve their wealth situation in the next three years.

• “The two most often-cited reasons for not being able to accumulate wealth are the current level of income and the need to honour other financial obligations.

• “(Generally) Canadians are satisfied with how much wealth they have accumulated, but often are unaware of how much wealth they have. Little attention is paid to changes in the economic environment, which can affect household wealth.”

I would say that the bottom line relating to all of the above simply is this: It’s time more Canadians improved their understanding of personal finance, and by that I mean all the ins and outs of credit, debt management, monthly budgeting, savings, investment, as well as financial planning for the long term.

As a final thought here, I quote the 18th Century author and statesman Edmund Burke: “If we command our wealth, we shall be rich and free. If our wealth commands us, we are poor indeed.”

The post Bankruptcy and the need for more financial literacy. appeared first on For the Love of Money.

Acts of kindness and generosity make us better people. It’s just that simple. In fact being charitable makes us feel better according to a study undertaken by a team of Canadian researchers at the University of British Columbia.

Professor Elizabeth Dunn, who led the study, said: “We wanted to test our theory that how people spend their money is at least as important as how much money they earn. Regardless of how much income each person made, those who spent money on others reported feeling greater happiness, while those who spent more on themselves did not.”

This is good news in an age where we are flooded by reports of all the greed that appears to be afflicting our society. It only shows that bad news is not all it’s cracked up to be. There is so much negativity in what is being reported these days. Yet if we stop to closely observe our surroundings we find all kinds of reasons to celebrate the human race as a big-hearted species.

I should add here that in matters of money it’s highly beneficial to feel good about one’s behaviour. As I’ve stated so many times before in this blog the attitude one brings to money has a great bearing on one’s well-being.

We don’t need to cite studies to make this claim at Credit Canada Debt Solutions. Some 45 years of helping people with debt problems through financial coaching has told us that a positive approach to money can make all the difference in the lives of individuals and families, particularly in relation to overall personal money management, following a monthly budget, and – if need be – finding debt solutions.

In Canada we ought to feel proud that culturally and politically we foster and promote acts of giving. Recent proof of which is readily seen in our federal finance minister’s call to take advantage of Ottawa’s new First-Time Donor’s Super Credit relating to charitable donations.

Just last week Minister Jim Flaherty announced, “the new First-Time Donor’s Super Credit will significantly enhance the attractiveness of donating to a charity for young and new Canadians who are in a position to make donations for the first time. By helping to rejuvenate and expand the charitable sector’s donor base, this important initiative will have an immediate impact in supporting the charitable sector.”

In a news release about the program, the government said, “the credit will apply (to) cash donations of up to $1,000, claimed in any one taxation year from 2013 to 2017. It will increase the value of the existing Charitable Donations Tax Credit by 25 percentage points, if neither the taxpayer nor their spouse has claimed the credit since 2007.

Go to http://www.fin.gc.ca/n13/13-075-eng.asp for more about the new Super Credit program.

So my fellow Canadians, give a little and start feeling better about life. Not only that but given the past season you can start feeling better about the Canada Revenue Agency (CRA)  since normally so little positive news is reported. Unbeknownst to many the CRA has devoted considerable resources to helping Canadians sort out charitable contributions providing plenty of online information and advice about matters surrounding giving.

Check out the CRA video highlighted above for guidelines about how to research and choose charities that you might wish to support. As the video points out, you can quickly search a charity’s name to determine if it is officially registered. This is important, because registered charities must officially devote their resources to charitable activities, allowing for the issuance of tax receipts for donations.

Through CRA online resources you can also get a summary of a charity’s activities and its financial information. You can promptly determine how a charity spends its money and how it handles its revenue and expenses. This free financial coaching resource is an valuable tool for selecting a reputable charity.

As the CRA video notes, some charities are better at making the most of their resources to benefit others. If the charity’s figures show that a lot of money is going into non-program expenses, then it’s fair to start asking questions, and perhaps undertake some extra research about the charity through the CRA Web site. Or you can visit the charity’s Web site and even contact the charity directly. More information about these matters can be found at http://www.cra.gc.ca/donors.

I leave the last word about charity to Mahatma Gandhi: “You must be the change you wish to see in the world.”

The post More coaching on financial well-being. Give and live a happier life. appeared first on For the Love of Money.

Good money management is always based on reliable numbers. Day to day, month-to-month, we can only spend wisely – and determine what we might save – by knowing what things cost. It’s vital to a sound personal budget. Yet these days, we have to question the larger economic framework for our spending. We might ask, what’s going on with respect to reported increases in our cost of living? The numbers don’t seem to be adding up.

Or, at least, that is what an article in the Globe and Mail pointed out not so long ago. It questioned the prevailing view that inflation is not a matter of great concern right now. “Something does not make sense,” the article said, noting that although Canada’s inflation rate was reported to be 2.2 per cent, it feels much higher.

We feel it when we go shopping.

“Although food, fuel, consumer goods and so on have gone up by more than 30 per cent in the past two years, the Consumer Price Index (CPI) has barely moved. But the markets for real assets – gold, food, energy and commodities – continue to rise, which suggests inflation,” the Globe article explained.

It went on to say that governments in both Canada and the United States – who are responsible for defining CPI and inflation – may be “increasingly out of touch” in the age of computers, cellphones, and the world-wide Web. “Inflation numbers calculated by an economist at MIT, who has developed software that scours the Web and records the prices of close to five million items, are running much higher than official inflation estimates.”

So what’s going on here? Perhaps it’s time our governments reviewed the methodologies they are using to determine real increases in our cost of living, particularly in relation to real income growth, or the lack of it.

One thing is sure: a new report by the Royal Bank of Canada shows that inflation is very much on our minds nowadays when we go shopping for groceries. Last week, RBC released findings from a survey that showed Canadians are trimming food budgets in the face of higher prices.

Canadians’ are unhappy about food price increases, with more than 90 per cent of RBC survey respondents saying they intend to cut back on grocery spending. Right now, Canadian families spend an average of $411 a month on groceries. Ontario families, at an average of $379 per month, spend the least, while Quebec families spend the most at an average of $448 per month.

RBC reported that:

• one third of Canadians say that rising food prices will affect their personal budget;

• forty three per cent said rising food prices will result in cut backs to spending in other areas. For instance, about 15 per cent said they will make less use of their vehicles;

• forty-one per cent said they will give more thought to not making impulse purchases.

The upside to all this is that Canadians are likely to be more savvy in the way that they shop and compare prices; and they are likely to give more thought to cost-saving strategies in the process of creating a monthly budget (mostly among those families who take the monthly budgeting process seriously enough to have a written plan of action).

The big downside to increases in food costs is obvious: our Canadian dollar just doesn’t buy us as much as income growth remains torpid. Other downsides include the sacrifices we may have to make to quality. Some of us may trade down from organic to regular foods, but many more are likely to spend on carbohydrates, sugar, and fat-laden foods that keep bellies feeling full while opening the way for long-term health problems running from diabetes to cardiovascular diseases and arthritis.

Still, we should not be too negative in our outlook about our cost of living. In comparison to other industrialized nations, Canadians devote a relatively small amount of their income to food – the spending average being only 14 per cent, according to official reports.

Let’s hope that number is reliable and that it does not increase significantly in the months and years ahead.

The post What’s going on as food prices rise? appeared first on For the Love of Money.

Only the rarest of birds can detach from money emotionally, and remain unmoved by it under all circumstances, including decidedly embarrassing moments. Certain artists, poets, drunks, anarchists, and lunatics are among the rare species. They can amaze others with their disregard for money or managing debt, not to mention their ability to survive day to day through what appears to be supernatural grace.

Among the emotionally detached are those who even proudly flaunt their disdain for currency and free-market capitalism, believing that humankind got it all wrong in the first place creating the monetary system we now share (notably to date, though, the only alternatives they’ve offered for the system consist of failed experiments in the free sharing of tie-dyed t-shirts and communal teepees; and, oh yes, there was that other failed business involving a couple of guys named Marx and Lenin).

Then there are certain inheritors of great wealth – scions of illustrious estates – who could care less about money because so much of it has fallen into their entitled laps by sole virtue of familial ties. Not to disparage inherited wealth, mind you. I’m just saying that in some cases the inheritors are spoiled brats and money or even debt management aren’t an issue.

I suppose I also ought to lump certain superstar celebrities with the above groups. The superstars, so I read, are emotionless about money because they never carry it with them and they never see putting it to work. They expect handlers and others to cover all tabs at all times, and the wads of cash they make go directly to accountants and investment advisors, all of which creates a cold chasm between the superstar and his or her earnings.

For all these folks, money holds little threat of embarrassment.

For the rest of us, though, it’s another story. For us, money does not simply serve as a practical necessity, it serves as a barometer for how seriously we take life’s responsibilities, particularly if others are beholden to us for such things as food, shelter, clothing, and what have you. Necessarily, these matters have a great bearing on one’s emotional state. Simply put, we feel for the way we handle money. So it’s fair to say that our treatment of money serves as an essential measure of our emotional character, including our propensity for embarrassment.

Now, I would venture to say that on the scale of things in life that hold the greatest potential for embarrassment, money ranks only behind sex, incontinence, and messy, lightning-fast sneezes in busy public spaces. Which brings me to a new survey I chanced upon recently concerning embarrassing money moments, as reported by Michele Lerner at Daily Finance.com. Here I discovered an interesting analysis of cringe-worthy moments involving money.

In terms of the top embarrassing moments, survey respondents said they were most distressed by situations where credit cards were, for whatever reason, declined. This is understandable. My heart goes out to, say, the young man at an expensive restaurant courting a woman he adores. Or the account executive who, with an offer for an evening of dinner and drinks, hopes to sign up the important business prospect being treated.

As determined by the survey, other squirmy money moments that could be avoided with proper debt management include:

• Feeling pressured to donate to a charity on behalf of a co-worker, family member, or friend.

• Saying no to giving money to a panhandler or beggar.

• Feeling pressured to chip in on a group gift at work, like for a baby shower or wedding shower.

• Sharing salary/wage amounts with co-workers.

• Splitting a dinner bill or check with a large group of people.

• Determining a gift to get a partner for special occasions, like a first anniversary or a first birthday together.

• Treating someone to a meal and they order the most expensive item on the menu.

All this reminds me of a story I heard some time ago. It has to do with a woman who was to be treated by a friend to an expensive dinner out. Once the food and a wonderful vintage were consumed, and the bill was presented, the woman’s friend presented her credit card, but it was declined. The woman’s friend was mortified, but the woman calmed her saying she would happily cover the tab with her card. But that card, too, was declined. At that, the two women simply burst into laughter, and offered, between guffaws, to settle matters with the restaurant by perhaps washing dishes. Presently, the woman’s friend got ahold of her husband by phone and he took care of matters.

Had I been on the scene that evening, I would have encouraged both women to sign up for our Financial Coaching Series here at Credit Canada Debt Solutions. It’s a special, affordable program that can turn just about anybody into a wizard in terms of personal finance. It not only provides individuals with the skills to manage a personal budget, it explores the process behind how and why people spend, and establishes strategies for goal setting and savings. I can pretty much guarantee that anyone who goes through the program will never have to worry about washing dishes to cover a restaurant tab.

So, there are a couple of lessons to be learned from all these emotional goings on.

One, make sound personal money management a priority in life and you are likely to avoid embarrassing money moments. And two, where embarrassing money moments can’t be avoided, try to keep your sense of humour.

The post Thoughts about embarrassing money moments and personal debt management. appeared first on For the Love of Money.

Yes, it’s almost that time of year again. Our coveted Canadian summer will soon be upon us, and with it students from across the land will be setting aside their studies for other pursuits. Plenty I’m sure think that summer break is purely a time for sleeping in, lounging by the nearest available pool, or partying with friends. But the smart ones know it’s an opportune time to seek work, make some coin, and enjoy the benefits that come with one’s own efforts and earnings.

As I see it, wise students make a budget and work to create savings that deter scrounging for stuff during the next school year. They work to fund character-building excursions to distant, amazing destinations. They work to buy helpful, practical things, like a new computer – or creative tools like a new camera – or even a good bicycle or a reliable used car. As well, they work to gain training and skills that they can take with them into the future.

So it is that I address myself to you, high school, college, and university students (though you, too, mom and dad can benefit from this blog by passing the advice along to your children).

Maybe as summer approaches, notions of work, personal budgeting, and smart money management strike boring, if not sour, notes. But trust me, I and most other older folks have been in the same shoes as today’s students. We either squandered our summers in sloth and the pursuit of fleeting pleasures, or we seized the day and responsibly put ourselves to the task of making a living. The latter path, through my experience and observation, is the better way.

Let’s be clear. Approaching summer work starts with attitude. If a summer job conjures only images of drudgery, you’re setting yourself up for a self-fulfilling prophecy. On the other hand, if you frame summer employment as an adventure, you’re likely poised for a rewarding life experience on top of welcoming financial returns, which aside from allowing you to pay your own way can help you on the path to establishing solid savings and good credit.

Want more power to do what you want to do? Want to stop worrying about nickels and dimes even in relation to life’s simplest pleasures? Want to stop feeling humiliated by going on bended knee to borrow from others? Want more self-confidence and life skills? A summer job can put you on the path to getting all of these things.

Here’s a four-point game plan for students:

• FIRST, SEEK WHAT INTERESTS YOU, AND SET REALISTIC GOALS.

Ask yourself what kind of summer work might interest you. And consider what skills you already have that might be applied to a summer job. For example, say you’re extra talented in a certain sport, such as soccer, or you’re adept at playing a musical instrument, such as piano; you can look for opportunities to teach at schools and camps.

Good with people? Get into sales. Good with numbers? Can you make your own budget? Contact finance and accounting firms. Good with computers? Get in touch with IP systems providers and digital communication specialists, be they independent operations or a part of larger companies. Are you an artistic type? Contact galleries, museums, design studios et cetera. Likewise for any interest relating to science and technology, business, service industries, and the arts and humanities.

Maybe since brainwork has taken priority during school, you would like to do something requiring some muscle, and giving you the opportunity to return to school with the body of a Greek god or goddess. Perhaps outdoor labour involving the construction, energy, fishing, or agriculture industries – or forestry and parks and recreation – is worth pursuing. And why limit yourself geographically? If you’re mobile, make the leap to other parts of Canada. It’s a big wide, wonderful country.

Now remember, you would be wise from the start to frame your work search and expectations within realistic goals you set for yourself for the summer. Know what you are getting yourself into. What do you stand to earn during the summer with a given job? How much of the earnings will you be able to save and to what end do you intend to put the savings? Meanwhile, how will the work experience benefit you as a person and a skilled worker down the road?  Put your goals in writing. Revisit them if need be.

• SECOND, ACT LIKE A PRO – SHOW INTEREST AND CREATIVITY.

These days, thanks to personal computers and the Internet, you have at your command all the resources you need to quickly get in touch with a universe of potential employers. Investigate job sites as well as individual company prospects that interest you. Position yourself as a potential pro by putting together a great covering letter formally presented in your email with good grammar and absolutely no spelling errors. If you have past work (or volunteer) experience, you should include a simple but persuasive resume outlining responsibilities and achievements, including what you believe you learned from the experience.

Use the Internet to research effective, creative cover letters and resumes. If necessary, get help from others who are good with words and together with them create a covering letter template (essentially a form letter) that provides the basic elements that you can tailor to different companies offering different jobs. Don’t be afraid to be frank and creative in the way you address your job contact. Just don’t be silly. Talk to them as you would when having a honest, serious conversation with a friend.

Without being too wordy, mention your dreams and goals in life. Talk about your strengths and emphasize your willingness to learn. Investigate what each company does, and tell the company contact in enthusiastic terms why you wish to work for them. If you are aware of special achievements made by the company or organization, let them know that you admire them for those achievements.

Send your covering letter and email attachments not only to the company’s human resource or management contact, but to the company’s president and CEO if you know how to reach them. You might be in for a surprise. In all instances, try to reach company contacts by personal name (this may require a little research). My point is, try to somehow stand out from the crowd when dealing with job prospects. You’ve nothing to lose, and everything to gain.

Meanwhile, if you have stuff to show from school or elsewhere that somehow relates to the work you’re seeking, by all means include the material in your email to job prospects, and be sure to identify all honours and awards you may have received in the past in any capacity. Don’t settle on contacting just a few companies or organizations. Contact dozens, scores – even hundreds if need be. It’s a simple rule that extra effort brings better results.

• THIRD, NETWORK WITH PEOPLE. USE FACEBOOK AND LINKEDIN FOR CONTACTS.

In terms of seeking work, networking with people is just as important as applying for jobs in the offing through online venues. Let it be known amongst everyone you know – be they relatives, friends, or chums and associates on Facebook and on other social sites – that you are in the market for work. And be clear about what ideally you would like to do. But don’t limit yourself. Purely for the income, you may have to accept work that falls outside of what interests you. That can also make for a summer adventure, again depending on your attitude.

Among social circles, always keep your eyes and ears open for job prospects. And get set up online through LinkedIn no matter what your job experience level is. Many jobs are posted and discussed on the site. And insofar as your LinkedIn profile is concerned, just follow the general guidelines I’ve mentioned above with respect to preparing a covering letter and resume. Once you’re on board at LinkedIn, you will get a feel for how to piece the information together. And again, when in doubt, seek help from others who know.

• FOURTH, TREAT YOUR SUMMER EARNINGS WITH THE GREATEST RESPECT.

Once you’ve secured a summer job, put a monthly budget together in writing, and stick to it. No ifs, ands, or buts. Your hard-earned cash deserves your respect.  Putting together a monthly budget usually requires that you review your monthly spending habits beforehand. To this end, you will do well to take a look at the Monthly Budget Tracker we provide free of charge on our how to budget section of the Credit Canada website.

Go get ‘em. And good luck!

The post Attention students: get a summer job, manage your money, and enjoy some independence. appeared first on For the Love of Money.

Ask Eva Robinson about the effectiveness of our debt management program and she’ll tell you, they work beautifully. In fact, after my preamble here about Eva, you can read below a lovely letter she sent to us recently here at Credit Canada Debt Solutions. She thanks us for helping to turn her life around. And we thank her for taking the time to say so with such well-chosen, heartfelt words. Eva’s letter touched us. She left us feeling proud of the not-for-profit work we do to help Canadians beat debt, and to get back on financial track. We are particularly warmed by the fact that we were able to help Eva out of a terrible financial bind pretty quickly as her retirement got under way.  She is but one of about 60,000 people we assist annually through our debt management and financial literacy programs.

Though we’ve been in the field for more than 45 years, we never tire of hearing about the progress of those who have passed our way, completed our programs, and moved on to live full and happy lives free of all the baggage that comes with bad debt. As Eva points out, it’s not just the financial baggage that weighs heavily upon those who are mired in debt, it’s the anguish, fear, depression, and loss of self-confidence that drag individuals and families down. Which is important to know. Because as we see it, at least half the challenge for us is to help raise people’s spirits, give them hope for the future, and assure them that we are not only a family of professionals, but a family of friends who put personal and moral judgements aside. Truth is, strong bonds often form between our counsellors and those we serve. It’s bound to happen when you put people together to sort out not just the numbers and personal budgeting shortfalls that surround debt management problems, but all the painful and frequently unacknowledged psychological factors that underpin those problems.

I guess you could say that in addition to being financial specialists, we are therapists in a way, though we’d never make that claim officially.

Anyway, enough of me blowing the horn. Here is Eva’s letter.

Dear Credit Canada Debt Solutions:

In September 2009, I was in dire straights: in debt, creditors calling, worried sick about paying anything off, including my rent. I was at my wits end. With encouragement from my family, I went searching for someone to help me in a way that would not put me further into debt. Bankruptcy was not an option. I contacted the Ministry of Finance, who directed me towards a company that could offer a debt solution, as opposed to another loan.

When I searched the Internet, your company came up first. Contacting you was the best thing I could have done. Instead of being treated like I had committed some terrible crime, the lady I spoke to, Shamaila, treated me with respect and compassion. I was crying and frightened when I called, but I felt like a huge weight had been lifted off my shoulders when I hung up.   No matter who I spoke to when I called, everyone treated me with respect. Empathic, compassionate, understanding, encouraging – these are just some of words that come to mind in describing your company. You showed me that I wasn’t a failure, that I could successfully get out of debt in a short period of time, and that it really wasn’t that hard to live without credit cards.  

Yesterday I made my last payment to you. From this day on I go forward debt free and secure in the knowledge that, as a retired woman, I have no more money fears. My life, with your help, has taken on a new and positive meaning.   I can’t thank you enough.   Credit Canada Debt Solutions truly changed my life.

Sincerely, Eva Robinson

The post For Eva, our debt management services were right on the money. appeared first on For the Love of Money.

I suppose we should have seen it coming. A couple of U.S.-based entrepreneurs have developed a new service allowing debt management for Canadians by providing the ease of paying their tax bills by credit card, according to a recent piece by Toronto Star financial writer Ellen Roseman.

As Roseman explains, normally most government departments – not to mention most universities – don’t take credit card payments because of the costs associated with administering them. “The problem with credit cards is high transaction costs. Merchants absorb most of these costs, which are a big irritant to the industry.”

But now, Canada Revenue Agency is welcoming credit card payments through services provided by a Boston-based company called Plastiq, which has solved the problem of transaction costs by getting credit card customers to agree to pay a two per cent surcharge, meaning merchants now pay nothing.

The new service may hold appeal to those with enough cash to pay their taxes in full come the next monthly credit card bill. As Roseman illustrates, as a very temporary measure, the strategy can offer benefits to those who wish to bump up their Aeroplan points. But paying taxes by credit card is extremely ill advised if you simply don’t have the cash on hand to do so and need to find ways to gradually pay what’s owed.

Say you’re a self-employed soul who discovers that you owe the government $10,000 in tax dollars that you failed to set aside last year. By using your credit card through Plastiq to keep the tax man happy this year, you can count on paying a standard annual credit card interest rate running from 18 to 21 per cent – or $1,800 to $2,100 on the money owed.

Not a good plan for personal budgeting – or managing your debt.

No, as Roseman points out, you’re far better off paying the debt gradually through a line of credit if, say, you have secured an interest rate of under 10 per cent. Better still, Canada Revenue Agency charges only five per cent interest if you need time to pay up.

For those with a hefty cash flow from responsible debt management – and the ability to pay off credit cards in one fell swoop – I can see the allure of the new service. And, come to think of it, for Canadians of average income, I suppose it could be handy way of paying taxes if the amount owing is small and can be put to rest within the month.

Still, there are always those amongst us who believe that – when cornered on big debts – they can borrow from Paul to pay off Peter. In almost all cases, this is an absolute no-no in relation to the use of credit cards.

Just remember, credit is debt, and the piper will be paid – and paid lots more than what might otherwise be necessary as time goes on.

The post Paying your taxes using plastic? Not a good debt solution. appeared first on For the Love of Money.

Let’s hear it for the Ontario government, and specifically the Ministry of Consumer Services. In an announcement April 16, the ministry affirmed it is moving ahead with tough measures to protect consumers from unfair business practices surrounding what are called “debt settlement services” (also referred to as “debt reduction,” “debt relief,” and “debt negotiation” in advertising sales pitches).

The ministry pointed out that, “as part of the province’s continuing commitment to strengthen consumer protection, the Ontario government intends to introduce legislation that … would impose new rules for debt settlement services, including:

• Banning companies from charging upfront fees for debt solutions services;

• Limiting the total amount of fees consumers are charged;

• Requiring clear, easy-to-understand contracts;

• Establishing a 10-day cooling-off period, providing consumers more time to consider their agreements;

• Allowing the licenses of non-compliant companies to be revoked.

Early this year, the government had outlined a general plan of action. Now the new rules will be presented for passage in Queen’s Park.If Ontario’s admirable track record for consumer protection is any indication, then passage is practically a given. Truth is, sleazy practices by debt settlement companies have long since been outlawed in the United States, where many debt settlement companies took root, then moved north when their dubious – and even legally suspect – business practices created an uproar. Alberta and Manitoba, too, have reined in debt settlement services through regulations mandating fair play.

Here is a video of a news report that aired in the heat of our battle last year to bring awareness to problems associated with debt settlement services.
It pleases me to see that the proposed legislation addresses all the problems associated with debt settlement services, which have brought much grief to Ontario families and individuals struggling to deal with troublesome debt. Indeed, last year we here at Credit Canada Debt Solutions – along with many other agencies and trustees in the province’s debt services industry – received a slew of complaints about these companies from distraught souls who felt they had been given the run around. As the complaints grew, we took action.

I’m proud to say that collectively as an industry, we worked hard to air the issues publicly and get action by lawmakers. It was no cake walk. We had to work tirelessly because debt settlement services had dug in their heels in Ontario. In fact, even as I write these words, there are some 60 companies offering debt settlement services in the province. Of course, I would not tar them all with the same brush. Some have been operating for years without complaint. But many, including in particular relatively recent newcomers from down south, have been sailing along leaving all kinds of financial and emotional wreckage in their wake.

It’s not surprising, given their way of doing business. The stories I heard about these services were heartbreaking and maddening. The companies were telling clients to simply stop making payments on unsecured debts relating to credit cards, personal loans, lines of credit, and the like. Clients were advised to put their money aside in monthly savings and allow it to build to a point where a ‘lump sum’ settlement would later be arrived at with creditors at just a fraction of what was owed – in other words, a ‘pennies on the dollar’ settlement (that was the big pie-in-the-sky lure featured in TV sales pitches by debt settlement companies).

But as time went on with the lump sum building up, the creditors were left in the lurch, receiving no money in the framework of unreliable – or entirely absent – negotiations on the part of the debt settlement company, which was supposed to manage matters. The creditors would contact the clients wondering what was going on, and the clients would grow confused because they believed the debt settlement company was on top of the situation.

I believe that in many instances the debt settlement companies were just trying to buy enough time to get their up-front fees. Once they had their money, they kissed their clients goodbye and just scurried away. I saw situations where people were paying thousands of dollars in up-front fees for the privilege of being hounded and eventually sued by creditors. At the same time, the duped clients were seeing their credit ratings go up in smoke while still facing the original debt problem they thought would be resolved. I know of a case where a person owing $42,000 was charged $7,000 in up-front fees by a debt settlement company, only to be left with the full debt still owing and the $7,000 in fees long gone.

Thankfully, all this nonsense is now being addressed by a new set of rules. Passage of the legislation will once more prove the Ontario government’s commitment to maintaining a fair, safe, and informed marketplace.

The post Ontario lawmakers get tough with debt settlement services. Amen. appeared first on For the Love of Money.

Step aside conventional wisdom. Author David Trahair is cutting a swath through the crowd with his book, Cash Cows, Pigs and Jackpots. In this interesting volume, our friend and former board member at Credit Canada Debt Solutions offers non-traditional wisdom about personal finance, with observations and advice that could shake up your worldview in relation to credit, debt, how to budget, and how to invest.

We’ve all heard the expression cash cows, a metaphor based on the four-legged bovine in the barn that produces milk over the years and requires little maintenance. Substitute milk for money – and the bovine for an investment vehicle – and we arrive at the conventional view of the cash cow as, say, stocks and investment funds that promise to bring steady gains and security as we leisurely sit back and let the investments grow.

But times are changing, with the likelihood of tough years ahead. Indeed, how many of us still wince when we think back to investment losses in recent years while looking for tips to save money.

From Trahair’s alternative viewpoint, today’s real cash cow isn’t found on Bay Street or Wall Street; it’s found in front of the mirror of your bathroom. As he sees it, the most reliable cash cow in your life is you and your ability to keep the cash flowing as a result of all your hard work. Make sure, the author exhorts, that this cash cow is protected.

So it is that Cash Cows, Pigs and Jackpots devotes much discussion to ensuring you are doing all you can to take care of yourself, to live life well and fully. You are your own chief asset, so you ought to be eating in healthy ways, exercising regularly, getting a good night’s sleep, pursuing activities that bring pleasure, and surrounding yourself with loved ones and those whose company you enjoy.

But, of course, the book is far from being a “self-help” manual involving lifestyles. In practical terms of finance, Trahair has lots to say, and in the process of doing so he challenges the advice of many financial institutions, brokers, and investment companies. He notes that too many of us follow the traditional financial thinking. We get on a treadmill to build assets, even borrowing to invest – and pinning all our hopes on growing our net worth – only to find that tradition has lead us astray.

Do as the financial institutions themselves do, Trahair says. Put your focus on maintaining a positive cash flow day to day, month to month, and put less emphasis on the customary aim of building net worth and acquiring assets. You’ll find you may reduce a lot of stress and anxiety in the process.

He offers contrarian views about other matters. Paying rent, for instance, as opposed to paying on a mortgage. Renting is not a four-letter word; for some, it can make a lot of sense. He also promotes the fundamentals of personal budgeting, offering practical advice about living within one’s means, wiping out personal debt, and saving for retirement.

And what of cash pigs and jackpots?

Well, Trahair tells us a cash pig “is the opposite of a cash cow. It is something that constantly drains cash from your pocket.” A car is a good example here.  We should be very cautious about cash pigs, he advises.

Jackpots, meanwhile, are financial gambits involving long odds. Think the lottery or an investment that sounds too good to be true.  As Trahair says, “The key point to realize is that cash jackpots are rarely guaranteed. They are usually just potential jackpots … (which) come with a big risk.” This being that the jackpot frequently is nothing but a financial black hole.  The author urges us never to confuse cash cows with cash pigs. Nor should we even begin to rank jackpots with cash cows.

Actually, from a personal perspective, I can see Trahair’s point in an instance where a fellow I know confused all three. This fellow, after selling his house, walked away with about $200,000. Then, hoping to double or even triple his money in a couple of years, he took the advice of a good friend (now a former good friend no doubt) and put the full sum toward the purchase of penny stocks in mining.

Fast-forward a few years to today. The stock now holds a mere 10 per cent of the buy-in value, with scant prospects for growth in sight. So the fellow’s $200,000 investment has now dwindled in value to just $20K. Such is the outcome when cash cows, pigs, and jackpots get all caught up in a muddle.

Anyway, we can thank David Trahair for an interesting read that unmuddles financial matters in so many ways. He knows whereof he speaks. In addition to authoring several other books about finance – including Enough Bull and Crushing Debt – he is a successful chartered accountant offering a range of accounting and tax services to many businesses and individuals. As well, he is a frequent speaker, and appears regularly in the media.

Above all, I salute him for what is to me the heart of his latest book. In essence, he’s saying that life is not all about the gold at the end of the rainbow; it’s about the journey, and about doing our best to enjoy it as we go.

The post Cash Cows, Pigs and Jackpots. Other ways of looking at personal finance. appeared first on For the Love of Money.