Category Archives: Debt

Credit card rewards: perk or pitfall?

By Karen Richardson, FPSC Level 1TM Certificant in Financial Planning

Photograph of a stack of credit cards

Credit cards, when used carefully, can play a positive role in your financial life. Using credit wisely is critical to building a solid credit history. If you need a loan or a mortgage, or you want to renegotiate a loan, a good credit rating is important and will help you negotiate the best terms. But credits cards used carelessly can send your life and finances into a tailspin.

But we all know this, right? So how do smart people with six figure incomes end up with more credit debt than they intended? Often it’s the seductive lure of credit card reward programs.

How many people do you know who put almost everything on their credit card so they can earn reward points? Maybe you do it too. Well let’s take a look at the perks and pitfalls of a rewards plan spending habit.

Perks

1. If you are using a card with rewards that are of value to you, and you are paying off your balance each month, you may be benefitting from the program.

Well that was a short list.

Pitfalls

Unfortunately this list isn’t as short. Continue reading →

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Success Story: Louise – A life changing financial turn-around

All information used with the client’s permission.

In 2010, Louise was a single mom with a teenage daughter and another daughter under age 10. She spent her days working with words, writing sales and advertising copy that garnered her great respect in her field, but at the end of the day, it was numbers that weighed her down.

Despite the outward signs of success, Louise owed $15,000 on credit cards and $10,000 in income tax. She had purchased a duplex and had upstairs tenants to help offset the mortgage, but she was also paying rent of $1,000 a month for her daughter at college. And just over the horizon loomed an income tax bill of $26,000.

“It’s very shaming to be that far in debt,” she says, “so you start hiding a lot of information from family and friends.”

She felt isolated and uncertain about how to turn things around. She read books and blogs about money management, but confidence in her financial skills was so low, she wasn’t able to turn the general information into personal solutions. She discounted the idea of reaching out to a financial planner because she believed planners were for investing and not for dealing with debt.

“I had never heard of a money coach,” Louise says, until she came across the term in a Canadian Living magazine article featuring Money Coaches Canada co-founder Sheila Walkington. The idea that there were financial professionals who could guide and teach her how to manage her money gave Louise just enough courage to break her isolation and reach out. Continue reading →

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Three habits that may be keeping you in debt and one that can change everything

By Kathryn Mandelcorn, FMA

Erasing Debt

Have you ever dreamed about what you do if you won the lottery? It can be fun to imagine sudden wealth and all its possibilities. Many people preface their plans with; first I’d pay off all my debts.

We all like the idea of being debt free, so why don’t more people achieve it? There are as many reasons as there are people, but here are three habits in particular that can keep us stuck.

Confusing talk, or thought with action.

We make new year’s resolutions, we read financial blogs and books, we decide to spend less on groceries, maybe clip some coupons, we talk with our friends about how we never catch a break, that just when we decide to make bigger payments on our debt the car breaks down, or our child’s sport fees go up or our furnace needs repair… Money is so constantly on our minds, that we think we are doing the best we can, when in fact we have often done nothing concrete to change the situation. Continue reading →

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Success Story: Robin and James – from knowledge to action

Note: The couple’s names have been changed for privacy.

Debt ball and chain openedRobin and James were young professionals in their 30’s when they contacted Money Coach Kathryn Mandelcorn. They were frustrated because they made a combined income over $150,000 but they had $45,000 in consumer debt and felt they weren’t adequately saving for their future. They didn’t see how they could pay off the debt and invest for retirement, without sacrificing their dream to buy a home and invest in further education. They felt like travel and other leisure activities were completely off the table if they were to have any hope of turning things around.

“When I met Robin ad James, I could see they were a very savvy couple,” says Kathryn. “They knew a lot about investing, they had a good idea of what they should be doing, but they were going in circles financially. They were paying down debt then going right back in. There was a big disconnect between knowledge and implementation.” Continue reading →

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Do you have a debt free date?

Credit is seductive. Credit card companies spend millions of dollars to convince you to borrow their money. They have catchy slogans like:

  • It’s everywhere you want to be. (Visa)
  • There are some things money can’t buy. For everything else there’s Mastercard.
  • What’s in your wallet? (Capital One)
  • Don’t leave home without it. (American Express)

Couple Calculating BudgetIt’s no wonder that credit monitoring agency TransUnion is predicting the average consumer’s debt will reach an all time high by the end of 2014. It’s also no wonder that if you google debt stress you’ll get over 69 MILLION results

But there are things you can do right now to lower debt and debt stress. Continue reading →

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Debt: The Good, the Bad and the Ugly

The less debt you have the better. That being said, you will hear people talking about good debt versus bad debt.

Put simply:

Good debt

  • ggod debtUsed to purchase an asset, like a house or investments.
  • Ideally these are appreciating assets, something with real value that you could sell if you needed to clear the debt.
  • So while a car loan has an asset attached to it, it is depreciating, so something to be cautious about. Continue reading →
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The Best Retirement Plan is to be Debt Free

Continuing on with our theme of tackling debt this month, tune in to this podcast by two of our favourite personal financial educators – Jim Yih of retirehappy.ca, and Rob Carrick of the Globe and Mail. Jim has written a great article about how debt has become big business for the lenders, and why debt reduction needs to be a priority.

Next time you go to the bank, think about what is really in YOUR best interest, not what just sounds easy and helps the bank make more money. Jim sums it up effectively, “Less debt is better than more but the best debt of all is no debt!”

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5 Top Money Tips to Get UNSTUCK

1. Know What you Wantgoals

  • Create a vision and set authentic goals.
  • Well-defined, clearly articulated goals are easier to achieve.
  • Focusing on your top three priority goals will simplify your life.

2. Know your Financial Realityreality check ahead

  • You will be more resourceful and creative at finding solutions when you know where you stand.
  • Create a basic plan with goals, figure out where you are now; and take steps to get what you want.
  • Knowledge is power. Continue reading →
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Get UNSTUCK at our next Money Mondays – Feb 25th

MONEY MONDAYS

Save the Last Monday of the Month for Money

Money Mondays with your local Money CoachJoin your local Money Coach on the last Monday of each month for an informal, lively discussion about money – how it works, how to manage it and how to gain control of it.

Bring a friend, come with questions and build your knowledge and confidence in personal money management.

February’s Topic: “Top 5 Money Tips” from our newly released book:
UNSTUCK: How to Get Out of your Money Rut and Start Living the Life You Want
When: February 25th, 2013
Time: 7:00 pm – 8:00pm local time
Cost: FREE
(Information….PRICELESS!)

Locations: Continue reading →

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UNSTUCK: How to Get Out of Your Money Rut and Start Living the Life You Want

A REAL NEW YEAUnstuck-with-BorderR’S GIFT

At this time of year, no matter how much we try not to….it’s hard not to get caught up in holiday madness.

December is a time where merchants and retailers are vying for your nickel. January is a time where you get that sinking feeling about where all your nickels went!

And that’s the kind of feeling that Karin Mizgala and Sheila Walkington want to help you address. They want to help you get a grip on managing those precious funds to help you start the New Year off in the black, not the red.

The founders of Money Coaches Canada and the Women’s Financial Learning Centre are proud to offer UNSTUCK – How to Get out of Your Money Rut and Start Living the Life you Want, a book written by Canadians, for Canadians that will show you how to live a sane financial life.

There is no better time than now to order a copy of this new book. It will arrive just in time for the New Year and help you begin the year with a fresh outlook on your financial life and stick to some of those resolutions!

Start the New Year off right with this proven step-by-step money management guide that will show you how to stop living paycheque to paycheque and give you the tools and insight to the emotional and psychological challenges of today’s money culture.

2013 can be the year that you, your family, friends, business colleagues, employees, students, entrepreneurs, and everyone you know can stop the financial insanity and make the year the most profitable one yet – both in your life and in your bank account!

Put your hard earned money to good use by ordering a copy of UNSTUCK – How to Get out of Your Money Rut and Start Living the Life you Want today!

Stop the insanity and check out UNSTUCK today on Amazon.com http://amzn.to/XLNhlf

What makes this book different? Here’s what:

“Kudos to Money Coaches Canada! This book reveals your practical yet caring expertise. You showed me that financial calm is possible for me and for so many other Canadians who have fallen between the financial planning cracks. Unstuck will change lives. It will change the lives of our kids.” Patti-Jo Wiese, Vancouver, B.C.

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