Archive for the ‘Save Your Money’ Category

Say NO to Payday Loans

Monday, September 30th, 2013

Clicking through the TV channels the other night, I was appalled by the number of ads for payday loans. They make is seem easy (it is). They show happy, smiling people and make it seem like a reasonable, temporary option (it isn’t).

Payday loans are easy to get, but they are about the worst decision you could ever make financially.

Payday Loans - The sharks are coming!

Here are the reasons why you absolutely NEVER, ever, ever get a payday loan.

1. Beyond High Interest

If you look at the amount they “charge” you, or deduct from one advance payment, it looks small … maybe even reasonable.

There have been instances where  annual interest rates of 8000% have been changed.  No, I didn’t accidentally add a few extra zeros … 8000%!

In BC the amounts that can be charged by loan companies are regulated. However fees can still range from $17 to $31 per $100 borrowed.  $31 per $100 amounts to 754% interest per year!

If you keep on getting advances, you will soon be in a  downward loan cycle that will never end.  It will just keep on getting worse every month.

2. Too Easy to Renew

Once you qualify for the first money advance, it is very easy to renew every week or every month. You can even renew before you have paid back your last loan. If you thought you had problems paying off your credit card bills, this is even worse.

3. Your Credit Score Will Be Negatively Impacted

When it comes to calculating your credit score, the “type” of credit you have tapped into makes a difference. Payday loans have a huge and negative impact on your credit score.

What are your Options?

  • Family or Friends?  (pay them back immediately if you want to keep them by your side).
  • Ask your employer for a one-time-only advance.
  • Personal Bank Loan
  • Even tapping into your Credit Card is better than a payday loan.
  • Go into overdraft on your bank account can help temporarily. (My account lets me overdraft by $500 if I ever needed to).
  • Get your budget under control.
  • Take DRASTIC stop spending: measures NOW.

Another option is to consolidate your debt into your mortgage. With the new mortgage rules it has become harder to do this, but it is still possible.  Give us a call to discuss your options.

Once you have consolidated your debt into your mortgage, we will advise you NOT to rack up additional consumer debt. If you continue spending, you will end up in the same place again …  unless you take steps to control your money.

Getting Rid of Your Debts FAST!

Sunday, September 15th, 2013

A friend mentioned that we take a look at a TV program called “Till Debt Do Us Part.

Gail Vaz-Oxlade - Till Debt Do Us Part

Gail Vaz-Oxlade - Till Debt Do Us Part

The SLICE network program is hosted by financial expert Gail Vaz-Oxlade who uses tough love advice and techniques to help couples get out of debt.

In the programs I’ve watched,  couples are dealing with consumer debt issues ranging from $20,000 to a whopping $100,000.  This does NOT include their mortgages, if they have one.

Over the period of a month, Gail conducts a “reality” session where she shows a couple where their money is going and how much they actually owe.  It is no surprise to me that many of the couples have NO idea how much they owe. They are in total denial about their monthly spending.

In one episode, a couple was spending $8000 MORE each month than they were making.  In many of the episodes the couples are regularly spending thousands of dollars more than they are making … which is the reason they are in debt, and the reason they cried out to Gail for help.

Gail starts her tough love rescues by confiscating all debit and credit cards and by placing the couple on a cash diet.  And diet it is … variable spending (food, clothing, entertainment, transportation) is drastically cut.  Drastically cut! So far I’ve seen cuts of anywhere from a  50% to 90% DECREASE in the monthly variable spending budgets.

The totally amazing thing is, almost all the couples manage to cope with the cuts and some of them even have money left in their cash jars at the end of the month.

The second amazing thing is, the couples develop debt payback plans that get rid of their debts in three years or less.  One couple went from racking up a $60,000 debt to developing a plan to pay it off in less than two years.

The show is well worth watching.  You will be entertained and educated.  The SLICE network regularly runs old and new shows.

The “Till Debt Do Us Part” series has several specialty programs including a series of shows focusing on couples who have huge mortgages and are on the verge of losing their homes.  The most current set of programs focuses on couples about to have a baby, or more babies or couples who can’t afford their kids!

This season, Gail has a new series called “Princess” … if you guessed it is about spoiled women who are totally selfish, indulgent and who are overspending themselves and their families into near bankruptcy, you guessed right!

My advice is to watch a dozen or so of the shows.  If you don’t get the SLICE network you can watch many of the episodes online.

Here’s a link to Till Debt Do Us Part
In addition to the schedule and online episodes you will find some great articles and extra videos on budgeting and debt reduction.

Here’s Gail’s Website >> Gail Vaz-Oxlade
Gail has loads of great advice on her personal website, articles, worksheets,  and links to her books.

http://www.gailvazoxlade.com/

Glimmer of Hope for Debt Beleaguered Canadians

Wednesday, January 11th, 2012

Over the past two years almost every time Finance Minister, Jim Flaherty and Bank of Canada President,  Mark Carney have issued a press release or spoken on camera they have been warning Canadians about their growing levels of  consumer debt.

There is finally some good news. Apparently some Canadians have started listening.

According to Equifax the average credit card debt fell in 2011 by 3.4 per cent.

It’s important to note that this drop is in credit card debt. Other types of consumer debt are still at record high levels.

Nadim Abdo, vice-president of consulting and analytical services for Equifax Canada cautions …

 ”Although this appears to be a good news story for Canada, there remains some concerns about the high level of debt Canadians carry on average. The main concern is how the Canadian economy may react to stressed global markets while our GDP is projected to grow at a very marginal rate in 2012. Canadians are at record-high levels of indebtedness with little room to maneuver. If there is to be another financial crisis, we can expect losses from serious delinquencies and bankruptcies.”

Equifax.ca  provides consumer and commercial information solutions including credit reports.
Read the Equifax news release here:
Vast Improvement in Consumer Debt According to Equifax Canada-but Sustainability is a Concern

Find out more more about the report and what other experts are saying:

CTV News:  Canadians handling credit card debt better: Equifax

Globe and Mail:   Debt still rising, but Canadians better at paying credit cards: Equifax