by admin | Consumer Proposal, Credit Counseling, Uncategorized
Debt traps:
The Hidden Expenses Business Dictionary defines debt trap as “An incentive structure that lures individuals into accepting long-term debt obligations under conditions that strongly favor the lender. Victims of debt traps are often prevented from discharging the debt through techniques such as unusually high or variable interest rates, changing payment plans, and unreasonably high penalties for late payments.”
In simpler words, debt trap is a scenario where the debt becomes impossible to pay due to high interests’ payable making it difficult to be paid, thus becoming a trap.
Avoiding a Possible Debt Trap
There are still days left before the month ends? Where did all the money go? There are times when we are left with little or no savings because we spent too much on expenses that we didn’t plan in advance or realize while spending from our monthly budgets. This is when we start relying on credit cards, loans; money-borrowing from friend without realizing we are slowly moving towards a debt trap.
Irregular Expenses (miscellaneous): Irregular expenses are regular expenses that are often forgotten. These may be the reason why you have an infuriating urge to tear down your monthly budget list into pieces as you fall short of money while on a budget. But what did you miss?
• Gifts: Birthdays, anniversaries, baby showers, etc
• Fees: Gym membership, occasional public transport fee, home supplies, etc
• Tax estimates •
Pet expenses
• Lawn maintenance
• Contributions: charity, fundraising Unexpected Expenses (emergency savings): Self explanatory, these are the expenses incurred on emergency basis. You fall, you are taken to the hospital, and the bills and prescriptions payable are unexpected liabilities. Obviously you didn’t plan on incurring these costs.
These may include:
• Vehicle Insurance claims, warranties
• Home insurance
• Repairs: Home, vehicle, appliances etc
• Job lay-off
• Accidents etc
Ideal Budget Planning
The simplest of expenses can be stressful. Your husband invited his boss for dinner; your daughter wants a new uniform for school; your pet falls sick. Irregular expense is always there in the back of your mind. You know that in the next three months your car insurance is due. However we often forget these tid bits. On the other hand, you cannot at any cost avoid the emergency expenses.
Weekly budgets are also a useful tool for planning short term goals. Assign what expenses are to be incurred in the following week and try to save as much as you can on things that are not priority-oriented. This way, you will have money saved up in a piggy bank or a cabinet in your kitchen for emergency or miscellaneous expenses. Now, if any emergency expenses incur, you have enough saved up.Once the month ends, make sure to analyze where most of the expenses went and how much you saved.
So how is budgeting helping me avoid a debt trap?
Let’s say you want to go out for a movie, a ‘miscellaneous expense’. No need to rely on credits cards and worry about the interest rates or payday loans. You will have the money you saved and be free from going into debt. Also, you will feel a noticeable reduction in your stress levels once the money worry leaves your mind.
by admin | Bankruptcy, Uncategorized
Whenever we hear the word bankruptcy, an image of an irresponsible individual struggling to control his budgets or pay his debts comes to mind. Bankruptcy is often considered a disgrace. It is a word people want to stay away from, as far as they can.
A number of people file for bankruptcy as they are unable to control or find themselves in need of financial constraints. But that’s not something to feel ashamed about.
The article focuses on some of the most common myths about bankruptcy that demands to be diminished.
Myth of losing everything you own: True to some extent, but not entirely.
Creditors will take most of your assets because they expect their payment in some form, but you will be allowed to keep the legally secured ones along as long as you keep making the installments on leased goods. RRSPs and RRIFs are often exempted from bankrupt rules
Different territories apply different limits on bankruptcy policies. Some also allow you to keep your valued possessions such as pets, furniture clothing etc. whereas in some regions, these assets are divided equally among the creditors.
Myth that people will know that I am bankrupt: The ultimate fear why people don’t file for bankruptcy is that everyone will come to know about it ruining our image.
Although bankruptcy filings are public, they are not published in the newspapers if your assets are minimal. You will only receive through a notice via email. So unless you yourself tell all your friends and family, they won’t have a clue. Most importantly, the reason for filing for bankruptcy must be your financial safety rather than what the world is going to think of you.
Myth that credit rating will be ruined forever: That is absolutely false. The concept that bankruptcy will destroy your credit rating forever is not true. You can have credit ratings as early as nine months after of the discharge. Bankruptcy filed will show on your credit report of maximum six years but that cannot stop you from applying for credit cards or loans only after nine months and can be re-established.
All your debts will be erased: You can only wish that were true. However, the following debts are exempted from bankruptcy i.e. these still have to be paid.
• Car Loans
• Mortgages
• Spouse and child support
• Student loans
• Court fines and Assaults
Myth that my spouse credit rating will be destroyed: Credit ratings of your spouse will only be affected if he/she co-signed your loans and credit cards. If this is not the case, your spouse shall not be dragged into the scenario. Creditors have no legal right to go after your spouse if you have bankrupted. But on the other hand, the spouse must pay all the their due debts
Filing for liquidation is an important issue. It has to be taken after viewing all available options. However, the myths suggesting bankruptcy filing is shaming yourself or showing how incompetent you are when it comes to managing your financials, are not true at all. In fact, it is the opportunity to start with a clean slate.
by admin | Bankruptcy, Consumer Proposal, Uncategorized
What is Consolidation?
Debt consolidation is essentially a technique that enables you to pay all of your withstanding debts through one single loan on lower interest rates and monthly payments. But before considering it your very last resort, make sure you are assessing all your options sensibly.
Thoroughly examine;
• Your outstanding balance
• Interest rates and
• Monthly payment modes
Benefits of Debt Consolidation
It is the ideal way to let yourself take a breath to regain your financial conscious and take control of your financial accumulations. In addition, debt consolidation provides a window of opportunity when it comes to saving money and enriching credit score.
Makes budgeting easier: Before debt consolidation, you had to make budgets for all of your expenses separately and then plan to pay the most important ones first. That seemed time-consuming and left you in between numbers all day. But with debt consolidation, things become easier when it comes to budgeting wisely as you only have to rely on a single budget for everything.
Lowers your Interest Rate: Debt consolidation works on the principle of accruing all your preceding multiple debts into a single loan. This way, a loan with comparatively lesser interest rates than individual ones, can be paid on monthly basis. This helps in saving a sufficient amount of money on monthly interest rates and overcoming debts much quicker.
Single payment method: This ends the terrors of multiple payment deadlines. All you have to do is make a single payment monthly. Monthly payments under debt consolidation are much smaller which gives you ample time to pay off all your loans through a single payment.
Collection calls dilemma: When individuals are in huge piles of debts, creditors pass on their accounts to collection agencies. This is when the nightmares begin. You start receiving several calls a day, constantly reminding you of your unpaid debt leaving you stressed out and worried. A debt collection loan frees you from such torments.
Overcome Credit Card Debt: A credit card is much the same as carrying your bank in your wallet but comes with high interest overheads in return.
Overcoming credit cards interest rates sometimes as high as 29% can make anyone break a sweat. Debt consolidation provides means to pay high interest debts credit cards reducing the load of outstanding balances.
Reduces stress levels: An amazing perk of debt consolidation is the decline in stress levels. Debt is considered to be one of the most crucial factors in stress increase globally. A constant reminder of due able debt keeps you on the edge of the bridge, making it impossible to enjoy other things. Debt consolidation will keep you focused on what’s important and releases the nerve-racking pressure on debts on your soul.
To conclude, financial matters require serious thinking. Keep in mind that debt consolidation is one suitable way of paying off debts but not always the best. Therefore, it would be wiser to consult any credit counselor or www.gtacredit.com– before reaching a conclusion.
by admin | Bankruptcy, Consumer Proposal, Credit Counseling, Uncategorized
How heavenly would it seem if all our bills were paid on time and loans and money borrowing went out of the equation? Sounds ideal, yet of course hypothetical, at the same time. Financial troubles often come with ringing warning bells. Spotting them early with a proactive approach will always minimize repercussions later.
Lack of a planned budget: Ask yourself, have you ever ordered food in a fancy restaurant without looking at the menu? “No, never, why would I?” must be your top answer.
This is exactly why you need to plan a monthly budget wisely. Budgets are like gate keepers; they keep hold of your spending and navigate your financials accordingly. It is a way of seeing forward by staying in the present. It is wise to plan in advance so you have a better idea of how much you need to spend and how much to save up. Start by making a priority list. Identify the regular and irregular, or emergency expenses. That way, eventually, you will be able to eliminate financial worries later on.
Relying on Pay day Loans: A financial nightmare takes root the moment you start relying on pay day loans for your payments.
These short-term loans may help you in your desperate times, but they always come with a major catch. With higher interest rates, these loans will create hurdles for you in the future. Opting for loans from banks or using credit cards, is a much safer way to counter financial needs in the longer run.
Little to no emergency savings: Save for a rainy day! This is the first thing every parent teaches a child when teaching money value. If you listened, good for you; if you didn’t, pity.
You are on the road to financial disaster, if you are out of your emergency savings or worst, you have no savings at all. Emergencies don’t come with signboards. Remember that! One can’t simply ignore the costs for medical or automobile troubles when they come. Borrowing loans will only be a burden with added costs of interests. Saving up for them should be the first priority in life.
Not only that, make sure you are saving up for your retirement too.
Routine expenses via Credit card: Frequent use of credit card for day-to-day expenses is not any ideal way if you want to avoid financial bumps. It will ultimately result in higher interest rates which you obviously must be aware of, causing you to fall behind on money for the future when you need it.
Making Minimum Payments: It may seem at times that paying minimum payments is no payments at all. But don’t stop. Making small payments will save you from collection companies suffocating you with phones calls and bankrupting you. Don’t rely on what the bill statement says; try to pay as much as you can, when you can.
The bottom line
If reading this article made you think harder about your financial situation, then surely you need to start making wiser choices. It would be advisable to sit down and start visualizing your options to cut down on the unnecessary baggage and save more money.
by admin | Consumer Proposal, Credit Counseling, Uncategorized
Believe us when we say that you alone are capable of changing your life. You are solely responsible for what happens to you, so you can either choose to turn your life around by changing your attitude towards it or simply sit around and whine about your situation. The same stands true when it comes to your finances.
Simple steps at adopting a frugal lifestyle can help you overcome a grim financial situation and maybe even save you from having to declare bankruptcy. Cultivate the following habits and watch yourself turn into a thrifty person.
Be Proactive
Being proactive means taking charge of your situation; there isn’t much that you can do about what has happened already but you can control your response to it. Having a positive attitude is the first step towards change. Take a deeper look into your budgets, spending, and income to figure out where your money goes and where you can improve your budgets.
Envision Your Ultimate Goal
Your being proactive is bound to be wasted if you do not have a clear vision of what you want, in this case, to have a frugal lifestyle. Having a vivid idea of what you want to achieve helps you stay focused on your goal. Whether you aim at living debt free or building a savings account, you will eventually be taking steps that cut down on your over-spending.
Learn to Prioritize
Certain things in life matter more than others; it is always easier to focus on goals when you know why you’re working your way towards them. Remind yourself of the things that are of most value to you, put them first and you will see yourself planning and managing your efforts around them. So if you are saving for your daughter’s college tuition, you would do whatever you can to acquire/save up the amount.
Think of Mutual Benefits
While growing up, we are typically taught that life is a competition. While it might be true in some cases, it is mostly having an abundance mentality that helps you realize that you don’t need to snatch the things you need. Work out your situations in a way that they present a win-win situation for all. Frugal living might prove to be difficult as you watch your friend ‘having it all’ and you having to live on a budget. Do not wallow; just remind yourself that actual wealth is measured not in monetary possessions but in assets, and you need to focus on that. Trust us when we say that this habit will make your life a lot easier.
Although adopting a thrifty lifestyle requires patience, sacrifice, and a lot of guts, it is nonetheless quite achievable and fruitful. Your finances can flourish overtime as you settle in on a frugal way of life. However if you still need counsel related to your financial troubles, contact GTA Credit Solutions Services LTD.
by admin | Credit Counseling, Uncategorized
Counting days until the paycheck for the month arrives is something most of us do. Stretching the limited amount of money through the last few days remaining is a tricky ordeal, yet most of us tend to go through it. However, the good news is that you don’t have to continue living like that. You can make your hard-earned salary last longer with a few adjustments that can result in significant savings.
1. Make Your Own Coffee
We know you love your morning coffee, more so when you buy it from the coffee shop everyday on your way to work. It may not seem like it, but spending a small amount on coffee every morning adds up to be a considerable sum of money by the end of the month. We are not asking you to give up your coffee altogether, but switching to home-made coffee wouldn’t harm you plus you’d be able to save precious bucks to get you through the month.
2. Repair What You Can
Simple things that need repairing can mostly be accomplished using tutorials and instructional videos available online. There used to be a time when the smallest of things related to cars, appliances, or other technical issues required you to hire a handyman, with almost everything available on Google now, a handyman can be easily kept as a second option. No handyman means, no outflow of money.
3. Draw up a Daily Budget
Once you get your pay, make it a point to first pay off and buy the necessities- utility bills, rent, groceries, mortgages, etc. With the money left over, budget yourself to an amount that you can spend every day for the remaining days. For example, if you are left with $300 and you have 15 days until the next payday, you can afford to spend a maximum of $20 daily on average. However, if you manage to instead restrict yourself to spending $12 daily, you will have $120 left before your next paycheck arrives.
4. Don’t Spend to Make up For Guilt
We understand that as parents, most of you have tough job routines and timings; you are only trying to provide better for your families. Most of you spend considerable time away from home and your children, and then spend on gifts and things for your children to make up for lost time. Don’t do that – try and spend more quality time with your kids, even if it is just a few hours a day. There is no need to spend unnecessarily when you can make up for lost time by simple acts like reading a story to them, or watching their favorite movie together or playing games, or simply popping corn with them. These make for great memories, worth much more than things and cost absolutely nothing.
The alterations to be made to your habits are small, but can go a long way to help you maintain a comfortable living without spending too much. Make your paycheck last longer, or visit GTA Credit Solutions Services Ltd. for customized expert advice related to your financial struggles.
