8 ideas for a fun & frugal festive season

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The holiday season can be a time of friendship, laughter, and holiday cheer… and a time when you feel the expectation to spend a lot of money that you may not have. This is why it can be an especially difficult time for many people: the pressure to keep up with those around us, the fear of disappointing those we typically buy presents for, the stress of not being sure how you will afford food for the table let alone presents for under the tree.

Our debt solutions counselors at Grant Thornton Limited have shared some of their tips for trying to refocus this holiday season so you can make it more about enjoying the time with the people around you. Hopefully using some of these tips will help you feel refreshed in the New Year, as opposed to wondering how you will recover from the spends made in December.

  1. Talk to family / friends about the cost of gifts. Sit down and make decisions about a dollar limit for gifts. If money is tight then consider doing a secret Santa with the family. Remind everyone that thoughtfully chosen gifts are more important than expensive ones.
  2. Take advantage of the sales. Shop the sales throughout the year by making a “Christmas closet” that you can add items for people that you find throughout the year , or after Christmas and by discounted Christmas decorations. This is also useful if you have a drop in guest who brought you a gift and if you wanted to give them something in return.
  3. Have the kids make a list.  Ask them to pick 3 items that they want: 1. One that is a real want, 2. One that is a need, and 3. One that is a small / inexpensive.item.  Let them know that they will likely only get one item off of the list – this helps teach children that Christmas is about more than presents, they put real thought into what they want, and your pocket book gets to save by not buying them gifts they don’t really want or need.
  4. Cut out unnecessary items.  This could include ribbons, bows, and fancy tape. Use brown paper bags as a fun alternative with colorful marker to write the “To” and “From”.
  5. Sell old toys / clothing.  Find a local consignment store and get extra cash for new gifts.
  6. Do Christmas baking instead of gifts.  This helps cut costs, and has the added benefit of spending time with family to make the bake goods.
  7. Take advantage of the free events to get into the spirit. Santa Claus parade, craft fairs, outdoor concerts and tree lighting ceremonies are usually offered at no-charge.
  8. Hold a “Catch up Christmas”.  This one is great if you overspent last Christmas and your budget is super stretched. Consider not spending for one Christmas. Instead, focus on a nice family meal, taking in the Christmas parade, driving around seeing the Christmas lights, and really devoting your holiday to your family by giving your time. It enables you to spend quality time with your family and no one will be stressed because the focus is on time and making memories, not spending.

Other fun free activities include: a hot chocolate and Christmas movie night, ice skating at the river, or sliding in a park, take a drive around / walk around the neighborhood for Christmas lights. Center this Christmas on family activities instead of gifts and goodies.

We put a lot of pressure on ourselves to spend money at this time of year. Let’s try to take some steps to break that cycle, enabling us to end the year and start a new year with a fresh, positive, less stressful approach. Enjoy the loved ones in your life and the memories you can make rather than worrying about the debt we can incur.

If you have money-saving gift-ideas, we’d love to hear them.  If you are finding this holiday season particularly stressful because you feel your debt load is overwhelming, please reach out to us and let us present you with some options for your situation during a confidential, no obligation consultation.  Sometimes just knowing you have options can help relieve the stress you are feeling.

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Kristi Stuart is a  Licensed Insolvency Trustee (LIT) on the New Brunswick Grant Thornton team. In becoming a trustee, she won the 2015 Jack Biddell Gold Medal for finishing the Canadian Association of Insolvency and Restructuring Professional’s 2015 National Insolvency Exams with the highest standing in the country.

 

 

 

Black Friday & Cyber Monday: How to get past the hype and shop smart

pexels-photo-230544_72Door crasher deals. Limited quantities available. Lowest prices of the year – 4 days only!

With the holidays right around the corner and discounted deals constantly advertised to you, Black Friday and Cyber Monday is a time when you can get wrapped up in spending. Online shopping has become more prevalent and more convenient than ever before but can quickly send you into a spiral of debt if you’re not careful.

There is a psychology behind all the advertising and promotions surrounding Black Friday and Cyber Monday. It’s important to be aware that retail “events” like these are really just marketing tactics meant to over-hype discounts and deals that could promote and result in overspending. The advertising feeds on our emotions and plays into the fear many of us have of missing out on something big. There is a lot of buzz and excitement created as marketers aim to whip shoppers into a frenzy by putting high demand items on at seemingly deeply discounted prices — available only for a short period of time.

If you aren’t careful, you will end up buying more than you had intended – and spending more than you have by using credit and buying impulsively. If you are planning to participate in big retail days like Black Friday/Cyber Monday, be smart about it.

Tips for Smart Shopping

  • Don’t shop because you fear “missing out on something big”. The reality is that deals or discounts come in waves and will be available at multiple times throughout the year. Do the math to determine if it’s really a “deal” not to be missed.
  • Give yourself a financial reality check before shopping. It’s important for you to quickly pull out a statement of your largest debt (credit card or loan statement) to see the dollar amount owing on that account. You need to think about how you will feel tomorrow if you add on more debt today. Decide if it’s worth it.
  • Make a list. With discounts available on so many products, it can be easy to lose track of what you are looking for and make impulse purchases you will regret later. Making a list of exactly what is needed allows you to be in control of where your money is going.
  • Set a budget and stick to it. In addition to planning which items are on your list, set a strict budget of how much you are able and willing to spend. As you are shopping, keep a tab of how much you are spending and cut yourself off once you reach that limit. Despite the discounts being offered, some items may simply be beyond a reasonable budget.
  • Be aware that online shopping can result in overspending. These days, people don’t have to leave their homes to participate in Black Friday/Cyber Monday shopping. The problems with the ease of shopping via your home computer or cell phone is that you will likely use a credit card for the purchase and you’ll end up purchasing multiple items within a short time frame since it’s very easy to submit a payment and move on to the next item.
  • Is it really a “deal” if I buy it on credit? If you buy that great deal on credit, are paying only the minimum monthly payments on your credit card balance and it takes you more than 6 months to pay off your purchases, your overall cost with interest will end up voiding any original deal or discount you are getting.

Overall, just be honest with yourself about your financial situation. With the weakened economy and the unfavorable US exchange rate, many consumers do not have the financial means to participate in holiday shopping. If you are living pay cheque to pay cheque, assess if holiday shopping is a smart financial decision or if there are more economical gift options you can explore, like giving the gift of your time or making home-made gifts.

Do you have some great tips you use to avoid overspending? We’d love to hear them.

I’ve overspent! Now what?!

If you’ve already shopped and fear you overspent, don’t remove the tags. Leave the items in the bag and look at them the next day to decide if you still feel the same excitement. You might discover that an item in the bag was more a want than a need and you can still return it.

What are some warning signs that you are spending more than you should?
• You’ve maxed out your credit card (and are already only making the minimum payments).
• You feel guilty about your purchases – knowing you’ve bought ‘wants’ and not ‘needs’.
• You’re regularly spending more than you make.
• You’re dipping into your savings.

If you recognize some of these warning signs and are feeling the pressure of carrying an overwhelming amount of consumer debt, book a free consultation with one of our Licensed Insolvency Trustees. They can look at your personal financial situation during a confidential, no obligation meeting and make recommendations on what options are available to you.

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Freida Richer is a Licensed Insolvency Trustee with our Edmonton, Alberta practice. You can watch her Money Smarts segment on the third Monday of every month on Global Morning News Edmonton.

 

 

Do my student loans still have to be paid even if I go bankrupt?

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Larry Crandall, Licensed Insolvency Trustee

Yes, but with some exceptions.

If you ceased to be a full-time or part-time student more than seven years before declaring bankruptcy, your student loans will be extinguished when you are discharged from bankruptcy.

If the period between your termination of studies and bankruptcy is less than seven years a student loan guaranteed under a federal or provincial program will survive your discharge from bankruptcy. You continue making payments.

After five years, however, the Bankruptcy and Insolvency Act permits an application to the Court for waiver of your obligation if you experience, and will continue to experience, financial difficulty. The Trustee can help you with the application to the Court.

As well as proving this level of hardship to the Court, you will be required to show that you acted in good faith in connection with your student loan. You may be asked how you used student loan money, how you have used your education, how diligently you have tried to repay the loans and whether you have stayed in touch with the lender and appropriate government agencies, availing yourself of interest relief plans and other repayment programs.

New Repayment Assistance Plan 

As of November 1, 2016, the Canadian government put new measures in place to help recent post-secondary graduates manage their student debt. Canadians don’t have to repay their Canada Student Loan until they’re earning at least $25,000 a year.  Learn more…

If you have questions or would like to have a free consultation with one of our trustees, contact one at our location nearest you.

Some people are driven to deliver quality. Fortunately, some are awarded for it.

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Frank Fabiano, CPA, CA, CIRP Licensed Insolvency Trustee Partner and Vice President

 

A strong commitment to quality is core to everything we do at Grant Thornton. It is foundational to our success as a firm.

Frank was recently presented with our National Professional Excellence Award recognizing him as a partner who exemplifies the commitment to professional excellence to which the entire Grant Thornton team aspires.

Frank services Thunder Bay and Northwestern Ontario.  If you, your company or your client is experiencing financial difficulty, give Frank a call. Not only is he the right professional to consult, he’s understanding, respectful and here to help.

Learn more about Frank and book your free consultation.

 

 

What is a reasonable amount of debt to have?

Henry Francheville, LIT

Henry Francheville, LIT

A reasonable amount of debt allows you to make your monthly payments on time and in full while allowing you to maintain your other expenses.

You should be in relatively good shape if:

  • you’re able to pay your credit card balance in full each month;
  • your housing costs do not exceed 30% of your monthly income;
  • you’re not using payday loans or living in your overdraft; and
  • you’re able to put some money into your savings account.

For a large number of Canadians this is not always possible due to various reasons such as illness, job loss, separation/divorce, helping family members or simply the lack of a workable income.

We are pleased to offer a free consultation to discuss your situation.

Should I use my RRSP to pay debts?

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Larry Crandall, Licensed Insolvency Trustee

Larry Crandall, Licensed Insolvency Trustee with our Saint John, New Brunswick office, shares what you should consider before withdrawing money from your RRSP:

  • RRSPs are intended to save for retirement. Every dollar you withdraw today is a dollar that won’t be available when you retire.
  • Funds taken from an RRSP will be considered income in the year in which it is withdrawn. The institution will withhold income tax based on a sliding scale, but depending on your income, they may not withhold sufficient tax. This could leave you with a large tax bill at the end of the year.
  • Depending on the amount that is withdrawn from the RRSP, your increased “income” for the year may bump you into a higher tax bracket, which would increase your overall amount of income tax.
  • RRSPs are exempt in a proposal or bankruptcy (except for contributions made in the last 12 months). This means that if you file a proposal or go bankrupt, your RRSP will not be affected. If you have already withdrawn RRSP funds to pay debts and later file a proposal or go bankrupt, those funds are gone – your Trustee cannot get them back. However, the Trustee could help take care of the income tax liability created by the RRSP withdrawal.

Grant Thornton Limited provides advice and solutions to individuals and businesses experiencing financial difficulty.

Advice for Canadians facing housing foreclosure


Given recent news that nearly 1 million Canadians would be unable to keep up with their monthly payments if interest rateshouse-icon_purple  increased by only 1%, Freida Richer, Licensed Insolvency Trustee with Grant Thornton’s consumer insolvency team in Edmonton, warns that consumers who are unable to continue their mortgage payments may be facing a housing foreclosure.

She’s worked with consumers in a variety of financial situations and offered her advice for consumers in this situation:

  • Approach the situation earlier rather than later: A housing foreclosure can be more damaging to a consumer than filling bankruptcy. While facing financial worries can be daunting, approaching these situations earlier rather than later allows more time to find a solution that works for both the lender and the borrower.
  • Work with the bank: Banks don’t want to see a house sitting empty, if you work with your bank you may be able to live in the property until it is sold, granting you much more time to find alternative options.
  • Know your equity: More equity in a home often means a longer redemption period for a homeowner. Having more equity in a home could mean the difference between one day and six months in that home.
  • Resolving your exposure when foreclosure occurs: A mortgage deficiency judgment obtained against you as a result of the foreclosure is treated as an unsecured claim which can be resolved through a Consumer Proposal or Bankruptcy.

To learn more from Freida, visit www.gt.alger.ca

If I go bankrupt, how long before my creditors stop calling me?

Blaire MacNeil, Licensed Insolvency Trustee Sydney, Nova Scotia

Filing for bankruptcy creates a “Stay of Proceedings,” which prohibits creditors from taking any collection activity, including phone calls. This “Stay of Proceedings” is sent to all your creditors when you sign your bankruptcy papers.

In our experience, most creditors respect the bankruptcy process and stop calling. But, if you find otherwise, let your Trustee know and they can call the creditor, explain the process to them, and get the calls stopped.

We are pleased to offer a free consultation to discuss your options, what bankruptcy would mean for you and to help you make a fresh start! Grant Thornton Limited provides advice and solutions to individuals and businesses experiencing financial difficulty.

For answers to frequently asked questions about bankruptcy, visit our website.

For a free, no obligation consultation, in person or by phone, contact one of our offices:

Alberta | Manitoba | Northwestern Ontario | Quebec | Nova Scotia | New Brunswick and PEI

Having an honest talk about finances before getting married

With wedding season approaching and the focus on plans for the “Big Day,” it’s important before tying the knot to set aside time to review where you stand financially as individuals and as a couple, and have an honest discussion about how your finances will impact your marriage.

Whether you are entering into a marriage or a common-law relationship, this is a partnership that will benefit by having an open discussion about your finances prior to getting married or living together. Debt or disagreements about money issues are one of the top reasons for marital and relationship breakups.

Discuss finances with your partner

Here are some important points for you and your partner to discuss:

  • Share your credit ratings and credit reports with each other.
  • Talk about your past spending and use of credit behavior.
  • Discuss whether you should have a joint bank account or separate accounts. There is no one solution here. Many couples keep a joint account for shared expenses, then each person also keeps his or her own separate bank account.
  • Tell your partner about the amount of debt you are bringing into the relationship.
  • Budgeting for the wedding is a great exercise in prioritizing together and making compromises.

Am I responsible for my partner’s debt?

Although you are not responsible for the debt your partner brings into the marriage or common-law relationship, you are responsible for the debts you incur as a couple.

A party can only be held responsible for repayment of a debt if they have signed a contract, loan agreement or credit card application. If your spouse or partner never signed a contract or requested a credit card, they cannot be held responsible for the debt. In Canada, marriage alone does not make you responsible for your spouse’s debts.

With respect to credit cards, there are two ways in which the second party can be held responsible for repayment of the debt. One is where the individual actually requests a secondary card and signs an agreement saying they accept full responsibility for current and future debt. The other is where the credit card company sends a card out in the second individual’s name with the primary cardholder’s number and the second individual actually signs and uses the card. Use of the card may hold the secondary person responsible for not only their own, but all purchases made on the account by all cardholders.

Definition of a Common-law partner

This applies to a person who is not your spouse, with whom you are living in a conjugal relationship, and to whom at least one of the following situations applies. He or she:

a) has been living with you in a conjugal relationship, and this current relationship has lasted at least 12 continuous months; in this definition, 12 continuous months includes any period you were separated for less than 90 days because of  breakdown in the relationship.
b) is the parent of your child by birth or adoption; or
c) has custody and control of your child (or had custody and control immediately before the child turned 19 years of age) and your child is wholly dependent on that person for support.

More about common-law partners from the Government of Canada’s web site.

Related Videos

Contact a Licensed Insolvency Trustee

If you or your spouse / partner are in debt and need to discuss your options, contact one of Grant Thornton’s Licensed Insolvency Trustees in Canada. We offer a free, confidential meeting – in person or over the phone – to review all debt solutions, including debt consolidation, a consumer proposal, or bankruptcy.

Contact one of Grant Thornton’s Licensed Insolvency Trustees in Canada:

Alberta | Manitoba | Northwestern Ontario | Quebec | Nova Scotia, Newfoundland and Labrador | New Brunswick and PEI

Licensed Insolvency Trustees

The Office of the Superintendent of Bankruptcy Canada has recently issued a new directive changing the designation of a bankruptcy trustee, or “Trustee in Bankruptcy” to Licensed Insolvency Trustee (LIT). This designation will help individuals struggling with debt identify those who legitimately provide government programs such as Bankruptcy or a Consumer Proposal to eliminate debt from consultants who are not licensed by the federal government.

The designation of Licensed Insolvency Trustee instead of Bankruptcy Trustee is more indicative of the wider range of insolvency and debt restructuring services that these professionals provide. In other words, Trustees assist not only in filing bankruptcy but also consumer proposals and other debt restructuring services. The new designation may also help to alleviate the fear people may have in talking to a “bankruptcy” trustee and make it clearer to individuals that Licensed Insolvency Trustees can provide a variety of debt management solutions.

The role of a Licensed Insolvency Trustee remains unchanged. They will still:

  • Meet with you, during a free initial consultation, to review your debts and your financial situation in order to help you find the best available debt solution. That may or may not include any type of insolvency proceeding under the Bankruptcy & Insolvency Act. The role of a Licensed Insolvency Trustee is still to help you consider all of your options.
  • Collect information from you and prepare the necessary documents to be filed with the government, whether you are filing personal bankruptcy or a consumer proposal.
  • Notify your creditors, accept and review all claims, and otherwise administer the insolvency process.
  • Ensure you complete all necessary duties and apply for your discharge or completion certificate.

It’s important to know that the person you work with is licensed and has the training and experience needed to help you get out of debt. Licensed Insolvency Trustees are just those experts.

Learn more about Grant Thornton’s Licensed Insolvency Trustees in Canada:

Alberta | Manitoba | Northwestern Ontario | Quebec | Nova Scotia, Newfoundland and Labrador | New Brunswick and PEI