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.

freida_hs
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.

 

 

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

frank_head-and-shoulders

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.

 

 

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

In debt – how do you know where to get help?

The Alberta Debt Crisis: Making the trusted choice for consumer debt relief

Debt. We’re all in it, and the issue only seems to be getting worse – especially for Albertans. Alberta holds the highest consumer debt in Canada, nearly $50,000 more than the national average.  The oil and gas rich province continues to see growing job losses which only adds to the increasing consumer debt  – so how do you know where to turn to for help?

Credit counseling, debt consolidation, consumer proposals, bankruptcy – these are all terms that have been tossed around and advertised to us, but what do they mean to an indebted consumer? What options are best for your situation?  Who can you trust to handle your finances and bring you out of the red zone?

Consolidation loans

Often times the first method people consider is a consolidation loan, whether from a bank or other lender. The great part about a consolidation loan is the lumping of all of your debt into one new revised payment. On the downside, this revised payment is 100% of the debt owing wit interest. While a new payment is tempting, often times there can be many extra steps in qualifying for a consolidation loan and the new payments may not be all that much more affordable.  More on debt consolidation.

Credit Counselling

Before determining what options are best suited for you, you need to understand the debt relief landscape and who the players are. Credit counsellors have become more prominent over the last decade, mainly fueled by debtors’ desires to avoid the big bad “B” word – bankruptcy. Toted as a non-profit agency, credit counsellors require you to make regular payments to them under a debt repayment plan, and they in turn make payments to your creditors, while holding back a certain percent of your payments for their fees.

Often when consumers are choosing to eliminate their debt by way of credit counseling, they are choosing one of the most expensive methods available.  When choosing credit counseling the consumer must pay 100 percent of the outstanding balance, pay fees to the credit counseling agency, and may have to pay interest on their debts included in credit counseling.

Consumer Proposal

An alternative to credit counsellors is the more trusted and trained option of licensed trustees who are regulated by the Office of the Superintendent of Bankruptcy, typically have their accounting designation, and have been through rigorous training in bankruptcy and law.  Operating under a Code of Ethics, trustees tailor their debt solution approach to each consumer’s situation, and assist debtors into filing a bankruptcy, or the more preferred option – a consumer proposal.

A debt relief method that has become increasingly popular over the last few years (increasing 53% in Alberta from 2013-2014) is consumer proposals. Consumer proposals are attractive to people all across Canada because they allow a debtor to consolidate all of their debts into a fair proposal to their creditors to pay back all, or a portion, of the debt owing under new terms. It allows for debt consolidation, interest free terms, and flexible payback periods and allows the debtor to keep ownership of assets – your home, vehicle, tools of your trade, or potential inheritances are all protected.

Licensed trustees are the only professionals who are able to administer a consumer proposal.

As the debt landscape in Alberta continues to worsen, consumers need to be aware and informed of their options for debt relief.



The oil and gas price wave in Alberta, preparing your finances for whatever happens

It’s been said that most people in Alberta are either working in the Oil and Gas industry or have someone close to them that does.

With oil prices plummeting to the lowest they’ve been since April 2009, many consumers are fretting over the health of the economy and job security. According to Statistic Canada, Alberta’s unemployment edged up to 4.7 per cent in December from 4.5 per cent the month previous. Shell Canada, one of Alberta’s largest oil projects, recently cut hundreds of jobs – striking fear into residents that more lay offs are to come. With this in mind, I thought you might be interested in a story looking at the impact on Albertans’ personal debt and expert tips on how to prevent consumers from falling into a financial crisis during this time.

When it comes to debt in Alberta, the province holds highest average household debt in Canada, sitting at $124,838 –nearly $50,000 more than the Canadian average. A recent BMO Report shows that despite the slump in oil and the decreasing number of jobs in the province, consumers are still spending at an unsustainable rate. Experts are warning consumers to take stock of their financial situation and prepare for the anticipated job cuts.

Average Household Debt
National ATL ON AB BC
2013 $72,045 $47,237 $76,970 $89,026 $79,089
2014 $76,140 $64,120 $67,507 $124,838 $99,834

Bruce Alger, licensed trustee with our consumer insolvency team in Alberta elaborates on his concerns, “Albertans continue to have the highest household debt in the country, and as other expenses continue to hike up such as utilities, property tax, and potentially interest rates, now is the time more than ever for consumers to have discipline and caution in term of their expenses.”

Alger offers some tips to consumers in Calgary to brace their financial situations:

Plan for the worst and start an emergency savings fund if you haven’t already – the goal is to get to several months of living costs put away in case of job loss

  • Seek out where you can easily cut down on every day costs and apply the saving against debts or your emergency fund
  • Talk with a financial expert, like a licensed trustee, who can offer free advice on how to deal with any mounting debts or debts that have the potential to become a problem.

So our question to you is, has the price of oil affected you or someone you know? Have you started to take a review of your finances and developed a plan to ride out the oil and gas wave?

If you or a family member are facing financial struggles or would like some help with managing your debt, one of our professionals is available to discuss your situation. There are many options available to help and you may not need to go bankrupt. Contact us for a confidential, no-obligation, complimentary consultation. Call us toll free from anywhere in Western Canada 310 8888. Visit us online at BC: www.GTDebt.ca or AB: www.GT.Alger.ca.



Find the fun in scrimping and saving – strategies to knock debt out

OK, with the New Year a week in, how is your resolution doing? Finances seem to be one of the items topping the list this year for Canadians. You may have holiday shopping, entertaining or travel bills that need paying. Let’s not forget those credit card balances you’ve been carrying for a while. But how do you make room in an already tight budget and figure out which debt to tackle first.

So, it’s time to look around and find creative ways to ‘scrimp’, cut back, change things up and presto: extra money to apply to that holiday (or old) debt and then eventually add to our savings.

Where to start? There are some easy, tried and true ways that when added together really can result in more money in your wallet.

How about nixing the daily coffee fix? If you buy one $4 latte each day, that coffee habit will set you back $28 a week, about $120 a month and $1,460 per year. Keep that up for five years, and you’ve slurped away $7,300, not including any money you might have earned by investing your cash instead.

Take a look at your cable TV, Internet and smart phone contracts too. Candidly telling your supplier you intend to make savings can actually result in some! Discuss the packages and contracts you have and see where you can remove TV channels that you don’t watch, eliminate phone features you don’t need . . . or perhaps where bundling services can result in overall cost savings. Perhaps you no longer need a landline. And, when your smart phone contract comes up for renewal, consider forgoing the tempting upgrade to new technology and stay off contract with a streamlined package of services at a reduced fee.

We all know that eating out can be a significant drain on finances. So too, can be daily visits to the grocery store. It’s proven that popping in for milk typically leads to the purchase of at least three other impulse items. Instead, take time on the weekend to plan a week’s worth of meals and purchase all the supplies in one shopping trip. Quadruple make and freeze favourites like Chili that can serve several meals. Utilize a crock pot slow cooker too: prepare quickly before you head out the door and return to a meal all ready to go – and a great smelling house! Of course, it always helps to use coupons if you have them (look on line and print off) and check with your preferred grocery store as to which day of the week has the most cost savings and offers.

Other small ways to cut back:

  • Cancel magazine subscriptions or agree with friends to share the cost and circulate the issues.
  • Give up expensive habits like smoking and alcohol.
  • Install a programmable thermostat that can easily cut your energy bill by 10 to 20% (check out the NEST).
  • Stretch the gaps between hair cuts or colour treatments – after all Ombre is a trend.
  • Before shopping for new clothes, clean out your closet and figure out where you can re-style and re-purpose some of what you already have. You may be able to sell some items at a consignment store or re-discover outfits that you can adapt or re-incorporate into your current favourites.
  • Don’t spend a lot of money entertaining your children. They mostly crave time with you . . . so implement fun no-cost family activities like tobogganing nearby, or movie and game nights at home where everyone unplugs from devices and spends quality time together.

The money you save may later help fund a great family vacation!

If you or a family member are facing financial struggles or would like some help with managing your debt, one of our professionals is available to discuss your situation. There are many options available to help and you may not need to go bankrupt. Contact us for a confidential, no-obligation, complimentary consultation. Call us toll free from anywhere in Western Canada 310 8888. Visit us online at www.GTDebt.ca or www.GT.Alger.ca.



Which is the best method for paying down debt: Snowball or Avalanche?

Avalanche method recommends paying highest interest debt first, while snowball advocates smallest amount first.

Many of us have used our credit cards, cash advances and borrowed money over the holidays, shopped our way though the malls, ordered online and picked up gift cards for our friends, family, coworkers and picked up those little secret Santa gifts, all of this adding to the costs of the holidays. We purchased a turkey or ham, all of the trimmings, some spirits, made baked goods and bought boxes of chocolates.

Aside from the 5lbs you would like to lose, how many of us are going to be going on a debt diet over the next few months? Which is the best method to conquer those few debt pounds we plan to lose?

Blake Elyea, from our Vancouver office spoke to Canadian Press about some of his thoughts regarding the Avalanche method and the Snowball method, but which will work best for you?

‘Avalanche’ involves paying highest interest first

The avalanche method involves tackling the highest interest rate debts first — an approach that can save you money on interest payments, but may require more willpower if your highest-interest debts are also the largest ones.

“Mathematically that’s the best approach,” Elyea says. “However, you’re not going to see the instant results necessarily as quickly with that approach. It’s going to take more discipline.”

If you’re going to adopt the avalanche approach, you should be checking your balance and tracking progress and making a small budget to reward yourself when you reach your  short term goals.

‘Snowball’ method tackles small debt first

The snowball approach, popularized by U.S. radio and TV personality Dave Ramsey, involves tackling your debts from smallest to largest.

Knocking off the smallest balances first — while maintaining the minimum payments on all the other debts — gives the debtor some “quick wins,” making it a good approach for those who need to see some instant results in order to stay motivated, says Elyea.

“We all like instant gratification,” says Elyea. “We want to see that we’re making progress.”

It’s your choice

Although the avalanche method will save money on interest payments compared with the snowball technique, Elyea says any strategy that involves taking stock of your financial situation and actively tackling your debt load is a good one.

“If you have a structured way you’re going to approach your debt, either method is going to get you there,” says Elyea. “One might take you a bit longer than the other.”

If you are in a position where your debts feel overwhelming, one option might be to get a free consultation from a licensed trustee, not only can a trustee assist with helping you to plan and budget, but they may be able to offer additional debt reduction suggestions such as a  consumer proposal, an informal proposal to creditors, and, in certain situations to file for bankruptcy.

Whatever your financial situation may be after the holidays, if you feel financially hungover, there are options, take stock, develop a plan and reach out for help if needed.

Grant Thornton – Canada | We provide solutions for people with debt and financial challenges.

If you are facing financial struggles or would like some help with managing your debt—one of our professionals is available to discuss your situation. There are many options available, ask us about a consumer proposal. Contact us for a confidential, no-obligation, complimentary consultation. Call us toll free at 310 8888.

Excerpts adopted from the Canadian Press article: http://www.cbc.ca/news/business/debt-experts-recommend-avalanche-strategy-but-snowball-works-too-1.2886215

Not our parents’ generation when it comes to personal debt

It’s been said before:  In a number of ways, we are not like our parents’ generation. Things will always change. Bottom line, we often think and act differently from our parents.

Perhaps new technology and the digital revolution spring to mind first?  It’s true. From the fax and laptop to smart phones and wearable technology, the world looks and works in many new, and evolving, ways.

What’s also true is our change in attitude and actions when it comes to personal debt. In 2012, the Globe and Mail reported on a poll conducted by a firm of bankruptcy trustees. The results show that most Canadians are quite comfortable with using debt as a financial strategy. Yet, this was a time when debt loads had risen to alarming new highs. The survey found that nine out of 10 respondents would consider borrowing money to cover an unexpected expense that was not an emergency.

By contrast, in the 1960s, families frequently lived a ‘middle class’ lifestyle and managed to own a home on one income (usually the Dad’s). The mindset was typically to save for needed things—rather than to borrow. And, this lifestyle rarely included the additional luxuries we see fairly common in our lives today: second cars, cable TV, eating out, vacations and plane travel, smart phones and tablets, pricey gym or golf memberships, designer duds etc.

The downside to our view of what constitutes the appropriate lifestyle of the 21st century is that to acquire and maintain this level of consumerism we may spend more than we earn (a concept that would rarely be considered acceptable in the 1960s)! In our work at Grant Thornton, we often see where this can lead:  Consistently living beyond ones means, borrowing, excessive purchasing and maximizing high-interest credit cards can put individuals and families into highly stressful situations with increasing debt loads (whether we believe we can afford it or not).

Our role is to help people address their debt problems and find ways to rebuild a solid financial future. We can help with tips and reminders so that you may not need our assistance again in the future, including: disaster proof your life (get your life insurance and an emergency fund in place), spend less than you earn, aggressively pay down high interest debt, read the fine print on any purchase agreements (you may be liable for significant interest payments if you miss the eventual payment due date) and delay consumption (save for that vacation rather than charge it).
If you are facing financial struggles or would like some help with managing your debt—one of our professionals is available to discuss your situation. There are many options available, ask us about a consumer proposal.  Contact us for a confidential, no-obligation, complimentary consultation. Call us toll free at 310 8888.

BC: www.gtdebthelp.com

AB: www.GT.Alger.com

Take a ‘staycation’ . . . and other creative ways to have fun and spend less.

It’s summer and thoughts turn to fun ways to spend time and . . . (unfortunately) money. Whether it’s a family vacation, home improvements, backyard parties or out-of-town visitors – the impact on your wallet can be significant.

If you are already struggling with a worrying debt load, it’s likely time to change what you do this summer.

A recent BMO travel study found that more than half of all Canadians plan travel within their home province this year (in Albertans that number is an outstanding 81 per cent). This scaling back on vacation plans is due in part to cost-conscious Canadians who also see the impact of rising gas prices and are seeking to build savings; all positive news—and even more relevant if you need to address debt.

Paying off debt doesn’t have to be viewed as a burden, in fact, it should be viewed as an accomplishment. Reducing debt brings a sense of relief. Focusing on paying off your debt can provide an opportunity to explore cost-cutting alternatives to many summer activities.

Consider these ways to spend less and have fun:

  • ‘Staycation’: plan a ‘holiday’ in your own province. Be a tourist in your own City of one nearby. Load up on traveler information and see the sites you often overlook because they’re close to home.
  • Host a backyard ‘drive in’. Set up your TV outside for an evening video-fest and make it a pot luck BBQ or picnic with friends and family. (Maybe invite your close neighbours too, if it’s likely to get noisy!)
  • Camp in your own back yard. Adults and children alike can enjoy a night star gazing or reading under canvass. The bathroom and fridge are nearby and if it rains: enough said!
  • If you’re game to try crafts or Do-it-Yourself to save money on entertainment or home improvement projects, social sites like Pinterest and Houzz can be fun tools to get your creative ideas flowing.

 Remember to use the money you ‘save’ for debt repayment first—and start with high interest rate credit cards:

If you are facing financial struggles or would like some help with managing your debt—one of our professionals is available to discuss your situation. There are many options available to help and you may not need to go bankrupt. Contact us for a confidential, no-obligation, complimentary consultation. Call us toll free from anywhere in Western Canada 310 8888.