#GTKnowledgeisMoney – How to Manage Money for Student Life

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Since we know a thing or two about financial counselling, Financial Literacy Month is happening throughout the month of November and focuses on strengthening the financial literacy of Canadians.

Grant Thornton Limited is sharing the #GTKnowledgeIsMoney series, focused on money tips from experts and peers.

Everyone has different financial needs at different times in their lives and it’s important to understand what steps you can take to create a better future for yourself or family.  Grant Thornton has a team of Licensed Insolvency Trustees across Canada who provide advice to clients who are looking for financial guidance and assistance. Grant Thornton offers clients help with financial counselling, debt restructuring, consumer proposals and bankruptcy.

This week we are focused on managing money as a student and how to create a budget while being in school.

Here is a list of tips to help students manage their money:

  • Use your student loans wisely: Student loans are just that, loans, and they must be paid back with interest added. Make sure to use your loans wisely, don’t use it if you don’t have to, and understand what the interest amount will be in the end.
  • Find an interesting, non-stressful way to track your spending: Often times we get so caught up in the busy school life, we just pull out the wallet and charge the credit card. Find an app or tracking tool that works for you. For example, download an app on your phone such as Mint, or create a note section on your phone, or carry around a small notebook. Then once a week, find a cozy place to review your lists, to see where you can see where your money went, and try to spend a little less the next week, and save a little money.
  • Know your budget, and use gift cards only: Figure out what your weekly spend will be on groceries, coffee, gas, and eating out and then purchase gift cards for your spending each week. Once the cards are depleted, don’t spend any more until the next week when you purchase a new card.
  • Budget how much you want to spend when going out on the town, then take cash only with you; this can help you limit what you spend and wracking up your credit cards.
  • Watch for ‘dollar drains’: These are small repeat purchases that add up to a considerable amount over a month’s time. You don’t necessarily need to deprive yourself of what you enjoy, but find ways to limit the amount you spend. An example can include making coffee at home in the morning as opposed to buying a $3 coffee every day.

Are you drowning in student debt? Our team of Licensed Insolvency Trustees help provide debt solutions to those who are struggling financially. Contact a location near you to set up a free consultation.

Do you have tips on how student can manage their money? Share it with us online using #GTknowledgeisMoney and tag Grant Thornton Limited for a chance to win $500.  Full contest details here

Check back next Monday where we’ll share our advice on how to teach your children about money.

#GTKnowledgeisMoney – How to Live Within Your Means

GT_KnowledgeCampaign_WithinYourMeans

Financial Literacy Month is happening throughout the month of November and focuses on strengthening the financial literacy of Canadians.

Grant Thornton Limited has launched the #GTKnowledgeIsMoney series, a campaign focused around money tips from experts and peers. Everyone has different financial needs at different times in their lives and it’s important to understand what steps you can take to create a better future for yourself or family. We want to help Canadians learn more about how to manage their finances and what they can do to strengthen their financial knowledge.

This week’s topic is about how to live within your means.

Living within your means is an ongoing process that helps you achieve your financial goals. Here is our step by step guide to help you get started:

  1. Set a budget
  • Half the battle is knowing how much money you make and what you need to spend every month.
  1. Know the difference between needs and wants
  • Go back to the basics and prioritize your spending. Create a list of the essentials that are needed to survive and budget from there.
  1. Do not rely on credit cards
  • Credit cards provide a false sense of security for your monthly budget. These funds are not free and come with a price that effects your future cash flow.
  1. Create an emergency fund
  • Saving up a nest egg for those months when expenses can run higher than your income will lessen the burden to your budget and reduce your use of credit.

Grant Thornton Limited is a team of Licensed Insolvency Trustees who provide expert advice to clients who are looking for financial guidance and assistance across the country. Grant Thornton offers clients help with financial counselling, debt restructuring, consumer proposals and bankruptcy. Find an office near you for a free consultation by clicking here.

Want a chance to win a $500 prize? All you need to do is share your money management advice online with us using the hashtag #GTKnowledgeisMoney, tagging Grant Thornton Limited on Facebook or @GTDebtRelief on Twitter.

For full contest rules, click here.

Check back next Monday to read our advice on how to manage money for student life.

#GTKnowledgeIsMoney – How to Achieve Financial Wellbeing

GT_KnowledgeCampaign_FinancialWellbeing

Financial Literacy Month is happening throughout the month of November and focuses on strengthening the financial literacy of Canadians.

Grant Thornton Limited has launched the #GTKnowledgeIsMoney series, a campaign focused around money management tips from experts and peers. Everyone has different financial needs at different times in their lives, and it’s important to understand what steps you can take to create a better future for yourself or your family. We want to help Canadians learn more about how to manage their finances and what they can do to strengthen their financial knowledge.

This week’s topic is about how to achieve financial wellbeing.

First, what is financial wellbeing?

Financial wellbeing is defined as a state of being wherein you:

  • Have control over day-to-day finances
  • Have the capacity to absorb financial shock
  • Are on track to meet your financial goals, and
  • Have the financial freedom to make the choices that allow you to enjoy life

Achieving financial wellbeing is an ongoing, multi step process. Here is our step by step guide to help you get started:

  1. Set financial goals for the short term as well as the long term
  • Create SMART goals – Specific, Measurable, Achievable, Realistic, Time Based
  • Goals should be reviewed periodically and are likely to change over time
  • Create a Personal Financial Net Worth Statement and review annually
  1. Create a household budget
  • Track your fixed and variable household costs
  • Set limits and look for ways to reduce variable costs
  • For discretionary spending, do a “needs vs wants” assessment prior to spending
  1. Manage your available credit and use your credit to your advantage
  • Pay bills and monthly debt payments on time to improve your credit score – this helps you get the best interest rates available with the lowest collateral required
  • Review your credit score annually and ensure all errors are corrected
  • Consider closing unused credit that you do not need
  1. Manage your accumulated debt – review your debt and set a debt reduction strategy
  • List all your debt, both secured and unsecured
  • Create a debt reduction strategy that fits within your budget created above, and be reasonable with timelines (you didn’t accumulate the debt overnight, so it won’t go away overnight)
  • Target higher interest unsecured debt first as a means to improve your monthly cash flow. As cash flow improves, consider increasing your monthly debt reduction payments
  1. Save for the future / set up an emergency fund
  • Don’t neglect savings while concentrating on your debt repayment strategy. Unplanned or emergency costs often occur, and without savings available, credit is often used
  • Ensure you have life insurance appropriate to your personal situation. Obtaining life insurance at an early age is more cost effective than waiting until later years
  • Utilize RRSP’s for long-term savings. These provide a tax reduction in the year saved, however they should only be accessed at retirement due to the taxes due when liquidated
  • Utilize non-registered savings vehicles (TSFA, high interest bank accounts, non-registered mutual funds etc.) for shorter term savings, as these can be accessed in emergencies with little to no liquidation cost

Grant Thornton Limited is a team of Licensed Insolvency Trustees who provide expert advice to clients who are looking for financial guidance and assistance across the country. Grant Thornton offers clients help with financial counselling, debt restructuring, consumer proposals and bankruptcy. Find an office near you for a free consultation by clicking here.

Want a chance to win a $500 prize?  All you need to do is share your money management advice online with us.

To be eligible for the contest, entrants must:

Contest is open to all Canadian residents. Deadline for entry is Thursday, November 30th, 2017 at 11:59 pm AST. Winner will be selected through random draw. Full contest rules here. 

Tell us how you achieve financial wellbeing by using the hashtag #GTKnowledgeisMoney on Facebook or Twitter.

Check back next week to read our advice on how to live within your means.

Financial Literacy Month – #GTKnowledgeisMoney Contest

GT_KnowledgeCampaign_Contest

November is Financial Literacy Month. This month is all about strengthening financial literacy of Canadians and empowering them to manage money and debt wisely, save for the future and understand their financial rights and responsibilities.

Knowing the importance of financial literacy, Grant Thornton Limited is launching a #GTKnowledgeisMoney series, an online campaign focused around money tips from experts and peers.

Throughout November, our team of Licensed Insolvency Trustees will be sharing their expert tips on money management best practices at different stages of life on Facebook, Twitter, LinkedIn and our blog, but we also want to hear your money management advice too for a chance to win a $500 prize.

To be entered to win the $500 prize, entrants must:

  • Share their best money management tips on social media, tagging Grant Thornton Limited on Facebook or @GTDebtRelief on Twitter, using the hashtag #GTKnowledgeisMoney
  • For an extra entry, follow Grant Thornton Limited on Facebook & Twitter
  • Contest is open to all residents of Canada, excluding Québec, having reached the legal age of majority in their province or territory of residence prior to the Contest Period. Deadline for entry is Thursday, November 30th, 2017 at 11:59 pm AST. Winner will be selected through random draw. To read the full contest rules, click here.

Be sure to follow along on our blog and social media channels as we’ll be sharing our financial advice to different generations each week.

Connect with us on social media and be a part of the conversation to help financial literacy:

Like us on Facebook: https://www.facebook.com/GrantThorntonLimited/

Tweet us: https://twitter.com/GTDebtRelief

Linkedin: https://www.linkedin.com/showcase/10795238/admin/updates/

 

Canadian interest rate hike: 5 tips for consumers

With the today’s announcement that for the first time in seven years the Bank of Canada has raised the Canadian interest rate to 0.75 per cent from 0.5 per cent, it is a good time to get your financial house in order using both a cautious and deliberate approach.growthchart_burgundy

Rob McLernon, a Licensed Insolvency Trustee with Grant Thornton’s Nova Scotia practice, offers the following 5 recommendations to Canadians:

  1. Review your debts. Do a complete review of your debts to determine whether they will be susceptible to a rate increase now (variable rate products) or at renewal (fixed rate products).
  2. Review your spending plan. If you don’t have a spending plan, create one. Determine how much money you have left at the end of the month presently, the impact the interest rate increase will have and make adjustments.
  3. Create a debt repayment plan. Create a structured and focused approach to paying down your debts. For the greatest impact and most improvement on your monthly cash flow, attack debt with the highest interest rate first.
  4. Consider making cash-only purchases. Stop the accumulation of more debt and interest by relying less on credit.
  5. Seek out the advice of a financial expert.  Debt help experts, such as License Insolvency Trustees, can provide free advice regarding your personal financial situation.

To book a free consultation with one of our debt help experts, visit www.grantthornton.ca/consumer_insolvency to find a location near you.

RobM_HS
Rob McLernon is a Licensed Insolvency Trustee (LIT) and a Chartered Insolvency and Restructuring Professional (CIRP)  with our Nova Scotia Grant Thornton team. He’s been working primarily in the consumer insolvency area since 2003. In addition to being a LIT, he is a Certified Insolvency Administrator and Counsellor. Rob has extensive background knowledge on debt restructuring and brings this to his current role.

 

 

5 steps for getting your financial house in order this year

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Now that we are well into January, you’ve probably had many possible new year’s resolutions running through your head…lose weight, quit smoking, exercise more, spend more time with family…the list goes on. Where do you start?! My belief is that “getting my financial house in order” should be on, if not at the top of, most Canadian’s new year’s resolutions lists for 2017, and here is why.

As Canadians find themselves dealing with ever-increasing debt levels, a greater and greater portion of their monthly paycheck goes towards servicing this debt.  With grocery and gas bills on the rise, it’s predicted that the average Canadian family could spend $1,600 more in 2017 than 2016. So, now is the perfect time to review your financial health and set a plan for the coming days, weeks and months.


Step 1: Determine your personal net worth.

Review your current financial situation by creating a personal net worth statement. This should be done annually so you can see if you are gaining ground or not. List all your assets (e.g., home, car, investments) and give a realistic value for each. Then list all your debts (e.g.,mortgage, car loan, credit cards, lines of credit, etc.). File this away for next year so you can review your progress year over year

Step 2: Plan to pay down debt.

Review your list of debts from your personal net worth statement and create a debt reduction strategy.

Higher interest unsecured debt should be attacked first.
By reducing this debt first, you will free up more of your monthly income to be used to reduce other debt, or create savings. Paying down high interest, unsecured debt is a two-pronged approach:

  1. Stop (or limit) the future use of the unsecured debt.
  2. Pay more than the minimum the lender requires.

This seems simple in theory but can be difficult in practice because “life happens”. The budget you create should have some provision for unexpected expenses which can help with reducing the tendency to use the debt for such unexpected expenses.

Use cash on a go forward basis
Plastic (credit and debit cards) is very convenient and can lead to unanticipated or overspending. Leave the cards at home (in a safe place) to limit your access. Get receipts for everything you spend. Remember you are now using cash and without the receipts you have less ability to track where the cash went.

Step 3: Create a budget.

A budget is not a four letter word and it is not something to fear. A budget is merely a plan for how you want to spend your money. There is the old adage: If you fail to plan, you plan to fail. Nothing could be more true!  A budget is key to improving your financial health. If you already have a budget, pat yourself on the back. If you don’t, the beginning of the year is a good time.

The best way to create a budget is to review your spending patterns over the previous months because where your money has been going is probably a good indication of where it will go in the future.

  • As a starting point, look at your bank statements, credit card statements, etc.
  • It doesn’t matter what form your budget takes (pen and paper, Microsoft Excel, software, online), as long as it done in a method that you are comfortable using regularly.
  • It doesn’t matter what form your budget takes (pen and paper, Microsoft Excel, software, online), as long as it done in a method that you are comfortable using regularly.
  • Some resources to check out include the online budget calculator offered by the Federal Consumer Agency of Canada, and the budget tool and free mobile apps at Mint.com. Software for purchase such as Quicken can be useful, however, they come with a cost to purchase.
  • Look to online tutorials to help you create the best budget for your situation.
  • For your budget to be most effective and to be most successful achieving it, be sure to involve your spouse and your children (they will need to learn this as they get older) in the process .

Step 4: Create savings.

Pay yourself first.
Your budget should also have a monthly savings amount built into it. An effective way to do this is through payroll deduction. This way you aren’t tempted to dip into any savings you planned for at the end of the month.

Piggy bank_lavendarAutomatic Money Transfer
Another method of “forced” savings is to have your money automatically transferred from your checking account to your savings account according to your pay schedule. Start small and after a few months if you can handle slowly increase the amount. Out of sight is out of mind – over time you won’t even miss it!

Use a piggy bank
Collect your loose change. Loonies and Toonies can add up quite quickly!.

Step 5: Track spending.

An often overlooked step, you need to track your actual spending and compare it to your budgeted amounts. Review your budget at least monthly to see if your spending compares to your budget. If you find you are spending more in a category then the budgeted amount, you either need to increase the budgeted amount or decrease the amount you are spending.


Getting your financial house in order an important resolution. Create a plan and work towards achieving your plan. Don’t try to change everything overnight as you are more likely to give up and return to your old ways. If you find you are in over your head reach out to a professional such as a Licensed Insolvency Trustee for help.

RobM_HS
Rob McLernon is a Licensed Insolvency Trustee (LIT) and a Chartered Insolvency and Restructuring Professional (CIRP)  with our Nova Scotia Grant Thornton team. He’s been working primarily in the consumer insolvency area since 2003. In addition to being a LIT, he is a Certified Insolvency Administrator and Counsellor. Rob has extensive background knowledge on debt restructuring and brings this to his current role.

 

 

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.

 

 

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.

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:

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