Simple Money Advice

Do you remember the last piece of really good money advice that you got? Who did you get it from? Was it your parents, your co-worker, your neighbour? Was it from a magazine at the dentist’s office or an inspirational Pinterest board? Where ever you heard it, chances are you remember it because it resonated deeply with you.

Below are some of the most common but smartest ‘money clichés’ that you’ve probably heard – and maybe some that you haven’t!

  • The quickest way to double your money is to fold it in half.

This sage piece of advice really breaks down to this simplistic way of thinking: if you want to save money, stop spending. Put those bills back in your pocket and put away your plastic. Money trickles through people’s fingers because they can’t stop spending. Really thinking about your discretionary spending – not going to grab that daily coffee, for example – is one fast way to financial security and prosperity.

  •  Pay yourself first.

This popular adage is well known for a reason. People who put away their money into a savings account or into an emergency fund are more likely to stay out of the red if a financial surprise pops up. By paying yourself first, you ensure that all of your needs are met. Oftentimes I see individuals that dole out too much of their paycheque towards debt repayment, which leaves them with a shortfall for the rest of the month. The consequence? They have to rely on credit to fill the gap, which results in a cycle of debt and repayment. Ensure that you allocate an adequate amount towards debt repayment so that it actually gets paid down in a realistic time frame (aim for 5 years or less), but don’t overextend yourself.

  • Never loan money that you expect to get back.

If you’ve ever lent money to family or friends and lost the relationship over it, you already know this one to be true. Throughout my career, I’ve seen many personal relationships sabotaged by the lending of money – of course, only when it’s not paid back. Truthfully, lending money to friends and family is really not a great idea, for obvious reasons. But here’s another not so obvious reason – if the person can’t pay it back, for whatever reason, they may feel guilty for taking it in the first place. Avoid the awkwardness, resentment, and confusion that often accompanies personal loans by only lending money that you can afford to lose.

  • Pay for everything in cash.

This is a good one for people who are trying to ebb the steady stream of money that seems to flow out faster than it comes in. In this day in age, however, the high cost of housing and post-secondary education make some forms of debt unavoidable. Paying for everyday household expenses in cash is a great way to jump-start your savings and track your spending. Putting the brakes on using your credit cards will encourage you to stop unnecessary spending and plan ahead for your purchases. Ensure that you have a tracking system in place for your cash, because as we all know how quickly cash seems to disappear.

  • “The price of anything is the amount of life you exchange for it.” Henry David Thoreau

Every time that you buy something, you are exchanging a piece of your life for material goods. ‘Your life,’ in essence, is truly your time, as it is the only finite resource that you have as a human being (besides the natural resources of our planet). So, when you purchase that new nail polish, book, or kitchen gadget, you are really saying “I am willing to give up my time for this item.” Obviously, we all have to give up our time for possessions – we have to have a home to live in and clothing to wear and food to eat. However, it seems that many people have forgotten a basic principle – the more time that you spend working to buy things that you don’t need, the less time you have with family and friends. Your time can be spent enriching your life through relationships, hobbies, interests, volunteerism, traveling – whatever makes you content. Use your time and your money wisely.

Money advice is everywhere these days, but sometimes it is the basic advice that truly resonates and sticks in our minds. Write your favourite pieces of advice down in your journal, on your blog, or on notes on your fridge. Pause and reflect on the true essence of the message that you are reading.

What is your favourite piece of money advice? Please share with us!

Solutions Credit Counselling Service Inc.

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OWN YOUR POTENTIAL

                                                engage, explore, evolve

 

Potential: (adj.) Capable of being but not yet in existence. (Noun)The inherent ability or capacity for growth, development, or coming into being.

What is it - that something that you are looking forward to?” What is the common ground between this question and my time spent interviewing Margaret Johnson for this column?

The wise teen poising the question set out to deliver the message that no matter our age, individuals need something to dream for, to look forward to and aim toward the stars for. Children are thrilled at the mere thought of new possibilities each moment of their day. They carry themselves with wild abandonment in the pursuit of the next experience. This type of energy is brilliant. Those who witness it in adults invariably ask “What is it about her that she exudes such vibrancy and verve for life?” Margaret Johnson is in the business of guiding individuals to leverage their debt, so they can literally buy back their freedom and regain belief in the dream for new possibilities, for owning more of their potential.

Margaret is, engaging, compassionate and one of the best listeners I have ever come across. She has built a national clientele on the premise of listening to one client at a time to determine tailored solutions for their debt and credit challenges. She is a rare bird in her non-judgmental approach to clients arriving at her door with a mountain of debt. “It only takes one major life crisis to take an otherwise financially healthy individual down into a dark, deep hole of despair”. Her favorite saying is “It’s not about the money; it’s all about the money”. She believes that fear crafted this statement. “We would like to think that life and happiness are not about money. The reality is, it is all about the money. For those who do not have it, there is not too much peace, safety or rest because they worry all the time – life without money is a struggle and difficult. The statement means something different to every person. Being alive is about survival - money or lack thereof. More money doesn’t translate into more happiness but individuals with money are less fearful for the basic things in life. This affords them the luxury of space and resources to look forward to new possibilities with a bit more ease”.

I thought it appropriate to ask Margaret her definition of success given her livelihood.

“I define success as having the freedom to change. I changed through extreme adversity. I knew I’d be ok as a result of feeling more freedom through growing from change. I finally understood that I had the freedom to create my life the way I wanted to have it and not feel responsible or accountable to other people for what I believed. When you let go of being attached to worry associated with what others think, and you come to realize the only thing you are in control of is you, then you have the ultimate power and can set out to make yourself happy, and in turn, impact others – that’s success to me.”

I asked Margaret her sentiments on provoking clients to be more congruent with their present financial circumstances as it relates to fear influencing the outcome of their dreams.

”We strive to give each client an education because it translates into awareness and power. Something happened in their life that has driven them to find us because they are fearful. We take away their fear and replace it with knowledge which gives them the power to make other choices. When they leave our program, they are debt-free. It is a realized dream that they never knew if they could succeed at…Power is being able to make choices and see those choices through to completion. It’s about understanding the scope of choices, that all is ok as is, even if it is not the ideal. Power in this scenario equals one's perception of personal safety which creates personal happiness”.

So, back to the wise teen Miss question. “What is it - that something you are looking forward to?” Teen Miss asked me this in context to what possibilities I am dreaming of beyond realization of my present goals and responsibilities which are in full motion – some to create a terrific lifestyle full of purpose, some, part of life’s daily necessities and some, dreams in process. Her question served to provoke me to: continue to dream big as I explore my future; to awake the bubbling excitement for who I will evolve into; to live with a purpose that positively impacts something way beyond my own needs; to capture the child-like thrill in launching new possibilities for myself and those I am surrounded by; to align myself with individuals who are constantly becoming.

In order to remain young in body, heart, and spirit, it is imperative to “look forward” and be engaged in new possibilities.

When was the last time you felt the child-like thrill when looking forward to something?

Margaret has 35 plus years experience in the financial industry. A leader in the field of credit counseling, a distinguished speaker and a respected member of the community, Margaret is known for her sage advice and her fight for the consumer. Margaret can be reached at her company Solutions Credit Counseling at 604 588-9491 or by email at This email address is being protected from spambots. You need JavaScript enabled to view it..

Interestingly, a recent survey (http://www.huffingtonpost.ca/2015/03/02/credit-card-debt-denial-canada_n_6784570.html) suggests that nearly one quarter of Canadians underestimate how their debt stacks up against the national average (hint: they owe more than the national average).  On the other hand, the number of Canadians with no credit card debt is growing.  From the findings outlined in this article and the survey, it appears that some Canadians are complacent with their debt, while others are being successful at getting out of it. 

The idea that Canadians are comfortable with their debt is a troubling trend.  It’s something that I’ve experienced personally, as a financial professional – the complacency that comes with being in debt for months, years.  One day you’re pulling out your credit card to pay for that dinner date with your girlfriend - what’s the big deal, anyways?  You only owe a few hundred dollars on the card.  Fast forward a few years….you’re paying for a trip to Disneyland on plastic, simply because “it’s the right time to take the kids, before they get too old.”  Then the radiator in the car breaks, and you use your plastic at the body shop.  On the way home you stop for a coffee and takeout, because you’re exhausted.  And then, one day, you realize you’ve put your entire life on plastic.

If someone were to ask you, up front, about your behaviour – what would you say?  Would you own up to it?  Or would you chime in that everyone has debt, so it’s not a big deal?  

In years past, having debt was shameful; for baby boomers and younger, debt is becoming commonplace  It’s being used to excuse car purchases, houseware items, clothing, cosmetics, eating out, entertainment purchases, vacations, home renovations…..if you can think of it, it’s being put on plastic or a line of credit.  The idea of ‘wants’ and ‘needs’ has shifted to an almost indecipherable level, with the two constantly being confused in our modern age.  Clients will tell me that their children (as young as 10) ‘need’ a cell phone for safety reasons.  When I question why their child needs a brand new Iphone instead of a modest, older model phone (or the one you usually get for free with a contract), usually there is no direct answer provided.  Public school teachers have often told me that there are students in their classrooms who have brand new phones but no lunch in their backpack.  The idea that a want has transformed into a need doesn’t only apply to technology; it can also be linked to addictions such as caffeine, nicotine, gambling, television, or shopping.  I’ve even heard one person describe makeup as a need.   A need used to be (and still is for many families) answered by the question “What do I need to survive?” – for many middle-class families it has become “What do I need to be comfortable?”  Comfort often comes with a high price tag and the gap is filled by credit.       

So, how do you even know that you are in debt denial? 

You might be in debt denial if you:

Make excuses for why you have debt.

Compare your amount of debt to other people’s debt load.

Lament that ‘Everyone is in debt, so it doesn’t really matter.’

Shuffle debt from one source to another while claiming that you are making regular debt repayments.

Keep overspending and using credit even though you’re heavily in debt. 

Justify using your credit cards for every purchase to collect points (to get more things you probably don’t need) – and you can’t pay off the balance in full. 

Throw away or recycle (or otherwise ignore) your bank and credit statements before you’ve reconciled them. 

Lie to others amount your debt amount or what you spent your debt on. 

Borrow from family members and friends to bridge the financial gap. 

Claim that something is a need (a kitchen appliance, like a basic model fridge) when it’s a want (a complete kitchen renovation).

So, what’s the fallout from confusing a need and a want, and ultimately, debt complacency?

The obvious answer is that a person will never get out of debt – they will simple rotate their debt throughout their lives and ultimately transfer that debt to their estate upon their death (remember: debt doesn’t transfer upon death UNLESS you’ve signed on the dotted line yourself!).  Another possibility is that retirement could be pushed back, or the equity taken out of a paid in full home to pay off debt.  Dwindling emergency savings, constant stress and anxiety, concern of family members and friends, low self-esteem, and possible financial fallout (bankruptcy or a judgement from creditors) can all be a result of debt denial.  Failure to confront debt isn’t that uncommon, but the reality is that you do have to face it in one way or another.  Admitting your debt denial, getting professional financial guidance to help you get out of debt, and sticking to a realistic budget are the first steps to moving away from financial complacency and toward financial freedom.  

The recent news about tolling highways hit me in the head like a freight train. I mean, this means the Beatle’s song, Taxman, is becoming a reality. Remember the line….”if you drive a car, I’ll tax the street.” It used to be a poetic joke? You know, an exaggeration not intended to deceive. Now the political and government leaders are serious.

The second image that flashed before me after hearing about the new tax idea was Translink. You know, the financial black hole in the lower Mainland of British Columbia that keeps sucking up millions of dollars that vanish forever, never to be seen again – but whose hunger is never satisfied for tax dollars. It’s a bit like a horror film where an invisible creature that only eats tax dollars never gets satisfied or full.

In the past, highways and bridges were an indisputable destination for tax dollars. Governments did not complain about not having enough money to build and maintain transportation routes. It was one of the prime reasons for taxation.

Gradually and quietly, the practice of disguising tax increases by calling them tolls has become popular. Most recently, the toll on the Port Mann Bridge avoided extreme criticism against governments by tolling just the users. This was a grandiose version of the user pay principle. The toll lost its tax quality because it made sense to everyone else (except the users) that only those who used the new bridge would or should be tolled. (Taxed)

In my view this unending demand for more and more taxes, fees, levies, and tolls needs to be better studied, more thoroughly understood and for transit authorities to operate more efficiently. We need to get a close-up digital picture of the insatiable appetite.  

I’m very surprised the topic of telecommuting hasn’t entered the discussion of congestion on our highways and bridges. How many people are ‘forced’ to commute because of their employer? How many people must use a car to get to work because they have children to take and pick up from day cares and school? Would it not be better to find a way for parents to work from home that would also mean more quality time with their children?

It seems to me that the great promise of Skytrain in the beginning was to get people off the highways and bridges and get them to and from work faster, in a more environmentally friendly and affordable manner. For some reason Translink’s problems have multiplied since its inception. Translink has been transformed into a neo-feudal institution with kings and queens, barons and knights and peasants at the bottom (which are now called commuters) where the notion of affordable and efficient public transit has left the building.

Albert Einstein once remarked, “Insanity: doing the same thing over and over again and expecting different results.”

There is no light at the end of the tunnel as long as we keep doing what we’ve always done. We desperately need change instead of tolls and higher taxes.

It seems we’ve evolved from a world of prevention for protecting the public from a long list of hazards and perils to one that posts signs, like, “Use At Your Own Risk”. We see them everywhere. At beaches with empty lifeguard towers. At public and private facilities alike. Everywhere warning signs are posted to protect people from real dangers.

These signs seem to be a substitute for the real thing, such as trying to advise people with helpful details and preventative steps to avoid injury – or seriously discouraging people from going for a swim in a polluted river or lake – or by replacing real lifeguards or safety trained personnel with signs – or removing the danger.

It seems that warning signs protect merchants and governments from liability. It shields them from law suits by doing the very minimum. Signs have become proof that whatever happens on the other side of the sign, people have been duly warned.

Of course these signs don’t say, Do Not Use. (or perhaps build a fence to prevent trouble)  I’ve wondered about that when I see children playing on polluted beaches.

The recent public warnings about escalating household debt seem to follow this successful example to prove that business and governments are doing their due diligence by warning Canadians there is too much household debt.

They don’t say, “Do not use household credit because it could be harmful to your financial health.” They don’t even say, “Use At Your Own Risk.” All we hear from time to time is how household debt in Canada is too high. The same root causes are blamed - low interest rates and the cost of housing in Ontario and British Columbia being held hostage by hot housing markets.

The current warnings in the media include:

  • Household debt ratio grows in second quarter as debt increases faster than income
  • Hot housing markets in B.C. and Ontario are pushing mortgage growth, despite softness in oil producing regions.
  • Household debt in Canada continues to get heavier as the ratio of household credit market debt to disposable income climbed to 164.6 per cent from 163.0 per cent in the first quarter.
  • The increased borrowing comes at a time of low interest rates.
  • Overall, total household credit market debt amounted to $1.874 trillion at the end of the second quarter, up 1.8 per cent from the previous quarter.

There are no lifeguards on duty to rescue the casualties of high credit card interest rates or unaffordable housing. No tangible advice is given to a nation of debtors who have borrowed more each and every year since the 1970s, through periods of high and low interest rates, on how to stop borrowing.

It seems to me that neither governments nor the business community really want anyone to stop borrowing. They don’t want anyone shopping less. They just want to display their concerns in public, like a warning sign pointing the finger at a vague abstract phenomenon (hot real estate markets, low interest rates) that no-one controls.

Unfortunately, with credit and debt, no-one can shield themselves from the growing liabilities that accompany unaffordable housing, unaffordable day-care, unaffordable post-secondary education and insufficient wages for middle and lower income families. Everyone is paying a high price for these unspoken root causes that cry out for immediate attention and real action.

Remember, if you are experiencing financial difficulties do not wait. Call Solutions Credit Counselling at 1(877)588-9491 or fill out our Debt Consolidation Questionnaire and get your Free Credit Counselling Advice today.

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