Have you ever avoided the phone because of a creditor, I have. I can remember leaving my house for most of the day just so I didn't have to ignore the phone.
I still remember my first meeting with a life insurance salesman when I was in my 20's. I was newly married, we had a daughter and I did not want to buy life insurance. At the time I had never really thought about my responsibility to my family if I died prematurely (and of course I wasn't going to die).
When was the last time your really checked the terms and conditions of your the credit cards in your wallet? If you are like most of us the idea of reading the fine print is not something you would particularly enjoy ... but what you don't know can harm you!
Recently I had a family member come to me asking what I thought of pre-paid credit cards as a method of purchasing things on the internet. They did not have a credit card and figured if they put their money on a prepaid card they could control their spending and use it only when they needed it. 
According to the Bank of Canada ... household debt is emerging as the greatest risk to Canada's financial system and the financial lives of Canadian and Okanagan families.
What did you do for your mother last weekend? My daughters and I took their mother to Vancouver and we did our best to stimulate the economy. We ate too much, shopped too much and walked too much. Amazing all the best stores and restaurants are just minutes from Skytrain!
Much has been said about a coming "Global Recession" and our job as consumers is to spend to save our economy. I had great discussion today with someone if this "recession" is real or just a headline for newspapers, TV news and Internet sites. Here is my take ...
Everything in the last 4 - 5 years has gotten out of hand. One of The best example of this is real estate. We all watched housing prices going up well beyond reasonable growth rates. Another good example is the car business.The real problem is the industry is producing 30 - 40% more cars than it can sell.
As the economy shrinks, wages come down , workers will be laid off and companies will have to find new ways to attract consumers. In the short term this will be difficult as many are worried about potential job losses.This process will be more painful for most of us than the recession in the 80's. Why? In the 80's few of us had a sizable amount money invested, owned homes or had large amounts of debt. A 20% loss on 100,000 is much more worry some than on 10,000.
Trimming costs is good news for investors. Smaller liabilities and stronger balance sheets make companies more attractive. Who is going to invest in a company that has too many workers, too much debt and too little customers? It is in time likes these that money is made.
As the recession makes its way to the Okanagan ... what can you do about it? Check out the article "4 Tips for Weathering the Kelowna Recession".
Review your cash flow, eliminate your debt and find ways to simplify your financial life!
In today’s economic crisis, many families already drowning in debt are now having to deal with excessive penalty fees for everything from missed payments to over‑limit spending. Fixed Debt Can Save Money
Most credit card debt is “revolving” debt. Because of the way the interest is calculated, it’s difficult to tell how long it’s going to take you to pay off the balance. Revolving debt is compounded when additional monthly charges are added to the balance.
With installment loan debt, payments are scheduled for a fixed amount payable over a specific period of time. It’s easy to tell when the entire amount borrowed will be paid off and – even with a similar interest rate and monthly payment amount – the pay‑off date will generally be much sooner than with a comparable revolving account.For example:
If a client charges $15,000 on a credit card with a 15% interest rate (APR) and pays $525 per month, it will take 15 years to pay off the debt and the client will have paid an additional $8,156 on top of the initial charge.
With an installment loan (fixed), the same loan amount of $15,000 with a 15% APR, with the same $525 per month payment will take the client just three years to pay off – and they’ve only paid an additional $3,674 on top of the loan.
With a fixed loan, the client could save more than $4,000 in interest and pay off the loan in three years instead.Protect Yourself
In an age where “easy credit” is not always what it seems, it pays for clients to be educated about the credit cards in their wallet. Failure to manage credit cards could wreak financial havoc.
1.USAToday.com, September 17, 2008 This comparison between fixed and revolving devt assumes revolving payment (minimum) of 3.5% of the remaining balance or $20, whichever is greater. First month’s payment is shown and term assumes continued payment of minimum amount. No additional debt incurred and payments decrease over a time period and also assumes payment of 3.5% of initial loan amount, no additional debt incurred and payment amount remains fixed throughout the term of loan. This illustration is hypothetical only. Each debt situation will vary.
According to the February 1,2008 issue of Newsweek, the average household "owes 20 percent more than it makes each year." With the current financial crisis, that percentage may even increase as families go deeper into debt just to maintain their lifestyles.
Avoid the revolving consumer debt trap.
Most credit card debt is revolving debt. Because of the way interest is calculated on revolving debt, it’s hard for clients to know exactly how long it will take to pay off their balance. All that interest can add up to big bucks along the way.
With fixed debt, clients make payments over a set span of time. It’s easy to tell when the principal will be paid off and – even with the same interest rate and monthly payments – the pay off date is usually much sooner than with revolving debt. Consolidating revolving debt into one fixed rate loan can potentially eliminate those debts sooner and reduce a client’s monthly payment.
Understand compound interest.
With a revolving debt account, compound interest can eat away at a client’s financial health. But when a client uses compound interest in their favor, it can really help savings grow. The more a client saves, the more interest they can potentially earn on that money.
Make a lifestyle change.
When it comes to reducing debt, little changes can make a big difference. By separating “wants” from “needs,” and making the “needs” the priority in spending, clients can begin saving toward their future.
Where Has the Money Gone: The State of Canadian Household Debt in a Stumbling Economy
In the winter of 2008, the Certified General Accountants Association of Canada(CGA-Canada) embarked on a second consumer survey on the topic of household debt and consumption in Canada. A similar survey was commissioned byCGA-Canada in the spring of 2007. The purpose of this particular survey seeks to understand the extent to which the economic and financial crisis worsened financial positions of Canadians having already experienced some financial strains. As we have seen, the topic of household debt and consumption is timely, relevant and critical for Canadians to consider. We anticipate that this new report entitled Where Has the Money Gone: The State of Canadian Household Debt in a Stumbling Economy, will be of significant value to the Canadian public. For a PDF of the report click here
Debt Elimination using the Debt Snowball Dave Ramsey explains how debt stacking or "The Debt Snowball works. Courtesy of David Ramsey.
The Days of Debt - Broadcast Date: Nov. 30, 1995
The economy is on the upswing in 1995, but the financial picture in many individual Canadian households is not so rosy. Canadian have run up a staggering $450 billion in household debt and the average debt per household has doubled in the last 10 years. In this report, CBC-TV's focuses on one family dealing with its burdens and how they are surviving the pressure of their debts... check out the video here at http://archives.cbc.ca/economy_business/banks/clips/16438/
 |  |  |  |
Plan for Financial SUCCESS !