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Category: Money Saving Tips

  • Looking to Buy a House?

    Our feature in Redfin’s latest article:

    11 Tips on How to Save for a Downpayment

    Owning a home is a milestone is a person’s life. However, it has not always been easy to accomplish. By learning some of the basics of home ownership and how to save for a downpayment, you will be able to make wiser decisions about owning a home. Whether you are looking to buy a condo in Miami or a home in Atlanta, each of these tips is important. Take a look at what we had to say about the most effective ways to save for a downpayment.

    Looking to Buy a House? 11 Tips on How to Save for a Downpayment

  • Housing Affordability Crisis in the GTA: How to Find Other Savings in Your Budget

    Housing affordability in the GTA is close to the worst it’s ever been.

    According to the RBC Housing Trends and Affordability report, a household in Toronto would need 66% of its income to cover housing-related expenses. And the difficulties continue whether you’re looking to own a home or rent.

    • First-time homebuyers have to pay a higher cost to get into the housing market in the first place. Even relatively more affordable options, like condos, have gone up in price recently.
    • Renters are paying more in rent. According to RBC, rental rates in Toronto have gone up 4.4% in the past three years.
    • Even GTA residents who already own a home may be struggling as housing costs go up or if they are scheduled for mortgage renewal.

    Whether you’re a renter, shopping for your first home, or a homeowner, the housing affordability crisis likely isn’t going away anytime soon – but there are solutions to be found in your own pocket.

    These money-saving tips can help you put more into your housing budget, save for a down payment, or pay off debt that may be affecting your ability to get a mortgage.

    Here’s what we recommend:

    1. Get a roommate.

    If you are currently renting, you may already have a roommate. But if you don’t, finding one can be a good way to save on costs – especially if you are hoping to save up to buy a house.

    If your rent is $2,000 per month and you split that in half with a roommate, you’d be saving $1,000 each month – or $12,000 each year.

    Even current homeowners may benefit from having a roommate to share housing costs or looking into co-ownership, where two or three friends buy a house together. While you may have less privacy, you’ll be able to afford more home.

    1. Negotiate your lease or mortgage renewal.

    For tenants, you may be able to work out a deal with your landlord. If you’ve been a good tenant and have a history of paying your rent on time and in full, your landlord may be keen to keep you. You might be able to negotiate a break on rent for your good behaviour, or for doing something extra in the complex – like shovelling the driveway in the winter.

    For homeowners, when time comes for your mortgage renewal, ask your broker or lender if there is a way to save on your rate. You might benefit from a lower rate or by switching to a fixed-rate mortgage vs. variable-rate. If your renewal has already passed, consider looking into mortgage refinancing instead.

    1. Look for savings in your other bills.

    Like it or not, 66% doesn’t leave much room for other expenses. But if you can’t reduce the 66% any further, you may be able to cut back on the 34%.

    Look at all of your bills – not just the housing-related ones – with a fine-toothed comb. Do you need a subscription to HBO Go and Netflix? Are you paying for services you no longer use? Can you switch from brand-name groceries to generic? Are you paying pricy service fees for your bank account? Can you walk or bike in the summer instead of taking the TTC?

    While these potential savings may be relatively small, they can really add up. And if your goal is to own property in the next few years, they might be what makes the difference in down payment or shortens the homeownership timeline. It’s all about priorities.

    1. Focus on paying down debt.

    Debt is bad for your budget in two ways. First, having more debt means more payments each month. If you have $9,000 in credit card debt, for example, and are always making the minimum payment, you’re going to be paying it off for a very long time as interest adds up. And that money could be going to other things in your budget – like your mortgage or savings for a down payment.

    But the second reason that debt can hurt housing affordability has to do with lender regulations. Federally-regulated lenders in Canada (the big banks) have to assess your current debt levels when you go to them for a mortgage or refinancing. If you have too much housing-related debt (known as the Gross Debt Service ratio – or GDS) or too much total debt (known as the Total Debt Service ratio – or TDS) you’re going to have a much harder time getting a mortgage – if you can get one at all.

    Paying down your high-interest debt like credit card bills, a line of credit, student loans, etc. quickly is in your best interest, both to save more money and to improve your chances of getting a mortgage or a better rate on renewal.

    You might consider:

    • A debt consolidation loan, like the ones offered by DebtCare Canada.
    • If there is a lot of debt, filing for a consumer proposal or for bankruptcy.

    The housing affordability crisis in the GTA is making it difficult for renters, house hunters, and homeowners alike – but there are savings to be found.

    At DebtCare Canada, we offer financial help to people with all types of credit and income. Ask us today about our debt relief program or our loans and mortgages.

    Call 1-888-890-0888 or visit www.debtcare.ca.

  • 10 Better Budgeting New Year’s Resolution Ideas

    It’s been 2019 for more than a month — so why are we writing about New Year’s resolutions in February?

    Did you know that only 8% of people actually stick to their New Year’s resolutions — and 80% of resolutions fail by the second week of February?

    If you are in this boat, it’s not too late. You can still meet your goals, or even create new ones if you didn’t set any in January. But the key is to make smarter resolutions that will last through the whole year.

    Financial resolutions are great goals to set. Little, daily actions can add up to big successes in the long run. Here are 10 New Year’s (or any time of year) resolution ideas you might consider for 2019 — and ways to stick with them:

    1.Create a budget and update it monthly.

    Why it works: By reviewing your budget monthly, you will see how your goals are progressing. You’ll also be able to see where you need to tweak and plan for the month ahead.

    Make it stick: Set aside a day each month for your review — like the 1st of the month. Create a calendar reminder on your phone.

    2.Track your expenses.

    Why it works: You’ll be raising awareness about how you spend your money. Just by tracking alone, you’ll be able to see patterns crop up.

    Make it stick: Download an app that connects to your bank account to make the tracking automatic. Plus, some apps allow you to sync your budget, so you can see when you’ve gone over a category.

    3.Set up automatic withdrawals into a savings account.

    Why it works: You only have to act once, and you’ll have your resolution completed! This can be a great way to put money aside for a rainy day or for a specific savings goal.

    Make it stick: Every time you have “found money” or get bonus money, add it to your savings account.

    4.Set up an RRSP or (if you already have one) make your contributions automatic.

    Why it works: Similar to the savings account, this is a one-and-done resolution. Once you have your RRSP set up, figure out how much you can put in and then make it automatic. The benefits of an RRSP are numerous and starting to save early can set you up for success in the long run thanks to compound interest.

    Make it stick: Have a garage sale (or online garage sale through a marketplace site) and add all the revenue to your RRSP.

    5.Pay off debt every day.

    Why it works: Author Jeff Olson calls this “the slight edge” — the small, consistent actions that you take every day. What you do every day is often more effective than what you do once in a while.

    Make it stick: Rather than focusing on the total sum of your debt, break it down into manageable chunks and resolve to pay off each chunk in little payments every day (you can even set this up to be taken from your bank account automatically). Just putting $5 per day towards your debt will add up to $150 in a 30-day month and it will hurt a lot less to see it go in $5 increments than a $150 lump sum.

    6.Pay more than the minimum balance on your credit cards.

    Why it works: Some people think that the minimum payment is all they have to pay, but unfortunately this isn’t always the case. Paying only the minimum doesn’t mean you have good credit. Instead, resolve to pay your credit card bills in full every month and not to charge more than you can afford to pay.

    Make it stick: Consider putting a cap on your credit card accounts or signing up for a secured credit card that acts like a debit card but reports to your credit agency.

    7.Plan for your taxes.

    Why it works: While income taxes aren’t due until the end of April, you can start getting organized now. Sort your receipts and other important documents so you won’t have to scramble at tax time.

    Make it stick: Pick up a cheap accordion file and label each section as a different category that you claim on your income tax. Keep this file by the front door and drop receipts, paystubs, etc. in as soon as you get home.

    8.Pack your lunch.

    Why it works: If you are buying lunch out every day, those costs can really add up. If your lunch costs $8, five days a week, that would work out to $2,000 extra per year assuming that you work 50 weeks and keep to your budget every day.

    Make it stick: Cook extra dinner the night before and take the leftovers for your lunch. This will avoid the before-work scramble and save you money.

    9.Set up a grocery delivery service.

    Why it works: We have all had that experience where we’ve gone to the grocery store with a list of only a couple items and come out with an entire cart’s worth of food. Eliminate this by looking into online grocery shopping in your area. Many Canadian grocers are offering it now and the delivery fees are often minimal, or even waived if you spend over a certain amount.

    Make it stick: Do your online grocery shopping right after dinner when you’re not hungry. If you do continue going to the store, eat a snack before you shop. Studies show we buy more when we’re hungry!

    10.Make an appointment with a debt counsellor.

    Why it works: Debt counsellors are experts at making a plan to deal with high-interest debt — the kind of debt that ends up costing you more in the long run. If you’ve been resolving to get a handle on your debt for years with no forward action, take the step to ask for help.

    Make it stick: Tell a trusted friend you made this appointment. Research shows that people are more likely to follow through with something if they have told others they are doing it.

    At DebtCare Canada, we’re here to support all of your financial resolutions. We’ll help you make a budget, track your expenses, plan for savings goals, and deal with debt.

    Contact us today to get started. Call 1-888-890-0888 or visit www.debtcare.ca.

  • Preparing a Budget to Manage Back-to-School Shopping

    Back-to-school shopping in Canada can quickly get expensive. According to an Angus Reid poll of 1,500 people, in 2017 Canadians expected to spend $883 per family on back-to-school supplies and fashion — $325 more than they spent on holiday gifts last year.

    Over half of parents said that back-to-school shopping puts a strain on their household finances. Nearly 40% said it takes months for them to pay off the bill.

    If you’re already in debt, this could mean digging yourself into an even deeper hole. You need a plan to be prepared, especially with the current economic climate in Canada.

    As we’ve previously written, Canadian interest rates are on the rise. This means anything with a variable interest rate (like credit cards) will get more expensive with each Bank of Canada interest rate increase. So, if you rack up another $883 on your credit cards, the interest to pay it back could be potentially even higher if rates keep going up this fall.

    Don’t break the bank with back-to-school shopping — make a plan instead.

    1. Set a Budget

    How much can you reasonably afford to spend on back-to-school expenses without going into debt? Looking at your household budget can help you answer this. If you know what you typically spend in a month without back-to-school shopping, then you might be able to see where there is wiggle room for what you can spend.

    1. Choose Your Priorities

    As you’re reviewing your monthly household expenses, determine what is most important to you. For instance, if you have a monthly budget of $100 for entertainment costs, like new movies or a Netflix subscription, perhaps you forego those expenses this month to pay for back-to-school shopping. If you regularly order takeout, perhaps you decide to devote this month to cooking meals at home and use the savings for your school expenses.

    1. Determine What Back-to-School Supplies You Actually Need

    Your kids may not be big fans of this one, but it will really make a difference to your bottom line. What do they actually need for back-to-school? The school may have sent a list, or you can contact the administration and ask. For instance, they may be required to bring pencils, pens, and a scientific calculator, but they don’t need the latest iPad, the most expensive gel pens, or a brand-new lunch box every year.

    As for clothing, do they need new clothes because they’ve outgrown their old ones, or is new clothing just a nice-to-have? If it’s the latter, perhaps you agree to buy one or two new outfits but cap it at that. You could even put new clothing into your budget for the whole school year and use it as an incentive to keep grades up.

    1. Make Smart Shopping Choices

    Once you’ve determined what you actually need to buy, now you need to decide where to buy it. Some stores are going to cost more. If possible, avoid those shops. Plenty of great supplies can be found at less expensive options, like a dollar store, or , too. If you have friends with children a little older than yours, they may have clothes or school supplies their kids don’t need anymore.

    You can also get creative with your clothes shopping. Consider looking for a clothing swap (or organizing your own). This can be a lot of fun because it feels like going shopping without spending a lot of money.

    If your kids have supplies they’re no longer using, you could also sell those and use the proceeds for this year’s shopping.

    1. Look for Alternate Funding Sources

    If you absolutely must buy an expensive back-to-school item, like a laptop, and there’s no room in your budget, there may be assistance available. Ask about funding programs at your school or in the community.

    If you do need to go into debt to afford the back-to-school expenses, make it a smart debt. Don’t rack up credit card expenses that will take months to pay back, result in high-interest payments, and potentially harm your credit. Also avoid payday loans as they are dangerous cycles that are hard to get out of.

    Instead, look for a small personal loan with a reasonable interest rate that you can pay back in fixed monthly payments. This way you’ll know exactly what you have to pay every month and be able to budget for it accordingly.

    Back-to-school shopping can be expensive, but with some forethought it doesn’t have to break the bank. DebtCare Canada can help you make a budget or explore your options for loans or financial products that help you build credit.

    Contact us today for a free consultation. Call 1-888-890-0888.

  • Money Saving Tips for Back to School

    The summer is winding down and that means the back to school season is just around the corner. While most of us are probably reluctant to think about the relaxing summer days and warm summer nights ending, knowing the kids are headed back to the classroom often isn’t quite so bad! That being said, back to school spending can often put a damper on this exciting season for parents, and so we’ve compiled a list of some of the best money saving tips for back to school!

    Back to School Money Saving Tips

    See what you already have at home before you shop. Make a list of what your children need and raid the closet and supply room. Most of what you need is probably already tucked away somewhere in your home, and thus doesn’t need to be purchased again!

    The local dollar store is your best friend. Sure, those big box office supply stores may seem like the most likely place to find everything your child needs for back to school supply-wise, but of course these places charge far more. Instead, check out your local dollar store for all the same items at much lower price points. You can even turn this into a fun summer activity to beat the boredom by having your kids decorate those items to make them unique.

    Set a budget and stick to it. This is the most important tip. When you set a budget based on what you can afford to spend, and stay within its confines, you don’t run the risk of going overboard or finding yourself strapped when other payments roll around. Let the kids know the budget exists, and that this year a few main items, rather than a whole new wardrobe, is the name of the game.

    Buy in bulk. Making lunch every day can get expensive, so spending a little more upfront can sometimes save you a bunch down the road. Granola bars, juice boxes, fruit snacks – these are all easy to buy in bulk and store at home for easy lunch additions. Be sure to compare the price and volumes of bulk items. Sometimes the savings will surprise you!

    The school year costs money, so start saving for field trips and extra-curricular activities now. Whether your child plays sports, a musical instrument, or is into art or dance, those things cost extra money. So do the numerous field trips and school lunches. By putting away a little each week, starting at the beginning of the year, you won’t feel so strapped when the events come up since you’ll have a little bit of extra cash stashed away just for the occasion.

    For many parents, the back to school season can be almost as expensive as the holiday season, so this year take these back to school money saving tips to the bank and save!

    Finding yourself concerned even with these tips? At DebtCare, our goal is to help you establish financial security no matter what your current situation is.

    Call us today for a free consultation. 1 (888) 890-0888.

     

  • Back to School Debt Series: Money Saving Tips for Parents on a Budget

    Money Saving TipsThis time of year often ranks up there with Christmas as far as outright spending, and for many parents, the back to school season can take a major toll of the current standing of your bank account. This is especially true for those trying to get out of debt or looking for debt relief. So, to help you out, we’ve compiled a list of our top 5 money saving tips for back to school shopping! Good luck.

    Money Saving Tips for Parents on a Budget:

    –        Shop at home first. Often a great deal of what your child needs for the back to school season you already own. Get creative and repurpose old items to make them new again.

    –        Buy in bulk and make brown bag lunches. Go big on veggies and fruit as these are often cheaper and go farther than boxes of pre-packaged snacks. This is also a healthier alternative compared to having kids buy snacks or lunch at school.

    –        Wait to find out what kids need before purchasing what you assume to be the essentials. Many teachers will send home list of what is required, but if they don’t, send a note along with your child and ask. Also, make use of last year’s items, including pencils, pencil crayons, calculators and backpacks. And always shop around. The big box stores may not actually offer the best prices. Check the dollar store – after all, a pencil is a pencil no matter where you buy it.

    –        Check flyers for back to school shopping deals. Also, even though you might be tempted and kids are anxious, it can sometimes save you money to buy after the initial back to school rush. Buy end of season articles that are on sale and limit big ticket items as much as possible.

    –        Hold a shopping swap. Trading clothes with parents of like-aged kids, especially the younger ones that outgrow clothes so quickly, can also be a great way to save. Check social media and join online swap groups in your area – chances are you are not the only one looking to save money at this incredibly expensive time of year.

    Don’t let the back to school season cause you any undue financial stress. Use these tips to cut costs and keep everyone happy.

    For more money saving tips, for back to school shopping or at any time of the year, please contact DebtCare Canada today by calling 1-888-890-0888.