Life on Credit

The art of borrowing money

Budgeting for Back to School

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The global pandemic has already transformed schooling in Canada and around the world. Boards, teachers, children, and parents prepare for a different school year during which they either stay home or attend classes every other day. Budgeting for back to school has also become important as many parents face financial hardship and challenging times ahead.

How Spending Patterns Have Changed

It does not come as a surprise that Canadian parents spend less on back-to-school supplies this year. A survey by the Retail Council of Canada shows that the percentage of shoppers who spent more than $0 dropped across different categories in 2020 – 81 percent for supplies compared to 86 percent in 2019, 69 percent for apparel compared to 78 percent, and 33 percent for books and movies, down from 35 percent. According to Suzan Krecsy, executive director of the St. Albert Food Bank, parents need about $1,000 to prepare kids for the new school year which is a lot of money for those who are unemployed or have low incomes.

Save Money on Back-to-School Supplies

A new Deloitte survey asked parents how much they would spend on supplies and other items that kids need in grade K-12 this year. On average, parents said that they would spend $316 on online subscriptions and electronic gadgets, $395 on hardware and computers, $216 on clothing and apparel, and $102 on supplies. This is a lot of money. On top of this, parents are stocking on wide-mouth water bottles, facemasks, hand sanitizers, and other items they would have never thought of buying before the pandemic.

Obviously, supplies can be expensive when all purchases add up, from new uniforms and clothes to pencils, erasers, highlighters, and index cards. Shopping out of season is one way to save money as once the new school year starts, retail stores discount all the folders, notebooks, pencil sharpeners, and markers.

To save money on back-to-school supplies, it also pays to shop around, check flyers, use coupons, and make a list of stores to visit and benefit from the best deals they have on offer. Sales are also posted daily online.

If your children need big-ticket items such as a laptop or tablet to do their homework, it also pays to ask the principal if they have a budget for this or electronics that you can borrow. If this is not the case, visit stores that advertise educational discounts or offer refurbished devices.

 Include Your Kids in Back to School Budget Planning

Ask your children to go through what they have from last year as some items can be reused, whether markers, erasers, or pencil cases. Sit together and make a list of all the items they will need, depending on age and grade. In kindergarten, for example, your kids will need things like glue sticks, colored pencils, crayons, and assorted construction paper. Children in grades 1 – 3 use index cards, rulers, pencil grips, pencils, and washable markers. The list is quite long for students in high school and middle school. They need graph paper, loose-leaf paper, highlighters, plastic folders, book socks, etc. Go through all the items that you have at home to find out if they can be reused. If you have children in different grades, you probably have plenty of stuff that younger kids can reuse.

Asking children what they find important can also save a lot of money. They might be more than happy to reuse their backpack or lunch box from last year. This is also a good way to teach them how to budget and handle money. Learning about budgeting, spending, and saving early in life helps children to make informed financial decisions later on. They have the skills for successful financial interactions.

Teach Kids to Manage Finances

Involving children in back-to-school shopping is also a good way to teach them how to manage personal finances. Many Canadians lost their jobs and live with uncertainty but this is not the main lesson that you want to teach your children. Making responsible choices and spending decisions is the lesson that you would like to stick with school-aged children. This is also a way to encourage kids to distinguish between wants and needs.

Teaching children to manage finances also helps them to learn how to delay gratification and wait to buy the things they want. In fact, this concept is difficult not only for kids but for grown-ups of all ages. It pays to start early, and back-to-school shopping definitely helps parents teach kids important money lessons. When going to the store together, only pick things that you have on your list. This helps children learn not to buy things for the sake of buying which is basically splurging. When going to a store to buy a gift for someone, tell your kids that you are not there to buy things that they just spotted but only that gift.

Other ways to teach children about finances are to ask them to set goals, create sharing, spending, and saving jars, and involve children in money decisions and your family budget. Always tell them how much you have for leisure activities and entertainment, be it board games, toys, movies, or anything else. You can also try to come up with a family goal that they like and keep track of how close you are to achieving this goal. You may want to create a progress chart and ask kids to color in so that you can all check where you stand.

Save for Your Child’s Postsecondary Education

Budgeting for back to school also helps save for university or college, provided that you plan to fund your child’s postsecondary education. Unless you run a successful business or are really well paid, you have to give up on something, be it your retirement savings or things that are not worth splurging on. Saving on supplies can also help fund college education, especially if done on a year-to-year basis. To this, it is a good idea to create a back to school budget and compare what you spend and save each year. The first step is to list all essential items and decide what you can buy later and what is a must. You can buy non-essential items when you find good deals /for example, off season/. Next, you should check how much money you have. Add up your monthly income and expenses such as utility bills, rent, grocery shopping, loan and credit card balances, etc. Look at how much you have left after you deduct all expenses and compare this figure to the total cost of school supplies on your list. This will show you whether you might have to put any items on your credit card. If so, go through your shopping list once again to decide which items are must-haves. If you need extra money to buy back-to-school supplies, this shows that you might have to start saving for next year early on.

Surviving the Economic and Financial Impact of COVID-19

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The coronavirus pandemic has seriously hit the Canadian economy, especially in provinces such as Alberta, Ontario, and British Columbia where hundreds of thousands of jobs were lost. Rising unemployment is mainly the result of many industries being severely affected, from travel and transportation and recreation and entertainment to food and beverage services and accommodation. Rising unemployment has also resulted in a significant drop in car, retail, and home sales, and recent reports show that home prices are expected to drop by up to 5 percent due to the pandemic. Restaurants, gyms, sports facilities, and movie theatres are closed, with people being ordered to stay home. The drop in crude oil prices hit a blow on Newfoundland and Labrador and Alberta as they mainly rely on oil exports. This is largely due to travel restrictions, lockdowns, and stay-at-home orders which resulted in reduced oil demand across the world. Alberta’s major oil exporter Western Canadian Select hit a record low of less than $4, and experts warn that this usually happens during depression. University of Saskatchewan Professor Greg Poelzer explained, however, that for oil producers it is cheaper to reduce oil prices than to shut down and restart operations.covid-19Many Canadians who lost their jobs struggle with debt, whether mortgage, personal, or car loans, lines of credit, or credit card debt. Some complain that big banks refuse to defer payments on mortgages that are new. And while in most cases big banks are willing to work with customers and defer payments for 6 months, some finance companies and other non-bank lenders offer payment deferrals of up to 3 months. And while the pandemic has a devastating effect on Canada’s economy and many struggle to keep their finances afloat, there are some things to do even during turbulent times. To deal with unmanageable debt during the COVID-19 crisis, a consolidation loan can help save on interest payments. In the coronavirus aftermath, it is important to rebuild credit to get access to a range of borrowing solutions with flexible repayment terms and attractive rates.

Dealing with Unmanageable Debt – Apply for a Consolidation Loan

Applying for a debt consolidation loan is one option for Canadians paying high interest rates on personal loans and credit cards. Many financial institutions in Canada offer consolidation loans to help borrowers repay multiple debts provided that they are eligible. These include utilities, lines of credit, credit cards, and personal loans. Mortgages are one exception. The main benefits for customers include lower monthly payments and interest rate and a single payment. What is more, the borrower’s credit score is not affected. RBC, for example, offers consolidation loans and lines of credit to help customers repay outstanding balances faster. Those who choose to leverage their home equity are offered a lower interest rate. Customers who opt for a line of credit are free to access cash at any time, and they pay no annual fee. Borrowers who apply for a personal loan can choose a term of up to 5 years to lock in their rate.face mask

Another option to avoid high payday loan fees and credit card rates is to apply for a consolidation loan offered by Consolidated Credit. Customers can consolidate their existing card balances by moving them to a balance transfer account. One of the main benefits for borrowers is that they are offered a customized debt management plan that comes with reduced interest charges. Being a non-for-profit charity, Consolidated Credit Counseling Services of Canada works with customers to help them solve their financial problems and deal with debt. The goal is to help Canadians pay off their debts faster through debt management and credit counseling. The charity offers education, counseling, and consolidation. Customers benefit from a variety of educational resources with a focus on credit rating and the factors that affect it, household budgeting, and money management. Their debt management program allows borrowers to get rid of debt while credit counseling helps pay off outstanding card balances and take control of personal finances. Financial advisors examine customers’ budgets to offer advice on how to get more organized and manage money.

How to Rebuild Credit in the COVID-19 Aftermath

If your credit score suffered during the pandemic, there are different ways to rebuild it to access a pool of attractive borrowing solutions. One option is to apply for a secured credit card and another is to get a credit builder loan.

Applying for a Secured Credit Card

Secured cards offer many benefits, one being that financial institutions report to the main credit bureaus. The fact that account history is reflected in the report means that timely payments help rebuild credit. Some issuers offer additional benefits such as cash back, no annual fee, and no limit on rewards that can be earned. The Refresh Secured Card is one option to rebuild credit and benefit from a low annual fee. Customers’ account history is reported to Equifax and TransUnion on a monthly basis, thus allowing them to improve their score. Approval is guaranteed, and customers are only asked to provide a valid government ID. Refresh takes into account factors such as budget, expenses, income, financial goals, score, and location but they do not run a credit check. Customers are offered a low annual fee of $48.95, and the interest rate is just 17.99 percent.

Applying for a Credit Builder Loan

This is also a good option for persons who are rebuilding credit or are looking to establish one. Credit builder loans are offered by unions, financial companies, and smaller loan providers. Upon approval, the borrowed amount is deposited in a savings account over a specified period and is returned after the loan amount has been repaid in full. Payments are reported to the credit bureaus.

There are many options to choose from, but if you are looking for a loan that helps you to rebuild credit and make approval for low-rate solutions more likely, check the credit builder loan offered by Refresh Financial. This is also a good solution for Canadians who have filed a consumer proposal or declared bankruptcy. It comes with an interest rate of 19.99 percent and there are no admin fees – you start building your equity, and credit score from day one. Customers also have access to a paid referral program and education. It is easy to make payments as they are scheduled on the borrower’s account. However, it is important to make timely payments to ensure that the account is in good standing. There is also an option to change the payment date as to avoid missed or late payments. Early repayment is an added benefit meaning that the outstanding balance can be repaid at any time. Refresh Financial also offers perks such as credit simulator, score updates, and discounts on wellness, entertainment, travel, and shopping. The Refresh Academy features templates, quizzes, and video courses that help customers to improve their financial literacy.

motusbank – Meridian Credit Union Creates a New National Bank

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A subsidiary of Meridian Credit Union, Motus Bank features a suite of financial products, including mortgages, personal loans, investment solutions, and savings and checking accounts. As a full-service digital bank, it will soon introduce banking services tailored to the needs of business customers. Motusbank is a Canadian federally chartered bank that opened doors in 2018 and is headquartered in Toronto, Ontario. It is also a member institution of the Canadian Deposit Insurance Corporation.

The idea behind the new bank is to offer customers across Canada the opportunity to access all services and products and to manage accounts online. In fact, virtually everything can be done by phone, mobile app, and online. The new bank is customer-oriented and offers checking and savings accounts with no monthly fees.

Meridian Credit Union

As Canada’s third largest credit union, Meridian offers personal and business financial products and online banking services. Individual customers are offered a selection of checking accounts, including U.S. dollar, senior, electronic, and limitless. Meridian also features youth, advantage, and high-interest savings accounts. There is an array of credit cards to choose from, with cash back, U.S., travel, and Visa benefits. Lines of credit, personal loans, and fixed and variable rate mortgages are also available. Travel insurance and mortgage protection are also offered as well as investment solutions such as registered retirement income funds and tax-free savings accounts. Business customers also benefit from a wealth of financial products, including business U.S. dollar checking and small business checking accounts. In addition to cashback credit cards, customers are offered business lines of credit, loans, and mortgages, and equipment financing and leasing. Meridian also features cash management and investment solutions and business planning assistance.

Competitors

Unlike financial institutions that have shareholders and pay profits, motusbank has members and the main goal is to offer personalized service, competitive rates and pricing, and the option to access all products online, including mortgages, investment solutions, lines of credit, and more.

Why Choose motusbank

This new full-service digital bank features a selection of investment, borrowing, and savings solutions with competitive rates. Given that Motus has no physical branches and associated overhead costs, customers enjoy affordable interest rates on mortgages and personal loans. Another benefit is the fact that decisions on applications for loans, mortgages, and other products are made quickly.

Personal Loans and Other Borrowing Solutions

Personal loans come with low interest rates that can be as low as 5.15 percent, and members can borrow up to $35,000. Secured lines of credit feature even lower interest rates (3.75 percent) to help customers secure financing for major purchases. It is quick and easy to apply, and customers only need to provide their social insurance number and information such as housing and family status and employment type. They are also asked about the amount required and the loan purpose, i.e. vacation, investment, home repairs, debt consolidation, or recreational vehicle, boat, or vehicle purchase. Motusbank also features fixed and variable rate mortgages with affordable interest rates that can be as low as 2.90 percent. 5-year fixed rate mortgages come with an interest rate of 3.09 percent. In comparison, Scotiabank offers an interest rate of 5.34 percent on the same type of mortgage, and the Bank of Montreal offers 3.54 percent. Secured home equity lines of credit also feature a low rate of just 3.75 percent. CIBC, for example, offers a rate of 3.95 percent on secured credit lines.

Savings and Checking Accounts

Motusbank also features a selection of checking and savings accounts, including RRSP, TFSA, and high interest savings accounts. Customers who choose to open high interest savings accounts can enjoy a rate of 2.25 percent. Savings accounts offer multiple benefits such as the option to make unlimited withdrawals and purchases, free-of-charge access to ATMs, no banking fees, no minimum balance requirements, and no monthly account charges. Motusbank also features checking accounts with no monthly fees, and customers enjoy unlimited Interac e-transfers. There are plenty of reasons to choose this type of account over products offered by other banks. The account has no minimum balance requirement and allows for unlimited bill payments and debit purchases. Another benefit is that every dollar earns 0.50 percent interest. Customers are free to make mobile check deposits and are offered 25 checks free of charge. Those who are travelling to the U.S. can access cash through the Cirrus or Accel ATM networks.

Investment Products

Motusbank also features investment solutions such as 5-year RRSP guaranteed investment certificates, 18-month TFSA GICs, and 18-month GICs. The 5-year RRSP GIC, for example, comes with a competitive interest rate of 3.25 percent, which makes it a good addition to a balanced investment portfolio. In comparison, CIBC offers non-redeemable 5-year RRSP GICs with an interest rate of 1.25 percent. Opening an account is quick and easy, and customers are asked to provide details such as personal information, term and length, and renewal option, i.e. reinvest in the same term or payout to the account. The bank features additional benefits such as tax free options, choice of non-registered and registered plans, and a low minimum investment of just $100. Terms vary from 1 month to 5 years.

Online Banking and Features

The online banking platform of motusbank offers convenient features to access and monitor investment accounts and view e-statements. Customers are free to download deposit forms and transactions and filter and sort accounts. Notifications, alerts, and secure messaging are also available. Depositing checks is also quick and easy and can be done from the customer’s phone. There is also an option to set up mobile alerts. The mobile app offers convenient features that allow customers to transfer money, make bill payments, and check account balances, including savings and checking accounts and tax free savings accounts. Mobile Bill Pay is a convenient feature that allows users to make bill payments and access more than 10,000 payees. The app can be used on Android and iOS devices.

The Money Mover service featured by motusbank offers customers the option to transfer large amounts of up to $10,000 daily and is free to use. Money is transferred within 3 business days. Users are also free to set up recurring and future transfers through the mobile app or online. Motusbank also features Interac payments to transfer amounts of up to $3,000 a day, and money is deposited immediately. Customers can make an unlimited number of transactions up to $10,000 a month.

The bank’s contact centre offers assistance to members and can be reached by dialing its international or toll free number. While the bank is fully digital, the fact that it is customer-centric means that the emphasis is on customer service. Motusbank also places an emphasis on safety and security, and all deposits are insured by the Canada Deposit Insurance Corporation.

Finally, the new bank also offers advice and practical information across a host of different topics related to borrowing, investing, and saving. The goal is to help customers learn more about dealing with debt, planning for retirement, preparing financially for a new child, and choosing the best investment solution. Other topics include home improvement loans, choosing between variable and fixed rate mortgages, down payments. The bank also features handy online tools such as mortgage prepayment calculator, savings calculator, retirement planning calculator, and loan and line of credit calculator. These online tools help customers figure out what size of mortgage to apply for, whether their monthly payments are affordable, and other important issues.

Student Loans in Canada – The Ultimate Guide

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There are plenty of ways to pay for college in Canada, and many young people opt for student loans to pay tuition fees, room and board, textbooks, books and other expenses.

Student Loan in Canada Overview

Who Offers Student Loans

Financing is available from different sources, including the federal and provincial governments as well as private providers such as banks, finance companies, and credit unions. The Government of Canada offers federal loans to students enrolled in designated universities and colleges. The provincial governments also offer funding in the form of grants, bursaries, and loans. The rules and requirements vary by province and territory. Quebec, the Northwest Territories, and Nunavut, for example, have their own funding programs, and federal loans are not available. Depending on the student’s territory or province of residence, when applying for funding, students may be asked to provide information such as their bank account number in Canada, their last year’s income tax return, birth date, social insurance number, spouse or parents’ social insurance numbers, etc. Undergraduates who fail to qualify for federal or provincial assistance often apply for a loan with their local bank or credit union or a major bank such as BMO or RBC. Many financial institutions feature education or student lines of credit with reasonable interest rates to help pay major expenses such as residency and tuition fees. Personal loans are also available to meet college-related expenses and come with either variable or fixed rate. Some banks also offer scholarships based on merit and scholarships for females, indigenous and aboriginal people, children of their employees, and people in special circumstances in general.

Laws and Regulations

A number of regulations and laws govern loan provision, including the Canada Student Financial Assistance Act, Canada Student Loans Act, and others. The Canada Student Loans Regulations, for example, include provisions on applicable interest rates, payment of interest rate and the principal, agreements and alterations, consolidation, reinstatement and continuation, and a lot more.

Federal Government Student Loan Programs

Canada Student Loan Program (CSLP)

Funding under the Canada Student Loan Program is available in most Canadian territories and provinces, including Quebec, Ontario, British Columbia, Nova Scotia, and others. There are certain eligibility criteria to meet, one being financial need. Students qualify for financial assistance provided that they are enrolled part-time or full-time in a certificate, diploma, or degree program. Permanent residents and citizens qualify for funding, and protected and designated persons are also eligible to apply. People aged 22 and over are required to pass a credit check.
The repayment period begins once people leave school, transfer from full-time to part-time studies, graduate from school, or leave school for a period of more than 6 months. There are different types of repayment assistance plans for undergraduates who find it difficult to keep up with payments, including Canada Student Loan Rehabilitation, revision of terms, the Repayment Assistance Plan, and others.

Canada Student Grants Program (CSGP)

Government grants are available to students from middle- and low-income families who are enrolled in a post-secondary program. Only people in designated institutions qualify for grants. Designated colleges and universities include the Red Deer College, Mount Royal University, College of New Caledonia, Atlantic Business College, Maritime Business College, and more.
There are plenty of options to look into, among which grants for part-time and full-time students, for persons with disabilities, people with dependents, aboriginal people, registered apprentices, and others. Full-time scholars are eligible to apply provided that they are enrolled in a certificate, diploma, or degree program. Funding is based on financial need, i.e. factors such as household annual income and family size. In addition, there are different programs to look into, examples being the Athlete Assistance Program and Post-Secondary Student Support Program.

Provincial and Territorial Student Loans

Alberta: The Alberta Learning Information Service

Scholars are eligible to apply for grants and student loans based on financial need. Funding is available to help meet expenses such as supplies and books, mandatory fees, and tuition fees. The monthly allowance is different for people with dependent children and those with no children. Students with dependents can also apply for dental, optical, and medical coverage.

British Columbia: StudentAidBC

People in British Columbia have different options to meet college expenses, including scholarships, grants, and loans. Other types of financial assistance include the Youth Educational Assistance Fund, work study programs, bursaries, awards.

Manitoba: Manitoba Student Aid

Students in Manitoba are offered financial aid in the form of bursaries, grants, and loans. Protected persons, landed immigrants, and Canadian citizens qualify for assistance. Undergraduate loans are interest-free during the repayment period and while enrolled in a diploma or degree program.

New Brunswick: New Brunswick’s Student Financial Service

Scholars in New Brunswick have access to a number of programs and services, among which personal learning and academic upgrading programs, digital literacy training, GED preparation courses, employment counseling and assistance services, financial assistance, and others. When applying for financial assistance, people are asked to provide details such as citizenship, province of residence, visible minority status, and category, i.e. married, single parent, or dependent.

Newfoundland and Labrador: Newfoundland and Labrador Student Aid

Aid is offered in the form of grants and loans and is available to part-time and full-time students as well as to persons with permanent disabilities. Applicants who are landed immigrants or Canadian citizens and demonstrate financial need qualify for assistance. To maintain eligibility, students are required to have an 80-percent course load for provincial funding and a 60-percent load for federal funding. Different types of assistance are available, including NL and Canada loans, the Canada Student Grant for Adult Learners.

Northwest Territories: NWT Student Financial Assistance

In the Northwest Territories, funding is available under the Student Financial Assistance Program. There are different types of funding for part-time and full-time students, including course reimbursement, the NWT Grant for Students with Permanent Disabilities, repayable loans, remissible loans, and basic grants. Repayable loans are offered to help students meet expenses such as travel, books, tuition fees, etc. Remissible loans, on the other hand, are in the form of a monthly living allowance.

Nova Scotia: Nova Scotia Assistance

There are different types of funding available, including grants and Canada Student and Nova Scotia loans. Financial assistance is available to both full- and part-time students. When applying, they are asked to provide information such as their income and spouse’s income, course description, start and end date.

Ontario: Ontario Student Assistance Program

In Ontario, funding is available to students who are enrolled in private career colleges, diploma and college programs, and universities. The type and amount of funding depends on factors such as parental income, number of children, and the year in which the student graduated from high school. Financial assistance is also available to people in special circumstances such as those on social assistance, deaf students and those with hearing problems, former and current crown wards, and other categories. Sources of funding include the indigenous people bursary, living and learning grant, and others.

Prince Edward Island: PEI Student Financial Services

People enrolled in the College de l’Ile, Maritime Christian College, Holland College, and UPEI are eligible to get a bursary in the amount of $4,400 to $8,800. There is no need to apply. They can also apply for the Government of PEI Marine Atlantic Bursary and Community Service Bursary. Loans are also offered to students from middle- and low-income families. In addition, there are different types of funding available, including the Island Student Award, Island Skills Award, George Coles Graduate Scholarship, Career Connect, and others. Debt reduction is available to scholars who are unable to keep up with repayment.

Quebec: Aide financiere aux etudes

Part-time students are offered loans while full-time students are eligible to apply for grants and loans. People with special needs are also offered material resources, special needs housing, paratransit, and specialized services. Scholars with disabilities are eligible, including those with organic and motor impairment, speech and language impairment, and severe hearing and visual impairment.
People who are unable to repay their loan are offered a deferred payment plan whereby the government of Quebec pays monthly interest on behalf of the debtor over a certain period of time /up to 6 months/.

Saskatchewan: Saskatchewan Student Financial Assistance Program

The Government of Saskatchewan offers grants and loans to scholars who are enrolled in post-secondary programs. When applying for a loan, people are asked to provide personal information such as social insurance number, dependents, ancestry, program information, name of institution, and so on. Students enrolled in designated universities are eligible to apply, including St. Peter’s College, Luther College, First Nations University of Canada, University of Regina.
Student Loan Forgiveness for Nurses and Nurse Practitioners is a program that targets healthcare practitioners and encourages them to move to small remote and rural communities. To be eligible under the program, applicants must have a license to practice in the province as a nurse practitioner, licensed practical nurse, registered psychiatric nurse, or registered nurse. To apply, healthcare practitioners are asked to provide employment information such as name of facility, profession, work address, valid registration number, loan forgiveness period, and attestor or supervisor information.

Yukon Territory: Yukon Student Financial Assistance

Students in Yukon have plenty of options to explore when it comes to financial assistance, including scholarships, training allowance, Yukon Excellence Awards, Canada student grants and loans, and the Yukon Grant. The latter is offered to people enrolled in post-secondary studies, including PhD and Master’s Programs. Only scholars enrolled in designated institutions qualify, such institutions being the Yukon College and Alkan Air Flight Training.

Private Student Loans

Loan Types

Financial institutions in Canada offer student lines of credit, personal loans, and specialty and standard student credit cards. Big banks such as the Royal Bank of Canada and the Canadian Imperial Bank of Commerce offer lines of credit with competitive interest rates, extended grace periods, and flexible limits. Credit lines are offered to undergrads who are pursuing a degree in Veterinary Studies, Dentistry, Medicine, Law, Engineering, Accounting, and others. Applicants are asked to provide proof of citizenship or residency status, list of financial resources, cost estimate, and confirmation of enrollment. Examples of financial resources to include are part-time employment, government financial assistance, bursaries and scholarships, RESPs, and others. Scholars are also asked to provide a cost estimate, including travel expenses, room and board, fees, supplies and textbooks, and tuition fees. Credit unions, banks, and other establishments also offer personal loans with flexible repayment periods. Some banks offer loans with no prepayment penalty. Many finance companies and banks feature student credit cards with attractive interest rates, welcome bonuses, awards points, cash back on purchases, and other beneficial features. There are credit cards that go with sign-up bonuses, no annual fees, comprehensive travel and medical insurance, and generous discounts.

Who Offers Private Student Loans

Big banks such as TD Bank, Scotiabank, BMO, CIBC, and RBC offer private loans and other borrowing solutions. TD Bank, for example, offers home equity and personal loans to help students pay major college expenses.

Education Savings – Canada Education Savings Grant and Registered Education Savings Plans

The Canada Education Savings Grant is money contributed to a RESP by the government. The goal is to help parents save toward education. The money can be used to cover the cost of part- and full-time studies in a designated university, college, trade school, publicly funded college or pre-university, or apprenticeship program. Parents, guardians, relatives, and others that choose to open a Registered Education Savings Plan are required to make a personal contribution. For every $1 contributed, the Canada Education Savings Grant contributes 20 cents.

Too Many Bills to Pay? What Bills to Pay and What to Put Off

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Bills are piling up and you are short of cash to meet all expenses. You receive letters from financial institutions and utility companies as well as threatening calls. This is a warning sign that it is high time to put your finances in order and start to prioritize. There are expenses you cannot cut off completely such as insurance, groceries, and shelter and bills you can delay paying or you can look for cheaper alternatives.

Most Important – Basics

Obviously, you cannot go without basic necessities such as food, shelter, and utilities and there are bills you cannot delay paying.

Groceries

We buy groceries on a weekly and even daily basis and while there are ways to save on groceries, you cannot live without food. A balanced and diversified menu is essential for your health. Whenever you can, use grocery store coupons.LOC36

Shelter

Shelter means security for your children, family, and belongings. Whether paying rent or mortgage, you need a certain sum of money on a monthly basis. Otherwise you risk losing your home or your landlord will take action against you.

Transportation

Transportation is also an important consideration. We use public transport or drive to work, for grocery shopping, emergencies, and so on. There are unexpected expenses such as car repairs as well.

Utilities

Utilities are basic expenses for gas, power, water. This is the minimum to keep your home heated, clean, and safe. There are ways to save on utilities such as buying energy efficient light bulbs.LOC34

Insurance

Home, health, and auto insurance are necessary expenses. Home insurance covers your property and belongings while health insurance pays for hospital accommodation, treatment at the ER, medical expenses, and more.

Less Important

While you cannot deprive your children of shelter and food, there are expenses and services that are less important for the health, safety, and wellbeing of your family. Less important expenses are those that bring comfort and enjoyment but you can cancel subscriptions such as gym memberships and magazine subscriptions if need be. The same goes for internet, cable TV, and cell phone plans.

Phone

Obviously, it is important to have a phone in case of emergency. What you can do is cancel your cell phone plan and keep the landline.

Gym Membership

Unless you go to the gym for health-related reasons, look for ways to reduce membership costs. One way to do this is to cancel your membership and shop for deals during the slow season. Another way to save money on membership is to go at the end of the month and check for deals and promos.LOC35

Cable TV

There are ways to reduce your cable TV bill and free up cash to pay for necessities and emergencies. You can lower your bill by paring down your subscription plan. Another option is to cancel your plan and comparison shop to find a low-priced plan. Downsize and bargain.

Internet

To lower your internet bill, contact your provider and ask for lower-priced packages. Check what competing providers have on offer for new customers and ask your neighbors, colleagues, and friends about the types of deals they are getting. One way to negotiate a discount with your current provider is to tell them that you are not satisfied with the level of service.

Credit Card Bills

Credit card and loan balances contribute to piling debt. If money runs tight, it is time to look at your income and prioritize bills. Your income should cover basic necessities and debt payments at the very least. If you have multiple debts, you may want to prioritize and pay high interest balances first. If you have cash advances or payday loans that go with extremely high rates, think of ways to repay these debts first.

Decisions, Decisions

The most important step is to decide what to keep and what you can do without until you repay your debts, find a well-paid employment, and get back on your feet. Compiling a list of your expenses helps create a realistic budget. This is a good way to find out where your money is going. List your basic expenses first to see how much you are left with for other expenses. Then you can make a decision on what you can do without, whether it is cable TV, gym, or magazine subscriptions.LOC33

What to Do Next

The first step is to decide what bills to put off and how to scale down your expenses. The next steps are to pay outstanding balances and find a second job, additional source of income, or a high-paid position. If you have high-interest cards, shop around for a balance transfer card with a long introductory period and zero interest rate. You may want to open a savings, money-market, or checking account and use it as an emergency fund to cover the basics and pay off existing debts.

Conclusion

There are ways to create a realistic budget and stick to it to be able to meet all expenses, both basics and expenses such as cable TV and gym memberships. It is important to prioritize necessities, activities, and expenses to avoid excessive debt and live within your means. Talk to all family members and discuss different ways in which everyone can help lower your household bills. This is also a great way to teach your children a lesson to learn how to be financially responsible.

5 Steps to Debt-Free 2015

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Is Debt-Free 2015 Possible? Start Planning Now

Medical bills, car and mortgage payments, and card balances add up unless you acquire good financial and budgeting skills. Specialist advice and online spending and budget tools can help sort out your finances for a debt-free new year.

1. Get a Good Look at Your Budget

The first step is to look at your family’s budget, income, and expenses. Make a list of all sources of income, including bonuses, wages, salary, rental income, cash in savings accounts, employee achievement awards, child support payments, and others. Then list all expenses, for example, utility bills, insurance premiums, groceries, rent, loan and credit card payments, and others. Compare your expenses and income to see where your money is going. This will help you to make a good decision about future purchases and how to allocate your money.

TOOLS: Budget Tools and Calculators

One option is to use online budget tools such as planners and calculators. Some tools help track sources of income, spending, and savings, investment, and checking accounts. There are online budget calculators that allow users to develop a budget based on their total income and expenses such as health and medical bills, clothing, transportation, housing, food, utilities, and others. There is an option to print your budget. Some online calculators allow users to plug in monthly expenses and savings and annual income and expenses.LOC5

2. Set Your Financial Goals

Setting your financial goals is also a very important step. Consider factors such as total debt, income level, household size, age of family members, and others. If you have excessive debt, it may be a good idea to prioritize debts. Setting up an emergency fund is also a good idea. You may want to open a savings account to save for unexpected expenses such as medical bills and car and home repairs.

Think of long-term and short-term financial goals you want to achieve. Examples of short-term goals are saving for a summer holiday or car down payment, minor home improvements and projects, buying furniture or electronics, and others. In general, these are goals to achieve over a period of 1 – 2 years. Long-term financial goals take more time to achieve, i.e. 5 – 15 years. Examples are saving for retirement or college education, saving for a large mortgage down payment, and others. Such goals require financial commitment and discipline.

TOOLS: Financial Goal Calculators and Other Tools

There are some tools that help set your financial goals, including money saving apps, tools to track spending, financial goal calculators, and others. Financial goal calculators ask users about their monthly income before taxes. Users can choose from different goals, for example, saving for retirement and getting out of debt. If you are looking for ways to get rid of debt, choose this option and plug in details such as payment frequency, interest rate, current balance, type of debt, target end date, payments, amount, and others. There is an option to view a debt chart.LOC15

3. Reduce Your Spending

This is one way to get out of debt quicker. Look at your list of expenses to see if you can reduce your spending. There are different ways to cut your spending without changing your lifestyle too much. It is a good idea to create a shopping list to avoid buying on impulse. You will also save on gas by making a single trip to the grocery store. Compare prices at different stores and clip coupons to reduce your spending. Instead of eating out, you may want to pack your lunch to save money. Unsubscribe to sales alerts to avoid impulse purchases.

TOOLS: Cut Back Calculators to Track and Reduce Spending

You can also use different online tools that help reduce your spending. There are cut back calculators that allow users to choose from different purchases, for example, takeaways, petrol, music, magazines, lottery tickets, gym, and movies. You can also choose from fares, coffee, cigarettes, chocolate, alcohol, and other purchases. You are also asked about the price and purchase frequency. For example, if you smoke 1 pack a day and it costs $4.50, you will save $135 a month.

4. Use Debt Consolidation Specialist/Service

Using a debt consolidation service is also an option if you have high interest balances. Consolidation specialists help customers to secure a lower interest rate and more affordable payments.

In general, debt consolidation is an alternative to bankruptcy, credit counseling, and consumer proposal and can be used for unsecured loans. If you have multiple high-interest cards, you may want to transfer your balances to a low-interest credit card. The right approach depends on the types of debt you have, the amounts owed or outstanding balances, the interest charges, repayment terms, credit standing, and other factors. Debt consolidation specialists offer professional advice and counseling and free savings estimates. Your consolidation specialist will ask about the total debt held, including student loans, health club memberships, lines of credit, medical bills, and legal bills. Other types of unsecured debt include cell phone bills, personal loans, department store credit cards, and unsecured credit cards. Secured loans are not accepted, including auto loans and mortgages that require collateral. Specialists also offer personalized solutions to your debt worries as well as tools, tips, education, and resources.

TOOLS: Debt Consolidation Calculators

You can use debt consolidation calculators to find out how much you will save. To this, choose from different types of debt such as retail credit cards, standard credit cards, consumer loans, and others. Enter the estimated monthly payment, current balance, and annual percentage rate.LOC14

5. Become Debt Free

There are different ways to go about excessive debt and alternatives to choose from. Options to consider include settlement, debt management plans, budget planning, individual voluntary arrangement, and self-money management. Other options include formal proposal, negotiation, and debt restructuring. These are alternatives to bankruptcy, and the choice depends on whether you have delinquent or excessive debts and other factors. A home equity loan is one option if you have debt problems. In this case, your home equity is used for loan repayment. The good thing about home equity loans is that lenders offer attractive interest rates because your home serves as collateral and a guarantee of repayment. A debt management plan is another option to pay down your outstanding balances. In this case, your financial institution may be willing to lower the interest rate to make payments more affordable, especially if you are about to default. Finally, debt settlement is yet another option to become debt free. This method involves a cash settlement with your financial institution. A one-time payment is required in exchange for a partial debt payment.

Getting out of Debt: Get a Chance with Debt Consolidation Loans

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A consolidation loan helps combine multiple high-interest accounts and obtain a fixed or lower interest rate. This is one way to make payments affordable, pay down excessive debt, and reestablish your credit history.

How to Tell if You Have Bad Credit?

Having a low score affects your purchasing power and access to credit. People with poor credit find it difficult to get a job, rent a house or apartment, and meet unexpected expenses. There are some red flags and warning signs that you have made poor financial and credit decisions. If you have multiple card accounts, excessive credit card debt, and missing or late loan or card payments, you probably have less than perfect or poor credit. Getting calls from collection agencies and accounts closed by issuers are other signs that you are knee-deep in debt and need help. There are other warning signs that you need to look into different repair options, for example, having too little or too much credit and having your card and loan applications denied. Obviously, your score is the best indicator of credit problems. A FICO score below 620 means that you have poor credit.LOC7

Finding a Debt Consolidation Loan with Bad Credit

Many people check with their local banks first, especially if they are existing customers. Banks have stringent criteria for approval, however, and you may see your application turned down. Some finance companies specialize in consolidation loans for customers with tarnished credit and allow borrowers to combine payday and consumer loans into a low-cost payback solution with a single monthly payment. Look for loans with no early prepayment penalties or hidden charges.

What is the Best Way to Consolidate Debt with Bad Credit

There are different lenders that offer bad credit debt consolidation loans – payday loan providers, credit unions, and banks. The best option for customers with poor credit is probably a reputable consolidation service that charges no upfront fees and advertises generous interest savings. Credit unions are usually more lenient than other financial establishments, banks in this number. Reputable companies offer a range of options, and customers are allowed to consolidate between $2,000 and $10,000 in unsecured credit. Some providers require stable income and have minimum income requirements. If you have student loans, the best way to get out of debt is to apply for a student consolidation loan. There are two options – fixed rates and capped variable rates with terms of 5 to 15 years. Some providers also advertise loans with 20-year terms. Customers who opt for automatic payments enjoy interest rate reduction. Some issuers also offer interest rate discounts to existing customers who have checking accounts or existing loan balances. And some financial institutions even offer loan deferral options.LOC6

Are Debt Consolidation Loans Bad for Your Credit

In fact, debt consolidation loans help customers to reestablish credit. They go with lower rates and affordable monthly payments, making it easier to catch up on payments. The fact that customers have only one monthly payment means that it is easy to keep track of and avoid missed payments which affect your credit. Timely payments will boost your score and will widen the range of financial options available through mainstream financial establishments. At the same time, missing loan payments may ruin your score, leaving you with few options available, most of which carrying high interest rates. As a rule, debt consolidation has a positive effect on your score because it simplifies payments, and customers can opt for automatic payments. It is a good idea to close some existing accounts so that you avoid piling up debt again.

What are Your Chances of Getting a Debt Consolidation Loan?

Many people are unsure how to qualify for debt consolidation loan if they have a bad credit. The chances of getting a loan depend on your overall stability, employment history, and earnings. Some issuers are willing to work with customers with less than perfect credit provided that they are able to meet their payments. Finance companies often require proof of income and proof of employment such as recent pay stubs. Some issuers also look at your debt to income ratio. Your disposable income must be at least 15 percent of your gross monthly income. Your chances of getting approved for an unsecured debt consolidation loan are low if you are switching jobs often. Some financial institutions offer debt consolidation loans for bad credit to customers who have home equity. Finally, your chances of getting a loan also depend on how much you owe to different creditors.LOC10

Advantages of Debt Consolidation Loans

There are plenty of benefits for debt-ridden borrowers, one being that customers are able to eliminate debt without incurring additional charges. Budgeting and financial planning are also made easier given that customers have only one payment to make. Multiple monthly payments take a huge amount of effort and mental energy to deal with. Customers benefit from easier debt management, and payments are spread over a longer repayment term. Another benefit for borrowers is the fact that customers are allowed to consolidate different types of accounts, including credit card balances, student loans, and other unsecured debts. A further benefit is that customers can choose from several types of loans and programs, including balance transfers, and home equity loans. Unsecured loans feature shorter repayment terms and are safe for customers as they don’t risk a valuable asset. Secured loans go with lower interest rates, longer repayment terms, and affordable monthly payments. With home equity loans, borrowers benefit from the fact that interest is usually tax deductible.

Deb Consolidation Application

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Disadvantages of Debt Consolidation Loans

While convenience and lower rates are major advantages, there are some issues and downsides. One of the downsides for borrowers is that a longer repayment term adds to the cost of borrowing. Customers pay more toward interest when payments are made over a longer period. A secured loan carries a risk in that customers risk losing their home, vehicle, or other asset in case of default. There are other risks as well. Retirement funds, life insurance policies, and other assets may be available for use only after loan repayment. Another issue is that financial institutions are less willing to offer unsecured short term loans to customers with poor credit. Those who are willing to work with customers with bad credit usually offer higher-than-average interest rates. The only option may be a secured loan with a competitive rate. In any case, stay away from providers that feature points, charge costly penalties, and advertise low introductory rates that skyrocket after the initial period. Finally, there are unscrupulous loan providers that assess outrageous charges and rates and try to take advantage of your financial worries. Avoid companies that offer help with bankruptcy, settlement, and debt management because these methods work differently. Also avoid issuers that offer credit insurance because it makes borrowing a costly endeavor.