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Serious money problems seldom sneak up on us. Usually, warning signs of financial difficulty begin months before we recognize that we are in trouble. Learning to spot these red flags early on, then taking the proper steps to help eliminate them, can help you keep your finances from spiraling out of control.
Signs of Trouble
Most people know they are in trouble when sleepless nights are spent worrying about money problems, but there are many other signs to watch for. Symptoms that your finances have taken a turn for the worse include:
Kids who know how to handle money have a great advantage in life, especially if they learn young. You can teach your children how to wisely manage their finances, even if you have money problems yourself.
Learning to Handle Money—The Sooner the Better
When it comes to teaching kids about money, the best advice is to start young. Young children are fascinated by money and what it can buy. Somewhere between the ages of three and five,
Debt often gets a bad rap, but not all debt is bad. After all, debt allows us to make purchases that we may not otherwise be able to afford with cash, such as a home or vehicle. Sometimes though, “bad” debt, like high interest credit cards or personal loans, can accumulate and cause serious trouble with finances. There are many resources that provide help with debt, but how do you know when you need to see a professional?
Here are five signs you may need professional help with your debt:
When faced with the situation of being unable to make their monthly bill payments people often look to sell some of their assets to reduce their monthly payments and pay down their debt. While this might seem like a great idea it can sometimes be the worst thing that you can possibly do for yourself, your family and for your future. Before you start to sell assets or redeem RRSPs, RESPs and life insurance policies it is extremely important that you speak with one of our counsellors.
With the guidance of Bromwich and Smith we can assist you in returning financed cars, snowmobiles, travel trailers and all other manner of personally financed, serial numbered goods and still have the shortfall owed on the loan included in the settlement. Of course, if you want to keep some secured loans and get rid of others we can help you do that too! How do we do this?
“Bad credit ok!” "We won’t turn anyone away!”
Chances are, you’ve probably heard ads or seen flyers that promise easy approval for credit, whether it’s a car loan or credit card. If you’ve been through a bankruptcy, divorce, or have had trouble getting credit before, these offers can be tempting. But the many dangers of easy credit can make it even harder to rebuild your credit.
Types of Easy Credit
What exactly is “easy credit?” A few examples of loans and credit to watch out for include:
Forgetting to pay a bill now and again or experiencing temporary money troubles is normal. But when getting behind on the bills becomes a habit, it can cause serious financial harm. But what do you do when there’s no money for bills?
If you don’t have the money to pay your bills, don’t panic—there are still options, from things you can do yourself to enlisting the services of Bromwich & Smith.
Downsize. One way to free up money for bills is to downsize. For example, if you can’t afford your car payments, sell the car for a less expensive alternative. If you’re recently divorced and can no longer afford your home on one income, you may need to start shopping for affordable housing.
If you are having difficulty in making your monthly bill payments (or you are thinking that you are going to have trouble due to an unanticipated circumstance that has come up – car repair, school fees, etc.) your first reaction may be to simply ignore the problem (i.e. simply not make the payment) and then deal with whatever the creditor or creditors do to you as a consequence of not making the payment (a phone call, a letter, taking money directly out of your bank account, stopping utility services, garnishee, etc.). Doing nothing is a very normal consideration (and it is one that most people will immediately default to), but it is, unequivocally, the worst thing that you can do.
When we can`t keep our original financial commitments its natural to be afraid of what people will think of us and so it is natural to want to avoid the conversation. Will they think we are dishonest? Will they think we are a liar? Will it reflect poorly on my parents, my spouse, my children?
If you’re feeling stressed over debt balances that are steadily getting larger, you aren’t alone. With credit card and loan balances increasing all over Canada, you may be one of many whose health is suffering from a serious combination of stress and debt.
How Stressing Over Debt Makes You Sick
Beyond the obvious danger to your blood pressure, stressing over money can make you sick--mentally and physically. Worrying about money can be all-consuming, and it’s often more difficult to handle than other issues you might be concerned about.
Most of us know budgeting is important, but it’s not always easy to stick with. Budgeting’s bad rap often comes from trying to live within unrealistic budgets. However, creating a budget that works for you will help you see firsthand the benefits of this important financial tool.
Try some of these budgeting tips to help you develop a realistic working budget:
Be Your Own Auditor: The best budget is built on an honest and accurate view of your financial situation, so your first step should be to organize your income and expenses. It’s easy if you make a list that is divided into four columns:
Constant calls from creditors can be overwhelming. The worry caused by threatening phone calls and demanding notices can push you to the breaking point. If you’ve been trying to cope with aggressive collection efforts, here are a few ideas to help you deal with the stress.
Know Your Rights
Sir Francis Bacon said, “Knowledge is power,” and that’s true when it comes to dealing with debt collectors. Although you may have been late or even missed payments, you have rights. Understanding what a collection agency can and can’t do empowers you, making it easier for you to deal with their tactics.
Do they help or hurt your credit rating?
Payday loans act as bridge loans, allowing you quick and easy access to cash you have coming in your next paycheck. Generally, the loan is paid back through an automatic deduction from your checking account immediately after the next paycheck deposit. With such a short time frame and the guarantee of repayment, few Payday lenders require a credit check before approving the loan. What’s more, they are not yet registered with the principal Canadian credit reporting agencies.
What this means is the Payday loan has no impact at all on your credit rating, if you pay it back. It does not help your credit rating if repaid on time. However, if something else happens in the interim and the funds to repay the loan are not available, you could be in for some serious consequences.
When you're late on your bills, creditors will sometimes take drastic steps to collect their payments from you. One way they may attempt to collect money is by garnishing wages. When this happens, a portion of your wages is withheld by your employer and sent to your creditor, and you are paid the remainder. If you're already having financial difficulties, wage garnishment can make a stressful situation even worse.
Luckily, there are a few things you can do to protect your income from creditors.
Wage garnishment basics: Garnishing wages is usually the last resort a creditor takes and it requires a number of steps. First, it requires a court order. Your creditor must go to court and file a lawsuit, then request that the court grants them a garnishing order.
Most of us have money problems from time to time, whether it’s occasionally straying from your budget or accidentally overdrawing an account. It’s only when these occasional problems become the norm that it’s time to take action.
But what do you do if you’ve already budgeted or cut expenses and your money problems and debt are still an issue? If you’ve done everything you can to get your finances on track and are still living paycheck to paycheck or having trouble making ends meet, it might be time to seek help.Here are some possible solutions that can help:
High credit card and loan payments make it difficult to balance your budget or pay off your debts. When you reduce your monthly payments you can free up cash, making money available for debt reduction or saving. It’s surprisingly easy; you just have to know where to look and how to take advantage of opportunities to lower your payment amounts.
1) Tap into your home equity
If you are a homeowner and have built up equity, you can tap the money you have earned as your home’s value has increased. One way of accessing that cash is through refinancing your home. By carefully shopping for the lowest interest rate available, you may be able to draw out money and still keep a low payment. Use the money you receive to pay off or reduce your debts.
Creating a Budget can be difficult, especially if you have never done it before. This is what Credit Counsellors are really terrific at: helping you create a budget. Plus, if your Credit Counsellor is also part of a team of Consumer Proposal Administrators and Licensed Insolvency Trustees, like the Credit Counsellors at Bromwich & Smith, then your Counsellor has access to a number of powerful legal options that can put you back on the path to being debt free.
Since 2002 the Credit Counsellors here at Bromwich & Smith have helped people just like you to not only create a working budget, but they have also helped to immediately stop collection calls, creditor harassment, wage garnishments, asset seizure, and even income tax collection through a forced settlement process called a Consumer Proposal!