Canadians Showing More Caution On Borrowing

It is becoming clearer that the average Canadian is cutting right back on borrowing as the global credit crisis continues to exert its hold on the purse strings of both businesses and the individual. In a world where money is now becoming more of a luxury item, people are becoming much more likely to save than to go out and spend money that they do not really have. What is becoming more and more obvious with every new set of figures that is released, is that more and more people are coming around to the idea that this credit crisis is not something that will be here today and gone tomorrow.

It is therefore no great shock that people are seeking to feather their nests in the current climate. With the best will in the world, no one really seems to have any firm idea when things are going to be better. So while people at the beginning of the credit crisis may have taken a more gung-ho attitude and resolved to ride things out without making major changes, it would take a brave or foolhardy individual to look at the pronounced slowdown and assume that things will improve tomorrow, next month or even next year. In such a climate, the only thing that many people feel they can do is hold on to what they have and pray for a boost.

With the figures for 2009 likely to show that the market growth globally for this year has slipped into the negative numbers – the first time that it has happened since the end of the Second World War – there is an absolute necessity to live according to the realities. This in turn is posing problems for governments, though. In order for markets to recover, it is essential that consumers are spending. If consumers are to spend, it is necessary that banks will allow them to borrow. With banks going to the wall in many countries, it is unsurprising that those who remain are keeping a firmer hold on the purse strings. It all adds up to a apocalyptic vision.

Fewer people are buying homes at the moment, and now it emerges that less money is going on retail too. When you are not sure that your job is recession proof, the prospect of speculating in order to accumulate is naturally less attractive. So what does the future hold? If people do not get spending, how will the markets ever recover? What we are likely to see – and there is not a period on this – is a slow, cautious improvement when it happens, which will gradually pick up pace as people gain confidence in the markets. We must hope when this does take place that banks and governments have learned lessons from the chaotic situation which has led us where we are now – and make the changes that need to be made.

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How To Save Money

We could all do with a little more cash in our lives. Be it due to rising energy costs, a desire for a big purchase or saving toward a holiday, there is always room for a few extra dollars. There are a few tips and tricks you can try to save yourself a little cash and invest it toward a better future.

To begin with, evaluate your outgoings. Look closely at the price plans you are on for energy and heating, as there might be a better deal available. Check comparison websites and if there is a saving to be made, switch immediately. Some people have reported up to $160 a year saving on energy bills purely because of this.

Next up, look at your home and cell phone bills. Again, there might be a cheaper tariff available. A neat trick is to telephone your current provider and inform them that you’re planning to leave and would like to cancel your contract. At this stage, you will be put through to a department – often going by the name of “Cancellations”, though they are anything but – who will try and woo you and persuade you to stay. They’ll offer deals on your plan that could save you hundreds of dollars a year, just to keep your custom.

Continuing along the same theme, check the interest rate you’re paying on any credit cards you may have. Many people remain with the same provider for years out of habit, never bothering to see if there is a better deal available. Nine times out of ten, there will be – apply for a new card with a better rating, transfer the balance and cut up your old card. Your monthly payments will reduce and you’ll be paying less interest.

With these things in check, you can move on to trying to cut your expenditure. One of the biggest, and often unavoidable, expenses is the price of gasoline. To begin, consult a website such as Gas Buddy, to find the cheapest gas station closest to you. These done, then try to fill up your tank on a Monday. Gas prices traditionally rise over the weekend and dip again at the start of the new week, with Monday being the cheapest. It might only be a small amount, but every little helps.

On more frivolous pursuits such as shopping, savings can also be made. One priceless tip to remember is that eBay is not just for used goods. Many big companies – such as IBM – run eBay stores as a way of clearing old stock. Many brand new items are available on eBay for huge discounts off their original retail price. While online and buying a new purchase, try the many comparison websites – like the aforementioned for credit cards and energy companies – to get the best price.

When it comes to health and beauty, you can also make savings. Most salons charge high prices, but will offer discount rates if a junior treats you or traine e stylist. This may sound risky, and no one wants to end up with bad hair, but a senior stylist will usually oversee the junior and if something does go wrong, they’ll fix it for free. You can also try making your own skin care products – a bottle of branded exfoliating lotion will cost anything up to $25, where a warm bowl filled with sugar and rubbed in firmly with a sponge will have the same effect.

Essentially, there are ways to save money on everything. Utilize the Internet, as it genuinely does offer some spectacular deals if you have the patience to look for them. In the same vein, learn to haggle when in store – many retailers price their items with mark ups that allow for negotiation. 99 times out of 100, you can find a discount on something – all you need is a little clear thinking and a large amount of patience.

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Filing Bankruptcy In Canada

Sometimes, no matter how much one wants to prevent it, personal finances can spiral out of control. You can find yourself struggling to make debt repayments, worrying constantly about the future and what it may bring. If you ever reach the stage where you freeze in terror every time the phone rings or the doorbell goes, it may be time to face the state of your finances.

When it comes to personal debt, the word bankruptcy is particularly terrifying. To many, it signals the end of life as they know it, and as well as the financial implications there is something of a social stigma attached to it. Yet sometimes, if debts are substantial and you aren’t earning enough money to cover your outgoings, it is the only reasonable option to free yourself from the never ending cycle of debt. Bankruptcy is the last resort and should only be entered in to with the knowledge that all else has failed, but it’s part in helping resolve finance issues is irreplaceable.

In 2007, more than 100,000 Canadian nationals filed for bankruptcy, so you are not alone. If you have decided bankruptcy is the only option left available to you, you begin the process by filing for bankruptcy via a trustee for bankruptcy. To find one, check your provincial advice pages or even just check the Yellow Pages.

When you file for bankruptcy, an automatic stay is granted to you. This means that, during the bankruptcy process, your creditors cannot make moves to seize assets and should stop making collections calls.

For a first time bankrupt, the term of the bankruptcy is nine months. This increases if you have to go bankrupt more than once. At the end of the nine months, the bankruptcy is discharged. During those nine months, you are required to make payments to your creditors and to the trustee you petitioned for bankruptcy with. Depending on the size of debt, these payments vary, with a national standard of $200 per month for the nine months. You will also need to pay around $85 for financial counselling as a condition of discharge. At the end of the nine-month period, the bankruptcy is discharged and in all but a few rare cases the debts are erased.

Bankruptcy does not automatically mean you will lose all your asset s, as in most cases there are certain limits that you can own. For example, In Ontario, you can keep up to $5,650 equity in a vehicle, $11,300 worth of household goods, and up to a value of $11,300.00 worth tools you use to earn your living . Your trustee, who will advise the best course of action, which may involve selling items, makes the decision on any amounts over these for each particular area.

When discharged, the bankruptcy will remain on your credit file for up to six years. During this period, it may be difficult – though not impossible – to get credit. However, this should not be too much of a deterrent; as if you are in a situation where bankruptcy is the only option; your credit file is going to be damaged hugely anyway. At least with bankruptcy you gain a clean slate in six years, something that would be hard to do struggling to make repayments on any large debts.

Overall, if you have reached the end of the line and creditors are hassling you non-stop, bankruptcy may be the most efficient and effective method of getting out of trouble. If you are having difficulty paying your debts and/or considering bankruptcy, I suggest you contact a Canadian Bankruptcy Trustee licensed by the federal government to discuss your situation. To find a trustee in your area, search on Google or Yahoo using these keywords: Bankruptcy, Trustees, Your Area.

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Strict Budgeting Does Not Work

It would seem that anyone giving financial advice always begins by saying “use a budget”. Unfortunately, this to many seems restrictive and cloying, and few people do it when times are good. Budgeting is associated with periods of low income, but in reality, if you budget during the affluent times too, the benefits can be huge.

If budgeting does seem to be too restrictive for you, then introduce a flexible budget. Instead of saying that X amount will be spent on X every month, try saying between X amount and X amount will be spent on X every month. For example, a strict $300 for groceries can become $300 to $350 a month for groceries. Studies have shown that even this slight difference is enough to make people feel released from the confines of a budget.

A budget doesn’t need to be strict. Instead, it can be more of a general guide If you aren’t struggling financially, then you can make your budget as vague as you like, while the practice of actually having a budget and sticking to it will be stored for future use should your circumstances change. There’s no need to write down the exact amount of money for everything you could possibly spend it on; some budget “$10 per month for magazines”, which is a little extreme.

Why not budget just for the essentials?  . These are simply amounts that rarely fluctuate and are essential. When you know roughly how much you need for these each month, the real budgeting begins.

At this point, the most common mistakes of budgeting arise. People make the limits of their budget too strict or not strict enough. The only way to avoid this is by trial and error. Split your non-essential expenditure into different groups, rather than specific sets, to begin. Allow amounts for entertainment, going out, clothing and other such variables. At the beginning, it really is best to just guess – find an amount that you think “sounds” right. This might sound a little pie-in-the-sky, but there’s no set figure that is ideal for each person. You have to find out what works for you.

With this done, go through a month on your non-essential budget, then evaluate it. Are there areas where you have a lot of money left over, or areas where you spent more than you were expecting? Within reason, simply alter your budget for the next month to fit the discoveries you’ve made. After three or four months of this, you should have a pretty good idea of the patterns to your expenditure. After six months, you’ll have learned enough to set a semi-permanent budget. After all, if you keep changing your budget forevermore, the point of it is lost slightly!

With your personalized budget in hand, you’re ready to begin. But there’s one final addition that should be in every budget; miscellaneous. You can never know what exactly might appear over the coming months – be it an unexpected bill, or something more exciting like a gadget you just can’t resist – so by always including a miscellaneous amount, you’ve got that covered. If nothing of this type appears over the course of a month, simply roll this amount over. With a plan designed to suit you and a miscellaneous figure allowed for, you’ll soon wonder how you ever managed without a budget.

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