90 Days to Financial Stability

Many people hear debt settlement and think what a great idea. They will negotiate with their creditors to pay a lower sum than what is owed and the debt will disappear. The debtor will pay less money, the creditor will get some of what they are owed and life will go on its merry way, right? Not quite. There are consequences to taking this route to get out of debt. What usually happens is the debtor contacts a debt settlement company. The company will take the payments the debtor was supposed to be making to the creditor and hold it in a special fund. Then, when the debtor has fallen significantly behind in their payments, the settlement company will contact the creditor and negotiate a lower balance. But what if the debtor was current on his/her payments but has followed the advice of the settlement company? Now, their credit record has been damaged and will remain so for the next 7 years. There are dangers to this method of getting out of debt. Especially if the debtor gets...

Debt consolidation. We've heard a lot about it but what exactly is it? Simply put, it is a loan that will allow you to pay off ALL of your other smaller loans. Because you are going through a bank for the loan AND because you are combining all the debt into one payment, you will usually pay less interest. Which means you will be able to pay the debt off faster and save money. There are a few benefits to obtaining a debt consolidation loan. You will get a lower interest rate. One payment instead of multiple ones may be easier to maintain. Your creditors will be paid off immediately by the bank. If your credit rating hasn't been too damaged, you will be able to save it. You will get out of debt faster. You will pay less interest. The advantage of a debt consolidation loan is that it can make your life a lot easier. And as long as you adhere to the procedures stated, your credit rating should not be negatively affected. If you have a valuable asset like...

A tax-free savings account - TFSA. We've heard a lot about them but what does it actually mean? In 2008, Finance Minister, Jim Flaherty, introduced the TFSA in the Federal Budget. The C.D. Howe Institute stated,    “This tax policy gem is very good news for Canadians, and Mr. Flaherty and his government deserve credit for a novel program”. Other organizations such as Canadian Federation of Independent Business, Canadian Bankers Association, Bank of Montreal economist Doug Porter, the Canadian Chamber of Commerce and the Canadian Taxpayers Federation also supported this policy.    If you are 18 years or older, you can put money away into a registered TFSA and you are not taxed on any income earned from that contribution. You can also withdraw money any time you want and you don't have to pay taxes on it.Unlike a RRSP, contributions to a TFSA are NOT tax deductible. So how much can you put into a TFSA? That depends on the year. Years TFSA Annual Li...

Summer is almost over. Labour Day weekend is almost upon us and after that, school starts. The lazy, hazy days are over for another year. As our thoughts return to the education of our children, panic may set in. The costs of post secondary education have been rising and we don't want our children to start off their professional lives, drowning in debt! So what can a parent do? RESP's - Registered Education Savings Plan - are the first thought. Especially since the government will contribute 20 cents for every dollar you put in, up to $500 on an annual contribution of $2,500. Although there are no limits to yearly contributions, there is a lifetime maximum of $50,000. Now, if you are a low-income family, there is more help from the government. You can apply for the Additional Canada Education Savings Grant (A-CESG). This money is added to the RESP to help reach the maximum contribution amount. And it can be used if the child wants to go to university, college, trade sc...