90 Days to Financial Stability

Interest rates go up and down, depending on what is happening in the economy.   When times are tough, interest rates go down to entice people who are apprehensive about borrowing money to get in debt. When times are good, the rates go up since people are more open to taking on additional liabilities to get the things they want. Rising interest rates can be good and bad. Especially if you have consumer debt. Credit cards take a beating – or a I should, you, the credit card holder – takes a beating. A card with a $10,000.00 balance and an interest rate of 16.83% could see an increase of $25 a month just on a quarter-point rise in interest rates. That’s $300 in a year all thanks to interest. Auto and student loans and mortgages on a fixed rate will not have a noticeable increase. Or at least they shouldn’t.   When the loans were taken out,   the rate of interest was fixed at that time. However, if you take out a loan when the interest rates are high, you are...

I know I have written on budgets before but because it is such an important topic, here are some more tips. When creating a budget, there are a few rules you may want to use. One of them is the 50/30/20 format. The theory behind the 50/30/20 is that 50% of your income is applied to housing and bills. 30% is allocated for wants and entertainment and 20% goes to savings, investments and paying off debt. There is also the 80-20 rule: 20% for financial goals as in savings etc. and 80% for everything else. That is the ideal. Sadly, many of us can’t adhere to those rules. I live in Vancouver, BC, which is a very expensive city to live in. Property is expensive and so are rents.   50% of income going to pay rent or a mortgage is not unheard of. Too often, people don’t have the funds to be able to put away 20% of income. So what do we do? The best we can. Personally, I would feel hopeless whenever I read some of these budgeting rules. I would feel desperate – wit...

Why do I, and other debt coaches like me, advise you to keep a spending journal? What is the benefit of that? It isn’t only for you to see where your money is going but also so you will start to think before you spend. If you know that there is a record of every cent you spend, somewhere it is going to be listed that you spent money you didn’t have on something foolish, you may stop yourself. Even if you are the only one who sees it, you may stop. Or course, you   could just not record it but that would be lying and you don’t want to lie to yourself. Another advantage of keeping a spending journal is when you also record how you are feeling when you want to spend money (or do) you may be able to find your triggers. Did you just get into a fight with your significant other and now want to go out and spend a lot of money? If you have sat down and wrote in your spending journal about this experience – the fight, the feelings it brought up and the desire to buy...