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HOLIDAY SPENDING: HOW DO I STOP OVERSPENDING DURING THE HOLIDAYS?

We hope that you and your family are safe and healthy.

The Ira Smith Trustee Team is absolutely operational and Ira, in addition to Brandon Smith, is readily available for a telephone consultation or video meeting.

Holiday spending introduction

The holiday sales days of Black Friday and Cyber Monday holiday retail shopping are over. You may feel you tend to overdo it on your annual holiday spending and that will put you in a poor financial position entering into 2021. On the other hand, COVID-19 has made a lot of people anxious and even depressed. You want to buy something nice this Canadian holiday season for your loved ones and close friends to cheer them up.

So I have created our holiday spending in Canada tips to attempt to help with your holiday shopping. Ideally, by following our suggestions, you will not go into the New Year with more financial debt than you can take care of. You ideally will have avoided the most typical holiday spending mistakes and not end up being one of the miserable holiday shoppers who have awful holiday spending habits.

Holiday spending: Tale of two countries?

The COVID-19 pandemic has devastated the U.S. economy and kept lots of would-be consumers at home this year. Nationwide US consumers are expected to spend much less on gifts and various other holiday-related merchandise than they did last year. So many Americans are hurting because the federal government has not gotten the much-needed relief to people and businesses in the United States.

On the other hand, in Canada, the federal government has distributed relief very quickly. It has come as monetary support for citizens and businesses. It has also come in the form of mortgages and other loan deferrals. By the end of 2019, most, but not all of the Canadian government coronavirus support will end.

As I have written in previous blogs, the combination of government support payments and people staying at home, has resulted in people spending less. They have been able to put money towards paying down debt. Although debt levels are still high, they have been reduced over the last 10 months.

CPA Canada, the association that represents Chartered Professional Accountants of Canada, did a survey on the holiday outlook for this year. According to the CPA Canada survey, most Canadians’ spending will be on gifts: $588 this year versus $583 in 2019. So according to that survey, Canadians will spend, on average, the same this holiday season as last year. Perhaps the only question might be will they do more online shopping this year than in previous years? It will certainly be interesting to see the holiday spending retail sales report early next year.

How will Canadians buy for this year’s holiday spending?

Gifts are only one portion of total holiday spending. Traditionally, travel was always a large part of non-gift holiday spending. The CPA Canada holiday spending survey shows that Canadians have spending plans to spend the same on gifts as they did last year. However, due to the coronavirus pandemic, travel spending will certainly be far less than in prior years. It could even be essentially eliminated. This will create lower total holiday spending in Canada in 2020.

Another major trend sped up by the pandemic is a curbside pick-up. Many Canadians will select this approach for their online purchases. The reality is that Gen Z and Millennials use this approach or get their purchases delivered to them all year round – not just for their holiday spending.

Canadian adults aged 55-plus are traditionally the last to use curbside pickup or delivery. This holiday season may be very different for this group of Canadians. Health concerns may very well drive them to more online shopping this holiday shopping, given the reality of our current environment.holiday spending

Holiday spending budgeting

It is so important that you really think out your holiday spending budget plan before you start spending. I think there are 3 major classifications to your holiday budget: (i) presents; (ii) food and beverage in your home; and (iii) what you might spend in clothing and other amounts because of various holiday parties you would normally be attending. This year I don’t think there will be much spending relating to holiday parties as most, if not all, are cancelled.

To begin setting your holiday spending budget plan, you require to establish 2 different mini-budgets. For gifts, the first thing is to write down the names of everybody you feel you want to get holiday gifts for. Then write down only those who you must buy a gift for. You might not have the ability to afford your “wants”, however just your “needs”.

Check out your regular monthly income and expenses as well as any kind of savings you may have assigned for holiday costs. Also, look at your spending habits to understand what your needs will be over the first few months of the New Year. This will better equip you to understand just how much you can spend overall without going into holiday financial debt.

You also need to then estimate your spending on food and drink for your holiday entertaining this year. That number may very well be less than in previous years as people are being encouraged to not congregate in the same large numbers as they have previously.

Use your holiday spending calculator and take all of this into account, you can set with some degree of confidence your gift and other holiday spending budgets. Then you have to follow them!

My 6 best holiday spending tips

Here are my 6 best holiday spending tips:

  • Purchase with a purpose – You have now determined just how much you can safely spend on each person. Locate the ideal items that meet your costs goal. You do not have to think of price anymore since you will adhere to your specific gift cost limits. You can now focus only on suitable gifts within your budget restrictions. Purchase gifts that fit within your budget plan.
  • Only buy with cash money – You will certainly be enticed to get with your credit card. Using plastic will certainly trigger you to spend too much due to the fact that you will not really feel the purchase. To really feel the purchase, just use cash. When you feel it, you don’t spend too much. You will likewise prevent the awful surprise in January due to the fact that you will not receive an out of control charge card statement that you will not be able to settle fully. You will not only feel wonderful in December; you will have that same or even a better feeling in January.
  • Consider a family present to conserve money – If you feel you won’t have the ability to pay for individual presents, think about the members of the same household and look for a family gift. A gift card for the family may be more affordable than the total of individual presents. Don’t forget to take a look at that choice. Or perhaps one thing for the house that you know all family members will take pleasure in. There are many possibilities for a family present and you will still have an enjoyable shopping experience.
  • You have many talents so give of yourself, not your money – Don’t assume that the only gift that counts is one that costs money. You can actually do a buy nothing day for someone. You have many abilities and talents. Probably one or more would make a great present. If you cannot consider anything unique you can supply that would make a fantastic present, how about your time as an item? Babysit for nieces or nephews, give an afternoon to an ageing relative that needs help either in the house or getting around for errands. These can all count as important presents that won’t cost you anything or much at all. Your time and theirs spent together are much more precious than any type of present you would get in a shop.
  • Visualize the decorations – If you don’t currently have a box of ornaments from years past to use, visualize creatively. The accessories bought at a Dollar Store will look just as wonderful on your tree as ones purchased at a much more expensive specialty shop. Or, use your own creative thinking to make your own decors. If you aren’t certain where to begin, search the numerous videos online to teach you how to make terrific looking decorations that do not set you back too much for materials. Your work, certainly, is cost-free and you will get such joy out of seeing your own creations on your tree and in your home. Why not spread such joy to yourself first; you deserve it.
  • Do you have reward points you either do not see making use of or will quickly expire? – You have been collecting the points. You undoubtedly thought they would certainly give you something extra you may not otherwise be able to afford. Perhaps you might lose them or even otherwise, you don’t see on your own being able to use them in the foreseeable future. So, why not use them for an appropriate gift or gifts for those you need to buy for? You will also save time because more than likely, buying with points means that you are shopping online. You will certainly feel good about using them in this manner due to the fact that you will be making use of the points for someone important in your life. You will also feel good about not having to spend the cash. The people you get the gifts for will cherish your gift, never knowing that you didn’t have to spend cash to get them. It is a win-win.

I wish all of our readers a Happy Chanukah, a Merry Christmas and a healthy, happy and prosperous 2021.

Holiday spending: What if you already have too much debt?

I hope you have enjoyed this holiday spending Brandon’s Blog. Do you or your company have too much debt? Are you or your company in need of financial restructuring? The financial restructuring process is complex. The Ira Smith Team understands how to do a complex restructuring. However, more importantly, we understand the needs of the entrepreneur or the person who has too much personal debt.

You are worried because you are facing significant financial challenges. It is not your fault that you are in this situation. You have been only shown the old ways that do not work anymore. The Ira Smith Team uses new modern ways to get you out of your debt troubles while avoiding bankruptcy. We can get you debt relief freedom.

The stress placed upon you is huge. We understand your pain points. We look at your entire situation and devise a strategy that is as unique as you and your problems; financial and emotional. The way we take the load off of your shoulders and devise a debt settlement plan, we know that we can help you.

We know that people facing financial problems need a realistic lifeline. There is no “one solution fits all” approach with the Ira Smith Team.

That is why we can develop a restructuring process as unique as the financial problems and pain you are facing. If any of this sounds familiar to you and you are serious about finding a solution, contact the Ira Smith Trustee & Receiver Inc. team today.

Call us now for a free consultation.

We will get you or your company back on the road to healthy stress-free operations and recover from the pain points in your life, Starting Over, Starting Now.

We hope that you and your family are safe and healthy.

The Ira Smith Trustee Team is absolutely operational and Ira, in addition to Brandon Smith, is readily available for a telephone consultation or video meeting.

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BUY NOTHING DAY CANADA: WILL IT HAVE ANY EFFECT ON HOLIDAY SHOPPING

Introduction

Buy Nothing Day Canada is part of an international day of protest against consumerism. In North America, it takes place on the Friday after U.S. Thanksgiving. That is the same day as Black Friday. Elsewhere, it is held on the last Saturday in November.

It is a Canadian invention. Founded in Vancouver by creator Ted Dave in 1992 it was subsequently advertised by Adbusters magazine, based in Canada.

In this Brandon’s Blog, I discuss what effect, if any, Buy Nothing Day Canada has on Black Friday, Cyber Monday and holiday shopping in general. I also provide some tips on how not to go deep into debt from holiday spending.

What is the purpose of Buy Nothing Day Canada?

Buy Nothing Day Canada and worldwide, it is meant as a day for society to take a look at the problem of over-consumption. In 2000, Adbusters tried to purchase advertising time on television to promote Buy Nothing Day Canada and elsewhere were rejected marketing time by nearly all significant TV networks besides CNN.

Notwithstanding, it has become a grassroots movement. Campaigns started showing up in the USA, the United Kingdom, Israel, Austria, Germany, New Zealand, Japan, the Netherlands, France, Norway and Sweden. Currently, it is held in about 65 countries.

Doubters of the day feel that it merely:

  • shifts people’s buying habits to the next day; or
  • appeals really only to those people who rebel against over-consumerism all year through.

Is it effective?

Based on a recent study, I think Buy Nothing Day Canada is meaningful only to those who already practise a lifestyle against over-consumerism. This study says that Canadians will spend approximately$1,593 per person for the 2019 holiday season. This is a little up from $1,563 (or 1.9 percent) in 2018, according to the same report.

For many years now, there have been reports that say Canadians are over their heads in debt. They are living paycheque to paycheque. On average, Canadian adults are $200 away from financial disaster. I have written several blogs on the topic of Canadian households in debt.

So, from what I can tell, this movement has no effect at all on holiday shoppers.

Must I resort to a buy nothing Christmas?

Black Friday and Cyber Monday are over. You may feel you overdid it on your holiday spending last year. Perhaps it put you in a bad place that took a lot of time to get out of. You don’t wish to repeat it going into 2020.

So I have created a holiday spending in Canada tips list to try to assist with your budgeting for the holidays. Ideally, by following my suggestions, you won’t get in the brand-new year with more financial debt that you cannot handle. You will have avoided one of the most typical holiday spending blunders.

By following my tips, you can buy gifts and remain financially healthy without resorting to shopping abstinence.

But first, it all starts with a budget

You don’t need to adhere to a Buy Nothing Day Canada philosophy, but you do have to live within your means. So, the overall key is proper budgeting for holiday spending. It is so vital that you think out your holiday budget before you start spending.

I believe there are 3 major classifications to your Xmas holiday spending plan:

  1. presents;
  2. food and beverage in your home if you are hosting; and
  3. tree and decors.

To begin setting your holiday budget plan, you need to establish 3 separate mini-budgets; one for each item. For gifts, the first thing is to detail out everybody you feel you would like to buy a gift for. After that reduce the list to everyone you really must buy a present for. You may not be able to manage your “desires”, but only your “needs”. The various other classifications will be easier to establish.

Now, check out your regular monthly earnings and expenses as well as any kind of savings you might have designated for holiday costs. This will help you to understand just how much you can afford to spend without going into holiday spending financial debt. Simply figure out the amount you can safely spend.

With that total, you should estimate your spend in the food and drink and tree and decors groups. What you have leftover in total will be your gift spending plan. Nothing is set in stone. If you feel you require to readjust the allowances among the 3 categories, go right ahead. Eventually, you will be left with your present total spending plan.

Now spread out the total gift budget among the people. Your specific amounts need to add up to a number not higher than the total you established as your total gift spending amount. With the budgeting worksheets finalized, it is now time to go shopping!

Holiday spending in Canada tips list

Purchase with objectives – You have determined just how much you can safely spend on each person. Get the best gift possible for each that satisfies your spending budget. Stick to the financial limitations of your gifts. You can now spend more time focussing on the appropriateness of the gift within your budget limitations.

Only spend cash don’t buy on plastic – You will be lured to buy with your charge cards. Using plastic will cause you to overspend due to the fact that you will not feel the purchase. To truly feel it, you must only use cash. When you feel it, you don’t spend beyond your means. You will also stay clear of the nasty shock in January since you won’t get an unmanageable credit card statement. You will feel terrific in both December and January.

Think of a family present to conserve cash – If you feel you will not be able to afford specific gifts, think of people in the very same family and search for a household present. A gift card for the household to go see a movie or a family pass for admission to a tourist site may turn out to be cheaper than the overall cost of separate gifts. Or one thing for their home that you feel all family members will take pleasure in. Look at that option. There are many opportunities for a group gift.

Give an experience, not simply your money – Do not think that the only gift that counts is one that sets you back the money. You have numerous abilities and talents. Probably one or more would certainly make an excellent present. If you cannot think of anything special you can give of yourself to that special someone that would make a wonderful present, how about your time? Think to babysit for nieces or nephews. How about helping out an ageing relative because they can’t go out a lot on their own but have appointments or tasks to get. These can all count as useful presents that won’t cost you anything or much in any way. Your time and enjoying each other’s company are much more valuable than any gift you would buy in the mall or online.

Think outside the gift box – If you do not have a box of ornaments from years past to use, think artistically. The accessories bought at a Dollar Store will look just as good on your tree as ones bought at a more expensive specialty shop. Or, use your own imagination to make your own. If you aren’t sure where to start, look online. There are many video clips to reveal step-by-step how to make terrific looking ornaments that don’t cost too much for materials. Your creativity and labour, of course, is cost-free.

Summary

I hope you found this Brandon’s Blog on Buy Nothing Day Canada and my holiday spending tips useful. Are you in need of financial restructuring? The financial restructuring process is complex. The Ira Smith Team understands how to do a complex restructuring. However, more importantly, we understand the needs of the entrepreneur or the person who has too much personal debt. You are worried because you are facing significant financial challenges.

It is not your fault that you are in this situation. You have been only shown the old ways that do not work anymore. The Ira Smith Team uses new modern ways to get you out of your debt troubles while avoiding bankruptcy. We can get you debt relief freedom.

The stress placed upon you is huge. We understand your pain points. We look at your entire situation and devise a strategy that is as unique as you and your problems; financial and emotional. The way we take the load off of your shoulders and devise a debt settlement plan, we know that we can help you.

We know that people facing financial problems need realistic lifeline. There is no “one solution fits all” approach with the Ira Smith Team. That is why we can develop a restructuring process as unique as the financial problems and pain you are facing. If any of this sounds familiar to you and you are serious in finding a solution, contact the Ira Smith Trustee & Receiver Inc. team today.

Call us now for a free consultation. We will get you or your company back on the road to healthy stress-free operations and recover from the pain points in your life, Starting Over, Starting Now.

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HOLIDAY SPENDING IN CANADA: 5 HOLIDAY SPENDING TIPS TO STOP HOLIDAY DEBT

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We are trying something new. At the bottom of this holiday spending in Canada tips blog is an audiogram of this Brandon’s blog. If you would prefer to listen to it, and not read it, scroll down to the bottom and press on the play button. Let us know what you think by sending us a message in the Question box below.

Holiday spending in Canada: Introduction

Black Friday and Cyber Monday are over. You may feel you have a tendency to go overboard on your holiday spending and that will put you in a bad place going into 2019. So we have put together our holiday spending in Canada list to try to help with your budgeting for the holidays. Hopefully, by following our tips, you won’t enter the new year with even more debt. You will have avoided the most common holiday spending mistakes.

Holiday spending in Canada: Budgeting for the holidays

So, the first hint already is when I said budgeting for the holidays. It is so important that you actually think out your holiday budget before you start spending. I believe there are three main categories to your Christmas holiday budget: (i) gifts; (ii) food and beverage in your home when hosting; and (iii) tree and decorations.

To start setting your holiday budget, you need to set three separate mini-budgets; one for each group. For gifts, the first thing is to list out everyone you feel you want to buy a gift for. Then figure out who on the list you need to buy a gift for. You may not be able to afford your “wants”, but only your “needs”. The other categories will be easier to set.

Now, look at your monthly income and expenses and any savings you may have allocated for holiday spending to understand how much you can afford to spend in total without going into holiday debt. Just figure out the total amount you can safely spend. With that total, you should then estimate the spend on the food and beverage and tree and decorations categories. What you have left over in total will be your gifts budget. Nothing is set in stone. If you feel you need to adjust the allocations among the three categories, go right ahead. Eventually, you will be left with your gift total budget.

Now spread the total gift budget among the people. Your individual amounts have to add up to a number not greater than the total you already set up as your total gift spending amount. So you should now have actually three different worksheets, adding up to the total amount of money you can safely spend. With the budgeting worksheets finished, it is now time to go shopping!

Holiday spending in Canada: A new kind of shopping

You will now be able to do a new kind of shopping. In the past, you may have just gone to the mall or local stores and then just wander around until something that reminds me of the person that you are shopping for pops up.

The new shopping method will have you shopping for each group already knowing how much you can spend. Do not overspend!!

Holiday spending in Canada: Here are our 5-holiday spending tips

  1. Purchase with purpose – You have already determined how much you can safely spend on each person. Find the right gift that meets your spending goal. You don’t have to think about cost any more, because you will stick to your individual gift limits. You can now concentrate only on appropriateness within your budget limits. Although the Farberware cookware may be wonderful, you can only buy gifts that fit within your budget.
  2. Only buy with cash – You will be tempted to buy with your credit cards. Using plastic will cause you to overspend because you won’t feel the purchase. To really feel the purchase, only use cash. When you feel it, you don’t overspend. You will also avoid the nasty surprise in January because you won’t receive an out of control credit card statement that you won’t be able to repay. You will not only feel great in December but in January too.
  3. Think of a family gift to save money – If you feel you won’t be able to afford individual gifts, think of members of the same family and look for a family gift. A gift card for the family to go see a movie or a family pass for admission to an upcoming event or tourist site may prove cheaper than the total of the individual gifts. Don’t forget to check out that option. Or perhaps one item for the house that you know all family members will enjoy. There are many possibilities for a group gift.
  4. Give of yourself, not just your money – Don’t think that the only gift that counts is one that costs money. You have many skills and talents. Perhaps one or more would make a great gift. If you can’t think of anything unique you can provide that would make a great gift, how about your time. Think to babysit for nieces or nephews, taking out for an afternoon an ageing relative who can’t get out much but has appointments or errands to get to or doing someone’s grocery shopping (with their money). These can all count as valuable gifts that won’t cost you anything or much at all. Your time and theirs are much more valuable than any gift you would purchase in a store.
  5. Think outside of the decoration box – If you don’t already have a box of ornaments from years past to use, think creatively. The ornaments purchased at a Dollar Store will look just as nice on your tree as ones purchased at a more expensive store. Or, use your own creativity to make your own decorations. If you aren’t sure where to start, I am sure that there are many videos online to show you how to make great looking decorations that don’t cost too much for materials. Your labour, of course, is free.

2 BONUS TIPS to help with your holiday money management:

HOLIDAY SPENDING TIPS BONUS #1 Save all year for your holiday spending budget – Now that you have your spending budget, start saving for next Christmas in January. Take the total budgeted amount that you spent this year and divide it by 12. Starting in January, set up a separate savings account and deposit into it every month the monthly amount needed that will add up to your total budget by next December. Avoid the temptation to dip into that fund during the year. By the time you get to next Christmas, you will already have all of your holiday spending cash.

HOLIDAY SPENDING TIPS BONUS #2 Do you have reward points you either don’t see using or will soon expire? You have been collecting the points. You obviously thought they would give you something extra you might not otherwise be able to afford. Now you might lose them or even if not, you don’t see yourself able to take advantage of what the points can provide. So, why not buy a proper gift or gifts for those you need to buy for using some points. You will feel good about giving this way because you will be using the points for someone valuable in your life. You will also feel good about not allowing them to either expire or lay dormant. The people you buy the gifts for will hopefully cherish your gift, never knowing that you didn’t have to lay out any cash for them. It is a win-win all the way around.

I wish all of our readers a very Merry Christmas, Happy Chanukah and a healthy, happy and prosperous New Year.

Holiday spending in Canada: What if you already have too much debt?

Licensed Insolvency Trustees (previously called bankruptcy trustees) are the only specialists approved, certified and monitored by the federal government to deal with debt restructuring. As a licensed insolvency trustee, our individualized method will certainly help you learn every one of your bankruptcy alternative options. The choice you choose based upon our suggestions will certainly end the stress, anxiety and discomfort you are really feeling due to your debt troubles.

The Ira Smith Team has years and generations of experience assisting people and companies in a financial problem. Whether it is a consumer proposal debt negotiation strategy, a bigger individual or business restructuring proposal debt negotiation, or as a last resource, bankruptcy, we have the experience.

Our method for every case is to produce an outcome where Starting Over, Starting Now occurs. This begins the moment you come through our front door. You’re just one telephone call from taking the essential actions to return to leading a healthy, well-balanced life. Call us today for your free consultation.

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HOLIDAY SPENDING MISTAKES IN CANADA: 12 SECRETS TO SOLVE THEM

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Holiday spending mistakes in Canada: Introduction

Other than for some last-minute small items, your holiday spending is complete. The credit card bills will arrive next month. You will soon find out if you made any holiday spending mistakes in Canada.

Maybe you overspent and will now have too much debt you won’t be able to repay. Perhaps you spent wisely, but it will put you over the top given your current debt level. Regardless, you now need to know how to help yourself financially from holiday spending mistakes in Canada.

Holiday spending mistakes in Canada: You are not alone being in debt

Are you fighting financial threats daily? Do you wish you could unlock how to help yourself financially? If so, you are not alone. Lots of Canadians have fought the good fight to barely survive. There have been many articles in the media of the dangers of living with way too much debt. Many Canadians are living paycheque to paycheque.

The Bank of Canada has warned Canadians for years now. With the rate of interest having been so reduced, Canadians have taken on much debt. Now interest rates are beginning to rise. You have to know how to help yourself financially, so that you will not only be able to make your minimum payments, but you will also be able to start reducing your debt. Your holiday spending mistakes has now increased the pressure on you. I do not want to see anyone living this way.

Holiday spending mistakes in Canada: Who this information will help

You know you have debt troubles and this information will help if you:

  • often pay expenses after the date they are due;
  • on a regular basis write cheques that don’t clear your bank;
  • use room from one charge card to get a cash advance to pay the minimum due on a different card;
  • get telephone calls from a debt collector;
  • routinely ask pals or relatives for money;
  • utilities are threatening to cut you off;
  • cannot live to a balanced budget based on your current family income;
  • need to take a second job just to meet normal daily living expenses;

Holiday spending mistakes in Canada: Statistics Canada reporting

Statistics Canada reported that on average, at the end of 2016, Canadian families have a debt-to-income ratio of $1.67 for each dollar of after-tax revenue. At the end of the second quarter of 2017, they report that the ratio has risen to $1.68. Although Canadians’ net worth is also rising, primarily due to rising housing prices. So now housing prices have dropped, yet the debt remains.

If this sounds like how you have lived, then you need to take corrective action now from your holiday spending mistakes before it is too late. Bankruptcy should not be your first option. There are bankruptcy alternatives which include credit counselling, debt consolidation and a consumer proposal.

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Holiday spending mistakes in Canada: Our 12 secrets on how to help yourself financially

If you are living in a debt threatening zone, it is currently the time to act to turn things around. Consider the following 12 secrets to stop your debt from spiralling out of control.

  1. Safeguard Your Health – Make sure that you are taking good care of yourself and your health, both physical and mental. You won’t be any good to yourself or your family if you are ill.
  2. Don’t Talk Yourself Out of What You’re Worth – Don’t put up with the things as they are of your job without seeking out new opportunities. Don’t sell yourself short. Make sure you understand if there are opportunities awaiting you that will pay you more than you are currently earning. Stay current on your marketable skills.
  3. Keep It Simple – Don’t over-complicate things. Don’t get involved with difficult payment plans. Put yourself in a position where if you need an essential item, you can pay for it. Don’t get sucked in by sexy advertisements for things that have long-term payment plans.
  4. Give to Your Future Before Giving to Others – There are many worthwhile causes that clamour for our money. Make sure your own house is in financial order before you give to others. Volunteer your time and not your money. You will find it very rewarding and you will be helping both yourself and others at the same time. Just say no to relatives and friends who ask you for money, until you have no debt yourself.
  5. Make Savings Automatic – Otherwise known as pay yourself first. Set up a special bank account and have the same percentage hived off of your paycheque every payday. Do not touch the funds in that special bank account, until you have enough money to invest in a safe investment. Have this money work for you over and over.
  6. Control Your Impulse Spending – Make sure that you have a monthly budget and follow it. Your budget should account for all your necessary living expenses for you and your family AND allow the percentage you are hiving off each pay period for your investment savings account. If there is anything left over, this balance should be used for debt reduction. Don’t buy on impulse as you will regret it.
  7. Evaluate Your Expenses, and live frugally – We can all get by on less than we think. This ties back into your budget. Make sure that your necessities of life and your regular payday savings are all accounted for. By cutting out expensive daily coffee drinks and other non-essential items, you will be surprised how much you will have leftover for debt reduction.
  8. Invest In Your Future – Upgrade your skillset. Take a course that will make you more marketable. Make room in your budget for this type of expense, as it will generate more income for you for the long-term future.
  9. Keep Your Family Secure – Involve your entire family in the family budget process. Everyone needs to be on the same page and working towards the same goals. Meet regularly to go over your real performance as compared to budget. When everyone knows the plan is working, they will all feel secure and try even harder.
  10. Eliminate And Avoid Debt – Make sure that you are not taking on any new debt. Use budgeting to make sure that you allow a certain amount out of your monthly budget for paying down debt. Even small amounts add up over time. You will see and feel the difference it makes in your life.
  11. Use The Envelope System – Set up a separate envelope for each of your weekly necessities, based on your budget. Only take out enough cash for those amounts and place the right amount of cash in each envelope. Do not use credit cards to pay for the necessities; just use the cash in each envelope. Make the cash in your envelopes last the entire week, then rinse and repeat.
  12. Pay Bills Immediately And Automatically – If you don’t like the envelope system, here is another idea. Pay as much as you can online from your bank account. Set up regular automatic monthly payments so that the bills are paid. You can also use this method for your regular payday savings account. Make sure you budget properly so that you realize what money is coming out of your account in a month automatically so that you don’t overdraw your bank account.

Holiday spending mistakes in Canada: Will you need immediate help from your holiday spending mistakes?

These 12 steps will ensure that you get back on the road to financial health as soon as possible. You can recover from your holiday spending mistakes.

If you find that you have too much holiday or other debt, debt collectors are harassing you and you can’t keep them all happy, then you need to take more action. I say more action because it will be in ADDITION to the above 12 steps. What you will need to do is to immediately speak to a professional trustee.

The Ira Smith Team has a cumulative 50+ years of experience helping people who are facing a financial crisis and we deliver the highest quality of professional service. Make an appointment for a free, no-obligation appointment today and Starting Over, Starting Now you’ll take your first steps towards financial freedom. We can devise a plan so you can come back from your holiday spending mistakes in Canada.

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DEBT MANAGEMENT SPREADSHEET: USE OURS BEFORE YOU START HOLIDAY SPENDING

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Debt management spreadsheet: Download ours for free at the bottom of this blog

T’is the season to be jolly but it’s also the season that can have you taking on debt you can’t afford. If you have too much debt before you begin your holiday spending, you could make use of our debt management spreadsheet. At the bottom of this blog is a link for you to get it.

You may have already made your Christmas list and checked it twice, but Santa won’t pay the bills when they arrive, even if you’ve been nice. The question is, will you be able to pay your holiday spending bills?

Why?

Now is a very important time to make a debt spreadsheet. Believe me, it’ll be a reality check as what you can really afford to spend. A debt spreadsheet can give you a clear picture of how much you owe and how you plan to pay off your debts. If you’re in the process of repaying debts, now is no time to take on more debt. Getting deeper in the hole is not what the holiday season is all about. The holidays are all about getting together with family and friends, not spending money you don’t have and can’t repay.

How to enjoy the holidays without new debt

Listen to your spreadsheet and instead of going overboard shopping here are some ideas to control holiday spending.

  1. Sit down with family and friends and let them know that you’re only buying gifts for the children. They’ll probably be relieved that you’ve lessened their load.
  2. Buy books and crafts for the kids, not over-the-top electronic toys and gadgets.
  3. Instead of spending money on hostess gifts, homemade items are always well received – baked goods, jams, sweets or homemade wine.
  4. Give the gift of time. Spend time with your loved ones.

How to get rid of debt

The real spirit of the holidays doesn’t involve spending money you don’t have and creating a bigger hardship for yourself. For help with your financial problems and issues contact Ira Smith Trustee & Receiver Inc. We’re your best defence against debt. Make an appointment for a free, no-obligation consultation and you can be well on your way to a debt-free life Starting Over, Starting Now. Give us a call today.

Our free debt management spreadsheet

CLICK ON THE PICTURE BELOW TO GET OUR FREE EXCEL DEBT MANAGEMENT SPREADSHEET

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CONSUMER PROPOSAL VS BANKRUPTCY: THE GREATEST INFO YOU REALLY NEED TO KNOW

 

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Consumer proposal vs bankruptcy: Introduction

The holiday shopping season is upon us and the first sign that you are in financial trouble is if you truly need to learn about consumer proposal vs bankruptcy BEFORE you begin your holiday shopping! If you have already recognized that you need to know your options in dealing with your debt before you start putting holiday gift purchases on your credit card, I suspect that the New Year will become the time when you begin taking positive action to reduce your debt and gain back control over your life.

A consumer proposal is an alternative to bankruptcy. Although similar in many respects, there are some major differences. Consumer proposals are available to people only whose total debts do not exceed $250,000, not including debts secured by their principal residence. Division 1 proposals are available to both businesses and people whose debts exceed $250,000 (excluding the mortgage on their principal residence). The focus of this vlog is on the differences between a consumer proposal vs bankruptcy.

Consumer proposal vs. bankruptcy: What are consumer proposals?

Consumer proposals are formal ways governed by the Bankruptcy and Insolvency Act (BIA) available only to people. Working with a licensed insolvency trustee (Trustee) acting as the consumer proposal administrator, you make a proposal to:

  • Pay your creditors a percentage of what you owe them over a specific period not exceeding 60 months
  • Extend the time you have to pay off the debt
  • Or a mix of both

Payments are made through the trustee, and the trustee uses that money to pay each of your creditors. The consumer proposal must be completed within 5 years from the date of filing.

Below I will highlight more differences between a consumer proposal vs. bankruptcy.

Consumer proposal vs bankruptcy: What are the advantages of a consumer proposal?

The advantages of a consumer proposal vs. bankruptcy are:

  • You keep all of your assets
  • Actions against you by unsecured creditors, such as wage garnishments will stop.
  • Unlike informal debt settlement, the consumer proposal is a forum where all of your creditors must deal with your restructuring
  • You don’t have to declare the “B” word

What are the differences in credit history score?

The individual that declares bankruptcy will certainly get R9 status. This is the lowest credit score as well as it will continue to be on their report for 7 to 14 years. A person that submits a consumer proposal will have an R7 ranking which is less extreme. It will certainly continue to be on their record for approximately 8 years in total, from the moment of declaring.

For the most part, you will certainly pay less than you owe with a consumer proposal. Often as much as 70% less. Your several financial obligations will also be consolidated right into a simple regular monthly settlement. This number will be based upon what you can pay for.

Your ability to improve your credit score later is much different in a consumer proposal vs bankruptcy

What are the costs and fees of a consumer proposal versus filing for bankruptcy?

When doing a consumer proposal, the Trustee’s charges are included in the payment you bargain with your creditors. For instance, if your consumer proposal has you paying $400 monthly for 60 months, the Trustee’s fee and disbursements are taken from those funds.

Nevertheless, if you were to file for bankruptcy, the cost is established by any kind of excess earnings you could have (based on the criterion that includes earnings as well as family size), any assets that you may intend to try to keep, and also the monthly contribution for surplus income if any.

If there is no excess earnings or assets, the insolvency cost will be around $2,000. This is another difference between a consumer proposal vs bankruptcy.

Are assets treated differently between a consumer proposal vs bankruptcy?

If you do a consumer proposal, you can retain your assets whereas in bankruptcy your properties might be impacted. This consists of the equity in your home if higher than $10,000, a car or truck worth more than $6,000 (with no liens against it), financial investments, tax refunds, and also RRSP payments made in the last 1 year. In bankruptcy, you transfer your possessions (except those that are exempt by regulation) to the Trustee, and they are then sold or transferred to repay your creditors.

This difference between a consumer proposal vs bankruptcy is huge.

What if I default on my consumer proposal vs bankruptcy payments?

If you do not maintain your payments on a consumer proposal, it defaults and is void. You also are unable to submit an additional one. Collection action by your credits will begin again. If you do not complete all your duties in bankruptcy, you will certainly not be discharged and eventually, your creditors will resume collection activities as well.

This is another consumer proposal vs bankruptcy difference.

When is a meeting of creditors held in a consumer proposal?

A meeting of creditors in a consumer proposal is held if one is requested by one or more creditors who are owed at least 25% of the total value of the proven claims.

A request for a meeting has to be made by the creditors within 45 days of the filing of the consumer proposal. The OSB can also request the Trustee to call a meeting of creditors any time within that exact same duration.

The meeting of creditors should be held within 21 days after being called. At the meeting of creditors, they vote to either approve or decline the proposal.

If no meeting of creditors is asked for within 45 days of the filing of the proposal, the proposal will be deemed to have been accepted by the creditors no matter any objections received later.

How long does it take to complete a consumer proposal vs bankruptcy?

A consumer proposal is finished once the individual has actually made the required payments for the needed period of time. In a bankruptcy, the discharge depends on a variety of different aspects, consisting of whether it was the first time the debtor filed for bankruptcy and if they need to make surplus income payments.

If the debtor has actually never ever declared bankruptcy before and they do not have to make surplus income payments, most bankrupts are discharged 9 months after declaring bankruptcy. However, if the bankrupt has surplus income, they will need to make payments for 21 months prior to when they can be released.

This is another difference between a consumer proposal vs bankruptcy.

What do consumer proposals and bankruptcy have in common?

Both a consumer proposal and filing for bankruptcy are lawfully binding procedures that are provided by a Trustee. If you are thinking about bankruptcy, it is essential that you consult with a Trustee so that you can totally understand the procedure, what’s involved, and also any charges. You can speak with friends or family that may have filed for one or the other before, yet it is necessary that you get professional recommendations concerning your unique situation.

Filing for bankruptcy or doing a consumer proposal are both matters of public record. That means there will certainly be an irreversible public document regarding your insolvency that can be accessed by anyone. If the debts are joint or co-signed, the other individual is accountable for the financial debt in both a consumer proposal and personal bankruptcy as well, unless it is a joint filing.

Even these similarities still point out differences between a consumer proposal vs bankruptcy.

Consumer proposal vs bankruptcy: How to Figure Out Which Option is Best for You?

As you can see, when you look at a consumer proposal vs bankruptcy, there are definitely differences between the two, but they also have a lot in common too. What’s most important, though, is that you find the best way to get your finances back on track in a way that will help you achieve your long-term goals.

Consumer proposals and bankruptcy aren’t the only ways of obtaining debt relief and consolidating debt. There are also other ways of resolving debt problems that don’t involve an official program or paying anyone. If you honestly want to carefully and objectively look at all your options, contact a local Trustee, and speak to him or her. They’ll listen to your situation and issues and advise you on what will work best for you even if you do not need to file for either a consumer proposal or bankruptcy.

Their help is usually free and non-judgmental.

At our Firm, declaring bankruptcy is only encouraged until all other settlement solutions have been exhausted. A consumer proposal in Ontario is shaping up to be one of the better bankruptcy alternatives, primarily because of the reasons I describe in this Brandon’s Blog.

Consumer proposal vs bankruptcy: Who qualifies for a consumer proposal?

A consumer proposal is available to people whose total debts do not exceed $250,000, not including debts secured by their principal residence.

Consumer proposal vs bankruptcy: The bankruptcy process

Before you decide what to declare, contact a professional to discuss all of your options. A trustee is a highly-skilled, professionally licensed by the federal government that can evaluate your situation and presents all the options available to you. Whatever process ends up being the best and the most helpful for your particular circumstance, we can administer the insolvency process.

Consumer proposal vs bankruptcy: How to file for bankruptcy?

In order to file, you must engage a Trustee. This is an individual or company licensed by Industry Canada to administer the insolvency process. The 10 steps below are a guide to the bankruptcy process.

Consumer proposal vs bankruptcy: The 10 steps of the bankruptcy process

  1. Contact a licensed insolvency trustee and attend a meeting with him or her to talk about your personal situation and your options including if it is possible for you to avoid bankruptcy.
  2. Work with the trustee to complete the required forms. The trustee will then file the bankruptcy with the Office of the Superintendent of Bankruptcy (OSB).
  3. The trustee notifies your creditors of the bankruptcy.
  4. You attend a meeting of creditors if one is called.
  5. You attend two counselling sessions.
  6. Subject to your provincial exemptions, the trustee sells your assets; you may also have to make surplus income payments to the trustee.
  7. In certain circumstances, you may have to attend an examination by an officer at the OSB.
  8. The Trustee prepares a report to the OSB describing your actions during the bankruptcy.
  9. You attend the discharge hearing if required.
  10. You get your discharge from your bankruptcy and then the trustee completes the administration, including paying a dividend to your creditors, if available.

Consumer proposal vs bankruptcy: Move on with your life

I hope you have enjoyed this consumer proposal vs bankruptcy Brandon’s Blog. Both a successfully completed consumer proposal or obtaining your discharge from bankruptcy lets you get back on the road to financial health, relieve the stress you face and bring you:

  • Relief from harassing calls from debt collectors;
  • Freedom by getting out from under garnishments;
  • The ability to live better than just hanging on one payday to the next;
  • Improved credit ratings; and
  • Improved health and well-being.

Ira Smith Trustee & Receiver Inc. offers a full range of insolvency services to people facing a financial crisis. Whether you need help with a proposal to your creditors to avoid the worst case, financial counselling or advice about insolvency options, our goal is to make sure that you understand the process, your choices, and what steps will get your life back on track.

Call us for your free first consultation. We will inform you about all the choices readily available so you can make a proper decision about the very best plan to deal with your financial obligations. Contact Ira Smith Trustee & Receiver Inc. today. All you have to lose is your debt!

consumer proposal vs bankruptcy
consumer proposal vs bankruptcy
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HOLIDAY SPENDING CALCULATOR: 5 HOLIDAY SPENDING TOOLS EVERYONE NEEDS

Holiday spending calculator

If you are an individual or company who needs to free themselves from the stress and strain of too much debt, and especially if you have been told your situation is hopeless, Ira Smith Trustee & Receiver Inc. can prepare and implement the plan made just for you, to free you from the burden of your financial challenges to go on to live a productive, stress-free, financially sound life.

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HHoliday spending for the holiday shopping season has started. We have been inundated with commercials, advertisements and emails about Black Friday and Cyber Monday sales. We are all thinking about buying those Chanukah and Christmas gifts. It is natural for all of us to want to buy something special and of high quality for our loved ones. Something special and high quality usually means expensive, but it doesn’t have to be.

We previously wrote about holiday spending and holiday debt:

  1. SUFFERING THE CONSEQUENCES OF TOO MUCH HOLIDAY SPENDING?
  2. HOLIDAY DEBT; ARE YOU DROWNING IN IT?

Below are our 5 tools everyone who wants a holiday spending calculator should be using in order for holiday spending not to turn into holiday debt that we cannot afford to repay:

  1. Make a list of what you will need to buy

Impulse buying can get anyone into a lot of trouble. It is difficult not to buy on impulse if we do not have a plan to follow. Before buying anything, make a list of what you need to buy for each person. Usually, a gift that a lot of thought has been put into will be one that the recipient cherishes, and it is not necessarily the most expensive item. Emotions don’t know price tags, and the best heartfelt gift geared perfectly for your loved one will steer you away from impulses.

  1. Set a budget for each expense

Figure out how much in total you can afford to spend, and then allocate the funds amongst the things you need to buy. If you will be travelling to friends and family over the holidays, don’t forget to include the cost of travel, lodging and food as part of your overall budget. Then stick to it. Use your ordinary calculator as a holiday spending calculator.

  1. Start saving early

You should have your total budget figured out early in the year, and then start saving. That way you can afford to purchase either for cash or if on credit card, you will be able to pay it off in the following month. It is hard to put your hands on a lot of money all at once, but it may be no problem for you to save a little bit each month, ending up with the total you need for when you need to make your purchases.

  1. Start shopping early

If you set your list and budget early, then you can be looking for the non-perishable items on your list throughout the whole year. This will let you cash in on special sales, thereby saving you money. This will keep your holiday spending total as low as possible.

  1. Don’t disrupt your normal bill paying and savings program throughout the year

Have you ever heard the expression “pay yourself first”? That is the best gift you can give to yourself. Make sure that your year in year out obligations for bill paying and a normal savings program is intact and on budget, before you add more expenses into your budget. Don’t rationalize a break in your normal bill paying and savings program by saying you will play catch up next month. It rarely happens and then you just fall further behind. Use your holiday spending calculator to help you figure out what you need to save.

Do you already have too much holiday spending debt and other debts?

Now it’s time to deal with the sobering reality of holiday spending and there is no time to waste. If you are experiencing serious debt issues contact Ira Smith Trustee & Receiver Inc. today for advice and a plan to tackle your financial difficulties so that you can be Starting Over, Starting Now.

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