Tag: living paycheque to paycheque

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IT WILL BE EASY TO BEAT PM TRUDEAU’S VIEW OF WHAT DEFINES THE MIDDLE CLASS IN CANADA

what defines the middle class in Canada, Canada middle class definition, middle class in Canada, tax hike, middle class, Canada’s middle class, federal tax rate, debts, trustee, financial plan, living paycheque to paycheque, Debate (Quotation Subject), Politics (TV Genre), Justin Trudeau (Politician), Stephen Harper (Politician), federal, federal election 2015, Canadian federal election 2015 What defines the middle class in Canada?

Canada’s newly elected federal Liberal government wishes to show what defines the middle class in Canada. It has plans to raise income taxes on the wealthy; but what does that really mean and what effect, if any, will it have on Canada’s middle class? Canada’s middle class has really been struggling and this is a plight that we have discussed in several blogs.

The Canadian Centre for Policy Alternatives Report

There is a new report out by the Canadian Centre for Policy Alternatives (CCPA). Canada “has become a low-tax jurisdiction for the affluent compared to the U.S.,” the report says. It found that the average top marginal tax rate in the U.S., when combining federal and state taxes, is 47.9 per cent. In Canada, the average combined federal and provincial rate is 45.7 per cent. “In fact, during Canada’s high growth years between 1940 and 1980, the top marginal income tax rate was well over 70 per cent. … Our federal government used to ask more of Canada’s richest one per cent. There are plenty of reasons to do so again.”

Will the campaign trail have been what defines the middle class in Canada?

Prime Minister Justin Trudeau campaigned to create a new tax bracket for Canada’s highest earners (the top 1% who earn over $200,000 per year). He stated it in every debate and he made it an important part of politics. He differentiated himself and the Liberal party from Stephen Harper and the Conservative party on this issue. It was always front and centre in the Canadian federal election 2015.

He proposed raising the top federal tax rate to 33%. It is presently at 29%. And he promised to lower taxes slightly for middle earners; however he did not define what he meant by lowering taxes slightly. So does he even know what defines the middle class in Canada?

The middle class may still not be better off under the Liberals

The study by the CCPA doesn’t agree with the number that Prime Minister Trudeau is proposing. Instead the CCPA believes that Canada’s 1% should have a federal tax rate of 65%. They estimate that this would amount to an extra $27,700 in taxes, on an average income of $289,000. The CCPA’s argument is that the 65% rate would bring in an additional $15.8 billion to $19.3 billion in revenue annually. With this money Canada could potentially provide free post-secondary education and cover the costs of infrastructure projects. Of course as you can imagine this is a hotly contested subject with no definitive answers.

The reality is that Canada’s middle class is still struggling. It’s difficult to consider the plight of Canada’s 1% when most Canadians are living paycheque to paycheque. Unless Prime Minister Trudeau will direct some of the new tax revenue into programs that directly help Canada’s middle class, I doubt that it is new infrastructure projects and free post-secondary education (even for children of the 1%?) that anyone wants to be the new Canada middle class definition, or to be what defines the middle class in Canada.

Do you have too much debt and are living paycheque to paycheque?

If you are struggling financially and feel overwhelmed by mounting debts, there is help out there. Contact Ira Smith Trustee & Receiver Inc today. With a solid financial plan and immediate action we can help put your financial worries behind you Starting Over, Starting Now.

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7 REASONS WHY CANADIANS LIVING PAYCHEQUE TO PAYCHEQUE

Canadians living paycheque to paycheque, living paycheque to paycheque, debt, budget, balanced budget, trustees, trustee, Canadian Payroll Association, paycheck to paycheck, living paycheck to paycheck in america, more and more Canadians living paycheque to paycheque, not receiving their paycheque, Ira Smith Trustee & Receiver Inc., starting over starting now, how to stop living paycheque to paycheque, budget, Vaughan bankruptcy trustee, Vaughan bankruptcyMore and more Canadians living paycheque to paycheque (and people are also living paycheck to paycheck in America)

The results of a new survey released by the Canadian Payroll Association were quite frankly alarming.

  1. Almost half of people polled said they are Canadians living paycheque to paycheque and would find it difficult to meet their financial obligations if their pay was delayed by just a week resulting in their not receiving their paycheque on time
  2. Less than 25% of respondents said they could probably not come up with $2,000 if an emergency arose within the next month
  3. 36% per cent of working Canadians said they felt overwhelmed by their level of debt
  4. 12% per cent doubted they’ll ever be debt free
  5. 75% of working Canadians polled reporting having put aside less than 25% of the money they expect to need in retirement
  6. 35% of respondents expect to work longer
  7. 20% of employees surveyed said they will need to work four years or more than they originally expected before retiring, citing a lack of sufficient savings as the main reason

How to stop living paycheque to paycheque – behaviour modification

Although this situation is nationwide, it’s worse in Ontario, British Columbia and Atlantic Canada. Can the Canadians living paycheque to paycheque problem be cured with a change in spending habits? According to BMO’s 2015 Psychology of Savings Report, it is.

The report shows a majority of Canadians, or 88% of respondents polled, said they are willing to improve their current financial status. However, 38% also admitted that they have developed bad spending and savings habits and 31% said they’re not willing to let go of them.

Consult your Vaughan bankruptcy trustee

As professional trustees we recognize and preach the importance of a balanced budget. In fact we published two blogs on the subject.

If you’re like many Canadians living paycheque to paycheque, it’s time to put an end to the constant struggle. Contact Ira Smith Trustee & Receiver Inc. today. We can help to restore you to financial health with a balanced budget and a plan for healthy financial living Starting Over, Starting Now.

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THE NEW ECONOMIC ATTACK IS ON CANADA MIDDLE CLASS

young Canada’s middle class, Canada’s middle class, Statistics Canada, renter households, living paycheque to paycheque, trustee, debt, starting over starting now, Vaughan, “middle class”, middle class, definition of Canada middle class

Canada middle class – what is your definition?

My definition of Canada middle class is the group under a new economic attack because of housing costs. Affordable rental housing for Canadians has become an oxymoron in term. In fact, rental housing has enslaved young Canada’s middle class, forcing them to spend so much of their incomes on a place to live, that many are in danger of becoming homeless.

What Statistics Canada says

According to the experts, spending more than 30% on housing is unaffordable. This doesn’t take into account food, clothing, transportation or any of the other necessities of life. According to data from Statistics Canada:

  • There are more than 4 million renters in Canada
  • Over 40% of all renter households are spending in excess of 30% of their gross income on rent
  • 20% of all renter households are spending in excess of 50% of their gross income on rent which housing advocates say puts them at high risk of becoming homeless
  • In Vancouver and Toronto, 45% of renter households are spending more than 30% of their income on rent

Not just a big city problem for Canada middle class

The lack of affordable rental housing is not a problem exclusive to the big cities. Renters in small cities across Canada are also struggling financially. In the Toronto area, average rents are higher in the suburban communities of Milton and Vaughan than in the City of Toronto. And, Mississauga ranked among the worst cities in the country when it comes to a shortage of affordable rental housing.

Traditionally people rented apartments to save money and eventually buy a house. With young Canada middle class enslaved by rental prices, buying a house isn’t even on their radar; keeping a rental roof over their heads is a primary concern.

What to do if you have debt problems

Are you living paycheque to paycheque because you’re enslaved by rental prices? We can’t help you find a cheaper place to live, but we can help you deal with what may seem to be insurmountable debt. Call Ira Smith Trustee & Receiver Inc. today. We’ll review your file and come up with a plan so that you can be Starting Over, Starting Now.

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BACK TO SCHOOL: TEACH YOUR KIDS ABOUT MANAGING DEBT

back to school, debt, living paycheque to paycheque, student loan, financial plan, credit score, RRSPs, RESPs, life insurance, budgets, trustee, starting over starting now, how to manage debt, managing debt, personal debt in Canada, dealing with debt, how to get help with debtManaging debt or talking about sex?

It’s commonly believed that all parents dread having the “sex” talk with their kids, but a recent study from BMO shows parents would rather talk to their kids about sex than their financial situation and managing debt. Imagine that! Canadians are stressed about money and probably feel ill-equipped to educate their kids about finances and managing debt.

Personal debt in Canada

According to a new national study conducted by Leger:

  • Canadians struggle with regret over financial decisions
  • Argue over spending
  • Feel pressure to keep up with friends or colleagues
  • Bend the truth to friends and family about their financial situation in order to save face

A Bank of Montreal study reports that:

  • More than 33% of all Canadians are ashamed of the debt that they have
  • Almost 40% say they stress over debt levels multiple times a day

There’s no doubt about it, money and managing debt is the top source of stress in our lives. Why are we so financially stressed? Why are Canadians stressed over debt and have so much trouble managing debt? Here are 10 of the most common reasons:

  1. Expenses are greater than your income
  2. You worry about job security
  3. You’re living paycheque to paycheque
  4. You’re fighting with your spouse/partner about money
  5. You’re paying bills late
  6. You use your home equity like an ATM machine
  7. You’re counting on an inheritance to solve your money problems
  8. You’re late on student loan payments
  9. You’re helping out your parents and your kids
  10. You don’t have a financial plan

Dealing with debt

It’s time to become financially literate and educate your kids, not just about the birds and the bees, but about finances and managing debt. Foresters recently offered 5 tips to get smarter about your finances:

  1. Learn everything you can about your finances, including your mortgage terms, bank interest rates and credit score
  2. Start with the simple things like contributing to RRSPs, setting up RESPs for your kids and protecting your family’s financial future with life insurance
  3. Keep track of every penny you spend for a couple of months and look for ways to cut back and start saving. Even a small commitment to saving will make you feel better about your finances
  4. Look ahead 10, 20 and 30 years. Imagine the life you want and what it will take to make that happen
  5. Talk to your kids regularly about money, involve them in household budgeting, open bank accounts for them and encourage them to save for things they want

How to get help with debt

All of this is great advice to avoid financial problems, but if you are already in serious financial difficulty and don’t know where you will begin on how to manage your debt, you need professional help now. Contact Ira Smith Trustee & Receiver Inc. Don’t ignore your debt issues. Face them head on and with the help of the Ira Smith team you’ll be on your way to conquering debt Starting Over, Starting Now.

 

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CANADA’S MIDDLE CLASS: DO YOU YOU QUALIFY?

Middle class, middle-class, middle class lifestyle, student debt, housing prices, trustee, living paycheque to paycheque, bankruptcy, starting over starting nowCanada’s middle class is a huge topic these days. There’s been a lot of talk recently about the growing gap between Canada’s affluent and middle class. Before we can begin to understand what’s happening to Canada’s middle class, we must first be able to define it.

“One of the troubles with the term middle class is it’s so elastic and there’s not a clear-cut definition,” said Charles Beach, an economist and Queen’s University professor emeritus. Beach says surveys have shown most Canadians consider themselves part of the middle class without quite defining what it is. “There is no consensus definition of ‘middle class,’ nor is there an official government definition,” said the memo, obtained by The Canadian Press under the Access to Information Act.

The New York Times defines the middle class as families earning between $35,000 and $100,000 a year. This would seem to hold true in Canada as well. According to Employment and Social Development Canada:

  • The middle 60% of families earned an average of $53,500 after tax in 2011

According to Statistics Canada:

  • The total median 2012 income for families, defined in this case as all couples with or without kids, was $81,980

The problem is that it’s now difficult to make middle class. Paul Kershaw, policy professor at the University of British Columbia reports:

  • The typical 25 – 34-year-old is now making wages that are 11% lower than they were for the same aged person in 1976, even though their education levels are higher
  • The typical older worker is making wages that are 3% – 7% higher than a similar person did 30 years ago
  • House prices have nearly doubled in that time, meaning more wealth for the older person and more debt for the younger person

“It takes longer now to do anything that looks like a middle-class lifestyle,” says John Myles, professor emeritus of sociology at University of Toronto, as young people stay in school longer than in generations past, get more credentials, start careers later, get married later and buy homes later. And the gap between the affluent and the middle class is growing.

Canadian Centre for Policy Alternatives report finds most affluent families in their 20’s have net worth over $500,000, more than most middle-class families save over decades. Real estate is typically the reason the affluent are able to meet such a high net worth at such a young age. Their parents buy a property for them, help purchase the property and/or give the down payment. In addition the affluent are starting off life with no student debt as their families were able to fund their educations. Conversely, those striving to make middle class are often buried under a mountain of student debt. This in and of itself is problematic enough, but it also delays being able to purchase a house. And with the cost of housing rising exponentially (the average price of a detached house in Toronto is now over $1 million), the gap between the affluent and the middle class will continue to grow.

Many trying to make a middle class lifestyle are struggling financially, living paycheque to paycheque and need professional help. Trustees are experts in dealing with debt. The Ira Smith Team has a cumulative 50+ years helping people and companies facing financial crisis or bankruptcy that need a plan for Starting Over, Starting Now. Call today. Stop struggling and start enjoying life again.

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TORONTO BANKRUPTCY TRUSTEES: 1 IN 5 ONTARIO RESIDENTS MAY BE INSOLVENT

Target liquidation program, Toronto bankruptcy trustees, bankruptcy alternatives, bankruptcy questions, credit card debt, living paycheque to paycheque, bankruptcy, Target, housing bubble, credit card debt, financial plan, debt, starting over starting nowToronto bankruptcy trustees believe that 1 in 5 Ontario residents may be insolvent (unable to pay their debts when they are due), as astonishing as this seems. Sadly it seems that many Ontarians who have been living paycheque to paycheque and on the edge of a financial crisis, have now fallen off the edge.

According to a recent Ipsos Reid poll:

  • Almost one in five Ontario residents owe more than they own or earn, making them technically insolvent and at risk of bankruptcy.
  • Eastern Canadians led the country in owing more than they own, with 28% in Quebec and 24% in Atlantic Canada.
  • Residents in Alberta, Saskatchewan and Manitoba tied at a 23%.
  • Ontarians at 16% and British Columbians are at 14%.

It’s no surprise that Toronto bankruptcy trustees are being asked about bankruptcy alternatives and bankruptcy questions by so many people stressed about money. The Canadian dollar is volatile, retailers like Target are closing their doors, the Target liquidation program is ongoing and many are worried about a housing bubble.

Toronto bankruptcy trustees are also aware of a Global News poll which reported that:

  • 45% of Canadians say that their income, or keeping a steady income, causes them stress.
  • 40% are stressed about saving for retirement.
  • 40% report that saving for big-ticket items, like a car or a down payment for a home is a cause of stress.
  • 33% say that paying bills on time and credit card debt is a cause of stress.
  • 33% are stressed about mortgage or rent payment.
  • 25% are stressed about caring for their dependents like aging parents or kids.

Toronto bankruptcy trustees summary

Times are tough for many people. If you’re teetering on the edge of financial disaster or have already reached the critical point, it’s time to turn to Toronto bankruptcy trustees for professional help. Contact Ira Smith Trustee & Receiver Inc. as soon as possible. With sound advice and a solid financial plan Starting Over, Starting Now you’ll be well on your way to a debt free life.

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HOUSEHOLD DEBT; CANADIAN LEVELS SOUND ALARM BELLS

household debt, debt, mortgages, consumer credit, Equifax Canada, credit card debt, living paycheque to paycheque, starting over starting nowHousehold debt has hit record levels according to Statistics Canada. The total amount of credit market debt which includes mortgages, non-mortgage loans and consumer credit held by Canadian households hit a record high in the third quarter of 2014, climbing to 162.6% of disposable income. That means Canadians owed about $1.63 for every dollar of disposable income.

Equifax Canada reports that household debt levels are climbing fast, to a record $1.422-trillion in the fourth quarter of 2014. Installment loans, primarily car loans, were the fastest growing segment of debt, up 11% year over year. Credit card debt rose 5.9% from a year ago.

These household debt figures have attracted international attention. A report, recently published by McKinsey & Company, singled out Canada and six other countries (The Netherlands, South Korea, Sweden, Australia, Malaysia, and Thailand) with “potential vulnerabilities in household debt.” One of the most alarming statements in this report is that Canadian household debt levels are higher than those that existed in the U.S. at the peak of the credit bubble. However the data suggests a “potential risk, but not an imminent crisis which is good news indeed. The risks that were identified in the report were:

  • Mortgages are the main form of household debt.
  • If the economy slows down and unemployment rises, many mortgages could become unaffordable.
  • If interest rates rise, it could create a much larger burden on households repaying debt.

Many Canadians may not realize it, but because of their household debt, they are one paycheque away from what could be a financial crisis. Even worse, what would happen upon the death of the debtor?

Do you owe more than your disposable income? Are you living from paycheque to paycheque? Don’t wait for financial disaster to strike. The earlier you seek financial help the more options will be open to you. Contact Ira Smith Trustee & Receiver Inc. today. We’ll review your individual issues and come up with a sound plan so that Starting Over, Starting Now you can enjoy financial peace of mind.

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RENT-TO-OWN OFFERS ARE REALLY EXPENSIVE DEBT

RENT-TO-OWN OFFERS ARE REALLY EXPENSIVE DEBT, rent-to-own, living paycheque to paycheque, the Canadian Consumer Handbook, debt, trustee, starting over starting now, bankruptcy canada faqRent-to-own offers sound great, but beware, because it is another form of very expensive borrowing. At this time of year we tend to shop much more than any other time on the calendar. And, from time to time we come across a great deal on a new television, or computer or piece of furniture but the credit cards are already close to their limit and there’s not much available cash. You’re about to walk away but then the salesperson tells you that they have a rent-to-own program and it sounds perfect! But, what the salesperson isn’t telling you is that rent-to-own can be VERY expensive. The reality is that the rental charge can amount to three or four times what it would cost to pay cash or finance the purchase on an installment plan.

According to a CBC News investigation, Canadians spend $260 million every year for rent-to-own products, often paying exorbitant prices that would not be allowed in some U.S. states. Canada lags behind the U.S., where the majority of states have enacted laws to protect rent-to-own customers by requiring more transparent advertising. Five states have actual price controls. Not a single Canadian province has followed suit with specific rent-to-own legislation. Rent-to-own targets low-income and credit-constrained consumers who are living paycheque to paycheque by offering low weekly and monthly payments for household goods.

Before considering rent-to-own, The Canadian Consumer Handbook has suggested four questions to ask yourself:

  1. Is the item something I absolutely have to have right now?
  2. Can I delay the purchase until I have saved enough money to pay cash?
  3. Have I considered all my credit options, including applying for retail credit from the merchant or borrowing money from a credit union or bank?
  4. Would a used item purchased from a garage sale, classified ad or second-hand store serve the purpose just as well as something new?

Don’t sign a rent-to-own contract without calculating what it’s really going to cost you and ask yourself if it’s really worth it. Getting into more debt is not the way out of debt. You need professional help to solve your debt issues. Contact Ira Smith Trustee & Receiver Inc. We can help you get back on solid financial footing so that Starting Over, Starting Now you’ll be well on your way to conquering debt. Check out our bankruptcy Canada faq yourself to start finding answers.

 

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HIGH EARNERS LIVING PAYCHEQUE TO PAYCHEQUE

living paycheque to paycheque, living paycheck to paycheck, bankruptcy, alternatives to bankruptcy, credit counselling, debt consolidation, consumer proposals, starting over starting now, trustee, high earners, norma walton, ronauld waltonIt may surprise you to learn that high earners, earning a six figure salary is not a guarantee of financial stability or security. A big house, luxury cars and exotic vacations frequently don’t tell the real story. You may be looking at a lot of smoke and mirrors. Often these high earners become victims of their own success.

The costs of maintaining a high flying lifestyle eventually becomes too great and a debt spiral begins. No one is immune. Famous actors and actresses, lawyers, doctors and captains of industry file for bankruptcy just like the working poor living paycheque to paycheque. According to the Wall Street Journal “some high earners end up leading a lifestyle that they can barely afford, saving little or nothing for retirement and living paycheck to paycheck”.

This problem appears to be global, with no sign of letting up. In fact we reported on it last year in two blogs titled “Is Canada’s 1% Immune from Insolvency or Bankruptcy?” and Famous Celebrity Bankruptcies Happen Too. A recent study at Princeton University calls this phenomena “wealthy hand-to-mouth”. The study reports that the wealthy hand-to-mouth behave in many respects like households with little or no net worth. So, whether you’re a high earner or have little or no net worth, if you’re living paycheque to paycheque, you’re in the same boat and your options are the same.

If you are one of the high earners, or just a normal person, the time to end the spiral of debt is now. There is no time to waste. Debt doesn’t go away on its own. You need professional help and a sound plan for moving forward. Contact Ira Smith Trustee & Receiver Inc. We’re a full service insolvency and financial restructuring practice serving companies and individuals throughout the Greater Toronto Area (GTA) facing financial crisis or bankruptcy that need a plan for Starting Over, Starting Now.

There are alternatives to bankruptcy – credit counselling, debt consolidation and consumer proposals or ultimately bankruptcy may be the answer – for both high earners and normal people. Don’t make living paycheque to paycheque a lifestyle. Call us today and take the first step towards a debt free life.

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BAD CREDIT: CAN IT HURT YOUR JOB SEARCH?

bad credit, credit, job search, Equifax, TransUnion, BackCheck, credit history, credit report, credit check, medical debt, marital breakdown and bankruptcy, starting over starting now, good credit and bad credit, credit check, living paycheque to paycheque, credit ratingBad credit showing up on your credit history can impact your job search. Many companies will check your credit as part of the routine background check. Some people believe that how you pay your billsgives employers an indication of the quality of your work. These employers believe that an applicant with bad credit indicates either an inability to live up to your commitments or a belief that it is not important to honour your commitments. This belief, correct or not, are traits that potential employers do not wish to inherit.

Of course this is painting a picture with very broad strokes and doesn’t take into consideration the reason for your financial problems causing the bad credit, which may be due to a divorce or a layoff. But, employers want to avoid situations when collectors start calling the office or try to garnish wages. Previously, we have written many blogs on such causes of financial problems, including:

According to Dave Dinesen, President and CEO of BackCheck, a pre-employment screening services company, they’ve screened over three million Canadians for more than 5,000 organizations, and the vast majority of employers use credit checks for identification verification purposes (such as employment history and address history). By doing so, they can also differentiate between candidates who have good credit and bad credit.

Before a potential employer can pull your credit history, you must sign a release. Protect yourself and know exactly what’s in your credit report before your potential employer does. To get a copy of your credit report contact either of the two major reporting agencies – Equifax or TransUnion. They are required to provide you with a free copy of your credit report once every 12 months, if you ask for it. Have them correct any inaccuracies that you find. If you discover anything in your credit report that could be potentially damaging, the best thing to do is be upfront with your potential employer. The likelihood is that a few late payments won’t prevent you from being hired. However, if you believe that a credit check will expose that you have bad credit and would negatively impact your job search, you may want to consider applying to smaller companies that don’t do routine credit checks as part of the hiring process.

Bad credit is serious and can impact many aspects of your life. Don’t ignore your financial problems; face them head on with professional help. Contact Ira Smith Trustee & Receiver Inc. We’ll work with you to get your life back on track so that Starting Over, Starting Now you’ll never have to be afraid of a credit check again.

Call a Trustee Now!