Posted on Tuesday, January 18, 2005Budgeting - making plans for your moneyIn my last posting, Dealing with Debt: taking charge of the problem, I asked you to do some homework. Specifically I asked you to put together a list of all of your debts and to write down all of your monthly income and expenses.The next step (and the subject of today's posting) is to prepare a budget. For some reason, the idea of a budget scares a lot of people - all we're really talking about is plan for spending your money. We take a look at how you've spent your money in the past and based on that we decide how you want to try and spend your money in the future. We say try because a budget is just a tool - just becuase you've written down that you plan to spend $500 on groceries that doesn't mean you are going to. It is up to you to stick to the plan, but we'll talk more about that in the next posting. So, what do we do with the information that you have gathered. First, set the list of debts aside, we'll come back to them later. Let's start with your monthly income. Ask youself these questions about each of the income items you wrote down: (1) Do I receive this money every month? For instance, if we're talking about your paycheque then you probably do. If you're talking about a GST cheque from the government then you probably don't. (2) Do you know which day(s) you will receive this income? For instance, do you get paid every other Friday? If it's a government pension you might receive it on the 21st or maybe the 28th. (3) Is it always the same amount? Does the income amount change every month (or every pay?) Once you have answered these questions you can write down the total income you expect to receive next month. If you want to be really detailed, write the amounts down on a calendar on each of the days you expect to receive them. The first half of your budget is done - now that wsn't so bad was it? The next posting will deal with your expenses and things may get a little more complicated. If you are already finding this more than you can comfortably deal with you may want to contact someone locally to give you some help. Posted by Ted Michalos, CA trustee @ 12:41 PM
Posted on Saturday, January 15, 2005How Many Bankrupts Have Credit Card Debt?In a study just released by the Superintendent of Bankruptcy, over 80% of all Canadians that went bankrupt in 2003 had credit card debt in their files.While this rate is lower than the 90% of American bankrupts carrying credit card debt, it does confirm that high credit card debt is a significant factor in many bankruptcies. For many of the people we see in our practice, a consumer proposal is a great way to work out a payment plan to deal with credit card debts. A bankruptcy may also be an option. Since everyone's situation is different, we recommend that you contact us; one of our professionals will meet with you to walk you through your options, and help you work out a plan to deal with your credit card debts. Posted by J. Douglas Hoyes, CA, Trustee @ 11:32 AM
Posted on Monday, January 10, 2005Dealing with debt: taking charge of your problemIf you found this blog you must have been surfing the net to learn more about bankruptcy and bankruptcy alternatives (for dealing with financial problems) in Canada.This is going to the be the first in a series of self-help messages to either set you on the straight and narrow or warn you that it's time to seek some professional help. How are we going to do that? Well, you need to do two things for us before we can begin. First, we would like you to take a few minutes to write down everyone one that you owe money to. It doesn't matter if it's your mortgage, a car lease, an overdraft at the bank, a credit card, your buddy at work, a cell phone account - whomever and whatever you owe needs to go on this list. Second and this may be more difficult, we want you to write down how much money comes in every month (your take home pay, baby bonus, pension income, allowances, etc) and how you spend that money (the rent, the groceries, car insurance, cigarettes, coffee at Tim Hortons, etc.). If you're like most Canadians, you don't keep detailed records of how you spend your money so a lot of this could be guess work. That's okay, but the more accurate you are with your numbers the better the end result will be. If you don't have any idea at all where your money goes then try this exercise: for the next two weeks carry a little pad of paper around with you and write down everything that you spend money on. If you buy gas write it down, groceries write it down, a candybar off the canteen truck write it down - get the idea? You'll be amazed at how quickly the money gets spent and where it ends up going. Once you've got these two tasks completed you'll be ready to proceed with the next step - drafting a budget. You've probably heard of budgets in the news - governments seem to live and die by them, but can never get them right. Simply put, a budget is a plan for how you will spend your money. The next blog will deal with the mechanics of preparing a budget - watch for it in a couple of days. Posted by Ted Michalos, CA trustee @ 3:25 PM
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