Posted On: September 30, 2014

For family or personal budgets to work requires the determination to run a tight ship. Otherwise small leaks can turn into a torrent that sinks your good intentions. Here are five problems that can torpedo a budget and ways to cope with them.

1. Food Eats up Your Budget
When it comes to food, few of us like to deny ourselves. As a result, we’ll spend too much at the grocery store, or treat ourselves to meals out as compensation for a tough day at the office. When at the grocery store, don’t pay by debit or credit card. Make out a budget and take cash, so you can only spend up to a set limit. Also create a shopping list and stick to it, avoiding impulse buys. And don’t be afraid to use coupons. Trips to restaurants should be treats, not a matter of course. Don’t be afraid to use coupons here, either. And liquor is always priced many times above its actual cost. Have water in the restauant and save your real drink for when you get home.

2. Forgotten Bills Surprise You
Sometimes we lose track of our bills and expenses, and then they arrive when we don’t have the money to cover them. Most online banking services will let you set up automatic payments for bills and other expenses. See if you can time the payments for just after your paycheque goes into the bank, ensuring that funds are available.

3. Irregular Expenses Throw You Off Your Game
Unexpected expenses can lay waste to a tight budget. It might be unplanned entertaining when friends drop by, or your home office printer suddenly dies and needs replacing. You should give your budget breathing room. Add 10% to the amount you regularly spend in all your budgeting categories to prepare for choppy seas. And create an emergency fund for big unexpected expenses, such as car repairs.

4. Your Spending Patterns Change
Your budget needs to change as your financial picture does. If you have a new child, change jobs or food prices climb, then your budget needs to be revised before you get into trouble. At the very least, you should revise your budget at least once a year to take into account things like changes to the cost of living and rises in property tax.

5. Non-Essentials Become Important Problems
Just because something doesn’t cost a lot doesn’t mean that it isn’t eating a large hole in your budget. An afternoon coffee at work, cigarettes, a drink on the way home, the weekend newspaper – take the expense and multiply by the number of days a year you estimate you indulge yourself and you will be shocked by the final figure. Do without and you will feast on the sight of a rising balance in your bank account.

Posted On: August 29, 2014

Parents everywhere can breathe a sigh of relief as their kids go back to school. However their happiness at no longer having to keep young ones amused is tempered by the worry of school-related costs: supplies, class trips, clothing, etc.

We feel your pain. Here are some ways to lessen school sticker shock

Take Stock

Usually panicked about the approach of school, parents rush out to buy the things they think their kids need, racking up bills fast and furious.

Take a deep breath and take inventory. What in fact do your kids really need?

Check their closets and clothes drawers. Maybe some of their garments and shoes can be used again. They don’t need umpteen new outfits.

Call their teacher and see what supplies the students will require through the year. Don’t just guess. And again, check what your child already has. Perhaps you’ll find that she has kept notebooks she didn’t use last year.

Make a list and, when you go shopping, stick to it. Don’t make impulse buys.

Go Cheap or Go Home

Of course, look for sales. Don’t be afraid to go to thrift stores, used stores, outlet malls or massive department stores that buy a wide range of items in bulk, reducing price tags.

Do you have friends with kids about he same age? Perhaps they have extras of things you need and vice-versa. Do an exchange. Don’t feel ashamed. There are whole economies built on the barter system.

Speaking of swaps and sales, don’t forget web sources. Besides the usual online retailers there are sites like eBay, Craigslist and Kijiji, where parents can find bargains and do swaps.

If you do go to an online retailer, first google their name and “coupon” to see if there are any savings to be had.

Don’t Get Guilted into Overspending

When shopping don’t get guilted into buying a name brand or the item with the highest price tag. With backpacks, for example, there are a huge number of styles with some at the top end sporting eye-popping price tags. Take a breath, ignore the prices and look for ones that seem sturdy, look nice and will do the job. If among these there’s one for sale at a reasonable price, go for it – proudly.

Procrastination May Work in Your Favour

Perhaps you are already feeling guilty because you should have done your shopping earlier. Rejoice. Waiting a little works in your favour. After getting through the prime sales time of late August, retailers will start putting on sales in September to get rid of inventory. So you can save, save, save.

Also, why buy everything in one shot? Purchase the clothes that your child needs now but don’t buy a school year’s worth. Shop for clothes as the year goes on. That way you can get just what they need, when they need it, and you can keep your eye open for sales.

This way you can spread your pain around.

Posted On: June 14, 2014

The fear is eating away your stomach lining. You can’t sleep. You can’t concentrate. You feel like a failure in the eyes of the world.

The envelopes of the unopened bills have changed to new ominous colours. The days you could juggle minimum payments between credit cards is coming to an end as you reach your limits. You stop answering the phone calls for fear of bill collectors . . . and then the phone stops working altogether.

Many people come to Toronto Licensed Insolvency Trustees gripped by the worst fear of their lives. They are looking at the end of their world, and who could be complacent in the face of that?

When people arrive at one of our offices for the first time, turning the handle of the front door feels as hard as moving a boulder. What our trustees try to convey at this meeting is that their visitors are not the first to have faced this situation. And while things might be dire, we are no longer a society that sends people to debtor prison. You can take concrete steps to deal with the crisis and begin the trip back to solvency and self-respect.

Of course, not all severe debt problems need to be dealt with by bankruptcy. But let’s assume you must face the worst. Does it mean that your world is over? No, absolutely not. While we cannot wave a magic wand and make everything go away, we can help you manage the process so that the road to recovery is seen clearly and followed sooner.

People ask if they will lose everything they have. No. Contrary to popular belief, you don’t lose all your assets when you go bankrupt. While there might be some things you have to give up, you will probably get to keep your furniture, personal effects, car and business tools.

What will stop the lawsuits and wage garnishees? some ask. A bankruptcy immediately stops anyone from suing or garnisheeing you, even the CRA. Only Family Responsibility Office Garnishees aren’t stopped.

Will my spouse and their property be affected by my bankruptcy? Probably not, except perhaps indirectly.

The above only touches on some of the issues a first free assessment covers. To get a full appraisal you need to come in and move the boulder on our front door. We guarantee that the knob will be a lot easier to turn on the way out.