How to Restructure Your Finances in a Covid-19 Crisis
The COVID-19 crisis continues and with the lockdown extended many businesses will continue to be closed and people will be out of work longer. While many Canadians are fortunate to still be working, the threat of suddenly getting laid off from work looms for many as the future is still uncertain. Understandably, everyone is worried about their finances. No one can escape, one way or another we all feel the economic impact of COVID-19.
Our government and those in positions of authority are doing what they can to help. We need to be proactive and help ourselves as well. One of the things we can do right now as we are facing unprecedented times is to review our budget and see where we can cut back expenses — let’s not wait when we have already lost our job or if our next paycheque is reduced.
Here are some suggestions on what you should do to restructure your finances in this difficult time:
Set your current budget differently
If you don’t have emergency savings right now, it might be a little late to save up. What you can do now is restructure your current budget into an emergency budget. We do not know the long term financial impact this pandemic will create, so we need to set up a new budget based on our current financial circumstances while anticipating any future financial turn of events. You may need to consider a reduced level of income and possible changes in monthly expenses.
Sit down with all family members and have an open discussion on ways to reduce expenses in the household so you can have the money saved and used for important essential expenses.
Some areas to look into:
- Cancel monthly expenses for gym memberships, newspaper and magazine subscriptions
- Put expenses for transit passes and parking permits on hold if possible
- If you have two cars and are not using both at this time you can find out how you can reduce extra vehicle insurance — it’s possible to save several dollars a month by temporarily cancelling the insurance or choosing to remove or reduce liability and collision.
- Remove special channels from your cable package to reduce the total amount you have to pay each month if you can’t cancel completely.
- Reduce spending on buying in-app items, downloading games, music or pay-per-view movies, or other non-essential shopping online.
Many of your expenses will be less or different than before the COVID-19 crisis hit — fuel costs will be minimal as you may now be working from home, daycare expenses can be omitted for now because of school closures, expenses for entertainment and recreation like eating out and watching movies can be eliminated for now because of the lockdown.
Use a budgeting spreadsheet or budget workbook and start outlining all of your expenses. Just skip over the income section if you don’t have any now or aren’t sure how much you’ll actually have, and start listing the most important expenses first — rent, food, and medicines are your primary basic needs now, but also account for immediate utilities like power, water, gas, and communication needs like internet and phone bills.
If you don’t have enough money to cover all utility expenses, contact each service provider to see how you can reduce what you need to pay by at least 10 per cent. Many utility and communication providers are offering extended and flexible payment arrangements. See if you can scale back your service plans temporarily to save a little on each bill. Be careful of fees and interest charges that may be hidden in the revised terms. Any flexibility with your payments that you can find right now, take it so you can stretch your money for as far long as you possibly can and, if possible, you can start putting some of it away in case things get worse.
Halt RRSP and TFSA contributions
In any situation that money is tight and you’re forced to choose between paying bills and saving, always pay your bills first. While it’s important to save for the short term as well as the long term, it can be difficult to set aside money for your RRSP and TFSA savings right now with your income gone or drastically reduced. Experts say that the best thing you can do right now is to leave your RRSP and TFSA savings alone. Continue putting money into them if you are able to, if you cannot just leave them as is.
You may find the need to tap into your RRSP and TFSA savings to tide you over during this rough financial patch, but experts say the best thing to do is leave them untouched. In many ways, it can be difficult to access savings that are in a TFSA with many banks closing its doors to customers now, and you will also most likely face penalties for withdrawing money from an RRSP before retirement.
If your current income permits you to save a little bit every month, the best thing to do under these unpredictable circumstances is to stash it away in a high-interest savings account even if the interest earnings go down. All that matters right now in these uncertain times is to have money set aside that you are able to quickly and easily withdraw in case of an emergency.
Reduce loan repayments
Loan repayments will be an important part of your emergency budget, and if you’re still able to make full repayments on your loans, then you should continue to do so. However, if you’re in survival mode and your situation is at a point where you need to choose between putting food on the table and paying down your debt, then your priority should be to meet your immediate need for food. Make the minimum payments on your loans if you can, and make alternate arrangements with your lenders as soon as possible to keep debt repayments on track.
Many of Canada’s banks and lending institutions have all announced that they will review requests for assistance on a case-by-case basis. This assistance may come in the form of mortgage payment deferrals, loan extensions, revised terms or even reduced interest rates. What your lenders will be able to offer you will largely depend on several factors:
- what you need help with,
- your payment history,
- how soon you contact them, and
- your most recent credit behaviour.
A critical step here is to contact your lenders as quickly as you can, before you even miss a payment. If you think there is a possibility of losing your job in the near future, or if your income has been reduced and you realize you can no longer afford to make the payments, talk to your creditors immediately and they will be in a better position to help you.
Also keep in mind that any revised arrangement on a loan means new terms and conditions, so make sure you understand any revisions made. Another thing to remember — deferring a loan payment only means skipping the payment for now and paying it at a later time, it does not mean that the debt is eliminated. You will still have to pay, and if you’ve not made any arrangements with your creditors these payments will add up all at once once the extension period is over. And don’t forget that if you get to skip a payment it doesn’t mean your interest charges were skipped, too. The interest accumulated even with the payment skipped.
Seek advice to ease the uncertainty. Keeping a roof over your head and food on the table is the most important thing right now, even if it means reducing debt payments and savings.
However, If you’re facing looming debt problems due to COVID-19 and are worried about how it will play out, the best thing to do is to seek help from a Licensed Insolvency Trustee (LIT) like Richard Killen & Associates Ltd. We will review and assess your current financial situation and give the best advice on how to deal with your finances in this COVID-19 emergency.
We can also get involved on your behalf. We can help you restructure your entire relationship with your creditors. Sound advice from a LIT can be critical in helping you find the best option and empower you to make the best decision for you and your family at this time of crisis.
We at Richard Killen and Associates remain committed to help you in this global health emergency. If you need to talk with us, contact us anytime at 1-888-545-5365, or email us at lawrence@killen.ca or brampton@killen.ca and we do the free consultation on the phone or by email or video conference online. You don’t have to spend the next numerous weeks worrying about the future.
Tracy L Clark – How To Listen To Your Intuition And Change Beliefs
This video episode is about listening to your body and getting in touch with your intuition.
| Richard | I’m Richard Killen, welcome to The Glass Is Half Full program where we try to show people some really interesting ideas about what they can do to make life better for themselves, without necessarily having to spend the bank. I’m joined today by Tracy L. Clark.
Tracy, I’m going to have to read this Tracy, I’m sorry. I’m going to put my glasses on because at my age you need things like that. Tracy is a remarkable leader and pioneer in the field of Body Regeneration. She is the Founder of TLC Community of Extraordinary Living and Creator of The Body Regeneration Method. Did I get it all right? |
| Tracy | That’s correct. |
| Richard | Tracy serves on a global level as a Facilitator, Soul Specialist, Teacher, International Speaker, and Humanitarian. Now I’m going to introduce you properly here and beyond these things. |
| Tracy | The semantics. |
| Richard | Let’s talk about the real you. Tracy came into this world sick, riddled with physical ailments and disease. She was born with legs and hips detached, a hole in her chest, stomach valve closed shut and an extremely damaged nervous system. That I truly believe must have caused you excruciating pain. At the tender age of five, on top of all this, Tracy was kidnapped. I think we’re going to want to hear about that one. This terrifying event acted as a catalyst that began opening Tracy to her gifts in a unique way. It took several years for her to be able to understand what was happening to her. Now she teaches people to unleash the power within themselves. She teaches that “Whispers of the Body” are telling you so that you can fall in love with your life. Not many people fall in love with your life. I certainly want to hear about that one as well Tracy. Tracy holds many transformational events both here in the Toronto area and online. So, Tracy, welcome to The Glass Is Half Full. |
| Tracy | I’m so happy to be here. |
| Richard | Now, much of what you do revolves around teaching people how to interact with their body, basically? |
| Tracy | Their intuition. |
| Richard | And, changing basically, their beliefs, their approach to all of this. Now, before we get into that, I think we have to really ask you to tell us your story? |
| Tracy | Yeah. You know, you said it really well, with the introduction there. I have to say it was trauma after trauma. And before I was kidnapped, it was interesting because my sister, my mother and I at midnight, we’re also kicked out of our home. As our father moved in with his girlfriend and we were on a bus and ended up in a women’s shelter the next day. So we had a lot of pain, suffering, trauma, and that was life, I thought that was normal. A lot of you can imagine there was a lot of fear around my mother with poverty and welfare and living in a, we lived in… |
| Richard | This was when you were pre-school? |
| Tracy | Yes, I was three, when we lived in a very small apartment. We had a mattress on the floor and my mom would pretend we were camping because it was that bad. So it was trauma after trauma after trauma. So I know when I tell people to live a really good life. My whole life, I walked around like a pezz doll and my whole body shook like those people thought I was having seizures. I had many, many experts tell me you’re not going to change your body. You’re not gonna be able to shift it. You’re going to live in pain. I lived on a mask to breathe because my asthma was so bad. I had croup and bronchitis all the time constantly coughing stuff up. I actually almost died when the doctor came in and said, Wait a minute, we were in a small town, Flynn Flawn, Manitoba, if anybody knows where Flynn Flawn is? I always say I was built. It’s a gold mining town. So back then I said I was born on a pile of gold. Time money born on a pile of gold. But just before, I had thrown up a lot, I couldn’t keep food down and a Doctor came in and said, I think I know what’s wrong with your child. He wasn’t from the community, and he did, it was very rare for a girl like that, you know, early 70’s to have their stomach valve sealed shut. So he opened it and I was actually ready to go at that time. I’ve had three near-death experiences. So when I can say I kept saying the other side was a lot better than this side. And I know what it’s like when you’ve struggled, you know, physically, mentally, emotionally, financially. And you just think there’s nothing. I was miserable. I was miserable until I hit 32. Complete misery. |
| Richard | And now you teach people. |
| Tracy | Yeah, and now… |
| Richard | To overcome what they’re going through. |
| Tracy | What they’re going through… |
| Richard | To make their life better. |
| Tracy | Yeah, because I can relate. I understand. I know what it’s like when you’re at the bottom? I know what it’s like to have your last $1000 in the bank. I know what it’s like when doctors constantly are telling you you’re never going to fix that. You’re never going to get over that, you’re going to live with it. I was really the youngest kid in Canada, five, diagnosed with ulcers, diverticulitis, and irritable bowel syndrome. That’s how much stress I had in my body, just from life circumstances that were going on. And then just before I got kidnapped, I got hit by a car and almost died because they ran over me and I was into the hospital and I was like, Yeah, on the, I remember these. So I’m like, it was thing after thing after thing and people look now and they’re like, How can you have this beautiful life? I had to get up and I had to make some changes. Get out of my victim mode, get out of my stress. |
| Richard | Explain the kidnap? I can’t leave that subject. |
| Tracy | Yeah, a lot of people say what happened? Especially in Canada, right? Oh, when my parents were like, Yeah, very different in Canada. And so this is about going back to your intuition. I was a very sensitive kid, and there was a gentleman that would be in the area. And I kept saying to my mom, that man scares me and I remember saying, Scares me, I was five, scares me. No, no, no. It’s okay. No, you’re just being, then oversensitive. Well into the park one day, sister, long story short to fast track it, will get all the details. He grabbed me. He had a gun. He had his dog and he grabbed me and I screamed and my sister and friend came. And thank God the girl that was with my sister was an afterthought, raised by bikers, so she was seven, but her brothers were in their 20’s and she was a biker. She saved our butts. Took us to a dugout, wanted to have his way. She eventually got out and then my sister couldn’t get me out because I was too small. So she ran. They got help. All I know is, when he came back, he was so angry, he pulled me up by my hair. Now I’m a frail kid who could barely breathe, to begin with, and he threw me on the ground and put the gun to my head and all I have I just heard sirens. That was it, blacked out. But it actually became a catalyst to other things because I started seeing things, feeling things and I just thought it was some crazy child PTSD, right? Yeah, that’s the short version Yeah, yeah, it’s pretty scary. Yeah, but when you actually start to go back and realize, wow, I was told money doesn’t grow on trees. I was told you don’t deserve that. I was told that’s for somebody else. I was told that was greedy. When you start to listen to people, that programming starts to come up and you automatically are in it. So you start to function with what you know. So they’re not going to school teaching you, How are you a steward of your money? That’s a relationship. So the only programming that you pick up, it’s like your computer. You have programs on your computer. You have to remove the ones that don’t work anymore. But people keep running them and running, they all complain. Everyone’s going to tell you they want $1,000,000. But I was teaching a class last night. If you got a $1,000,000 today, how would you handle all those problems? Most people will lose it all. Right away, because they’re just going to, Oh, I got a $1,000,000 it’s a lot of money. Well, nowadays $1,000,000 doesn’t go very far. You and I know that it really doesn’t. |
| Richard | Some people out there |
| Tracy | They will disagree. They will. But look at a house where we live. A house, a shoebox, is $700,000 right? So if you start to look at that, if… |
| Richard | By the way, for those of you who don’t live in the Toronto area, she’s talking about Toronto. |
| Tracy | Oh, sorry. Yes, the Toronto area. A shoebox is like $700,000. But if you start to look at the fact that if you give someone a $1,000,000 tomorrow, they have never dealt with it. They don’t have the education, the right frame of mind. They don’t have the habit. They’re not a steward of it, and they can get rid of it. I’ve seen people come to me. I asked last night how many people know lottery winners? I know four, they knew two. We’re talking millions of dollars. And the one lady who knew her friend, she said they made $10 million. I think she said it was 10 years ago. They’re down to $2 million. That shouldn’t have happened. But the frame of mind, the habits, was that’s what it was. It was like, Well, I’m just going to do what I was told. |
| Richard | If you make it, it’s a little different, because you’re learning the stewardship as you make it. Henry Ford once said that, to turn $100 into $110, it’s hard work, to turn $100 million into $110 million is inevitable. That’s the person who made it. |
| Tracy | That’s the person who made it. |
| Richard | He didn’t have it handed to him. |
| Tracy | No. When you make it, there’s that you start to learn to have more respect for it. But a lot of people, if they’re just going to their job, the way jobs are structured, most people, that’s why people need to hear this. Because if you go to the job, a lot of times people complain about their job, but they only give you just enough so you’re going to come back, right? You have to keep coming back. So, they keep coming back, coming back, but that paradigm just, okay, I’ll go to my job, I have a little bit more and a little bit of a nugget, I got a little bit of a bonus, and then we just sit in this space. And what are people waiting for? Their golden nugget, which is a pension. It’s a habit. |
| Richard | We were talking before about the idea of a comfort zone. A comfort zone that you have now, you’re an exception, by the sound of it. But up to the age of seven, most people live in a very comfortable zone. |
| Tracy | 100% |
| Richard | First of all, they’re not aware of the outside world. Therefore, they’re not aware of the dangers of these things. So the memories they have of those first 7 years are usually very comfortable memories. So what was implicated in that time by the people around you, your family? |
| Tracy | And if your family you saw, if you saw them, just get up, go do a 9 to 5 job and that’s how you make your money. That’s your pattern. |
| Richard | So how do people shift this perception? |
| Tracy | Of making their money? |
| Richard | Well, just their perception about money? |
| Tracy | Yeah, the first start, really. |
| Richard | Really break the habits, I guess. |
| Tracy | Yeah. I say to people, the first thing you have to do is you have to start actually, really start to build a relationship with it. Money’s energy. That’s all it is. It’s like everything right. It’s a relationship. So I love giving people this exercise. I say to them, You go out for 24-48 hours. You have to be very aware on that day. So most people are on autopilot, and every time you spend some money, how does it feel? Where are you spending it? And really see. |
| Richard | Do you make them write it down? |
| Tracy | They can write it down normally, then they can look at it differently. Some do, some don’t. But they’re like you know what? I have this one great, great lady. She came to me and she said I was going to Starbucks every day. But when I was spending the money, she said, I realized I actually didn’t even like the coffee. I was going out of habit because my friends would go. So, she says, When I actually had that realization, we’ll do the math. Okay, if you’re spending $5-$6 a day on coffee, that adds up in a year, right? That’s money you can put on a credit card or somewhere else. She said, I actually looked at it and she said, Yeah, she said Tracy looked at it and I went, I don’t even like going there. This is just a bad habit I’ve created. Do you know, when she had that awareness, she stopped and she moved the money into another area. |
| Richard | Now I ask you about people shifting their perception of money and then you explain that to me, Tracy. But I’m interested in and I think most people would be interested in, how does this conversion happen and how long does it take? |
| Tracy | To shift the paradigm? You know, it’s really interesting. Awareness is 90% and then changing the habits, the other 10%. Some people, literally, I’ve seen this, we always say those are those miracles. Some people literally shift the very next day. That’s how quick. Like I’ve had a lady walk in…. |
| Richard | Is it commitment? |
| Tracy | It is a commitment. I always say, commitment, dedication, like you have to have that through. I wouldn’t be where I am today if I didn’t step up every day and say, What do I need to shift? What do I need to look at differently? What’s a different choice I need to make? People you got to forgive yourself too, for all the past choices you made with your money. You have to. And people say Really? I said so many people are still beating themselves up. I did a bad investment. You did it 10 years ago. Okay, it’s over. Get rid of it. Or you had to go through bankruptcy. Okay, fine. You now learn from that. |
| Richard | Don’t say any bad things about bankruptcy. |
| Tracy | No, no, but I’m saying that people beat themselves up, but they go through it. I say to people, forgive yourself that you went there. But now look at why you went there. |
| Richard | Bankruptcy is a bad word. |
| Tracy | Well, not if you’re certain people in the world. Certain people, they’re okay with it. |
| Richard | Practically just as a mild aside as to what I do, all the people that have come in to see me over the past almost 30 years, and that adds up to 16,000-17,000 people, I don’t remember one of them who didn’t say something along the lines of, I don’t want to go bankrupt. |
| Tracy | Yeah. |
| Richard | Horrible thing. |
| Tracy | No, but it’s true. But then people hold these emotions or it’s a stigma, right? Talk to someone who’s gone. And I’ve had many clients who’ve gone through it. They show up like I’m going through this and I’m like, Okay, one, we’re going to get rid of the guilt around it. The fear. We got to look at why you got there and shift those habits and those thought processes, so you don’t go through it again. Work with the people you’re working with, and it’s OK, you’re starting again. It’s part of your journey. But they hold so much emotion.
How do they hold that? Or, how difficult is it to get them to unhold it? You know what, I can say that everyone I’ve worked with probably within about six months, they don’t have that anymore. And I can tell you everyone, that we’ve shifted this, they now own their own homes. They have really good jobs. They are like and they’re clean and they don’t even look at it. They said that was the best thing I ever did. Because I said, What happens with people energetically that they don’t get? And this is why tell some people, go declare bankruptcy. And they’re like, What? Oh, that’s a sin. The energy of all of that debt literally weighs on you physically. It makes you sick. And I say to them, You will feel so free, your mind will become uncluttered and now you’re free to make a new choice. Some of them have started successful businesses. I know one lady, she’s like all I want to do is go into sales. And she was so scared she was being an assistant. Her, you know, husband, they had their situation with their marriage, whatever. I said. Okay, declare it let’s move on. And she goes, Oh my gosh, Tracy, the weight is lifted. Well, now she’s in sales. She’s making $250,000 a year, she’s got her kids. She’s like sky-high. Single woman having a great time, |
| Richard | You know, the number of cards we get from people, thanking us? |
| Tracy | Yeah, exactly. Because the energy naturally lifts off. And then if you look at it, you’re like, I’m not going to do that again. What can I create now? And they get excited. It can be weeks, as long as you have that right. That right adjustment to see that it doesn’t have to carry the guilt, the shame, and the fear, is what locks everyone up, in every area of their life, especially money. Because money in some families, don’t talk about it or it’s a taboo, that creates problems. |
| Richard | You left out one word there, pardon me, I think we are being joined here. |
| Tracy | We have some friends. |
| Richard | Shame is what accompanies all of this. One of the things we tell them, I’ve been telling people for years that way because we’re on the same wavelength, is the idea that making mistakes is part of life. We all make mistakes, and probably I’m going to put some money on this, each of us makes at least one mistake a day. |
| Tracy | Easy. |
| Richard | At least. |
| Tracy | Easy |
| Richard | And the whole point of it is that making mistakes simply qualifies you for membership in the human race. And all of these things all depend on what you’re going to do about these so-called mistakes, let downs and all that, and you seem to have the answer. |
| Tracy | But that’s how you grow. I learned… |
| Richard | You should come over and talk to the people who come in and see me. Except for one thing, you would be telling them to go bankrupt, and I’m not allowed to tell people to do that. |
| Tracy | Well then, they can come to my Soul Sundays, where it’s just this place where we have fun. Yeah, it is just Soul Sundays. Just show up, have fun. But that’s what it is, and they don’t have to have shame. And the reality is if we don’t fall down… |
| Richard | But it’s human nature to have that. |
| Tracy | It is because of society, though, and you don’t want to feel like you’ve done something outside of somebody else’s paradigm or what are people going to think? Who cares what people think? It’s your life. You have to decide. I’ve been called crazy and weird my whole life. I didn’t know what that was. Because imagine a little kid, and literally, too, I was born without eye-teeth and permanent teeth and like, I looked like a little kid that walked like that, I was called everything under the sun. So when you have that come through, I was weird. You’re crazy. What’s wrong with you? Only to realize that Oh, I’ll be weird all day long because if weird means that I can fall down, have a great community of people that want to lift you up and support you and get you going. I’ll be weird all day long. |
| Richard | And look at what happened to you? |
| Tracy | Look what happened, exactly from being weird. So be weird. That’s a good thing. |
| Richard | So the stress and the illness and all that, that accompanies these negative thoughts and perception of your situation can all be dispelled through application basically. |
| Tracy | It can be. |
| Richard | How important is the commitment to it? |
| Tracy | Commitment is huge. It’s a way of living. It’s a way of being. Like people say to me, Do you do this every day? I said, Yeah, I look at different things that come up every day, and you have to like a lot of people who don’t know that your body is always telling you what’s going on. So by the time we have an illness, you have missed it on the emotional level, the mental level, the psychological level. So a lot of people carry a lot of pain in their lower back because it’s actually related to their money stress and people don’t realize that. But you need to every day say, I’m going to get up. What can I do differently today? |
| Richard | So if somebody wants to make a change, here’s a call to action kind of thing. Okay? Somebody wants to make a change Tracy, what do they do? |
| Tracy | Where do they start? |
| Richard | Other than just call you? |
| Tracy | Come to Soul Sundays. I’ll tell you what that is in a minute. Here is what I’m going to tell you about what happened to me, and this was my epiphany and people could really hear anything today. I joke, and I call it my Come to Jesus moment, cause literally was a doctor saying you’re going to die. There’s nothing more we can do for you. Manage it. We’ll see what happens. Basically, that was the last. Yeah, figure it out. We’ve done everything we can. People wait until this. This is their moment where they decide I got to do something different. I got a very bad illness or something’s going to happen. My money is now run out. Huge debts. The relationship ends. Then they decide I’m going to make a change. That is not the best time to make a change. When you make it at that point, you’re digging out of the hole, like I was, and you’re literally crawling out. You’re very deep when you’re I was deep I knew like all this stuff that happened. So say to people If you can be in the space right now to say Okay, take a look at your life. Say, what parts do you really love about your life? I get out of bed, I love getting out of bed and I get out of bed because I’m like, I got to the other side. I’m like, Oh I’m out of bed today. This is awesome. Happy, fun. Never used to be like that. I say to people, look at your life right now and say, What part stresses you out the most? And ask yourself, not what part, this is the key, truthfully, what part is the biggest stress right now? Truthfully. You got to say that word. |
| Richard | How do you know it’s truthful? |
| Tracy | This is why. I’m going to tell you so, when people start saying people don’t talk like that, right? If I came to you and said, truthfully, how do you feel about that versus how do you feel about that? You’re going to think twice. I have a lot of businesspeople I teach this to and they say, Truthfully, can you get that assignment done? Can you get that report done on time? And they tell me 100% my CEO has come back to me and said my staff’s telling me the truth. They’re like, I can’t meet that deadline. Before they would say Okay, Yeah, I’m going to meet the deadline and they wouldn’t meet the deadline. Because when you start to learn how to talk to the body and yourself, the body, the mind, and the brain start to do this really cool different chemical reaction. So words affect the body. So if people get up and they’re stressed about their money and every day they’re saying to themselves, I’m so stressed about my money, I can’t make any more money. I’m so broke all the time. I’m so poor all the time. Your body goes okay. We’re broke. We’re stressed. We’re poor, we know how to function. Were good. And they start to pull that in. So then you have more friends to start time. I’m broke. I’m stressed if that’s your talk, that’s the first thing. So you say, Truthfully, what is it right now that I need to change? And I would say to people You want a quick tool, and I teach this all the time, people say it changes so much, they say. I actually caught my words. I went out today and said, I’m so tired and so stressed, I’m so broke. The body, your body’s brilliant like your heart is a very first organ to be formed and everyone says it’s a miracle and then the baby comes out. It’s like Yeah, OK, see you later. I teach this that when people learn this, I say it’s like a baby learning to walk. You have kids? I have kids right. They are in their twenties. Because I’m only 25. So they have this… |
| Richard | Everything happened to you young. |
| Tracy | Really young, really young. So I say to people, when a baby learns to walk, this is how you start to look a change in your life when a baby learns to walk and your baby first. So your son first learns to walk and he falls down. What do you say to your child? |
| Richard | Get up. |
| Tracy | Yeah, keep going right? Wow! The first step. You’re like, Yeah, keep going. Everyone’s cheering. Then the baby turns and then the baby runs. It’s the same thing as adults. We want to shift our thought process. We want to say Truthfully, what do I need to change? What isn’t working? I fell down. You’re the baby, ah you fell down. What’s wrong with you? You start telling yourself I made that mistake. I’m really stupid. I shouldn’t have done that. No, you need to be the baby. You need to be around people and yourself going, you know, I fell down, but I’m going to keep going. Because the only way I got to where I am today, was there a lot of tears? Absolutely. Was their frustration? Absolutely. Was I pissed off sometimes at myself and wanting to blame everybody else for why I was there and blamed the man that kidnapped me and blame my dad for kicking us out? I could have sat there, which a lot of people do, and they said, Well, I can’t make any more money. I’m only educated this far. That’s a bunch of garbage |
| Richard | You’re letting circumstances, events of your life dictate… |
| Tracy | Where you are. |
| Richard | It kind of forms a real unbreakable picture. |
| Tracy | It does. |
| Richard | Of your self-image. |
| Tracy | But if people stop, if they stop and if I challenge everybody that watches this, stop for one day and listen to what you tell yourself in your mind or to your friends. |
| Richard | Now, that’s easily said. |
| Tracy | Sure it is. But when you are conscious to do it for a day, |
| Richard | People are going to ask you. |
| Tracy | Yeah, they do. |
| Richard | Talk is cheap and I don’t mean that flippantly. |
| Tracy | No, but it is. |
| Richard | But people have a tendency to look and say, Well, fine for you. Look at you. Nevermind what happened to you. Look at you. |
| Tracy | They do. They look at you right now. They say that’s easy. |
| Richard | That’s all they see. |
| Tracy | Yeah, 100%. |
| Richard | And they don’t transpose that into something realistic for them. So how do they get over that hurdle? |
| Tracy | That is the first hurdle. When I actually. I sold a company when I was 26. I had all my family telling me, it must be nice to have this, it must be nice to have that, it must be nice to have this. Yeah, well it was what it was. But then I felt guilty. Shame all things you’re talking about. So I gave all my money away in the divorce. Now it’s your stupid what were you doing? So I had all these programs. How dare I have that. When I actually had that last $1000 in the bank and it’s Christmas time. So we all know that’s the worst time to have only $1000 in the bank with my two little kids who I’m now fully financially responsible for. I had to sit there and I’d say, Okay, what am I afraid of? What’s the worst thing that can happen here? Because we also don’t know, and when I started to dissect that out myself because I didn’t have anyone to ask, I had to figure it out. I’m like, What is truthfully, that’s what I was asking myself, what needs to change? And I had all these Ah ha moments that came in around what people were telling me, and I was like, So what’s the worst thing that’s going to happen right now? You have to ask yourself, What’s the worse thing? Because that is the fear. So, for me, my worst thing was am I going to be out on the street? Am I going to be in poverty? And people don’t realize this, energetically, naturally, everybody has a ceiling of what they’ll make and how low they’ll go. And when you get really low that’s when people start to move, right? But if they start to actually look and say that it sounds so simple and so crazy. And yes, you can say talk is cheap. But I promise this is saying, truthfully, what is it I need to change? What is it I’m afraid of? What is it I need to look at differently? That’s step one. Step two is you have two then do the action on it. So I fire clients all the time. And then I piss people off all the time because I’m like, You’re not being truthful because you just want to sit here and complain about it. What are you going to do about it? So it’s like when someone goes through… |
| Richard | You’re doing that because you can’t work with them? |
| Tracy | I can’t cause they don’t want to change. But the ones that do want to change, that’s where you hear these incredible testimonials of transformation. So for people who went through bankruptcy I said, Are you truthfully ready to get over the fears about what bankruptcy is? Yeah, it was just a mistake. You get to reset everything. Can we get in the fun of resetting? We get to start to play with it. Literally within a matter they go, they get ready, they file, they’re good, they’re doing their thing. They change within months because they’re like, I’m not and they get afraid. And that little monkey, what are you doing? What you’re doing? And I said I was teaching a class last night on money, and I said, When that fear comes up and there’s a very powerful, the monks have been using it forever, I always say, you rob her, you tip your heart because we’re all in our brain. We’re all trying to figure it out. You’re trying to figure out what that solution is. You’re not looking for creative solutions. You’re like, I gotta figure it out. Well, I don’t have to figure everything out. What if I come to you? You can help me figure it out. But I say when you get… |
| Richard | But people put that pressure on themselves. |
| Tracy | They do because they’re not stopping and they’re not, they’re panicking, they’re in fear. Rather than take a step back, connecting and say, how can they help me with this? The best word, I always say to people, Not only truthfully, I say, Ask yourself, What’s a creative solution that I haven’t thought of here? And be very grateful. Be so grateful to everything around you and people throw that out there and I can’t stand it. Oh, gratitudes and attitudes. I said No, no, you can say all day long, gratitudes and attitudes. If you don’t feel grateful, that’s not going to do anything for you. |
| Richard | If people want to get a hold of this, where can they go? |
| Tracy | Where can they go? Tracylclark.com. One of my favourite things I do in the GTA, we have a huge outreach fund. People don’t know, you’re going to see more of it. I do what’s called a Soul Sundays. It’s a donation only. You can come. You can learn. |
| Richard | Open to everybody. |
| Tracy | Open to everybody. I always say, Thank you to God, a lot. |
| Richard | Is that sort of an introduction to it? |
| Tracy | Yeah, you know it is. But I’m actually teaching you how to shift and work with your body, and we talk about different things. |
| Richard | Where do they go for this? |
| Tracy | Mississauga Living Arts Center or online. You can do both. We do a lot of things online. |
| Richard | I’m sorry, Mississauga… |
| Tracy | Living Arts Center. Free parking. |
| Richard | That’s the physical thing on Sunday? |
| Tracy | That’s it. |
| Richard | What time is it? |
| Tracy | 11am to 12:30pm. They can find it under the “Attend” section. We have one on November 10th and… |
| Richard | Online? |
| Tracy | Yeah, online. |
| Richard | What is it called? |
| Tracy | Soul Sundays under “Attend”. Tracylclark.com. Soul Sundays. But we always do a lot of things to give back to the community, to help people. So if people are open to meeting people, because I say how can we serve you? There are people there that can help you get to know what other people are doing, whether you need another connection, a job. I say, Come and meet people that have been where you are to support you. |
| Richard | So why don’t you folks go and meet Tracy L. Clark at the Mississauga |
| Tracy | Living Arts Center |
| Richard | Living Arts Center on Sundays at 11:30am |
| Tracy | 11 o’clock. It’s 11am to 12:30pm. It’s once a month right now. |
| Richard | They have to listen better than me. |
| Tracy | They have to listen. They have to show up is number one? Yes. |
| Richard | Thank you. |
| Tracy | Thank you. |
Is Your Canada Emergency Response Benefit (CERB) Safe from Wage Garnishment
The Canadian government has created the COVID-19 Emergency Response Act in response to the COVID-19 global crisis. Under this Act, workers all across Canada who have lost their income from the COVID-19 pandemic will receive financial support payments in the form of the Canada Emergency Response Benefit (CERB). In fact, as of this writing, CERB payments are now being released and many of our fellow Canadians are starting to see this in their bank accounts. The CERB payments will provide $2,000 a month for up to four months.
The CERB covers millions of suddenly unemployed workers, which includes those who have lost their jobs, are not being paid due to COVID-19, those who have become sick or are quarantined and cannot work because of the coronavirus outbreak, as well as people who are taking care of someone who is sick with COVID-19 and working parents who must stay at home to care for their kids because of school closures due to the COVID-19 lockdown. The CERB financial support is also available to self-employed and contract workers not eligible for E.I.
Under the Act, families with children will also be provided financial assistance of $300 increase per child only for the year 2019-2020 through the Canada Child Benefit (CCB), which will be given in the scheduled CCB payment in May.
Can CERB Payments Be Garnished (seized by a creditor)?
For those who’ve had a wage garnishment on their salary before losing their job, and are qualified to receive these support payments, you might be wondering whether the garnishments will continue and if these benefits are subject to a garnishment too. Additionally, can CCB be garnished too?
The general answer is no, but there is a specific exception to be careful about.
The COVID-19 Emergency Response Act, under which the Canadian Emergency Response Benefit (CERB) and the temporary increase of the Canada Child Benefit was created, states the following:
- These support payments are not considered income or property in bankruptcy.
- These support payments cannot be assigned or given as collateral for a loan.
- These support payments cannot be garnished.
- These support payments cannot be kept by the right of set-off by the government for government debts.
To sum it up, under the COVID-19 Emergency Response Act, CERB payments as well as the temporary additional amount from the CCB cannot be garnished as they are considered financial assistance provided by the government and are meant to help you through this difficult financial time. These support payments do not fall under income payments, which are regular payments made by an employer to an employee. These support payments should solely benefit the recipient, not anyone else, which in the case of a wage garnishment, would benefit the lenders. Therefore, even though you have a wage garnishment in effect, you are allowed to keep the full amount you receive from your Canada Emergency Response Benefit and CCB one-time increase.
If a lender or a debt collector threatens you with a wage garnishment and attempts to collect money from your benefit payments they will be unable to do so. Thus, garnishment of wages in Canada can only be deducted from the money you make with your job, and thus requires the your employer’s cooperation.
The exception – when these support payments get deposited into your bank account they are fair game for seizure by your creditors. Once it’s in the bank it is no longer covered by the Act’s protection. It is just money in the bank.
Now a creditor (other than CRA) has to get a judgment against you first, from the court. But then they can execute the judgment by seizing money from your bank account. CRA can do the same thing without bothering to go through the courts by suing you.
One exception to what was said above is if you the money goes into your bank account with Bank A and you also owe Bank A on a line of credit or credit card or personal loan. They can seize your deposit by going to court first.
Talk to a Licensed Insolvency Trustee If You Are Worried About Creditors
As the coronavirus shutdown leads to layoffs across Canada, we see unemployment rising and unpaid debt accumulating. Fortunately, you can rely on your Canada Emergency Response Benefit (CERB) support payments to fully provide a safety net during the COVID-19 crisis, at least for a few months. So, be smart with your money during this challenging economic time.
But, if you are worried about a possible garnishment order from your creditors, especially if you start to fall behind on your payments during this period of health crisis, talk to us and we can provide you with the best information you can get on how you can best deal with wage garnishment in Brampton. All your options, including of course what they call your non-statutory options: bankruptcy and proposals.
We at Richard Killen & Associates are committed to serving you throughout this COVID-19 global emergency. We are still here to offer you all our services: free consultation, debt counselling, and, of course, going forward with a bankruptcy or proposal if you decide that’s what you need to do.
You can contact us by telephone at 1-888-545-5365 for a free consultation now. Or you can email us at lawrence@killen.ca or brampton@killen.ca , or simply check out our website at www.rkillen.ca.
Above all, stay safe.
Laid Off Due to the Coronavirus – Should I File a Bankruptcy or Consumer Proposal Now
The financial impact of the coronavirus is upon us with layoffs across a wide range of sectors leaving nearly half of Canadians now on the brink of insolvency. If you’re one of the millions laid off because of the coronavirus outbreak, you may be wondering if you should file a bankruptcy or consumer proposal and if it will help your monthly cash flow.
A survey released by the MNP Consumer Debt Index found that about half of Canadians (49%) are $200 or less away from not being able to meet their debt obligations each month. Many of those surveyed are not confident they can cope financially if they lose their job without going further into debt.
Losing your job due to a layoff means an income interruption which means there’s less money to pay your bills. This is most devastating for people who already have a large amount of debt as it will seriously impair their ability to meet their financial obligations.
If you are struggling with debt and your household income has dropped due to the recent health crisis and you feel you can no longer manage your debt, it might make sense to file a bankruptcy or consumer proposal to help get you back on your feet financially.
After all, a Canada consumer proposal and bankruptcy has the ability to “wipe out” debt, or at the very least, give you more time to pay. Both can give you a sense of control as they eliminate credit card debts, medical bills, and other debts – the same types of debts that most likely are falling into arrears due to the coronavirus crisis.
But hold on. Don’t assume that just because you have no employment income right now you necessarily need to do a bankruptcy or proposal. There are many things to consider.
Is Filing for Bankruptcy or a Consumer Proposal the Best Course Right Now?
One big thing right now, with all the Covid-19 government and creditor assistance plans is that you may “creditor proof.” That is just a cute way of saying that there may be no immediate reason to do anything because the creditors either canèt or wonèt pursue you for payment during this Covid scare.
When a person files for bankruptcy or makes a proposal in Canada it is often for the purpose to protect their wages and assets from collection actions. However, when you have been laid off and are not earning money, you have no income to garnishee (seize). Unemployment benefits or pension income cannot be garnished. Also, if they don’t own anything of value, they have nothing to seize. Therefore, filing for insolvency may not be necessary at this time. It does mean there may be no urgency to file. On the other hand, if you see your situation as being insolvent with little or no hope of improving even if the Covid crisis ended tomorrow, you might file.
There is another facet of this question. Being creditor-proof does not really mean that you are entirely protected from creditors.
- It won’t stop collection calls. Your creditors can and probably will continue to call you if you are in arrears with payments. If you are getting collection calls, the best advice is to explain that you have been laid off and no longer have the money to pay them. They may not like it, but the truth is always the best way.
- Also, it doesn’t mean that you can’t be sued. However since you don’t have any income to garnishee or assets to seize, the creditor may not want to spend the money to sue you.
Dealing With Debts You Owe the Banks and the Canada Revenue Agency
If you have debts with banks and the CRA, and you cannot keep up with payments due to COVID-19, a bankruptcy or consumer proposal Canada Revenue Agency might be the only sure way to stop collection action immediately.
- If you have tax debts owed to CRA, the agency does not need to go to court to take collection actions. It can seize income, even benefit payments such as EI. It also has the right to seize your tax refunds and HST cheques until the tax debt is paid in full.
- If you have bank loans and credit card debt and you have savings deposited in the same bank you owe the debt to, the bank has the legal right of offset and can seize payments directly from your bank account.
In these cases, any income you receive will not be safe and it may be necessary to file a bankruptcy or CRA consumer proposal to protect yourself. In these instances, it is best to start by speaking with us so we can assess your situation and explain and discuss ALL your options with you, including the non-bankruptcy and non-proposal ones.
Get Advice from a Licensed Insolvency Trustee
If the coronavirus pandemic has left you in this situation right now, struggling with debt, out of work with no income and being harassed by collector calls, it is important to seek immediate help from a Licensed Insolvency Trustee. A LIT, by law, must review your financial situation and provide you with a clear and impartial assessment of your situation and your solution options. A LIT will not tell you what to do. That’s your job – to decide for yourself. The LIT is there to arm you with the best information you can get, so the decision you make will be a proper and correct one for yourself and your family.
What You Can Do Right Now
Right now, the priority for you is to take care of your own health and safety and that of your family. Stay home – stay safe. Follow the recommendations set by Health Canada and Health Ontario to minimize the chances of contracting Covid-19. While we don’t know how long this pandemic will last, let’s remain optimistic and know that this is temporary. In due course this p[andemic will end, and life will eventually get going again.
But, if you are one of perhaps hundreds of thousands of Canadians who have been put behind the eight ball by COVID-19 and either know you are in financial trouble or believe you soon will be, you need to talk to someone like us at Richard Killen & Associates Ltd.
Contact us by phone at 1-888-545-5365, or by email at lawrence@killen.ca or brampton@killen.ca or just visit our website at www.rkillen.ca. At Richard Killen & Associates we remain committed to helping you as much as possible during this crisis situation.
4 Money Mistakes You Need to Stop Doing Now
You may have made at least a few money mistakes in your life. Maybe you didn’t shop around enough and made a wrong buying decision that cost you huge savings. Maybe you spend money so easily that sometimes you wonder where all your money went right after payday.
Maybe you decided you would take care of your credit card debt but you keep putting off paying it month after month. These mistakes are all too common, many of us are guilty of them. However, we don’t want to keep doing them again and again because they can be costly mistakes that can add up over time and potentially create financial hardship for us and our family.
Make sure you avoid doing these common money mistakes over and over again:
Spending more than you make
Not living within your means is a top money mistake anyone can easily make. Baby boomers go into debt just to “keep up with the Joneses.” The millennials let FOMO get the best of them and try very hard to keep up with their peers to have the best things even though they cannot afford it. The fear of missing out is one reason why many young Canadians are carrying so much debt.
Ideally, you should be spending less than you earn, and not have to live paycheck to paycheck. It doesn’t mean you have to be cheap. You just have to be frugal and be careful about how you spend your money. Practice making smart purchasing decisions all the time so that every purchase you make is within your budget and you don’t have to live on borrowed money. Don’t buy a house or a car that you’ll struggle to pay and have to forego when you can’t keep up with payments. Focus on what you can afford now, and when you can earn more at some point, you can easily decide to upgrade.
Thinking you don’t need a budget
A budget is a crucial financial tool that can help you track your spending. You can easily go astray with your spending when you don’t have a guide to know how much money you have and how you are spending it. It’s important to set up a budget that is realistic to ensure it will work. List down exact figures on what you are spending on. Make sure to include every expense you make – bills, installment purchases, debt payments. Allow for some wiggle room for emergencies and entertainment, so that any unexpected expense won’t send your budget tumbling down. You should make a budget every month and make sure to account for new expenses so you don’t blow past your limit. Do what works for you – list your budget on paper the old-fashioned way, or create it on a spreadsheet or use a budgeting app like Mint or iExpenselt, the important thing is that you have a budget to help you track your spending.
Having credit card debt
Credit card debt has the biggest financial consequences and it’s a money mistake many Canadians have made at some point. Consider the high balances and high-interest charges you have to pay that could have been put to better use. If you’re not careful, it can drain your savings and get you into serious financial trouble. The excessive debt can cripple your household for years.
Make a commitment to yourself: If you can’t afford what you are putting on your credit card, do not make the purchase. Never pay much more than what you can afford, it needs to be within your means. Next, take the steps to correct this mistake right away and stop Using Your Credit Cards altogether. Pay up the balance you have now and stop adding to your balance. Start paying with cash so you don’t pay excessive interest and fees. It will be difficult at first, but spending with cash is absolutely necessary to help you be debt free. It’s also the best way to help you stay within your monthly budget because you become aware of what you spend and limit your spending quickly when you see that cash is low.
Not having an emergency fund
Another money mistake many of us make is not having an emergency fund. An emergency fund is ready cash which you can easily use in case of unexpected expenses. There are different definitions of what an emergency fund is. For some, it’s $1000 in a checking or savings account. For others, it’s a year’s worth of expenses invested. For most of us, it’s somewhere in between and having any emergency fund is better than none. It can be little expenses like minor car troubles or big expenses like a job loss or a debilitating illness, and this ready source of cash will help you be financially prepared when the need arises so you don’t have to be scrambling for funds. Determine how much you can set aside per month and start saving. Don’t worry whether the initial amount is sizable or not, you can always work your way to your desired amount. Any amount is better than not having any emergency fund at all.
You’re going to make some money mistakes over the years. If you’re aware of these mistakes, you can help yourself by taking steps to correct your mistakes and avoid them so you can plan for a better financial future.
COVID-19 – Why We Need to Stay Home
No one is immune to COVID-19. No matter how young you are. People of all ages can be infected by the new coronavirus. Older people, in particular and people with pre-existing medical conditions, such as asthma, diabetes, heart disease, kidney disease can become severely ill with the virus.
We’re in the middle of the pandemic. This is a new virus and we don’t really know yet how to deal with it. This is why it’s difficult to contain. It’s going to take some time for our bodies to know how to fight this virus. It’s going to take some time for our doctors to understand it and find the best ways to protect us.
The good news is we have dealt with viruses before – ebola, rabies, herpes, smallpox, dengue, influenza and the two prior novel coronavirus outbreaks SARS and MERS.
New viruses emerge all the time, the coronavirus is not the first and won’t be the last. We’ve learned how to deal with viruses in the past, and in time we’re going to win this one as well.
But, we’re going to need some time. How much time, no one knows for sure yet. But, we can make that time come quickly. How?
By social distancing – it means:
- Staying 6 feet away from other people if you must go out in public
- Not gathering in groups
- Staying home and limiting going outdoors
- Work from home, if possible
- Avoiding travel
- Isolating or sheltering in a place if government officials tell you to
Social distancing measures can slow the spread of COVID-19.
There’s evidence that it’s working – Find out here and here.
Social distancing will literally buy us the time we badly need:
- To help struggling health workers care for the hundreds and thousands sick,
- To understand how the virus works and find new treatments.
People can have COVID-19 and have very mild symptoms or no symptoms at all. So even if you think you are healthy don’t take any chances, it’s not worth it. Anytime you go to someplace with a lot of people, there’s more potential for exposure to the disease. And when you have it, everytime you pass this virus to someone else, it can pass to 3 or more people and during that time they can spread the virus to others as well. Before long a few people can turn into hundreds and then thousands and that’s how this whole situation blew up into the global health crisis it is now.
If you are young and healthy you might think this is no big deal because you’ve been told that this virus is nothing more than a bad cold to you. Not true at all! Almost 40% of people hospitalized are below 55, and for people older and have pre-existing conditions this is a lot more serious for them.
Social distancing isn’t just for you. It crucially protects people who are at risk from the disease.
You can literally save a life just by staying at home and staying away from each other.
You can just sit on the couch, watch TV or stare at your phone or tablet all day and save a life at the same time.
Now is the best time to work at home, sleep for hours, communicate on social media – use your phone and stay connected with family and friends.
Each one of us has a huge role to play in how the coronavirus outbreak plays out. You can potentially make it so much worse, or you can help make it better – if you’re willing to stay home.
All we’re being asked to do is stay at home and not go out. That’s not too much to ask.
We can all do this together. Let’s each do our part. Respect the advice of public health to keep us all safe. Practice social distancing. Stay at home, stay safe, stay healthy. If we get it right, then we’ll be able to move past this in less than no time.
Help for Individuals during the COVID-19 Pandemic
The recent COVID-19 business closures have made it a lot more financially difficult. If your debt payments become unmanageable give us a call. We have also included some short relief options in the article below from the Toronto & York Region Labour Council. Stay Safe!
Compiled by Labour Community Services and the Toronto & York Region Labour Council
Last updated March 30, 2020
Since COVID-19 has been declared a global pandemic, our society has changed rapidly as we respond to the health and economic crisis. Many levels of government have declared states of emergency, and drastic changes will impact every household.
Most information services are being overwhelmed with the volume of inquiries and applications – so please be patient with service workers who are working hard to focus on those most in need.
We hope this document can be a resource for you to find the help you need to sustain yourself and your family in good health and shelter. Most importantly, make sure you are safe at work. If you have any doubt about your personal safety, speak to your union.
On this page:
- Employment Insurance and other Work Benefits
- Health and Medical Resources
- Access to other Government-Supported Financial Assistance
- Housing Help
- Debt Assistance
- Community Resources
Employment Insurance and other Work BenefitsEmployment Insurance sickness benefits have always been available to people in quarantine as well as to those who are actually sick. With a massive increase in applications, there will be unavoidable delays in processing benefits. There are two main changes for workers who are quarantined or sick due to COVID-19:
- Applicants will not have to get a doctor’s note in order to apply for sick benefits.
- The normal 1-week EI waiting period is waived, so benefits start right away after someone stops working. There is a special toll-free number to call to ask for this:
Toll-free: 1-833-381-2725
Teletypewriter (TTY): 1-800-529-3742
Priority will go to processing claims from workers who are quarantined, and claims can be backdated if someone could not apply right away because of being quarantined.
Who is eligible for EI?
In order to be eligible for EI you need to have been paying into it. You also must have worked a certain number of hours in the previous year, depending on where you live. In Toronto, you are required to have 600 hours for EI sickness benefits and 700 hours for regular benefits. Note: if you have employer-paid sick benefits, you are required to use these first.
How to Apply for EI
We are in the process of developing “how-to” resources for EI applications. In the meantime, Settlement.org has put out a useful guide.
Also see this video produced by Public Legal Information, a Toronto-area legal clinic, summarizing the EI sick benefits, recent changes, and ways to apply:
Get assistance in your application through the City of Toronto’s Employment and Social Services.
Call 3-1-1 and ask for assistance. Help is available in more than 180 languages.
The Canada Emergency Response Benefit is a new measure introduced by the Federal government to cover workers who are sick, quarantined or laid off and who are not eligible for EI. This benefit will be available starting in April and will provide $2,000 per month for up to four months. To apply for the Benefit, Canadians will be able to access it through their CRA MyAccount secure portal beginning in early April.
More information on the Canada Emergency Response Benefit
Access CRA’s My Account for Individuals
*Note 1: More application details will be available in April as the government puts this new policy into operation.
*Note 2: The CERB was originally announced as two separate benefits, the Emergency Care Benefit and the Emergency Support Benefit. They have been combined into one benefit.
Health and Medical ResourcesCOVID-19 Specific: Stay informed and follow the advice of our public health experts. Access the most up-to-date information through the following links:
York.ca/covid19
Find a COVID-19 Assessment Centre: an interactive map of all assessment centres that indicates location, time, and advance appointment requirements.
Telehealth Ontario: Get fast, free medical advice through Telehealth Ontario on all subjects relating to health. Please note that wait times are long.
Toll-free: 1-866-797-0000
Toll-free TTY: 1-866-797-0007
Mental Health Supports: As social (physical) distancing may continue for a long time, CAMH has posted some strategies on psychological coping with COVID-19.
Access Other Government-Supported Financial AssistanceIncome Tax relief: The federal government has extended its tax filing deadline to June 1 and the tax payment deadline to September 1 in an effort to keep funds in the economy.
A GST credit of up to $400 for singles and $600 for couples who are in low- to moderate-income brackets will be automatically available upon tax filing, but note that you will need to have filed your 2019 taxes to qualify despite the extended deadline.
Canada Child Benefit: Families that receive the Canada Child Benefit will receive a top-up of $300 more per child. This benefit will be automatically added to your May payment if you are already in receipt of CCB.
For more information on the Canada Child Benefit such as how to apply and eligibility requirements, go to Canada child benefit or call 1-800-387-1193.
Help with cost of schooling from home: The Government of Ontario announced a one-time payment of $200 per child up to 12 years of age, and $250 for those with special needs, including children enrolled in private schools to help families pay for the extra costs associated with school and daycare closures. Please note that further details on the distribution of this money is not yet available.
Read Ontario Government media release
GAINS Top-up: On March 25, the Ontario government announced a temporary top-up to payments made through the Ontario Guaranteed Annual Income System (GAINS). Beginning in April 2020, monthly GAINS payment amounts will be doubled for a period of six months. This action will provide additional and immediate financial support to low-income Ontario seniors who may need more help to cover essential expenses during the coronavirus (COVID-19) outbreak.
Relief on Property Tax and other City of Toronto bills: A 60-day grace period is in effect for City of Toronto property tax, water and solid waste utility bill payments for all residents and businesses, for bills dated as of March 16. Late payment penalties for residential and business properties will be waived for 60 days, starting the same day.
The City said property tax accounts will be adjusted as necessary to reflect these relief measures.
More information via City of Toronto (see “extended grace periods”)
Property Tax and Utility Relief for other GTA Municipalities: Please refer to your specific municipality to see what resources have been put in place.
Whitchurch-Stouffville
Hydro Bill relief:
The Province of Ontario has temporarily suspended Time-of-Use rates so that they are now fixed at the lowest rate (known as the off-peak price) 24 hours a day for 45 days beginning on March 25, 2020. The Province has also expanded access to existing cost relief programs and eligibility for the Low-income Energy Assistance Program (LEAP).
Read Ontario Government media release
Toronto Hydro has programs in place to assist customers facing financial hardship. They will assist customers on a case-by-case basis with their bill payments.
More information from Toronto Hydro
The Ontario Energy Board (OEB) is extending the wintertime ban on electricity disconnections for non-payment for all residential customers to July 31, 2020. Low-volume, small business customers will now also be protected by the ban. In addition, the OEB is calling on distributors to be more flexible on arrears payment arrangements.
Licences and renewals: As part of the province’s enhanced measures, the Provincial government is extending the validity period of driving products, services and health cards. These new regulations include extensions for driver licences, licence plate validation, Ontario Photo Cards, and Commercial Vehicle Operator Registration certificates, among others. Expiring and expired health cards will continue to provide access to health services.
Media release from Ontario Government
Housing HelpEvictions: The Province of Ontario has declared a halt to new evictions and to enforcement of standing eviction orders.
More information via Steps to Justice
Chief Justice Court Order Suspending Evictions
Tenant Issues: The Federation of Metro Tenants’ Associations (FMTA) is an excellent source of help and advice on all tenant issues. Check the website for answers to your questions before calling. While FMTA has closed their office, you can still call the hotline and leave a message to get a call-back.
416-921-9494
Debt AssistanceMortgage Deferral: All six major banks have committed to working with individuals on a case-by-case basis to make deferred mortgage payments possible, for a single month or for up to six months.
For more information, contact your mortgage broker directly.
Student Loans: The Government of Canada has announced its plan to pause the repayment of Canada Student Loans and Canada Apprentice Loans until September 30, 2020, with no accrual of interest. These measures are effective March 30 2020. You do not have to do anything, as all pre-authorized debits will be stopped and other forms of payment will not be required.
Students who are currently studying can continue to apply for Canada Student Loans. There will be no change to the application process. If a borrower wishes to apply for student financial assistance during the pause, they should apply through their Province or Territory of residence.
Ontario portion of student loans: the Province is providing six months of Ontario Student Assistance Program (OSAP) loan and interest accrual relief for students.
Please note that for provincially-funded student loans from provinces other than Ontario you will need to check with the respective government to find out if similar measures are in place.
More information: Visit the National Student Loans Service Centre or Ontario Student Assistance Program webpages.
Contact your bank and creditors: If you feel you will be unable to stay current with your payments due to COVID-19, contact your bank and creditors immediately and let them know. Many creditors and banks are setting up measures to make sure anyone impacted by this disease doesn’t fall through the cracks.
Community Resources211 ONTARIO: A toll-free information line that can direct callers to resources for topics including abuse, homelessness and housing, emergency and crisis, mental health and addictions, family services, food, Indigenous services, disabilities, seniors, and more. Assistance is available in over 100 languages.
Dial 2-1-1 or visit 211ontario.ca
Legal Assistance: Community Legal Education Ontario is working to give practical answers to the important questions that people are asking about the law relating to the COVID-19 situation. They are also sharing updates about changes to government programs and court services. CLEO has a lot of information on many current issues including the following and more
Food Access: View this helpful list of available food banks and other food resources, compiled by Toronto Neighbourhood office
List of food banks
The New KOHO App Will Help You Get Your Finances In Order
This video episode is about helping you get your finances in order and introducing you to a new powerful budgeting and savings app from KOHO. The app has a very unique way to help you save money on autopilot. KOHO is a new digital bank in Canada.
| Richard | Today we are going to be talking about getting your finances in order. I’m going to introduce you to a new powerful budgeting app, from KOHO, K O-H O. Did I get it right? |
| Sylvie | That’s right. |
| Richard | Which is new, it’s a new digital bank in Canada. Now, my guest and the girl I’ve been talking with is Sylvie Pukitis. Did I get it right? |
| Sylvie | Pukitis, but close. |
| Richard | Sorry, I want to say I for some reason. Okay, Pukitis, sorry Sylvie, I know I asked you that before, but at my age, I forget things very quickly. You’re a financial coach with KOHO. Sylvie has been an investment analyst with some major corporations and a financial planner, and now, with KOHO a financial coach. She helps people take control of their budget and hit their financial goals, basically. So, Sylvie, welcome to The Glass Is Half Full. |
| Sylvie | Thanks for having me, appreciate it. |
| Richard | Now, I’m going to want to find out all about KOHO in a minute. But first, I’d like to find out exactly what a financial coach is? That’s what you do, financial coach? |
| Sylvie | Yeah. |
| Richard | And, people might have some weird ideas. What’s the difference between a coaching planner and adviser, and all that? So what can you tell us is the basics between a financial coach and say, financial advisor, financial planner? |
| Sylvie | For sure. So I’d say the biggest differences between a financial planner or coach and a financial advisor, and that’s because as a financial planner or coach you’re essentially helping people manage their money and giving them an unbiased financial plan on things such as how to tackle their debt or how to save up for retirement or potentially creating a budget, but you’re not actually managing their investments. So traditionally a financial advisor’s job is to buy and sell investments that basically help someone with savings achieve their goals. Whereas financial planning, you’re not touching that, it requires a lot of regulation, and you have to be part of an IIROC regulated firm, so it’s just a little bit different. The other thing is how you’re paid. So generally, financial planners or coaches are fee-for-service. So a flat fee, either based on the service or based on the number of hours you work. And it keeps it unbiased, you’re not selling products. So you’re not paid a commission. And, whereas a financial adviser, you’re generally paying a percentage of however much of your assets they’re managing. |
| Richard | So a financial coach isn’t telling people what to do with their money, it’s telling people how to do with their money. That it? |
| Sylvie | I would say, yeah, you could say that. So, we would touch everything up to actually the investment. But we could say, you know, Richard based on what your goals are, and your financial picture looks like, pretty simple. I think you’d be best off with an online investment platform. You know that needs keep your investments in there for 10 years and they will tell you exactly what to invest in. But I think that would help you achieve your goals versus I’m not taking your money and buying and selling stocks, in that sense. |
| Richard | Yeah, and of course is, as such, there’s no manipulation of money that way, just basic fundamentals, basically, right? Where you’re teaching people how to manage money without being specific as to where to put it. |
| Sylvie | Yeah, that’s exactly right. It’s the goal is to help |
| Richard | With some exceptions obviously. Like if you, if you thought that would be a good idea, that I would get an RRSP, for instance. |
| Sylvie | Yeah, I can tell you what accounts. So whether it’s a savings account or an RRSP or what order to tackle your debt, but wouldn’t go beyond that other than, say, why don’t you look at these institutions? I’m unbiased. I think they’d all be good options for you. |
| Richard | Right. I think that’s pretty clear. Now, in my business, and we’ve talked about this before Sylvie, the main thing I see of people, they get into financial trouble, is the inability to control their credit card debt. Right? Now, a lot of people have a hard time with this obviously, this is not new. Everybody has some difficulty with it to some extent. But, some of the things that they run into, things and getting in trouble, is the interest rates they pay, is the type of credit cards that they’re using, they get kind of drawn in by certain offers and things like that. Do you help them with this? |
| Sylvie | Yeah. We try and basically help them understand what they’re spending sort of personality or tendencies are. And then, based on that, figure out what financial products would work best for them. So a common thing that I see specifically when I’m working at KOHO, is that people have in the past used credit cards and to your point, without sort of a hard limit on how much you can spend, you can end up overspending. And, they all come to KOHO and they’ve actually decided, “You know what? I need to start tackling my credit card balance and I can’t use it anymore”. So they’ll put their credit card, for example, in their drawer or someone that I know, got rid of their credit cards and they started using KOHO because it’s a cash account like a chequing account where you put money on it and you can’t go beyond that limit. And so that works for certain people if they want a preload their budget or put their paycheque into an account where you can’t spend more than you have, and you actually start to get in the hang of living, you know, having more control over your money. So that’s one thing. But if there’s something else that might suit their personality a little bit better, we’ll certainly look at that and figure out what the best way for them to organize their finances is. |
| Richard | That sounds an awful lot like a debit account. Right? |
| Sylvie | Yeah, it so it’s very similar. Essentially, it’s just like a debit account, but it’s running on the network of Visa, which means that you can use it wherever credit is accepted, so, if I went to the cash register and someone asks me what form I’m paying with, I would say credit, but it’s really my KOHO chequing like account. The nice thing about that is that you can use it online, and you get a 0.5% cashback for all of your transactions. So it’s not as high of rewards as a credit card, but it’s better than a debit card. |
| Richard | But you actually have a card. |
| Sylvie | That’s right. I really find the |
| Richard | As far as the rest of the world is concerned, it looks like a credit card? |
| Sylvie | Yeah. |
| Richard | So, you go to Walmart, they say, “How are you paying?”, you say credit, whip out this particular card and you’re essentially operating, in a very very different way, but on the same lines as the Master credit cards. |
| Sylvie | That’s exactly right. And I think people, the industry has changed so that the people are so used to using credit that they feel almost ripped off if they’re not getting any rewards. So that little bit of cashback helps. And then ultimately, if you look at the numbers, often people will spend about 10% to 15% less when they’re using a KOHO or a debit card. So think of that, like a 10% or 15% difference, and that’s a really awesome reward. If you flip it that way and think about your rewards coming from actually having more savings just because you’re not |
| Richard | Like making 10% to 15% interest? |
| Sylvie | Exactly. |
| Richard | Is it hard for people who get the hang of this? |
| Sylvie | I would say, in the sense that because Canada has five really entrenched banks, it’s hard for people to sort of wrap their heads around using anything else. What we see is that often people will start small. So one of the things that I do is help people set a budget, which would be, you know, look at your income, what are your bills and then your savings or debt payments? And then whatever’s leftover is kind of your personal spending money, which is usually the hardest to control. So they might start by this putting that on KOHO, or they might even start smaller, saying, “It’s going to be my card for restaurants and entertainment”, and they put on, say, $300 month, and they kind of get the hang of it that way. And then I think once they, you know, we haven’t talked about it yet, but there’s an app that’s associated, that basically tells you in real-time where your money has been going and how much you have left and also some little ways to stash away change. So once they get the hang of that and see themselves in someone that’s more in control and maybe actually saving a bit, then they will put more spending on to it. But it certainly there is friction, like in Canada especially, people don’t really want to change financial institutions. |
| Richard | Really? Canadians are conservative. How about that? |
| Sylvie | Exactly. |
| Richard | I’m intrigued by KOHO itself. It’s a new bank, right? And it has features that you just mentioned here, I’m just reading it, apps, various other forms of assistance, they are giving people for their investing and whatnot, but no branches, unlike a traditional bank, it’s not, it’s not a visible bank. You’re offering the same services basically, like a regular bank? |
| Sylvie | Yeah, for the most part, so we’re not, so KOHO itself isn’t actually a regulated bank, but what we do is we, we left, we partner with a bank out of Vancouver called People’s Trust that actually holds the funds. And then we’re the, you know, the institution that basically moves the money. So, for example, if something were to happen to KOHO, you basically have a People’s Trust bank account, that’s insured, and your money wouldn’t be going anywhere. |
| Richard | They are regulated by the Bank Act, and all that, right? |
| Sylvie | That’s exactly right. So, that’s just to address that, but in terms of everything else, for the most part, it’s the same. You can send e-transfers, pay bills, do whatever you like to do. If you want to pay your credit card bill, you can do that. You can take cash out of an ATM, although we don’t have our own ATM, so you would be charged, whatever that out of network fee, that you probably experienced, when you need to get cash and you’re ATM isn’t right there, but for the most part, and we’re continually updating features, so I’m sure if we talked again in a year or so, we’d probably say, “Yep, we do everything”. |
| Richard | I probably will talk in a year or so. I’m reading the list of things that some since offered here. There are no fees for the card. |
| Sylvie | No. |
| Richard | This is a fee less process, as far as that’s concerned, it’s prepaid as you said? |
| Sylvie | Yeah. |
| Richard | You actually load up the thing, like you would a regular bank account if you’re using a debit card and no interest, obviously, you’re not borrowing any money, and then you got 1% rewards. Why specifically 1% here? Before you mentioned 10% or15%, that kind of thing, are we talking about different things? |
| Sylvie | I think so. That’s, I think, just, it’s not 1%, it’s 0.5% on everything. Or if you are signing up for something called KOHO Premium, you get 2% on groceries, restaurants and eating out and then transportation. And that is where there is a small fee. So, basically, for people that spend, the break-even is about $600 a month on those three categories that I just mentioned. You’d actually be better off with this premium service where you get 2%, but you pay $9 a month. But for the bare bones and what most people start with its free, no fees and get 0.5% cashback. |
| Richard | Yeah. How do they receive these rewards? You said, just cashback. What happens? |
| Sylvie | So on your, on your app, you would see your account balance, and then you see the cashback that you accrue and then it accrues basically immediately. |
| Richard | By a transaction basis. |
| Sylvie | Yes, so you might see that you have $20 in cashback and then you can actually just cash it out, and it goes into your balance on the card. |
| Richard | So your balance just went up to $20. |
| Sylvie | Yeah. |
| Richard | Not every bank does that. |
| Sylvie | Well, usually it’s once a year. |
| Richard | Well, that’s interesting, but it’s a question of visualizing all of this. |
| Sylvie | I know |
| Richard | It sounds a little different, right? |
| Sylvie | I should have brought with me my card because they’re these funky two-toned cards, and you can actually pick the colour that you want. They all have a kind of fun and personality behind them. So I have blue and kind of iridescent silver. But you can get lots of different colours and then, yeah, the app I can even, I know people if it’s audio, can’t hear this, but or see this, but you can see the app kind of shows your balance, and then there are different savings features, including your power-ups is the cashback. |
| Richard | Flip it around a little bit. |
| Sylvie | Oh, there we go. |
| Richard | Sometimes they |
| Sylvie | (Screenshot) |
| Richard | Sometimes the writing doesn’t show up there, anyway it doesn’t matter. |
| Sylvie | Yeah. |
| Richard | They get the gist of it. |
| Sylvie | Yeah, it’s kind of tech, it’s a techie feel. |
| Richard | Very 21st century-ish, right? |
| Sylvie | Yeah, that’s what we go for. |
| Richard | Cutting edge. And I guess the other thing that comes to mind is, how usable is this? Is this the kind of thing that you run into problems with? Places saying, “What is this?” Being doubtful about being able to use this? |
| Sylvie | So it’s, the adoption is pretty great by merchants because what they see is, just all they see is, prepaid Visa, and that’s accepted nearly everywhere. Not if it’s a debit, only merchant, then you wouldn’t be able to. What else? I guess |
| Richard | It’s where people accept credit cards, right? |
| Sylvie | Yeah, exactly right. A couple of things to be mindful of his, when you’re travelling, where it’s actually accepted worldwide, but sometimes, you know, as with most cards, if you’re in different countries, sometimes it doesn’t work, so I’d always bring a backup one. And also, you know, when you book a rental car or a hotel, and you might have to put down a deposit, say $500, the funny strange thing about prepaid Visa, sometimes that actually goes through as an authorization where it would say, okay, you just spent $500 and it will go away, but you have to wait a couple of days. So, when you’re renting, when you’re putting down a safety deposit, usually we’d say don’t use a prepaid card. Well, I use it all day, every day, for all my transactions. We have a free joint account too, so I use that, using Apple Pay and pay everywhere, I don’t have problems. |
| Richard | There’s no, very little problems and no negative feedback, kind of thing? |
| Sylvie | Yeah, we’re lucky. Now, I feel like the base of the payment just come so far, right? Dollarama even accepts credit cards now. I used my card yesterday there. |
| Richard | Now, I know from experience that getting people to get the gist of budgeting and be able to impose this, the disciplines and self-discipline involved in, in the proper or successful budgeting which they do. It’s a tough road at home. People, if this hasn’t been inculcated into them when they’re children, don’t grow up with that kind of attitude towards money, it’s a learning process, and a tough one for some people. Some banks offer budgeting, online budgeting help, things like that. But you have an app we’ve been talking about. |
| Sylvie | Right. |
| Richard | What I understand, this takes it to a new level. Can you explain the differences? So, where your app differs from the others? Go ahead. |
| Sylvie | So, I would agree with you that budgeting is generally a feared topic. And honestly, we don’t love the word either, but it does resonate with people. But if you kind of think of, like, why do people budget, usually the kind of things that come to mind are, one, to control your spending and spend within your means and two, to actually save or start putting away money towards, maybe it’s your payment plan to pay off a consumer proposal. |
| Richard | I’m glad you mentioned that. |
| Sylvie | So yeah, but I’d love to get, we’ll get into later. But in terms of controlling your spending, I would say the people that love KOHO the most, is people that, as I said before, we’re just using credit, and they’re finding that they can’t get their balance down there in the red every month. So when they switch to using KOHO, either for their whole paycheque or just that fun, a discretionary budget, then they have guardrails. So basically, when the money is gone, it’s gone, and they just basically have a hard stop for them. And of course, that sounds pretty abrupt, but the nice thing about the app is that it shows you, like I was saying before, where your money is going. So say you set a budget for $100 a month on eating out and entertainment. You could go into the app and check here, is called the Insights, and see, I’ve spent $75 this month. Like this is where I’m at. We don’t have it yet where you could set a budget, and then it would give you a hard stop. But that’s something that we’re hopefully going to come out with next year. So |
| Richard | That might be embarrassing. |
| Sylvie | Not a hard stop at the merchant, but just like a little notification or something, because I agree. But so that’s going to enter, |
| Richard | Like a very prominent red flag. |
| Sylvie | Yeah, you have to keep your dignity. Even if you’re nothing, no one can budget in a straight line. Life doesn’t happen that way. |
| Richard | This program is about anything, it’s about dignity. |
| Sylvie | Yeah. Most people, they start using it, they feel in control of their spending because there’s, their credit card balances not going up anymore, and that’s the most important thing. And then the flipside is in terms of saving. We have a couple of tools that help you automate your savings because one of the oldest, sort of tricks in the book for saving is, just pay yourself first and automate, and you tend to save twice as much. So, one of them is called Round-Ups, and what that does is, if you bought, say, a $1.75 coffee, it would round up to the nearest dollar, so to $2, or you could set it to the nearest $2, $5 or $10 so it could round up to $5. And then that extra money goes into the special savings pocket, so you don’t see that money in your balance anymore. And so as far as you’re concerned, that money’s not there, but it’s gone into this little savings pocket, and that’s there are also people that just like, they’re new to saving, they’ve never done it at all. |
| Richard | It’s the, in a sense of forced savings, but not quite force. It’s more like an invisible savings model. |
| Sylvie | That’s exactly right. And then you can also set, they’re called savings goals. And so another idea of automation where, say you said, “Okay, Sylvie, I need $400 this month to put towards my consumer proposal”. I would set that goal $400 by the end of the month and then set up when I want to contribute. So, it might be daily, just a couple dollars a day. Or it could be, you can set it to when you get your paycheque so that $400 goes right in there and then again, it’s like invisible savings that you don’t really realize you’re doing. And you wouldn’t believe how powerful that is for someone that’s coming from being in a debt spiral to now, not only not increasing that debt, but then they see they have savings for once in their life. It’s really, really cool to see that. |
| Richard | Now, all banks promote the idea of savings. |
| Sylvie | Yeah. |
| Richard | Most financial institutions promote that idea, somehow or other, but as you said, if you could do it, let’s call them tricks or, you know, the invisible ways to assist a person get into the habits of these things. You can’t do anything but win out of that, as far as the individual is concerned. But, well, you’ve written a number of articles, from what I understand on this whole subject and, the idea of getting through to people that what they can do and to actually do something, right? Now, let’s start with where can they find these articles? Where can they get this information from? And better yet, where can they get your services? |
| Sylvie | For sure. So, koho.ca/learn is where the blogs are, or if you just went home, you googled KOHO and went to the website and then clicked on learn, you’d see the blog. Where we have different, I guess, How To Guides, on different parts of your finances, if you are a KOHO user and you can access financial coaching through this sort of a chat function. I also work outside of KOHO doing one-on-one financial coaching. And so, my company’s called Wild One Wealth, and it’s Sylvie@wildonewealth.com, is where if you wanted more hands-on experience, either in person or on the phone that wasn’t through an app, then you could access it there. Yeah, we’re just trying to, I think the niche is people that, you know, don’t have a ton of wealth, but of course, they would like some support and some help, that’s traditionally been super hard. As you know, that’s what your whole business is built on, you know? |
| Richard | Yes. When people have hit a wall, you talked about earlier, and they have no place else to turn. Usually, when people will come to see us, the vast majority of them, budgeting is not going to be the answer to your problem. |
| Sylvie | No. |
| Richard | They have to take some more drastic steps to get themselves back where their feet are firmly planted on the ground, that’s where you would take over. Is there anything else that you’d like to leave people with, Sylvie, because we are just about running out of time? |
| Sylvie | Yeah, I would say, just as you said, it’s so overwhelming to feel like your finances are in disarray. But honestly, the best thing you can do is just not be hard on yourself, whatever situation you’re in, you’re definitely not the only person in that situation. We all go through ups and downs. |
| Richard | It’s never too late to start. |
| Sylvie | Yeah, just start. And, you know, don’t be afraid to ask for help. That’s what people like you and myself are here for, you know, you can change it. Debt is just a number that you can you’re in control of and that you can change. |
How To Achieve Your Financial Goals In Less Than A Year
In this episode of The Glass Is Half Full, Richard Killen a Licensed Insolvency Trustee interviews Alanna Abramsky who saved $20,000 is less than a year. She will share the secrets on how to achieve your financial goals in just a short time. She is now a Money Coach who is based in Toronto helping people on how to budget, save and invest.
| Richard | Today my guest is Alanna Abramsky.
She has a very, very interesting story because she was able to save in the space of a little over a year, a little under a year, $20,000. And I’m going to ask her to share with us how she did that, and perhaps what motivated her to do it as well. Wow, saving $20,000, Alanna, in under a year on a reasonably good, but not humongous, salary. Pretty amazing stuff. But before I ask you how you did it, tell me what motivated you? |
| Alanna | I’ve been living in Toronto for about five years at this point, and I was working in the production industry in a lot of live events, and I thought I was kind of ready for a change. So I decided to go travelling, and I wanted to do this big trip around the world, and that really was my main motivation to save all of this money because I had heard of people who had travelled before, and they had to come home early from their trip because I had run out of money. And so I had this goal in mind where it was like, I didn’t, I don’t want to be one of those people who had to cut their trip short because ran out of funds. So I had this, you know, I did some research, and I had this idea in mind of where he wanted to go and how much it was going to cost. And that number that $20,000, like that was my end goal. So that really was my motivation. It was time for me to get out of Toronto and see the world while I was still young enough to do so and yeah, I just kind of, |
| Richard | So you had the motivation? |
| Alanna | Yeah. |
| Richard | The desire to travel and see things and all that and you had an actual target. |
| Alanna | Yes. |
| Richard | $20,000 |
| Alanna | That was the big thing. It was that goal. I think everybody has financial goals. Mine in that particular year was to save the $20,000, so I didn’t have to stress out while I was traveling. |
| Richard | And you did it. |
| Alanna | I did it. Yeah. |
| Richard | Many of our viewers, perhaps most of our viewers since they’re tuning into a TV program, put on by an Insolvency Trustee, may not have a heck of a lot of money, so the thought of creating a budget and managing their money the way you had to, they might think that’s beyond their reach. What would you say to people in that position, thinking like that? |
| Alanna | So I’ve been living in Toronto for about five years at this point, and I was working in the production industry in a lot of live events, and I thought I was kind of ready for a change. So I decided to go travelling, and I wanted to do this big trip around the world, and that was my main motivation to save all of this money because I had heard of people who had travelled before, and they had to come home early from their trip because I had run out of money. And so I had this goal in mind where it was like, I didn’t, I don’t want to be one of those people who had to cut their trip short because ran out of funds. So I had this, you know, I did some research, and I had this idea in mind of where he wanted to go and how much it was going to cost. And that number that $20,000, like that, was my end goal. So that was my motivation. It was time for me to get out of Toronto and see the world while I was still young enough to do so and yeah, I just kind of, |
| Richard | So what’s the best way to create that budget? What mechanical logistical way would you go about it? |
| Alanna | Yes. |
| Richard | What did you do? |
| Alanna | This is yeah, this is something that I think everybody should do, it doesn’t matter where you are in life, but the first thing I think you need to do is to get real with what you’re spending right now. I think it’s a really important thing to do. |
| Richard | What do you mean by get real? |
| Alanna | So I always suggest to the clients that I work with to print out the last 2 to 3 months of their debit and credit statements and then go through all of those debit and credit statements and highlight them per category. So let’s say you have RBC MasterCard or something like that, print out the last 2 to 3 months and highlight all of your dining out expenses and then add up all of those dining out expenses over the last three months and then find an average of what you would be spending in that dining out category. I think that’s number one, and you want to do it for every category that you’re spending money in. So you want to figure out what kind of fixed expenses do I have first? So those fixed expenses are the expenses that don’t change monthly, and you want to figure out what kind of variable expenses you’re spending. So these would be, you know, those expenses that fluctuate like our grocery bill. Our grocery bill’s never going to be the same every time we go to the grocery store. Unless, of course, we’re buying the same thing every single time. So, like dining out is typically |
| Richard | That sounds like a boring diet. |
| Alanna | I know, doesn’t it? Yeah, chicken and rice every week. |
| Richard | Good chicken. |
| Alanna | Maybe, I don’t know. So then you want to figure out what your variable expenses are on average, so and that’s where you’re going to figure out, that’s where the credit card and debit statements come into play. |
| Richard | So you’re dealing with facts. |
| Alanna | Facts. You want to analyze your real data because I don’t think enough people do that. And I think you know, I have a lot of clients myself, who every month they have no idea where their money goes, and it’s because they don’t understand what they’re spending. |
| Richard | That’s, I was going to ask you that, when you’re doing this with some of the people, families, what not, how surprising are those initial results? |
| Alanna | It’s crazy. It’s, I’ve had clients before who, you know, they, they’re dealing with a lot of credit card debt. They’re dealing with big lines of credits, and I take them through this activity where I just say, all I want you to do is just go take the last three months and figure out your averages in each category. And I have some clients who are spending $10-$11,000 a month and they’re not making that kind of money. And a lot of it is on these items we don’t necessarily need, but they’re living this lifestyle that they can’t really afford. So I think this is step number one really is to analyze the real data that you have, get real with your numbers because that is going to make you a lot more aware, moving forward of maybe areas you need to cut back on. Maybe there are things in your life that you could do differently to increase cash flow, so that what I say, that’s step number one. And you also want to account also for those irregular expenses that we have. So maybe they’re not monthly expenses, but something like property tax if it’s not included in your mortgage. |
| Richard | Car insurance. |
| Alanna | Car insurance. If you’re paying an annual fee. |
| Richard | You get an annual bill. |
| Alanna | Yeah, an annual bill, and sometimes people pay it monthly. Vacation is typically, you know, the summers are usually a lot more expensive for a lot of us, because whether we go to cottages or hang out with friends or whatever, so you want to incorporate those irregular expenses and be aware that they’re coming. So December, for example, is a really expensive month for everybody, and we all know that December is coming. So if we sit down and we get real with our numbers, you know, what did we spend last year for the holidays? Well, I need to incorporate that into my upcoming expenses, those regular expenses. So when January hits, we’re not all of a sudden freaking out, and we’re in masses amounts of debt like we need to prepare for these expenses in advance. |
| Richard | So getting into the specifics it’s been using what you did, as the template for all of this, how did you manage this? You’re talking about groceries. You’re talking about eating in eating out, your own food preparation. All the money that goes into it, just putting something in your stomach kind of thing, is, it can get complicated, get convoluted a lot. Right? And there’s other things, like travel. You mentioned travel, all kinds. There’s a domestic day to day travel, there’s the, you know, the reason why you did all this in the first place, kind of travel. How did you do it? How did you break it down for yourself? |
| Alanna | So the first thing that I did actually was, I was, you know, I started reading all of these different blogs about, I kind of had an idea of where I wanted to go. So I started reading blogs about, realistically, how much was it going to cost every single day to live in, travel and live in some of these areas, in the way that I wanted to travel? I wasn’t an 18 year old backpacker like I didn’t want to stay in hostels all the time. So, you know I had to incorporate a couple hotel stays and car rentals, that kind of stuff. So that was step number one was actually figuring out how much I was going to spend on a daily basis in some of these places that I was going to. So then I had my number. That’s how I came up the $20,000. That’s what I wanted. Like all flights, that was my target. That was like all my flights, hotels, food, you know, going out, tourism. So from there, what I did was I sat down and I went through that exact activity, looked at exactly what I was spending now. So I went through my credit and debit statements. I looked at everything I got real with my numbers. And then what I did was that I created a budget for moving forward where I could cut back in certain areas. So for me, I loved dining out. I still do, but I was spending way too much money and dining out that I didn’t need to be spending because my priorities had shifted. So now my priority was travelling, so I cut back in dining out. That was a big one. I ended up saving about $200-$300 bucks a month in dining out. I got rid of my cable bill. I just stopped. It was like, I don’t need cable. I went out and I actually bought, the old school bunny ears, those digital analog boxes. And that is like it’s a $15 charge at Best Buy, cut my $60 cable bill, and I could still get, you know, all the big |
| Richard | It’s a $15 one off charge |
| Alanna | That’s what, that’s once, it’s a one thing plug, screw it into the back your TV and you get your, like, Global and CTV and CBC. And now with Netflix, you can pretty much watch anything that you want. |
| Richard | So you’re talking to somebody who grew up with that? |
| Alanna | Yeah, exactly. I can still remember that at our cottage. |
| Richard | Not that I want to talk about age. |
| Alanna | Yeah, and then, I never had a car at the time, but, I stopped taking public transit as much because, you know, $3 every time you ride, $3.25 every time you ride, it really started adding up. So I went out and I invested in a bike. And it wasn’t a nice bike. It was about a bike. I bought a bike and it got me to and from or I would walk everywhere. The biggest thing that I actually found the greatest impact on was grocery shopping. So what I did and I still do it to this day, but I usually grocery shop on Sundays and what I do, usually when I go to the grocery store, there’s typically a 50% off produce cart that they just usually restock. |
| Richard | Make sure you eat it today. |
| Alanna | Yeah, well, yeah, or just like, make sure you prepare it today kind of thing, but even still, like it lasts 3 to 4 days. It’s not the freshest stuff in there, obviously, because they’ve had to make room for the new fresh stuff coming in. But all of the produce I’ve ever had there was perfectly fine. So on Sundays, I would go out, I would spend about $30 in produce for the week, which was more than enough to last me the whole week, and I would just go |
| Richard | Compared to what have you been spending? |
| Alanna | Oh, previous to that? I was probably spending closer to, like, $70 or $80. Yeah. Yeah, and It depends also where you go grocery shopping, I like shopping at No Frills. I think their produce is good, but I find Loblaws to be quite expensive. But all of those grocery stores typically have some kind of 50% off cart. So I started going to that cart, and then I would go home, and I would food prep for the week. And that saved me a ton of money. One of the big things I always |
| Richard | So instead of going out and spending money to pay somebody else, to prepare your food, you were investing in the, what do we call that? |
| Alanna | Investing in myself. |
| Richard | Sweat equity. |
| Alanna | Yeah, exactly. Yeah. And I mean, for me, I like cooking. And I like, you know, I can follow a recipe, and I could basically create anything. Yeah, well, I mean, it takes time, though, right? You have to, like, you have to weigh, like, you know, time value for money. So for me, I like my priority was like I wanted to save this money. So it was okay. |
| Richard | Again, you had your target. |
| Alanna | Yeah. I had my target. And there was nothing. |
| Richard | A goal in your target. |
| Alanna | Yeah, exactly. So the transportation was the big one. The dining out was a big one. I always say to clients like, look at how much you’re spending at your bank. I think there’s a lot of the major financial institutions right now are spending their charging way too much money on bank fees and there’s a lot of no fee banks out there, now. |
| Richard | Did you start investigating all these little nooks and crannies? |
| Alanna | It was like everything, I was like, where can I start to save money? I called my telecom companies like I reduce my cell phone bill by about $40 a month. Like I said, I got rid of my cable. Same thing with my internet. I just switched my internet provider, saved myself about $20 a month, and it doesn’t seem like a lot at first. But when you have, you know, when all of a sudden you’re cutting back by, like, $500 a month and you can put that into, you freed up in cash flow to put into your travel fund, it added up. |
| Richard | To about $1,600 a month or something? |
| Alanna | Yeah, it was, it was like, it was probably, it was probably cut back. |
| Richard | $20,000 a year. |
| Alanna | Yeah, I probably cut back around, I would say, $1,000 bucks a month, and then whatever extra I had and from work, it would throw into savings. |
| Richard | It wasn’t all savings. |
| Alanna | No, but the biggest thing for me, I think was dining out. That was like I was going out. And it’s easy to do in Toronto. It’s expensive. And so easy. There’s six restaurants for every eight buildings or you know, every eight shops or whatever. So |
| Richard | So I got a question for you because I know that people are listening to this and, yeah, fine, it’s all well and good, but did you think you were depriving yourself of anything during all of this, or was your goal so strong that it compensated for and any negative feelings you might have had over these changes? |
| Alanna | Yeah. No, I didn’t. I never felt like I was depriving myself. There were times I would say that some friends, you know, would ask me to go out for drinks or food or whatever. And, you know, I just said no. |
| Richard | Or you said, you buying? |
| Alanna | Yeah, I said, why don’t you guys come over instead and I’ll make something here. |
| Richard | I would have said, you buying? |
| Alanna | Yeah. Yeah. So I didn’t go that far, but, I never really felt like I was depriving myself. There were sometimes in the winter when I was biking to work where I was like, I should just jump on the streetcar. But I was, like, so motivated to just save that money. That, I think that winter actually was a pretty harsh winter, I think I only took the streetcar twice in the whole winter. I was that crazy person, that was outside on my bike, like with my parka on |
| Richard | Yeah, I think I saw you. |
| Alanna | Riding, riding to work. |
| Richard | Alanna, can you explain to me, about this mindset, mindful spending, what do you mean by that? |
| Alanna | So I think now, especially in our day and age, it’s really easy to spend money. And, you know, I blame a lot of the credit card companies for that because they created that tap system where people don’t even have to think twice about the money that they’re spending. And I think that’s a huge issue |
| Richard | Do you know what the big thing about that is, you don’t have to remember your PIN. |
| Alanna | Yeah, like you don’t have to remember anything. You can go to |
| Richard | Just remember where your card is. |
| Alanna | Any store and swipe it on this machine and you’ve made a transaction. So people haven’t been mindful of how much money they’re spending because it’s so easy now to spend money with technology. They’ve made it so simple. I think now, even on your Apple Watch, you can, you know, with Apple pay, which is like, I haven’t even tested that one yet, but I think now the biggest problem that a lot of my clients see when they, when I work with them, is that they just they don’t know where all of their money goes, and it’s because they’re not being mindful of where they’re actually spend spending their money. They kind of have an idea of how much money they have coming in, but they have no idea where it goes. So I think that first, you know, when you, you know, first step is analyze the data. The second step is to be mindful about spending moving forward because, yeah, because I think once you start to, you know, think about like, is this something that I really need or is this something that I really want? And if it is something that I want, do I want to get out of debt more than me wanting this thing that I’m about to purchase. And I think that’s kind of that mindfulness those, you know, creating new habits where you think, is this the absolute priority? |
| Richard | Mindful spending. |
| Alanna | Mindful spending. It’s and it’s hard. It takes time. But, I do think that when you actually start to track your spending, it just kind of naturally starts occurring because then you start to see where all your money starts going. |
| Richard | I firmly believe in that as well. I’ve heard you mention that you equate spending to a gym membership and you’re the personal trainer in that particular gym membership? |
| Alanna | Yeah, so I like to consider myself a personal trainer for your finances. You know, I think financial health and, our everyday health are very similar in a lot of ways. So for me, if I’m not aware of the food I’m putting into my body, I’m not going to feel good, and I have to be mindful to be healthy inside. Same thing goes for your wealth. And so what, when I work, when I work with my clients, you know, all of those all of the people that I work with, they need that accountability. They need somebody to talk to, to be like, well, maybe instead of doing it the way you have been doing, why don’t we try it a different way and the same way that if you went to a gym and got a personal trainer, they could sit down with you and say, look, you have this. We need to change this and do this. We’re going to give you these exercises. Maybe don’t eat this food, Maybe eat this instead. So when I refer to myself as a personal trainer for your bank account, I do a lot of the same things with clients that I feel like personal trainers do with their clients in the gym. Just looking at what you have and say, look, this hasn’t been working for you so far. Maybe we should do this instead, or, you know, maybe try doing this and moving this around. So that’s kind of where that came from. |
| Richard | One of the things important things that goes with being a personal trainer in a gym context and physical context like that is, the relationship that develops between the trainer and the trainee is going to be a sympathy, and if you want, a trust. |
| Alanna | Yeah. And the accountability, to people, need that accountability partner sometimes. Because if there’s nobody there, you know, at the end of it being like, hey, did you do this, this week, then a lot of people just won’t do it. |
| Richard | Do what? |
| Alanna | Anything |
| Richard | And now you’re a money coach, you helped over 300 people. |
| Alanna | I have so far. Yeah, in the last year and 1/2 I would say two years. |
| Richard | Now, this you say, 300 people, does this represent a real cross section of humanity or particular type or age group? |
| Alanna | No, I have a lot of clients. My clients range in age from, I have some clients who are just getting into, like, they just are, you know, finished university and now they’ve got a lot of student debt. I’ve got a lot of clients who have very high net worth. And they have a lot of investments and need help. I have clients who you know, have medium incomes and they just don’t have any money and they’re in debt. So, my clients range from anywhere I’d say, like 25 years, all the way up to 70-72 years old. |
| Richard | That old, eh? |
| Alanna | Yeah, yeah. So I basically as a financial coach, what I do with them is accountability. I look at what they have currently and think about different ways that I can help them and not it’s not doing very, it’s not going out and getting new products necessarily. It’s looking at what they have now. And how can we be |
| Richard | Modify. |
| Alanna | How can we modify what you have now, too, you know, create a really solid foundation, create a really solid budget, look at your cash flow, so moving forward we can, you know, we can help you. If they struggle with that, we can help you get out of debt. I can help you do that. But we need to, first of all, educate you on what you have, how that works, and then from there, you know it’s moving forward and it’s really coaching them through the process and educating them. I think education. I think the lack of financial education in Canada’s it’s really creating a huge issue for most people because I have clients who have a lot of credit card debt and they don’t understand how their credit card debt is calculated or they don’t understand compound interest or they don’t understand, you know, why am I, why is my credit card debt not going down if I’m just paying the minimum amount due. Like they don’t understand how all those things are calculated. So as a financial coach, I help to first look at it and then educate them so they could make better decisions moving forward. And then it’s that accountability to be better moving forward and have those checking points because when they have those that accountability partner, they typically get the work done. |
| Richard | Alanna, it was great having you on the program. You have a savings guide that is available to people, tell us what it is and how to get it? |
| Alanna | Yeah. When I got back from my trip, I created a blog called thebudgetbabes.org and I had a lot of people in my trip who were asking on how I saved all the money? I then started writing blogs about saving money. If you go onto that blog, there is a little e-savings book guide that shows how I saved all that money in there. On top of that, I am the head of financial, the head of a financial coach with a company called Enriched Academy. And we empower Canadians to be better with their finances and educate them with their finances, so you can go to enrichedacademy.com, to check out more. We have a 12-course system on what to do with your finances moving forward. |
| Richard | That’s great. So that’s how people get it? This is the book I wrote, which you’ll find that, talk a lot about much from the same things from a different angle. |
| Alanna | Thanks, Richard. |
| Richard | Thank you for being here, Alanna. |
The Big Secret of Financial Success with Robert Gignac
In this episode of The Glass Is Half Full, Richard Killen a Licensed Insolvency Trustee interviews Robert Gignac, a speaker, writer and author talk about The Big Secret Of Financial Success. He is featured in many publications, including The Globe & Mail, Money Magazine, Private Investor and has his own TV show called “We Talk Money:
| Richard | Hi, I’m Richard Killen. Welcome to a very interesting show we hope we have for you today on The Glass Is Half Full. We’re joined by Robert Gignac, am I getting it right, Robert? |
| Robert | Perfect, Richard. Thank you. |
| Richard | Good. Today we’re going to learn about the big secret of financial success, right Robert? |
| Robert | Yes. Absolutely. |
| Richard | Robert is a very, very highly sought after speaker who combines knowledge, passion and visuals to encourage people to take control of their personal finances and to live what you call a richly imagined future, right? |
| Robert | Absolutely. |
| Richard | Robert delivers keynote speeches and interactive workshop programs to International organizations, financial industry and private clients, right? He also featured in many publications, including the Globe & Mail, Money Magazine, Private Investor and you have your own TV show on, what is it? We TV? |
| Robert | We TV? |
| Richard | What’s it called? |
| Robert | It’s called We Talk Money, |
| Richard | And, one of the more interesting things, if you think anything is more interesting than TV, is that you’ve written a Canadian bestseller called Rich Is a State of Mind. |
| Robert | I did, accidentally by chance. I did. I’d never intended to write a best selling book on personal finance. I was trying to help a friend create a marketing brochure. |
| Richard | Some of the best things come from things like that? |
| Robert | Absolutely. |
| Richard | Well, I’m going to get back to your book in some depth little later on Robert. I personally found it very interesting, but I’d liked to ask you, you spend a great deal of time speaking to Canadians about concepts of personal finance and taking control of their financial future, and I’m sure you’re often asked, what is the big secret to financial success? So what is the big secret? |
| Robert | I get asked that a lot. And people are generally incredibly underwhelmed with the answer, which is that there’s no big secret. There’s no magic pill, there’s no silver bullet. There’s no one thing that if I only knew what that one thing is. What it is, is with many things in life, it’s a series of small, little, incremental things that we do over and over and over that allow us to get better with whatever it is, including managing our personal finances. If I were to pick one thing and I was asked this recently in an event because the person was adamant that there must just be the one thing it would be this, marry the right person and stay married. That would be the one thing, right? If anybody’s ever been through an asset-ectomy, i.e. divorce, and lost half their assets, it’s a huge impediment to being successful financially and the…. |
| Richard | Not to mention being a bit of an emotional letdown. |
| Robert | A huge emotional letdown and lots of other issues to deal with there, but If people are looking for that one thing, they’re going to be really disappointed to find out that there just isn’t that one thing. |
| Richard | So essentially you brought marriage counselling to the table? |
| Robert | No, absolutely not. But at the end of the day, |
| Richard | It’s important. |
| Robert | It’s important and it’s important that we do a number of things better than we’re doing today to have a better future tomorrow. There’s a line I’ve heard that I like that said, If you’re willing to do the things today that other people won’t, then tomorrow you can have the life that other people won’t be able to have. If you’re willing to do those things today. |
| Richard | But it has to be today. |
| Robert | But, if not today, certainly tomorrow or next week because we all believe we have huge, vast amounts of time at our disposal. |
| Richard | Especially when we’re young. |
| Robert | When we’re young, certainly. When you’re 25 the concept of being 50 seems ancient, right? |
| Richard | If you think about it at all. |
| Robert | If you think about it at all. But we think about it because we look at our parents and we look at our grandparents and we go, yeah, I’ll get there, but I’ve got lots of time. And the reality is that time disappears before we know it. |
| Richard | You wrote an article called, It’s Possible, and in that article you talk about giving a speech, I guess it is, to a group in Timmons, I think it is, on the subject of, you call, richly imagined future. I understand that an audience member commented, confronted you if you want, to go with his own thought on the matter, saying, basically that this was all well and good for you, but there’s no way that it’s going to be possible for him. Can you explain what happened next? |
| Robert | So it was during the Q and A portion, and the gentleman came up and he said, “he thoroughly enjoyed the presentation”, he said, “but this concept that you talked about won’t work for me”. And I said, “Okay and tell me more?”, because that’s always my favourite question to someone. Tell me more and he said “well, you don’t understand. I just have a high school education. I never went to university.” That’s great. He said, “why is that great”? I said because too many people confuse education with the ability to do better things with money. You don’t need a university degree to do great things with your personal finances. The fact you didn’t go to university is great If you had gone, sure, that’s nice. But don’t let the fact you didn’t go to university determine your financial future, and I drew his attention to a quote that I had put up during the presentation by a British entrepreneur named Brad Sugars. And the quote, I use it all the time, is the quality of your life is determined by the decisions you make, which is determined by the questions you ask, which is determined by the quality of your education. But don’t confuse that education has to come from a school system. It comes from the books we read, the things we watched, the people we associate with, and as long as we’re willing to learn something new and change your behaviour, then we get educated. When we’re educated, we ask better questions. Those better questions could be to financial professionals, the peers around us, and when we ask better questions, we make better decisions. And that’s what determines how successful we’re going to be. Not whether or not you went to University, college or even graduated high school. |
| Richard | In fact, some people will say that your education only really starts when you leave school. |
| Robert | Oh, absolutely, But, many leave the educational sphere, and I’ve actually heard people say this when they were done with school, it’s like, “Oh, thank God I’m done with that, now I don’t have to read any more books.” No, reading books is excellent. It’s a phenomenal way to gain the education to help you do better things. |
| Richard | You could be describing my father, who had a 7th-grade education, but it was possibly the, certainly the most everyday man I’ve ever known. |
| Robert | That’s great. |
| Richard | But he read a lot, quite a bit. |
| Robert | It’s important. |
| Richard | Can I ask you? People are always looking for, easy or shortcut answers to think about that. I’m gonna see if you can provide one here. What is the biggest single thing that somebody can do to improve their financial situation? |
| Robert | If I were to boil it to one thing, Richard, I’d probably boil it to one word. And the word is no. It’s a word that most people in today’s day and age or incredibly unfamiliar with because they’ve never said no. They’ve never had no said to them. Sometimes as parents we don’t say it enough to our kids. Right? Can I have the new Xbox, XYZ killing video game? No. Do I want to go out and buy a new Lexus GS450? Yes, but no. Because the more often we say no to ourselves, the more successful we will be in the long term. That doesn’t mean I’m against spending money. Spending money is a great thing, right? We work hard. We earn money. We should spend some and enjoy what we’re doing. But the reality is, the more often we say no and delay the gratification, the more successful we can be with our finances. |
| Richard | Yep. I’d like to talk to you a bit about your bestseller, Rich Is A State Of Mind, right? Just a comment I’d like to make about the book, is I found it very interesting that you wrote it is a novel instead of the usual how-to-book, which is almost a manual, right? You have very good writing skills, I’ll tell you that. |
| Robert | Thank you. |
| Richard | When I was reading it, I found that I was, it was a page-turner. |
| Robert | When it comes to books on personal finance, I’m flattered to hear that. |
| Richard | And that’s the thing that impressed me the most on it, is that it is very thorough, but because it had it was a novel, had a plot, storyline, characters, that you get involved in, personalities if you want. But using that as a vehicle, what you did is, you brought in everything that I could think of it as a factor in personal finances, personal finance management, everything from how to save to the effect of inflation on things and what not? And because you wrote it as a novel, it all started to kind of make sense. It was explained and explained in a very, very easy, to, understand way. I think anybody could read that, you don’t have to be an MBA to be able to understand. |
| Robert | Oh, and absolutely. And one of the things I tried to do with the book when I picked this format, is I knew if I created a personal finance book that read like a high school or university textbook, nobody would read it, right? But, if I could craft a story of a slightly dysfunctional Canadian family trying to come to grips with everything related to personal finance, if I was lucky, I could create characters that people would read the book and go, “That’s exactly how I feel.” Or that’s my kid sister. That’s my older brother. And if I could do that, then maybe I could keep them turning the pages in order to actually get from one point to the other. There is an email that I received from a reader of the book that I keep posted in my office, right on my filing cabinet. I can see it every day, and it was a reader, who said “Robert, there’s one thing I needed to tell you about your book. I own many books on personal finance. Yours is the first one I actually finished, and I was so grateful to see that, that it’s in a prime spot where I see it every day. |
| Richard | Well, I’ll send you an email that says the same thing. |
| Robert | Thank you. |
| Richard | I want to ask a few questions about the content of the book, the thing that you discussed, if you don’t mind? In it, you talk about the importance of saving. That should be obvious to anybody that if you want a plan for your financial future, it’s going to incorporate an element of savings, and it has to be released. But for somebody living paycheck to paycheck, it’s really hard to see how you can do this. And I know in the book, you do deal with that eventually and so on. But maybe you could talk a little bit about that now. |
| Robert | One of the things that is difficult for all of us to grasp, is that if we want a better or different tomorrow, then we have to do different things today. And as it relates to money that generally the first basic building block is saving money, spending less money than you earn. Now there are a number of different ways, we can attempt to do that, but at the end of the day, taking that first step saving dollar one or dollars one through five can be a significant challenge in today’s economy, and but at the same time there are some simple things we can do. I think that will help us along that path. So, for example, one of the examples I used in the book if any of us were to go through a salary reduction if our employer came along and said sorry times are tough, we could keep the business open. But we’ve got to reduce everybody’s salary by 5%. Our first reaction generally wouldn’t be, “Hey, I’m out of here, and I’m looking for a new job” it would be like, “Wow, this really sucks. But okay, what do I do now?” And one of the things I encourage people to do is if you’re having problems saving dollar one pretend you just got a 5% reduction in pay. You get to spend all the rest, but that 5% has to be set aside for things that you’re going to do in the future. And while you’re doing that, you may go look for a new job. You may create a side hustle that brings in a few extra dollars. There’s a number of things you can do on that front, but it’s taking that first step, that is the most critical piece, Richard. |
| Richard | And by essentially treating it as a fait accompli, where the thing is done, you just don’t have that 5% anymore, right? |
| Robert | And, put that 5% in a bank account that’s not linked to your debit card, because we all know what it’s like. You’re out on Saturday night, you’re out with some friends, it’s like, I need $50, wait a sec, I’ll take it out now and I’ll put it back in on Tuesday. No, it’s not going, it’s gone. So make sure that it’s in an account that is not easily accessible. |
| Richard | Didn’t Wimpy buy his hamburgers like that? |
| Robert | Sort of like that. So, yeah, I’d gladly pay you next week for a burger I can have today. |
| Richard | That’s right. Mind you, that showing my age, you’re not supposed to have heard of them. You say in the book that people, everybody’s interested in money, I find that fairly easy to believe. But you also say that people are afraid of it. |
| Robert | There’s a lot of emotion around money, and it’s not just a Canadian thing. I think it’s more of a global thing. That money tends to make us feel like we’re not successful. I tell people all the time. Money is a crappy way to keep score in life. But the reality is for many of us, it’s the only way we’ve got to keep score or we think we do because we’re always comparing ourselves to others. We compare ourselves to the people we live next door to. People were related to, the people we work with, and we’re always critical of people who look like they have more money because we wonder, what did they do to get this money? Was it illegal or immoral or some other thing? Or somehow, if I don’t have enough money, however much that is, then somehow I have failed and done something wrong. |
| Richard | Would that be because, like it or not, money is one of the very, very few objective things which we can measure things? |
| Robert | It is. |
| Richard | Hard to measure how much love you are receiving or giving? |
| Robert | Absolutely. When you know it’s numbers, it’s paper. We write it down, we add it up, we divide it and we can see it in black and white. But the emotion that goes along with that is where most of us get pretty messed up as it relates to the money. And it’s where the fear comes in because we always think we’re not good enough. And what if I don’t measure up? |
| Richard | If I can’t do it? |
| Robert | But the thing that I always tried to caution people is when you’re making that comparison, make sure that you’re comparing reality to your reality. So, you know, in the age of social media, I try to convince people all the time. Social media is not real, so when you’re seeing your neighbours or your cousin vacationing in…. |
| Richard | So what President Trump says all the time is not real? |
| Robert | Uh, no, I know. But the reality is when we see people we know vacationing in Mexico or they stand beside a new car or we go like, holy crap, they’ve got it all figured out. They never post the picture of them on social media at 2:45 in the morning, curled up in the fetal position in bed, can’t sleep because their visa bills due Friday and they don’t have the money? No. They post the picture of their meal dining out, or a sporting event or on vacation, and their life looks great. We then feel bad about ourselves going, “Why can’t I do all of that?” Well, we could. We just have a different plan. |
| Richard | So, Robert, you talk about the word rich. It’s in the title of your book, right? |
| Robert | It’s in the title. |
| Richard | But you have a very interesting definition of the meaning of that word. |
| Robert | Well, rich means different things to different people. And if you do look it up in the dictionary and I know the younger viewers watching go, what’s a dictionary? If you look it up, the very first Google, very first definition has to do with depth of colour, and hue has nothing to do with money until you get down to the fifth or sixth definition. I chose the title, Rich Is A State Of Mind, because nobody could tell me what rich is or was to them. They didn’t, they quote me a dollar figure. They didn’t say it’s 2,738 something. But they told me how they would feel, what their life would look like, who they’d spend their time with, if they ever answered the question, yes. Which made me think that it’s really a mental thing. It’s how we feel, not what the balance of a bank statement or mutual fund statement says. And the characters having the discussion in the book about the concept of the word rich, Richard, the mentor in the book, went to the whiteboard. |
| Richard | Very good name. |
| Robert | He wrote down one word. Freedom. Now, it was interesting that he chose that word because the other characters in the book in that discussion were freedom from what? And Richard just kind of smiled and said, “Not freedom from, freedom to. Freedom to create the life you want, spending time with who you want to spend it with, doing things that bring you enjoyment, not freedom from something.” And when we look at money is the ability to provide experiences in our life, then I think we get a much deeper appreciation for it. |
| Richard | In your book, you’re also, by definition, if we’re talking about building a better financial future for ourselves we’re going to be eventually talking about saving money. |
| Robert | Yes. |
| Richard | And in the process of that, discussing that in your book, your characters mentioned that, for most people, perhaps, saving is seen as a form of punishment, where you deprive yourself. |
| Robert | It’s denial. |
| Richard | Spending. Yes, denial. And spending is a form of reward. |
| Robert | Yes. |
| Richard | You don’t agree with that? |
| Robert | I don’t agree entirely, because what happens is sometimes we get things reversed when we need to do better things with our money. Saving is actually the rewards side and think of spending it is a little bit of punishment because we’re destroying the wealth we’re creating by doing so. Now, we all need to spend money, right? We have to pay rent. We have to buy gasoline for a car and a metro pass and some groceries. All of these things. But the end of the day is we’re trying to plan a long-range financial future. The savings aspect is actually the reward that we’re going to get later. But in today’s day and age, the concept of delayed gratification doesn’t exist. Where those who came before us? My parents, my parents before them? You didn’t buy things if you didn’t have cash in order to pay for it, you save money for a rainy day. You waited until you could afford to do something. But in today’s day and age where we have this kind of frictionless spending, you know, he used to be with a credit card used to make that noise, like when they actually ran your card. Now it’s tap and beep, the money’s gone, right? We don’t have any physical relationship to it. And that’s what I think messes us up about money today. |
| Richard | Well, you’re not going to get any argument from me. I’m an Insolvency Trustee, as you know Robert, and the whole concept of credit cards, although it has had a very positive effect on this overall standard of living, the economy in general, the size of the economy and |
| Robert | And there are people who use credit cards very well. |
| Richard | In fact, probably the majority. |
| Robert | I think the majority do. |
| Richard | Because it’s not the majority that to come and see me. But in any case, I have to agree completely with you. What you’re talking about there is essentially the difference between short-range thinking and long-range thinking, right? |
| Robert | Yes. |
| Richard | So the idea of instant gratification is that you can’t see beyond right now. A child thinks that way. He sees that he wants that and so on. Where, as an adult is supposed to come along and say, “So I don’t know. What am I gonna have to give up next week or next month or next year to |
| Robert | Right, and we can do a pro and con list if you want. If I do this today, what can’t I do tomorrow? If I’m willing to forgo this today, what will I be able to do tomorrow? And it’s that kind of decision-making process that hopefully allows us to make better decisions financially. |
| Richard | And it kind of leads into my next question, which is you’re referring to savings as something that is essentially, it has become a habit for it to be effective, basically or if you want. If you can get into the habit of doing it, it will really pay dividends. |
| Robert | And it’s the habit that drives us from a financial perspective. But we get into habits all the time, both good habits and bad habits. But when we’re trying to start that saving money process for somebody who’s always struggled with it, or never, ever saved a dollar, saving dollars, one through five is the beginning of a habit, and we do it this week and we do it next week to do it the week after, and the week after that and the lot more we do that, we ingrained the habit, it becomes second nature, and then we don’t even have to think about it anymore. It just happens. |
| Richard | And in your book, you essentially saying that the way to look to achieve this, when you move into this is to start small. So you use the example, one of my favourites that I think I learned when I was about 13 years old or something, I don’t know why, but I learned it, that little example, we’ll call it that of the value of a penny, double daily? |
| Robert | Yes. |
| Richard | Not one cent double daily? |
| Robert | Right. |
| Richard | The value of a penny double daily. So if it doubles tomorrow, you got two pennies, now double two pennies, you’ll have four. So by the end of the month, how much money do you have? |
| Robert | You have approximately $2.7 million now, realistically, there is no investment out there in the world. |
| Richard | But when you tell me where that was. |
| Robert | That will do that for you. But the reason I used the example in the book is to get the characters understanding the concept of time and compound interest in order to help your savings and investments grow over time. |
| Richard | And compound interest is what you call? |
| Robert | The Seventh Wonder of the world. And I didn’t I guess, seventh or eighth right, depending on your perspective, that you know. But the reality, I didn’t think that it was some guy named Baron de Rothschild’s in this 1800’s who eventually coined that phrase. But if you don’t start saving dollar one today, then 38 late days later or 38 months later or 38 years later it won’t matter. You will have lost that time and compounding opportunity in order to make your personal finances better. |
| Richard | I think you mentioned in your book that if used the example, that if a 20-year-old, give or take, is able to save $2000 a year and does it only for 10 years and stops saving at that point but allows it to compound at whatever rate of interest, whatever rate of compounding. But just to keep things simple, we’ll use 10% which is way higher than what you’re going to get today, probably on average, but for the sake of the example, that 10% how much money is a person had by the time they are 65? |
| Robert | Approximately $1.2 million. |
| Richard | And all they’ve saved his $20,000. |
| Robert | Right. But if their friend, who says I’m not going to do this from the time I’m 20 to 30, I’m going to start when I’m 30 and they save that same $2000 a month for 10 years for all the way to 60 |
| Richard | Oh, all the way. |
| Robert | For the next 30 years, they will still not catch up to their friend, who started earlier and stopped. |
| Richard | It’s pretty graphic. |
| Robert | It’s the value of time. Now to a viewer or listener to the podcast, they may go, I’m 48 years old, I’m screwed because I’ve never saved dollar one. No. Start now. The best time to have planted a tree in your backyard if you want to sit in the shade is 35 years ago. The second best time is today, because if you don’t do it today, 30 years from now, you’re still not going to have any shade to sit under. So it’s the point where, regardless of where you are in that spectrum, if you’re 22 and starting it, great. If you’re 32 and starting it, great. If you’re 42 and starting it, great. The key is you have to start. |
| Richard | And along with that starting, goes the idea of goal setting, isn’t it? |
| Robert | Goal setting is |
| Richard | Start, but start what? You can’t just flail around? |
| Robert | No you |
| Richard | I mean you could, I suppose. |
| Robert | You could. |
| Richard | But it’s not smart. |
| Robert | But goal setting is important because it’s what in many cases drives our behaviour in the decisions we make. Why are we doing this? Because I want to accomplish X Y and Zed. “X” in the next year, “Y” five years from now and Zed 10-15 years from now. But without those mileposts out for us to work towards, we don’t see the reason why we are doing this in the first place? So we need to get very clear about that. |
| Richard | Keeps us on point. And keeps us essentially on target. |
| Robert | And one of the cool things that happens about goals is once you start crossing them off the list, you get incentivized to go, cool, how do we get more of these? Well, then we create more of them, and we keep trying to accomplish them. |
| Richard | I’m going to throw an acronym at you, Robert, you may have heard of it before because it’s in your book. Smart. S M A R T. Tell us what that is? |
| Robert | It stands for specific, measurable, achievable, realistic and time-based. It’s the I’ll say, the backbone of goal setting. Everybody talks about goals, talks about this, and what it is creates a structure for you to set goals. Your goal has to be specific. I’m going to lose 36 pounds. It has to be measurable. Already had measured that when you get on a scale every once in a while, is it achievable? Well, it depends on your time frame if you said by the end of the calendar year, but we’re already in October, 36 pounds in a month and a half, may not be really may not be achievable or realistic? |
| Richard | Give up eating. |
| Robert | Well, exactly. But, then here’s what happens. We give up eating for like, three days, and on day four, we head to Tim Hortons for a couple of you know, sour cream doughnuts and a large double-double because after three days we have, we’ve committed ourselves to fail by not setting a realistic goal. |
| Richard | So that’s what SMART is? |
| Robert | Yes. |
| Richard | Okay, now you also mentioned something else. I’ve heard this before, but missed to see it in your book, nice to be reminded of it, the phrase called, Pay Yourself First. |
| Robert | When we think about the concept of money and saving dollar one, we have to, particularly for those of us who get a regular paycheck from an employer, take the money right off the top. So if you received $500 that week, is your paycheck the first X amount? Whether it’s $5, $10, $50 or $100 goes right off the top. You don’t see it. You don’t get it. You can’t spend it. |
| Richard | You don’t put it into the same account that you’re |
| Robert | Exactly. It goes into that account not linked to any of your debit cards, so that you have no access to it without maybe physically going into a bank branch in order to do it. |
| Richard | So this is a bit of takeoff on something you said earlier about, we’re talking about pretending that you have a 5% pay decrease. |
| Robert | Right. |
| Richard | Basically, you’re paying yourself that 5% first. |
| Robert | Right, and that once you do that the rest of the money you get to spend without ever worrying about it. The problem is, many of us try to do the reverse. How much money do I make? Here’s my bills, add all the bills up, and we draw that big line, say, I’ll save what’s left. |
| Richard | Right. |
| Robert | There’s none left. Because our unexpected expenses and our ability to go and hang out with our friends on the weekend and only eat into all of that residual income and then the amount at the bottom is zero, I don’t have any money to save. No, take it off the top and once it’s gone, the rest of the money, go ahead and spend the rest of the money. And I didn’t invent this phrase. I think it was the guy who wrote the book, The Richest Man In Babylon, in 1904, who actually coined the Pay Yourself First. |
| Richard | Nothing new under the Sun. |
| Robert | There really isn’t. |
| Richard | But, are munificent Government invented a couple of things for us, one is called on RRSP and the other one is called a TFSA, registered retirement savings plan, and the tax-free savings account. |
| Robert | Right |
| Richard | Now, you’ve got some ideas on the benefits and, to some extent, the detriments, of one against the other. |
| Robert | There are, I think there are certainly pros to both. The RRSP is thought of as a much longer-term vehicle for saving money. Because, you put money into the account, you get a tax break today, and then that income will be taxed back to you 10, 15, 20, 25, 30 years out. |
| Richard | Presumably at a lower rate because your overall income, |
| Robert | Presumably at a lower rate, because we make hopefully a decent living while we do that when we’re retired, our income falls. We’re taking money out, it should be taxed less. It grows compounds over all that time. And then we can tap into that later. The tax-free savings account, and I guess it’s a decade old now, so but it’s still relatively new in the grand scheme of things, allows us to put money away, and all of the growth has never taxed, in that account. We don’t get a tax break for contributing the way we do with the RRSP, but all of the growth that occurs in the account comes out of it, none taxed. I think, the one thing I wish they had given it a different name because they called it the tax-free savings account, so we tend to think of it as a savings account, like it’s transactional. We put money in this week, take it out two weeks now. Put money in next month, take it out two months from now. It wasn’t designed to be transactional that way, and you can invest inside it and hold stocks, mutual funds, ETF’s. It shouldn’t just be thought of as a savings account. Why? Because you can’t get compound interest when you’re only using, getting 1% on your money, using it as a savings account. |
| Richard | Yeah, and not surprisingly, and not that many people are terribly converse in with what a TFSA is and how it works, the way you’re describing. A lot of people, maybe most people understand what they’ve been, just a retirement savings plan, because CPP is that there’s always talk about providing for yourself when you’re as you get older. Generally, some concern and anxiety that comes into play for probably most people that, what will they be able to live on? Are they going to be totally dependent upon CPP and OAS? Or will they be able to provide for themselves completely, or maybe supplement themselves? |
| Robert | And, do some Canadians have a pension plan? Some of it’s a defined contribution plan based upon what you contributed through your employer and automatic deductions and what they might match. Others are defined benefit, which is more of an older style, which my father had because he worked for the same company for 35 years. But, all of these things, to me, go along with having a conversation with a financial professional because there’s lots of decisions to make, lots of options to have, and sometimes it helps to have another person help walk you through the process. Here’s the pros and cons. You’ve got 15 options. How do we sort our way through that? Yet, sometimes we try to convince ourselves that, I’m smart enough to figure this out all by myself. And, yes, some people are smart enough, but, going right back to where we started this conversation, how you work with your personal finances, has nothing to do with how smart you are it’s how, |
| Richard | What education is. |
| Robert | Or what education you have. It’s what are you willing to learn through the process to make better decisions? |
| Richard | Well, on that note, Robert, I think that wraps it up pretty good. You don’t have to be a PhD or anything like that to be able to manage your finances well. |
| Robert | Absolutely not. You just have to want to. |
| Richard | And, I know a little bit about how, and I can’t think of a better way for anybody to, for anybody to, find out how and to read your book, Rich Is A State Of Mind. Rich Is A State Of Mind. And highly recommend that anybody pick it up. Where can they get this book? |
| Robert | The best place to get a copy of the book is from my website, which is www.richisastateofmind.com. So it’s the book title, just as one word. If they’re interested in the other work I’m doing, It’s robertgignac.com, and they both link to each other. |
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