Time to Revise your budget?

It's always good to revise your budget as new expenses enter your life and old expenses exit as you pay off your debt.

If you're not into the snowball effect of paying off your debt what you can do is incorporate the interest charge you pay on your credit cards in your minmum payments for the month.

i.e. Your mastercard owes 1300 on it and your minimum payment is 37/month. But of that $37 dollars $30 is interest. Pay your bills biweekly instead to make it easier for you and make that payment (37+30/2)=33.50 biweekly.

You may not be able to do this for all your cards so get started and do just one. Then if you can manage, do it for a second one and so on.

Hope that helps! Doing it this way will actually save you hundreds in interest charges.

You're broke because you want to be

A friend of mine was skimming through this book today called "You're broke because you want to be". Strange title eh'

Are most people broke because they make a concious decision to be broke..or it's written down as one of their financial goals? No ofcourse not.

Something to think about:
If you're constantly spending money on the wrong things, which are things that don't have a postive impact on your financial future, then you'll be broke till death do you part. Win a million, a thousand, win cash for life, you'll max out what ever you get so you end up feeling the same way....broke.

So what do we do?
Invest your time in educating yourself about money, and smarter things to do with it. Simple.
Purchase a book on money, and read up on it. Use the internet to research about money, and eventually you'll find you're gonna start to figure things out.

Ultimate goal:
No matter how much money you make, you'll make educated decisions on how to make the most of it.

P.s. If you're into Zumba fitness, visit my other blog at: Ditch the workout and join the party!
http://thezumbasoul.wordpress.com
http://www.zumbaworkoutscanada.blogspot.com
www.zumbaworkoutscanada.com Video tutorials on how to dance latin style

Zumba Workouts Canada

I've recently launched a new website in another venture I got going to hopefully improve the quality of my life.

If you already have a gym membership with www.goodlifefitness.com then you probably have already heard about Zumba! Gotta make sure you say it right ZOOM-BAA!

If you love to dance, even if you don't have much experience with Latin Grooves Music, it's still okay. You'll eventually get better and better at it.

My website talks about how to bring Zumba into your life to invigorate your soul.

• Links to my blog at www.zumbaworkoutscanada.blogspot.com
• Hot MP3 Tracks that fit a Zumba themed workout class - can be purchased on www.itunes.com
• Basic Steps
• Zumba Instructor Reviews for the ones I've tried - each add their own flavor to the mix
• Important Zumba Links
• Before & Afters

If you have suggestions visit www.zumbaworkoutscanada.com

XBankers.ca - Review or Anti-Testimonial

XBANKERS.CA
lame italisized IMPACT font logo

Well well well, what do we have here? Something that seems too good to be true eh'. Well like they say, if it sounds too good to be true it probably is. Here is another good one - Curiosity killed the cat.

So in short, I wasn't happy with my experience with xbankers.ca. Their website doesn't have all the bells and whistles but their pitch in filling in that neat little form on the front page with the little red bow on top was enough to get me to press the "send" button.

After I pressed send, I received an email telling me that someone would respond to my inquiry shortly. They did in a matter of hours by email!

Email! Are you kidding me!

I was asked to email personal information. Not come into their office for a cozy appointment where they'd offer me free stale coffee they've had sitting there for a couple of days...but plain old email.

I got a queezy feeling in my stomache. So there was a number at the bottom of the email that I received and I called it. When I called, I was also told that I can email my personal information again! Credit card info, bla bla bla. And the email they were using was a from a gmail account! Hey Google, nothing against you guys, I love yaz. But they don't even have their own domain email.

It was downhill from there guys. I ignored further attempts to communicate with me by email and told them that I was no longer interested and I found another company - which I didn't.

For the politically correct version of this review - Xbankers.ca came across to be as being too informal, unprofessional, unsecure, and way too home businessy

That was my experience, feel free to post yours in the comments section below. toodle loooozz!

Money - The #1 Reason for Divorce

If you haven't had a serious discussion with your spouse about your current and potentially future financial situation then you're headed for trouble.

How?

It all happens when one of you decides to get serious about budgeting expenses of the household and the other doesn't. That alone will cause petty fights and arguements because one of you is trying to grow up and be more responsible and the other still wants to take their time or just doesn't see it as a big deal.

Advice: Do what you can to make a change to your lifestyle by making better spending choices. As a result hopefully your other half will see what music you can potentially make together.

Good luck!

A Balanced Budget: What it means exactly

Are you feeling balanced or strained?

When you're on a successful balanced budget, it truly feels like losing 20 pounds. You feel comfortable in your money and you get what you need without feeling strained. That's what it feels like.

Here's an example of a strained budget: Income $3000/mo

House/Rent = $1500 (incl. property tax+home insurance)
Car Loan = $300
Car Insurance = $200
Gas = $150
CellPhone = $70
Food= $240
Visa=$65
Cable/Phone/Internet=$150
=$2675.00/month spent
=$375.00 /month left

So when you look at the budget of a single person up above, it looks as if initially they can afford to live in their home. However, you have to prepare for unexpected expenses such as:

Car Repairs
Home Maintenance Repairs
Tim Hortons Coffee/Timbits
Convenience store snacks
Cigarettes
Eating out at restaurants
Cinema
Shopping, online or offline
freak emergencies

So based on the budget above and with possibility of expenses popping up and eating habits unaccounted for, Can you afford to live in this house or get a house at this time with your current income? NO

Expect to live like a someone walking around with a noose around their neck. You'll be strained, life will suck, and payments are bound to be missed.

So what do you do? Figure out what changes you can make to your spending so that you can balance your budget to the following figures:
Housing 35%, Transportation 15%, Debt 15%, Food/Entertainment/Emergencies %25%, Savings 10%

Based on the budget above you can cut costs the following ways:

-No Timmies, carry a thermos to work
-Don't eat out
-If you work in the same city, use public transportation and bike to cut costs
-Change cable/inet/phone provider. Use skype to make and receive calls, or freecall
-Lower cell phone bill to a my5 or free incoming calls
-shop around for car insurance
-Rent out part of your home
-Quit Smoking

Just a few idea's ...so improve the quality of your life by cutting costs so you can save to go on a vacation once and a while eh'

Debt Denial Anyone?

At some point or another we all can say that we've gone through a phase of our life where we've denied many things - Denied we're beautiful, denied we're well off, denied being in debt - oh yeah and denied being too old to wear a bikini!!! Like wtf!!!???

Does this sound familiar?

I'm not in debt! If I sell everything, it'll be paid off!

What about this one?

All I have to do is pay my minimum payments and I don't have to pay it off right away! (**and you say this with a huge grin and a wide eyed look on your face)

And this one takes the cake...

All I gotta do is win the lotto and I'm set for life!

Why don't we all take one moment to get real here? And realize a few of the following bad signs that you are in fact - IN DEBT:

• You can only afford to pay your minimums


• You're living paycheck to paycheck


• You have not prepared to pay for a last minute emergency and will look to your credit card to save you from it or a loan


• Your card or cards are maxed out


• You rely on your credit card available balance to supliment your income


• You take cash advances from your credit card to pay for things
• Your overdraft is used and you're living in the negative every month

And last but not least - You have no feasible plan to pay it off other than saying "I'll pay it off when I have the money"

So rather than later - make it sooner to make a plan, put pen to paper and pay off your credit cards and keep your balances low if you plan to use them.

Keeping your balances low lets lenders know that you're capable of handling credit. This rule alone helps keep your credit rating plump and juicy, instead of dried up and on fire!

Your Minimum Credit Card Payments? $$$

Paying your minimums eh' - definitely a bitter sweet isn't it?

Benefits of paying your minimums:

Pay less money at a time

You don't have to pay them back right away

You can use a portion of that money again for a purchase

Keep doing this and you'll never pay them off!

Disadvantages of paying your minimums:

Creditors don't like it when you just pay your minimums because it shows you're having difficulty handling access to credit

Although your payments are on time, with high balances it does nothing good for your credit rating

Lastly - YOU PAY AT LEAST DOUBLE IN INTEREST WHEN YOU PAY YOUR MINIMUMS ONLY!!

i.e. If your credit card is 10,000 and your minimum $106.50 at 11% interest on those lower interest rate cards. It will take you 18 years to pay it off and they get $13,004 in interest!

Think about it...

Put pen to paper and make a debt repayment plan to pay down that sucka' - no pun intended...

(The one on the left is symbolizes your relationship with your credit card and the one on the right signifies what you'll look like after 18 years of debt - just a wee bit worn out eh'...tee hee hee)

Inherit Mom & Dad's Debt: True or False?

I'm sure at some point or another you've wondered about the same question...

Can they past their debt onto me when they kick the bucket?

Do they have life insurance to pay off those debts when their coop is flown from?

Answer: No, unless you co-signed or have a joint account for which you indirectly become responsible for the debt. Any money left unpaid would be absorbed by the creditor.

Reason: As long as you're not doing anything so that the creditor sees that you're taking responsibility for the debt and leaving a paper trail as proof then you're in the clear!


Example:

• A joint credit card with a parent
• A joint checking or savings account with a parent
• Writing checks from your personal account to pay off dad or mom's bills

So be careful guys! Just because they're older, doesn't mean they're more responsible with money. Cover your asses. If you want to help mom and dad out as long as your financial situation is balanced, then you can give them cash or write a personal check to them and they can deposit it to their account.

(And for the parents that sign up for things in their kids names and then don't pay the bill - How the heck do you sleep at night for crissakes????) - Parental Identity Theft : doesn't sound too nice doesn't it...

How to Build Credit Score: With Bad or no Credit

Hey guys! Here are a few steps you can do to increase your chances of getting approved for a credit card.

1. Do not apply for any credit card or loan for at least 6 months. The reason is because when you apply for credit, it records a hard inquiry on your credit report and will decrease your score. Too many inquiries made at once to get a loan or credit card communicates to potential lenders that you're in need of instant cash. Not good. If you're however, shopping for a home and apply to for a mortgages from different banks, it doesn't have much of a negative impact on your credit score.

2. After 6 months to a year has past and you've continued to pay all of your bills on time and pay more than just your minimums. Ask your bank for a secured credit card for which they will take a small sum of money as collateral - like 250 or 500 which would also be equal to the approved limit on your card. Don't confuse this process with that of a prepaid credit card because the money they give you access to is credit for which requires you to make your monthly payments on time.

3. For the next year and a half to two years, use the card responsibly and keep the balance 50% or below the credit limit, pay the bill on time, and pay more than just your minimums. After that time has passed you should have no problem in getting approved, through the same bank, for an unsecured credit card.

A good credit rating will save you thousands of dollars in interest in the long run. Play the game but play it smart:)

How to Build Credit Score: After Bankruptcy

In the beginning there was man, animal and credit. Credit is the root of all evil and good. So if you build it; they will come.

Here a few quick tips on how to build your credit score after filing bankruptcy or from age 18 where you don't have a credit card yet.

1. College institutions...

often offer students their first credit card and it's quite easy to be approved - Look out for those agents, they stand at little booths near the cafeteria with small red horns on their head giving you the "come hither my sweet" glance from a far

2. If that's not an option, get your own cell phone in your own name.

Apparently they report if you're on time or late with your payments to the credit bureau. Pay your bill on time all the time and it's an easy way to get on the credit score map

3. If option one or 2 aren't an option then buddy up with mom and/or dad to co-sign a small bank loan with you to build your credit.

If you make a good reputation on that loan with the bank, chances are they may eventually approve you for your own credit card. So you build it fast make it a small loan for $1000 and pay it off in a timely manner. Also mom and/or dad or friend or whoever will do you a favor , need to have good credit.

If there are other ways you can think of, add a comment or send us an email

HSBC Finance Debt Consolidation is a huge rip off!

Calling all Canadians! Hey you learn something every day but gotta warn you that using HSBC Debt consolidation will rip you off in interest rates. The interest rate alone is double that of a consumer credit card at a whopping 33%!!!

Too bad some realize this too late. For example:

An approved debt consolidation loan for almost 10000 will cost you almost $6000 in interest rates over 3 years if you go with HSBC.

When I had my first consolidation loan with them and called to complain why I wasn't able to receive any statements of what my loan is at and this is what I was told. I was told that I would have to call in every time to find out and that I would have to redo my loan over so that I can receive automatic statements. AKA it was soooo lame. And as the rep made a lame attempt to appreciate my frustration it all went to nil when they said this...before I slammed the phone in their face

"We appreciate the interest that you forward to us"

Yeah I know pretty disgustingly transparent eh'

I did find a new company though and would like to share - http://www.xbankers.ca/ who are based in Toronto Ontario Canada. If any of you have experience with this institution kindly let us know by posting a comment below. Apparently a 10000 loan would cost under 11000 instead of the whopping 15000 with HSBC Finance

A Balanced Budget: Lesson 102 - Overspending

Overspending eh!

What is a balanced budget? How do you know if you're putting too much of your monthly net income toward a particular expense? Here's How...

1.
Take your monthly combined income: i.e. $4200 or
Take your monthly single income: i.e. $1600

2. Divide your monthly income up into the following percentages that signify a balanced budget.

25% Housing (rent or mortgage, gas, water, electricity, home insurance)
15% Debt (minimum credit card payments, loan payments, line of credit, student loans etc)
15% Transportation (gas and auto insurance and repairs)
10% Savings/Emergency (to be put aside into an RRSP and emergency savings account)
25% Leisure/Life (groceries, movies, dinner, fun stuff, baby needs such as diapers, formula, medical, pets, petfood, vet)

3. Examples using 4200 combined income: Let income be variable I

25% Housing = $1050.00 = H
15% Debt = $630.00= D
15% Transportation = $630.00 = T
10% Savings/Emergency = $420.00 = SE
25% Leisure/Life = $1050.00 = L

4. Analyze the numbers
-If your housing costs are more than $1050 then you've taken on a bit more than you can afford so guess what gets slashed first? That's right the savings. Not good because there has to be a back up plan incase your other half gets laid off.

- If your debt payments exceed that because of a debt consolidation loan in combination with credit card minimum payments, student loans and line of credit interest - find a way to make more money to get rid of them and cut costs on your variable expenses.

5. Analyze the numbers using the following formula for each of the 5 partitions above:

(H/I)x100 = The percentage you're spending on housing (Is it more or less than 25%?)
(D/I)x100 = The percentage you're spending on paying your debt (Is it more than 15%?)
(T/I)x100 = The percentage you're spending on your sexy ride (Is it more than 15%?)
(SE/I)x100 = The percentage you're spending on savings (Is it more than 0%? up it to 15%)
(L/I)x100 = The percentage you're spending on life/leisure (Does it exceed 25%?)

What this means for you?

Now that you know your percentages, time to cut costs. In many cases you'll find the debt D and the L Life/Leisure very high. See what you can do about cutting costs there. Also T might be a bit high too see what you can do about getting a better vehicle that you can afford and not just pay for while other payments such as cable/phone/internet are being put on the back burner.

This posting should give you a good idea on where you're at financially and what numbers would balance your budget based on your net monthly income. If you're living like you're rich, bring in the cash that you'll need.

(See posting on "Are you really affording it" in June 2009 Archive to see if you're making enough money to successfully maintain the lifestyle you want. ) http://debtfreetickler.blogspot.com/2009/06/debt-are-you-really-affording-it.html

Credit? Forget it!

Sharukh Khan - Bollywood Superstar

One saying I heard from one Bollywood movie for which I can't remember is "Credit? Forget it"

So next time your spouse asks you if he/she should buy something that involves a credit card, loan or something of the kind you say 2 words...... 3 times

Credit? Forget -it, Credit? Forget-it, Credit? Forget -it.

Had to pay tribute to one of the best Bollywood actors of all time - Sharukh Khan. so

Slumdog millionaire can eat his dust because America hasn't tasted what Bollywood is really about until they've seen Shahrukh Khan in action!

Debt-Free Budget Plan: Getting spouse on board

Getting the spouse on board can be like pulling hair out of a horses ass - A real kick in the head.

-Your opinion has little or no bearing on purchase decisions

-Spouse doesn't want to talk about numbers

-They're busy

-They point fingers and pass blame

-They say it's your problem

-They don't want to share responsibility of the accumulating debt

-Keeping secrets that get you deeper in debt

-They talk about the plan but no action

-You have separate bank accounts and keep your personal finances private

-Don't really care about their credit rating or getting a house-Rely on applying for bankruptcy as a way out

If any of you have any suggestions on how to get the spouse on board to making an agressive plan to pay off debt - share and please do in a comment below.

Cash Money Management: How to start

After you've made a solid and realistic budget implement a plan to live on cash. All your fixed expenses such as:
-Rent
-All Minimum Loan payments(Car, Credit Cards, Student Loan etc.)

Then shop around and/or cut costs on:
-Auto Car Insurance
-Water
-Gas
-Electricity
-Home Insurance

Then divide up all your variable expenses such as:
-Food
-Clothing
-Diva Maintenance (Hair/Nails/Waxing)
-Pets Medical/Food
-Anything other than what fixed expenses are but that you can forcefully do without(some of them)

Now there is only so much money you have to divy up unless you're going to get out there and make some more money.

So then you begin to live on cash and when you do, you wouldn't BELIEVE how much you've spent before. All of a sudden the answer to the question:
-Where did my last $100 go?????
Becomes clear. The answer to why the rent bounced, why Paul is still harassing you for his money...................all becomes clear

Guys you gotta start living within your means even if that means, cutting down on buying so many snacks, or even selling the dog.

But don't worry, it'll all be over when the debt is gone:)

Michael Jackson's 1.4M Memorial: Caring Humanitarian Deep in Debt

What an amazing memorial ceremony. Many stories and commendations were given to the King of Pop in an effort to restore credibility and empathy towards him.

He was indeed a caring humanitarian who gave and gave till no end. But was he able to afford it? Probably not. As long as he was spending up to 30 million dollars more than he made every year chances are his extreme generosity contributed to the massive debt balloon of 400 million dollars. Without a financial planning map it is said that the only place you'll get is lost.

Another question is who is going to end up paying for the massive $4,000,000 debt load???......his family or tax payers themselves? It definately worries me that with another write off debt hanging over our heads, what are the politicians going to come up with next?

Don't you think it would've made sense that they used the memorial as a fricken fundraiser to knock several million off the debt? For a man that was indeed very giving, it would make sense for the ones who care so deeply for him such as his immediate family to do the same.

All the roumers that are stirring about are just fogging out the fact of the 400 million dollar debt still needs to be paid back and there is no way in hell it's going to disappear!

(p.s. Also wondering why President Barack Obama didn't accept the invitation to come to the memorial ceremony?? We brothuz got2 stick 2getha' right...)

Michael Jackson died 400 Million Dollars in Debt

Michael Jackson 1958-2009
This is how I remember Michael Jackson - on stage he was cool, a great dancer and overflowing with charisma. Off the stage he was humble, quiet and caring and a billion dollar business man. Although there were rumors that he was in debt, the public didn't absorb the the truth of this matter until he died.

400 Million dollars in debt would make just about anyone wanna head to the grave due to the stress alone. R.I.P. (b.t.w. Did he die as a Christian or as a Muslim?)

How did he manage to go in to his debt up to his eyeballs and beyond especially after becoming so ill during his decade long scandal? Was it because he became too ill or sick to work or was he deep in debt before all of that started?

We know he was a business man who bought and invested in many things. Lets go through what we know some of them were and other factors that influenced the 400 Million dollar debt snowball...

• He hasn't toured since 1997 and last album "Invincible" was made in 2001


• Bought 2,500 acre Neverland Ranch for 14.7 Million Dollars in 1988 - Years later he borrowed millions from a wealthy friend to save the Neverland ranch from being sold in a public auction in exchange for a joint business venture


• Accused of Molesting a 13 year old boy in 1993 which cost him millions to settle the case


• When he secured a 95 Million dollar deal with ATV, he used it as collateral to secure 200 Million dollars in Loans


• Owed lawyer fees of 12 Million dollars in fees and expenses


• Defending many lawsuits to fight for his innocence which resulted in millions going out the window


• The king of Bahrain, Sheikh Abdullah bin Hamad Al Khalifa sued him for 7 million regarding a deal made with Michael Jackson to write a book and make an album which was never produced. The king also took him under his wing and subsidized his expenses for some time as a good gesture and let him stay in the Gulf.


• Millions in ticket sales to be refunded for upcoming Tour this year - but unfortunately no longer...


• It was said that he was spending 20 to 30 million dollars more than he earned every single year. Multiply that by 10 and double it due to interest it surely makes a lot of sense on how he'd get there

So even the great celebrities need tangible tips in money management. Based on this list we know spending more money than you earn will land you in debt. We also know that not paying back those whom you owe money is the true culprit in making debt snowball to a colossal mess that can kill ya'

So be tickled by the feeling of becoming debt-free because it's never too late. Put pen to paper and calculate what you can actually afford and where you can cut costs. The best thing is that the plan is only temporary. Once the debt is gone, make a pact to never borrow again. The money you get is now yours not theirs - a great feeling!:)

Snowball Calculator: How long till you're debt-free?

Hey - this is an awesome FREE tool that can help you figure out how long it will take you to become debt free depending on the amount of $$ money you put toward paying off your debt.

Give it a whirl!

Download FREE Excel Snowball Calculator

Thinking of filing Bankruptcy eh'???

Not to mention any names but one who was thought to be wise said "I'll just file for bankruptcy, it doesn't cost anything". Well did we look into that one

When to file for bankrupcy?

You file for bankruptcy when all your debt and loan minimum payments exceed 75% of your monthly income AND where the 25% left from your money isn't enough to cover your Rent, Food, and Transportation. Simply put - right there - you'd be smack dab in the middle broke and you'd never be able to dig yourself out of it based on your current monthly income.

So what are the basic 101 facts about bankruptcy?

Well it's simply this. They tally up all of your debt and lets say that's 270,000 for one individual. Then they tally up all your assets, which include:

• Equity in your home - by taking your home away including all the work you put into it


• Your Car - including all the money you spent on tricking it out


• Any other assets you have as well and liquidate that to cash

and here it comes.......................... liquidate all of that and turn it into cash, and use that to pay part of the debt off...and then write off the rest and say "forget about the rest". And you start from scratch all over again.

How long does it stay on your credit profile?

It stays on your credit profile for 7 years and then the credit bureau MUST remove it. So even if you apply for a house or a loan after 7 years and know that it's erased from your credit report, and they ask you "have you applied for bankruptcy within the past 3 years"....if you're on year 11 what is your answer? That's right...N O. So don't let that 7 year curse last longer than it needs to by reminding lenders that you've filed bankruptcy so and so years ago. Some lenders make their decisions based on their discretion.

What if I have co-signed loans with other people?

If you have loans that you've co-signed with other people be it family members or family or friends, know you'll end up bringing them down with you. But there's also a rule where you can't file for bankrupcy if the cosigners are your parents.

How do I reduce stress of bankruptcy during my 7 years?

Just accept and own your situation. Make a cash only policy, and don't buy what you can't pay in cash for. Embrase the feeling of being debt-free which is a positive thing. When you're situation get's better, then review option of becoming a home owner at that time. And in the mean while, play that fricken' lottery every week like their ain't no tomorrow. It's pretty affordable, 2 bucks a week that's 8 bucks a month. You probably won't miss it as long as you include it in your budget.

If you've filed bankruptcy and your seven years it will limit the following:

-which apartments you can rent from or not

-whether or not you can get a cell phone, might have to do pay as you go

-you can't get a loan in any shape or form

-possibly can't get cogeco cable or rogers cable or any utility company that requires to do a credit check because it will be so low they won't want to look at you

-anything and everything that involves getting a credit check will be declined

HOpe this helps guys so don't jump the gun and even think for one second that bankruptcy will make your life easier. If you're a habitual spender then you'll find it extremely difficult

Good luck!

What Bad Habits will cost you

Never realized how costly bad habits are until only recently. Here are a few...

• Medium Tim Horton's Coffee twice a day for 25 days costs: $64.00/month

$64.00 can buy you 2 trips to the movies twice a month with your partner

• A bagel with butter and a medium coffee once a day for 24 days: $57.75

Do that twice a day and that's $115.50/month which can buy you cable/phone/Internet with cogeco cable under promotional pricing

Solution?: Pack coffee in a heatable thermos, even if that means you have to purchase one. Instant coffee tastes pretty great with the right cream and/or the right amount of sweetener or sugar

• An egg or tuna sandwich from work once a day for 25 days costs: $60-70/month
• Pizza slices, or ordering whole pizzas
• MacDonald's
• Dairy Queen ...........yuuuummmmmm blizzards one a day 25 days = $100/month

Ever wonder why you fall short on rent, utility bills, or other fixed costs you've been encountering for the past several years because of debt. Well it's because you're overspending on those bad habits that definitely cost you more than you can afford.

Don't you think it's time to wake up and smell the Jalapeno Hummus?

(Longo's carries the best brand of hummus with the green lid on it...trust me on this)

Making a positive impact on credit score

There are a number of things that can impact your credit score:

• The total debt you owe
• Your total yearly income
• The # of revolving accounts and loan accounts
• The balances on your revolving accounts and loan accounts
• # of hard inquires made on your credit report
• Late monthly payments
• Accounts that have gone to collections
• If bankruptcy was filed within past 7 years

FACT: But believe it or not "the overdraft on your personal bank accounts" are not in your credit report and therefore do not accumulate to the total debt owing.

FACT: Your bill with your cell phone company be it Rogers, shows up on your credit report, and reports by month if you were late on your bill or not - that kinda sucks...

There are a few hidden ones I have yet to investigate and experience, but I'll definitely let you know when and if I find out more.

I had a conversation with a call center rep who worked for a company who keeps records on credit reports and score, and I asked them simply:

If paying down my closed card account will increase my credit score?

The only response I got from that whole 15 minute call was that "any payments you make to your card will have a positive impact on your credit score" What a generalized bunch of monkey doo doo! It was pretty disappointing and I politely finished the call and thanked them for their time - a waste of time that is....

So from my own investigation the answer is this"

No your credit score will not increase unless you pay off your closed account in full. Period.

Why Closing all your cards lowers credit score

Question: Has it ever happened that after you "paid off your cards", and then closed them all that your credit score got lower?

Answer: It's because after you pay off your cards, especially the ones you've had for a long time, your ongoing credit history with that card stops dead in it's tracks.

Keeping a MAXIMUM of 2 of your oldest cards with the LONGEST credit history OPEN and use no more than 35% of the balance and pay it off in 30 days in FULL...............here's the kicker.........you ready???!!!

Tells Lenders that you're capable of handling access to credit. WOO HOO!

man that took a lot of energy out of me to say....trust me...i was just as shocked as you are now:))

Which Cards to pay off first?

There are 2 types of credit cards: Secured credit cards and unsecured. The secured credit cards require collateral such as the home you own or your vehicle. Unsecured credit cards require none of the above and grant you the card based on your current credit rating status.

The answer: Pay the secured cards off first. The reason is because if an extreme variable change occurs in your life and affects your ability to make your payments on time they will eventually collect on the collateral you've put up. You don't want things to come to this point. In fact it's better not to apply for these types of credit cards at all.

At least, when you're dealing with collectors, you can buy time. Get it...buy time....hahah

Kick Bad Spending Habits or Debt will Snowball

"Honey ??? Where did all the money go? You just got paid 3 days ago?"

You've probably had this conversation before with your other half. And as soon as you begin to forget where your money is going and how it's being spent, chances are it's being wasted on something you didn't really need. Something you felt you needed at the time you looked at it for that split second.

Try to calculate how much of your money goes towards things other than mortgage, rent, gas, insurance, clothing, food, and utility bills. Basically every single dollar you spend outside of that is what you spend on your daily comings and goings of life. Take a half an hour and try to calculate how much % of your income is going towards variable aspects of your life. Is it 40% or more? If you don't know where your money is going, then chances are it's at least 40% of your income. And if you end up coming up short on your fixed expenses such as the mortgage, rent, food, car insurance, then you're definitely spending more than 50% which is more than you can actually afford.

Isn't it the first instinct to live in the now and not plan for future emergencies. But try to think, what if your honey loses his/her job? Then what? Any money in the bank that you don't have to dip into your RRSP to cover your butts? If you're finding it difficult at this point in time to talk about it, then work on yourself and set a good example and learn how to efficiently stretch that dollar. But be careful of the inevitable debt snowball that grows even in your sleep. And continuing to use your debit cards out of habit is a sure way to lose track and allow your debt to spin out of control...

Debt: Are you really affording it?

WARNING: The information on this post may shock you so be sure to have a glass of water on hand and an oxygen tank on hand.

Just because you pay your minimum debt payments on time every month, doesn't necessarily mean that you can afford it. Continuing to go about the same daily habits without revamping your budget, you'll pay those minimum payments for decades and the debt you pay will never seem to go away.

With your calculator, figure out all the money you pay towards your minimum monthly debt and divide it by 15. The answer is the money you actually need to maintain a good and healthy debt ratio.

For this example this is the debt of 1 family member not a combined household

Your Variables are: DEBT = $926.00 DEBT RATIO=15% X=?

X = $926.00/0.15 = $6173.33

So, a monthly income of $6173.33 is what you need to make to maintain a comfortable living lifestyle, never having to rob Peter to pay Paul. You'll be able to save for retirement, provide for your family, and even go on a vacation once an a while. Life would be great!

But let's get back to life, and back to reality. It's time to crack down on this....I know you've been considering it but debt repayment requires a plan and in writing. I'm talking about making shopping lists and comparing pricing, avoiding name brand products, cutting down on variable spending, scrapping the debit cards and credit cards and living on cash. Following a specific plan and setting goals that you can live by and working together on debt repayment is the best way. If communication is difficult with your other half, then work on you first and set an example. You will thank and treat yourself in the end when it's all over ;) Not to mention, you'll become very talented in finding great ways to stretch your dollar!

What is a Good Debt Ratio?

It is important to understand what Debt Ratio is and how it is relevant to your efforts of paying off your debt.

Ideally if your Debt Ratio is 15% or less, then you can live a comfortable lifestyle.........I said comfortable, not lavish :)) Once you begin to exceed this mark and as that mark eventually doubles, you'll be pickin' at Peter's pockets to pay Paul in no time.

Using the Debt Ratio Diagram, calculate what your debt ratio actually is. Let's say you got 41%. That means you're spending 41% of your income to pay your minimum monthly debt.

But here's the kick in the ass...You still have to factor in the remaining 59% for:

• Rent/Mortgage/Utilities


• Auto Insurance/Gas


• Food/Clothing/Leisure Activities/649


• Emergency/Savings (What most forget indeed! Trust me, pensions aren't that great...)

If your debt ratio is this high, then the first thing that gets dropped from that list is the savings and emergency fund - then comes clothing - food - and then when it gets really bad you sacrifice the leisure activities. After all, isn't it a lil' R&R that, gives us a peace of mind or temporarily forget about the horror we've created for ourselves in wasteful spending and racking up all that debt that will never go away until we die.............. oh yeah and then there's the 649 - no harm in dreamin' because it doesn't cost a thing:)

Your Credit Score Horoscope

Now that you're making the move towards becoming debt free, your credit score will begin to matter more and more. You're now turning over a new leaf - into a new frontier to go where many many men have gone before....

Getting an awesome credit score is kinda like flying to the moon, to stick your flag of commitment and integrity into the moons dust of debt freedom and say..... "Screw all o yawl creditors cuz you ain't gettin' a damn penny outta me anymore!" It's a feeling I have yet to feel but that glass is half full and I'm moving on up!

As you pay off each chunk of debt such as a credit card, a consolidation loan, a car loan in full, it automatically increases your credit score by 50 points or more. Also keep your credit score from going down by keeping your credit card balances at 75% of the entire credit limit or less.

How is our credit score, relevant to how lenders see us. If you look to the chart to your left here is a following explanation.:

• For those with a credit score of 700 or more, creditors say that there is a up to a 12% chance that you'll let the balance slide but will be more than willing to hand thousands of dollars to you in the form of pre-approved offers.

• For those of you with a credit score from 600 to 699, you're probably in a situation where you have more debt than you can handle at this time but you pay your bills on time every month or at least most of the time. Lenders say there is a 23%-39% chance you won't pay it in full and that you probably can't afford the extra debt and will likely decline the application - even if it is for as little as $500 bucks.

600-699 How to increase your score: Reduce the number of CLOSED revolving accounts you have by paying off the easiest one first. On open accounts, reduce the balances to 75% of the balance and under. Try not to have more than 2 credit card accounts and if more then pay them off and leave 2 or 1 account open.

• Now for those of you with a credit score of 0 to 549 have more than 6 revolving credit card accounts, for which you pay most on time but there may have been several you've forgotten about. Such as an unpaid ticket for jumping the Go Train because you didn't want to miss it but the cop didn't buy your story that you didn't know you had to swipe your ticket or you just gave up on your credit score all together. In this case, Lenders will say there's up to a 75% chance that you won't pay the loan so it's probably just better to save the embarrassment and not apply until you clean up your credit a bit first and pay off creditors that have been calling you.

0-549 How to increase your credit score: Create a budget and live on cash and pay off outstanding balances with your creditors. At the same time, reduce open credit card balances to 75% of the balance or less. Try to get a second job to have the extra money to pay the creditors such as finding a night job in the food services area or fitness area. With a step at a time, it will get better!

Get Debt Consolidation if...

The debt consolidation option for some is the only option.

Let me rephrase that - if you have a lack of self control once it comes to paying down debt, and need to be put on lock down so you get the darn thing paid off..then debt consolidation is the way to go:) That's me, I put my self on lock down and I'm currently onto round #2.

I've used this before and paid off a 6000 debt in 3 years. It worked and that part of the debt is no longer a part of my life. So I went back for another consolidation loan for almost $10,000 that I co-signed with the hubby. Another year to go an that too will also be paid off.

So in short here are the advantages:

• You get the debt paid off in a set amount of time
• Your payments are preauthorized on the day you get paid so you have no excuses
• When the consolidation loan is paid off your credit rating will increase by 50 points or more

And for the disadvantages

• The dog-gone interest! Expect at least a 30% interest rate.
• You're committed to pay it unless you purchase an insurance with it if you lose your job or something like this

So regardless of the fact that I may have been suckered into a 33% interest rate, consolidating a loan with HSBC finance but I'll be a debt-free lil' sucka in a few years! Cheers to that!

How much debt do you have?

It's not as easy as it looks to figure out the answer to this question. Student loans, car loans, line of credits, and credit cards and last but not least, the debt you owe to your neighborhood Mafia representative :)))

After you figure out how much debt you actually owe then do some simple math. Compare your payments towards that debt to your monthly salary. i.e.

Debt Payments/Monthly salary = % of your salary you're using to pay off your debt

If that % amount exceeds 15% then your next step is to re-evaluate your budget to get you there or less. So as a rule of thumb, you don't wanna be paying more than 15% of your salary towards paying off debt because as time goes on it only gets worse. Time to begin a debt repayment PLAN.

If you find that lowering your variable expenses, isn't enough to have your debt payed off in 5 years or less, then consider debt consolidation and or finding a way to make more money.

p.s. it's gotta be legal ;)

Budgeting on Grocery: The Invisible Disclaimer

There is one vegetable but officially a fruit that bugs the heck out of me to buy. How the prices on tomatoes just spiked up from the good old 0.67 cents /lb to a whopping 1.99/lb. I didn't feel like driving to another grocery store to get one for .99 cents like Walmart or No Frills. I was already there and probably spend a dollar of gas driving there. So with resistance I got them from Longo's. It took me about 5 minutes to decide which ones I was going to get because I was looking around for something cheaper than 1.99/lb. So then found these nice round ones at 1.49/lb, so I bought them instead. When at the cash I came up a bit short and I was wondering why and I let it go for the time being until I got home and did the math on my receipt. Buddy charged me for the wrong tomato! After spending all that time choosing what I was going to buy and then was charged for it anyway.

So folks, next time you're in the checkout ask that cashier "Did you charge me for the right tomato"...or just point out as a quick note "those are bla bla bla per pound". Because seriously.......... can't afford the screw ups!

Budgeting & Low Carb Dieting

Hey, did you know that budgeting your money and living on cash actually cracks down on your impulse shopping. The only way this can work is if you don't carry spare change in your pocket and take your breakfast or lunch with you to work. Everything you eat should be at home and drink lots of water during the day to calm those hunger pangies.

If you have a monthly banking statement handy, just take a glance at how many debit card transactions occurred during a one month time span. Two bucks here, and then five and a bunch more all in one day. If you can relate, you'll find that many of those transactions are to satisfy some sort of food craving whether it be chocolate, blizzards, mc flurries, fries, chips.... i'm sure we can go on forever here...

So...when budgeting your money you're going to have a budget for what you spend on food during the week which will be relevant to the meals you make for dinner. And ofcourse a few other healthy low carb candies or snacks you've budgeted in if you like. I do the low carb thing because it's what works for me. So candies like the Go Lightly fruit chews ....ummm awesome! Many stores like shoppers drugmart, Sobey's, Longo's carry a few varieties of low carb candies that you can buy. You may find them cheaper on this website and I think they deliver to the USA at the link below:



Oh yeah and last but not least...all those trips to Tim Horton's for that morning coffee has gotta stop especially if you go more than twice a day. That's 50$ a month if you add it all up. Same money that could be going to pay off a credit card and get out of debt even sooner.

and hey...while we're all getting out of debt here...feel good about yourself and eat healthier. Change is definately good:)

Main Idea:
Eat at home only
Drink Water during the day 3L/day
Leave cash home to stop impulse shopping
Try low carb to eliminate sugar cravings & save money

Making a Budget: Lesson 101

I didn't realize what a budget was until only a few months ago. Before that, I remember writing down what I thought was a budget and then forgetting entirely that I was on a budget after a little more than a week into the routine.

So...

Here's the thing - when figuring out what your budget is separate your expenses into your Fixed Costs, and your variable costs. Fixed costs are bills that you pay every single month that can't be avoided if your life depended on it. You depend on it so much that it is actually a matter of life or death.

To list a few:

• Minimum payments on loans and credit cards
• Mortgage Payments
• Utility Bills

And then there are variable cost which can be reduced to a limit so that you're able to live within your means:

For example:

• Food - (base your food budget on a dinner menu to prevent food being wasted)
• Gas - (only drive when necessary - great time to get out your mountain bike this summer)
• Cable, Internet, Phone, Cellular Phone - (can you live without your dvr or cell phone?)
• Insurance - (have you shopped around to make sure you're getting the cheapest rate?)
• Monthly memberships - (Goodlife fitness cost 18 bucks a month, so what are u paying with yours?)
• Daycare - (Is your child in daycare while someone you love and trust can watch your child for you anyway?)
• Savings - RRSP, RESP, tax-free savings account products -(Are you saving anything?)

After dividing your expenses into the 2 categories: Fixed and Variable expenses, then figure out how much money you'll bring in on a biweekly basis and divide the payments. Pay half of the payment on one pay and the other half on the other pay. I find that works best for me and you never forget who needs to be paid because it's the same every other week.

P.S. Use online banking to let your payments be deducted from your bank automatically on your pay day so the bill is automatically taken care of so you don't have to forget. Pre-authorized payments done by the company itself can be a pain...why do that when you can DIY :)

Closing your credit cards

Rule 4: If you close your cards you'll never get them back until your credit rating is up to par which is 700 or more again.

Rule 3: Close your credit card if you feel 100% that you do not have the self control to avoid using that card ever again as you pay the balance down to get out of debt.

Rule 2: If you have perfect self control in this case, then leave the card open and pay it down. Leaving your oldest card open as you pay it down will definately help your score faster than if it were to be closed.

Rule 1: The supremo hemoe, the master of disaster, the blast from the past most important rule of all once it comes to closing your card is that....................someone gimme a drum roll!..........................................

************As you pay down your card on a "closed credit card account", your credit limit will come down with it so it's as if that particular card is STILL MAXED OUT!!!!!

It's just better to get rid of a closed card asap to have a positive impact on your credit score, otherwise it won't change until you do.

Living on cash

I can see your halooooo , haloooooo I can see your haloooooo...haaaay-yaaah-aaaayy-lllloooe - nice hook in that lyric by Beyonce and ironic how it connects to our so called "convenience" cards. Definitely more like an inconvenience to my bank account! Look at that halo, so pretty and how it puts us in a trance saying "yes!, you can afford that". They shouldn't be called "convenience cards" they should be called "you're better off kickin' yourself in the ass because you won't have anymore money by the end of the week kinda card"

Living on cash... Isn't that how we used to do it way back in the 80's?

Here's what you do - quick and simple - Fold them in half. Don't cut them up because you may still need to know the info for online banking or other small not so commonly used situations.

Give it a try! Step at a time and save some money from going out of your bank account while you're at it:) The next step? Pay down a credit card using the money you've saved, 5 bucks, 10 bucks, it all adds up over time. Paying anything beyond just your minimum payment is better than just the minimum. Use the calculator below this blog to see how much it will make a difference. It may end up shaving a few to several months off of how long it will take you to pay off your remaining balance.

The yearly quick fix vowe

It's unrealistic to expect to pay off your debt in 3 years or less by only paying your minimums. Find out why by using the debt calculator below to see how long it will actually take you to pay off your card.

Brace yourself though.... you may be surprised on what you'll find

It was funny and I heard or read somewhere that in most cases, people almost never use their tax returns to pay off or pay down their debt. I know we may say so, but it's harder to do when we actually have the money in our hand. Instead of thinking of quick fixes, focus on developing a personal budget first and figure out what extra money you can put on your credit cards to pay it off faster.

Use the tool below to see what difference it makes by just adding 30$ / month to a minimum payment on your credit card.

Are you ticklish?

First I'd like to explain the title of this blog called "The Debt Free Tickler". The tickle is the feeling you get when you're offered a brand new credit card, line of credit or student loan which automatically signals your mind to think.... "shopping spree!" or "Let's fly to NY for the weekend" or "It's a good investment simply because it's for school". The tickle can be so intense that you surrender all at that moment and sign your life away on the dotted line of that credit application. ***sigh*** brings back old memories of good times :) But inevitably reality sets in years later after you come to your senses and see the hole you've dug for yourself, unless you realized and beat the debt game and paid it off before you put it off.

I think many of us here have been riding the same boat for years on end and probably since high school. It's the same feeling you get when you're in debt up to your eyeballs and have no idea how to get out of it except for filing bankruptcy.

As a rule of thumb "If you can pay all your minimums on your credit card, and manage living expenses, then you don't need to look to bankruptcy as a quick fix".

It's never too late to get out of debt..all it takes is patience, discipline and commitment.

I hope to learn and share what I've learnt about becoming free of debt forever and ever till death do us part