The post 5 Things to Look for When You Pick a Credit Counsellor appeared first on Credit Counselling Canada.

Perhaps you have earned some money over the summer and have been saving to further your education. Scholarships, bursaries and part-time jobs can help cover costs, but government student loans and grants remain the main source of funds for many Canadian students.

The average undergraduate tuition in Canada rose to $6,373 for the 2016-17 academic year, with the province of Ontario leading the way at $8,114. – Globe and Mail

Whatever your situation is, take some time now to prepare for the months ahead.

Consider these money tips to help make your earned money and student loan last the full school year.

Calculate your funds available – After you apply for a student loan, you will receive a notice stating your allocated student loan amount. Determine what your tuition will be for coming term or year and calculate what money you will have remaining after tuition is paid. Take into consideration the cost of books and supplies and subtract that amount.

Set aside an emergency reserve that you can use if something unplanned happens. A small amount can go a long way if you run out of food or you need to get home to see family. What you have left is for your living expenses and needs to last the whole term or school year. Part-time earnings may supplement your funds but otherwise you need to make the money last. The remaining balance is better off in a savings account where you will not be tempted to spend it.

Determine a monthly amount – Divide the remaining balance, or a portion of it, by the number of months (e.g. 4 for September to December term or 8 for September to April). This is your monthly spending allowance. You should transfer this amount to a chequing account at the beginning of each month as your monthly allowance. Remember, you are not obligated to spend the full amount of your student loan.

Consider your expenses– Take into account housing, transportation, telephone, Internet, food, toiletries, eating out, entertainment, any other expenses that you might encounter. Establish a weekly or monthly amount for every possible expense. Use cash for your variable expenses, it is easier to see how much you have left as credit or debit slips from vendors don’t provide your account balance. This should make it easier to stick to your plan.

No experience in making a budget? Our member, the Credit Counselling Society can help. Access their free downloadable student budget calculator worksheet for Excel.

”Government loans and grants can certainly help finance an education, but the problem is students often do not keep track of smaller expenses – such as entertainment, hair cuts, clothing, and coffees – that can add up. What often happens is that they run out of money before the end of the semester.” Patricia White, Executive Director of Credit Counselling Canada – Globe and Mail

Set up a tracking system – There are many ways to tracking systems from receipts, notebooks and excel spreadsheet to cell phone apps. Find what works best for you. Be aware that miscellaneous expenses might quickly add up with coffee, clothes and assorted other items that should have their own category if they happen several times in a month. If this happens you might need to revise your tracking system and add additional rows or categories for these expenses.

Keep track of every expense –  Regardless of what tracking system you are using, the main thing is that you dedicate a few minutes every day to record all your spending. Make it a habit. After a couple of months you will begin to see a pattern to your spending and ensure that you are staying within your plan.

Revisions may be necessary – Make changes to your monthly spending amounts if you exceed your original monthly allotments. You may need to reduce some other expenses if you find that your necessities are costing more than you estimated. Continue tracking to ensure that you are not spending more than you have.

Avoid credit – Credit is not available money for you to spend. It will limit your income with interest charges and reduce your next month’s allotment particularly for expenses that are not planned. Stick to your plan without using a credit card.

Remember, you are responsible for your student loan. This may be your first real opportunity to prove yourself as a borrower. Make sure the documentation is kept safe and secure; consider keeping a photocopy with you and safely store the original document at home. Before you leave home set up a file or folder to store your important information. Read over your student loan document and ask any questions before signing the document and know when you will have to start repaying your student loan.

Lastly, don’t be afraid to ask someone for help. Your campus will likely have a student financial aid office and professionals who can help you. And, you can always reach out to a member of Credit Counselling Canada for assistance or access their many free online financial literacy tools.

The post 7 Tips to Manage Your Student Loan appeared first on Credit Counselling Canada.

Linda Routledge (R) from the Canadian Bankers Association presents Shamaila Arif with the Credit Counselling Canada Exceptional Service Award.

Shamaila is an exemplary individual and the ideal role-model for those who aspire to become great credit counsellors. There is never a client whose situation, despite its challenges, will not be met with grace, patience, perseverance, and of course, skill.  Her passion for helping people is clear.

Recently, one of the clients Shamaila counselled was suffering from cancer and going through chemotherapy treatment. She was in a fragile state.  This client was a single senior citizen with no children.  She had only a small fixed income, limited mobility, and was facing foreclosure on her home.

“Shamaila has been nothing but great! She’s quick and efficient and always available to answer any questions or concerns I had.”

Upon meeting the client, Shamaila recognized that the client had lost all hope and needed serious help. It also became clear that the challenges of the situation went far beyond the scope of a normal credit counselling duties. Thankfully, for this client, Shamaila is no ordinary credit counsellor. She is an exceptional credit counsellor, and what she did next was truly astounding.

Shamaila took it upon herself to assist the client in the following ways:

• She assisted the client with filling out and completing application forms for long-term disability.
• She contacted the Support for Daily Living Program and Central Registry and assisted the client with enrolling for this program which would allow her to be eligible for “senior’s housing”.
• She walked the client through the foreclosure process and referred the client to a realtor to assist with the sale of the client’s property, prior to foreclosure.
• Together with the client, she contacted the client’s creditors to help explain her health situation, and stop collection calls.
• She accompanied the client on a visit to the local social housing, allowing the client to see where she would be living.

Shamaila consistently gives her own personal time to ensure that all the clients she interacts with are provided exceptional credit counselling service and care.

“I met with Shamaila and she was helpful, calm, spoke in a language I understood and non-judgemental. She provided me with referrals and advised she could help but to keep her posted on my decision after my findings. Very pleasant person.”

If you need help with debt management, budgeting or general financial education, we can help you find a credit counsellor who can provide you exceptional credit counselling like Shamaila. Click here to find a credit counsellor near you.

Submitted by: Isaiah Chan

The post Shamaila’s Story: Providing Exceptional Credit Counselling Service appeared first on Credit Counselling Canada.

Credit Counselling Canada is pleased with many of the outcomes of these consultations, including the Ontario government proposing to lower fees on payday loans to $15 on $100 by 2018. A lower rate will ease the financial burden on consumers when they are at a difficult time in their lives.

Our position is that while such amendments are a start, they are not a sufficient solution to the payday loan problem.

While the cost of borrowing is certainly problematic, we believe that payday borrowing is a symptom of much deeper financial problems. These include a lack of financial literacy and consumer protection. To protect vulnerable consumers, there should be additional payday loan regulations put in place, not only in Ontario but across all jurisdictions.

1. Increase transparency around rates.

Consumers using payday loans may be vulnerable in the sense that the average consumer does not understand the actual calculation of interest for payday loans.

We prefer lowering the fee but more importantly, we recommend a requirement for the rate to be expressed as an annualized rate. Consumers see $21/$100 and think this is 21% which compares reasonably with other credit products and interest rates. Consumers do not realize that the annualized rate is more like 479%.  Having the rate expressed in an annualized rate makes the comparison with other credit products clearer and creates a better understanding of the cost up front.

2. Decrease repeat borrowing. Ie. the payday loan cycle.

We are concerned about the prevalence of repeat borrowing. Many consumers are unaware of the longer-term consequences of taking the maximum possible amount when applying for their first payday loan. For example, they will only have $X of their pay remaining after they pay for their first loan and the cycle begins.

How many times do you estimate you have used a payday loan in the last three years? (FCAC national survey of 1,500 Canadian payday loan users)

British Columbia has dealt with this by implementing a regulation that says if you take out three payday loans within a 62-day period, a repayment option will be triggered, which allows the borrower to repay the outstanding indebtedness over two or three pay periods. This gives the borrower a fair chance to get back on track and end the cycle.

To give borrowers a chance to repay their loans in full as opposed to paying debt with debt, as proposed in New Brunswick, consumers should be limited in the maximum amounts to be borrowed based on net income. New Brunswick has proposed the total amount that can be borrowed by any one person be at 30% of net income as compared to 50% which exists in other jurisdictions.

In addition to changing borrowing periods and maximum borrowing limits, repeat borrowing may be decreased by increasing reporting of payday loans to credit bureaus. This practice could help regulate multiple concurrent loans and give consumers the opportunity to increase their credit ratings when they properly pay back money borrowed.

With current legislation, repeat borrowing often creates a dependency on payday loans which in our experience only ends in personal bankruptcy.  This occurs after months of financial stress trying to repay with an even larger psychological effect on the borrower and their families.

3. Incentives for proper payday loan repayment.

Options on lending products where paying on time reduces the interest or even opportunities for lowering interest when the total amount of credit is reduced are incentives for good repayment.

Such incentives could include: At the request of a borrower who has successfully repaid three prior payday loans from a lender over the preceding 12-month period, the lender be required to either grant a payday loan extension at a rate of 5% or convert the payday loan to an installment loan. The installment loan would be repaid over the next four pay periods. The applicable rate for the installment loan may be 7% of the principal outstanding amount of the principal owing when the installment loan was requested.

As previously mentioned, reporting of payday loans to credit bureaus would also provide consumers with an incentive to build their credit ratings. This could potentially increase their prospects of qualifying for more traditional loans.

4. Development of new options.

People using a payday loan are frequently facing circumstances with significant pressure.  They are already cash strapped and spend their paydays going from lender to lender to renew loans creating added expense on an already tight budget. If they are not physically going to a payday loan company, they are renewing or obtaining loans online. More online businesses are providing loans and credit than ever before. Consumers are not always aware of the jurisdiction they are dealing with. This makes it difficult to understand the associated laws and risks.

We need to be much more open to other types of credit products to assist people with short-term borrowing needs. For this reason, we support governments in making it easier for other financial institutions to develop easy to access, low-cost products to compete with payday loans. Additionally, lending circles have become popular in community development groups. These circles establish savings and borrowing concepts.

Other solutions beyond regulatory considerations should include a view to treating the underlying cause versus the symptom.  Financial literacy education which addresses the root cause for high-cost borrowing is essential. In a national survey of 1,500 Canadian payday loan users conducted by the Financial Consumer Agency of Canada, self-reported financial literacy correlated with both successful budgeting and less frequent payday loan use. Helping people to understand how to plan for emergencies and how to manage when income and expenses are not aligned is critical.  Choosing the right credit product is also an important feature of using credit wisely.

Together, we need to do more to meet the needs of underbanked, marginalized and vulnerable populations.

The post Improvements Necessary for Payday Loan Regulations appeared first on Credit Counselling Canada.

Yоur own аttіtudе tо mоnеу wіll hаvе bееn fоrmеd when уоu wеrе a сhіld, аnd wіll have been influenced bу what уоu lеаrned frоm уоur раrеntѕ and the еnvіrоnmеnt аѕ уоu grеw uр. Do not be fooled; each family member will still have their unique values and beliefs despite being raised under the same roof.

Yоur siblings, their spouses, you and your parents wіll all potentially be experiencing a dіffеrеnt fіnаnсіаl situation—jоb іnѕесurіtу/security, available сrеdіt/no credit, savings/no savings, —аll of which shape and form opinions, thoughts, feelings, and decisions.

So when ѕtаrtіng uр a dіаlоguе about money it іѕ important tо recognize thаt уоu mіght hаvе a dіffеrеnt mоnеу mindset from уоur lоvеd оnеѕ.

Rеѕt assured consensus can be reached! Here аrе four tірѕ tо hеlр you ѕuссеѕѕfullу nаvіgаtе a financial conversation with your fаmіlу, without іt bеіng аwkwаrd оr uncomfortable.

Pісk thе rіght mоmеnt to have a family money talk

Rаthеr thаn wаіtіng until уоu fееl uрѕеt about ѕоmеthіng, try to ѕсhеdulе іn a mееtіng with your family member(s) аt a regular time еасh month to review the finances.

Take the necessary steps to start a money conversation, don’t lеаvе іt until сrіѕіѕ point. Make аn аrrаngеmеnt tо talk about mоnеу rеgulаrlу. Yоu could brоасh thе subject bу ѕауіng: “I wоuld rеаllу lіkе to ѕеt аѕіdе ѕоmе time еасh mоnth tо tаlk аbоut your money рlаnѕ for thе futurе.”

Think before you sреаk

Parents are our very fіrѕt teachers іn life. Thеу аrе tаѕkеd wіth the responsibility of putting uѕ оn thе rіght path tоwаrd bесоmіng well-adjusted, рrоduсtіvе adults.

Sіnсе bіrth, wе’vе dоnе mоѕt оf our lеаrnіng from thеm (not thе оthеr wау аrоund). It should then be еxресtеd then аррrоасhіng thе ѕubjесt оf mоnеу with оur parents might feel awkward (оr еvеn a bіt mоrbіd, frankly) аt fіrѕt.

But, уоu саn’t lеt your fееlіngѕ саuѕе уоu tо ѕhу аwау frоm іmроrtаnt соnvеrѕаtіоnѕ!

Focus оn gоаlѕ nоt blame

A family money talk should be productive. Yоu can discuss ѕреndіng рlаnѕ, expenses, income аnd goals, аnd work out whеthеr changes are necessary. By fосuѕѕіng оn shared gоаlѕ, thе mееtіng іѕ lеѕѕ lіkеlу tо bесоmе соnfrоntаtіоnаl.

If уоu hаvе siblings or other close family members, tаlk аbоut hоw they саn соntrіbutе.  You may want to involve them іn more complicated discussions, for еxаmрlе talks about wills, or planning for the future. Remember, leaving people out of the conversation can sometimes create more difficulties than including them in the first place.

Shоw them and not tеll

If you undеrѕtаnd how fіnаnсе works, dоn’t try tо іntіmіdаtе уоur fаmіlу. Aсknоwlеdgе that thеrе аrе dіffеrеnt wауѕ оf асhіеvіng thе same gоаl.

Exрlаіn whаt you dо аnd how уоu ѕаvе аnd іnvеѕt. Ask other family members to share what works for them. Offеr each other hеlр wіthоut tеllіng each other what to dо. Consider it a teaching and learning opportunity for all involved.

Cоnсluѕіоn

Thеrе іѕ nо mаgіс formula tо hаvіng productive family money talk. And the gооd nеwѕ іѕ, if you hаndlе thіngѕ correctly, tаlkіng about mоnеу саn ѕоlіdіfу fаmіlу bоndѕ аnd gіvе еvеrуоnе involved a grеаtеr undеrѕtаndіng.

The post The Family Money Talk: 4 Tips to Avoid Awkwardness  appeared first on Credit Counselling Canada.

We all have our own money meaning; attitudes and beliefs that play a significant part in any conversation. Your family, the social structure you were raised in, personal issues and the education system you were a part of are all powerful influences in your attitude about money.

Recognizing some of the attitudes and beliefs that you and others have can make your money talk easier. This is particularly important if your values and beliefs are the opposite of the person you are talking with.

Here are 8 money beliefs that prevent the money talk.

1. Money is private

In your household, community or culture money was a taboo topic that traditionally was never discussed. Your parents never talked about it, so neither should you.

2. A money talk may cause shame

You may put someone in an uncomfortable situation when talking with them about money. They could have financial problems and become embarrassed.

3. Technology is a barrier

Your tech-challenged elders struggle to comprehend the tech-savvy younger generation. You will both get frustrated with the lack of understanding and be unwilling to offer or ask for help with financial matters again.

4. You’re unqualified to teach money skills

You have made some of your own mistakes. Given your track record, you feel there are more qualified people to provide help.

5. Talking means admitting financial faults

You are uncomfortable bringing up the topic because you have made mistakes. Even if sharing your experience could prevent someone from making the same mistakes.

6. You have no idea how to go about communicating money lessons or where to start

You don’t have a legacy of financial lessons from your parents to pass along. You had to learn on your own, so will they.

7. Let the experts do it

Your children will learn about money in school – let the experts do the job. There are people who are better qualified than you.

8. It is too late

Your money habits were not discussed earlier in your relationship so it is too late to bring it up now.

All the above challenges are legitimate. The important thing is to recognize the attitudes and beliefs you have and how they relate to your personal finance actions and goals. The good news is that knowing where you are coming from can make your conversations easier.

We all know at least a little about money. Our experiences, good or bad, are great examples for others if we are willing to share them – so let’s Talk About Money – it Just Makes Cent$.

The post 8 Beliefs That Stop You from Talking About Money appeared first on Credit Counselling Canada.

Funding for not-for-profit credit counselling comes from several sources.

Creditors

A large amount of funding for not-for-profit credit counselling comes from creditors, the companies that lend the money. This ranges from major banks to online lenders.

Canada’s creditors recognize that not-for-profit credit counselling services play a key role in providing money management and budgeting skills to their clients and to the broader community. For this reason, creditors help strengthen this sector and encourage the services it delivers.

Does that mean that not-for-profit credit counselling agencies are working for the creditors?

Not at all. You know how CIBC supports the Canadian Breast Cancer Foundation? They also support not-for-profit credit counselling. They trust credit counselling services will provide you with all the information you need to make the best financial decisions. Those decisions are not tied to any specific creditor funding so how you move forward is always your choice.

Creditors are not in the business of credit counselling but they do want you to pay them back and to succeed. Evidence shows that not-for-profit credit counselling works. It not only helps you get out of debt but it also improves your credit rating in time. The skills you learn through counselling make you a responsible, valued customer in the creditor’s eyes. For these reasons and more, they are happy to fund these counselling services.

Client Fees

A smaller source of funding comes from credit counselling clients who choose to use a debt repayment program. This program involves credit counsellors contacting creditors to negotiate repayment terms and combine debts into one easy monthly payment.

The fees associated with this program help to cover the administration costs but more importantly, they fund the on-going counselling that takes place. Often the fee you might have to pay is far less than what you would pay in interest. Credit Counselling Canada has a national policy regarding client fees. This makes sure no one is denied service if they are unable to pay. If a debt repayment program is an option for you, always ask your counsellor about potential fees. This will help you make an informed decision.

Grants and Donations

On top of that, funding to support the work of not-for-profit credit counselling may come from grants and donations. These can be municipal, provincial, or federal as well as from foundations, community groups, and the United Way. Not-for-profit agencies apply for funding to support programs that address the needs of the communities they serve. This ranges from projects on elder financial abuse to financial literacy education in school.

Like most not-for-profit agencies, Credit Counselling Canada members work diligently to ensure sustainable funding. This allows them to best serve you and your community.

Click here to find a credit counsellor in your community.

The post Who Pays for Credit Counselling? Funding for Not-for-Profit Credit Counselling appeared first on Credit Counselling Canada.