It’s the start of a New Year, and like thousands of Canadians, you may be worried about the size of your debt.

For decades, non-profit credit counselling has provided a pathway for indebted Canadians to get back on track. Now we have more proof that credit counselling works. Back in 2003 and 2004, Equifax Canada and Trans Union of Canada carried out independent research on successfully closed credit counselling files. The research showed that credit counselling does help Canadians get back on track with their personal finances after being in debt.

More recently, a 2019 report by Credit Counselling Canada (CCC) using data from TransUnion comparing long-term outcomes of Canadian Debt Relief options points to clear benefits. Five years after filing, DMP clients have the highest credit scores over those who filed a consumer proposal or bankruptcy. DMP clients also reduce their total debt substantially.

Paul Le Fevre, Director, Operations, Equifax Canada outlined these results in a media release “Equifax Canada analysis shows that consumers who have successfully completed a Credit Counselling Program through an accredited not-for-profit agency demonstrate a significantly improved credit score and lower delinquency rates compared with average Canadian consumers”. In fact, consumers in the research data who participated in accredited credit counselling programs significantly increased their credit scores. Indeed, they have a reduced credit risk compared to Canadians who didn’t access non-profit credit counselling.

Getting Further Ahead Without Debt

Credit counselling clients who repay their debt successfully through a non-profit agency are farther ahead because of the in-depth education. Education does make a difference. Learning how to manage money effectively and plan for the future and living without credit are key factors in their success.

Here is just one example of thousands of testimonials that CCC members receive each year.

 “When my husband and I went to the agency, we were heading towards bankruptcy. We decided on a debt repayment program and were to pay a percentage of our debt  once a month. I really feel that this program saved us from going bankrupt, and getting our credit and record back on track. We also used the budget planner that is recommended with the plan to help us out. Now our debt is paid off, and we can afford the things we could not before. We are both so glad that they could help us out, and hopefully can help others out, too.”   Susan N, Nova Scotia  

Financial Literacy Approach

In the last year alone, CCC members provided money management education to over 160,000 individuals. The largest percentage was through direct contact with consumers needing assistance one on one. Over 60% of the total accessed education and training through workshops, webinars and financial literacy sessions in schools, community groups and lunch and learn opportunities. Education is the backbone of the services members provide to consumers. The demand for financial education has grown exponentially.  Across the country, CCC members are extremely well equipped to be the ‘go-to’ resource when financial questions arise.  

We have advocated for education through accredited, non-profit credit counselling agencies for decades. It is refreshing to see this confirmation that the work we do really does make a difference! People learn valuable financial skills, including developing spending plans, setting savings goals and establishing emergency funds. Credit Counselling Canada members are all registered charities /non-profit organizations.  They provide accredited services that assist Canadians across the country. 

No matter your age, skill level or current financial position, CCC members can help. Contact a member now to see how we can help you.  

With the holidays looking a whole lot different for everyone this year, we could all use some tips for a credit-free Christmas. Now is the time to decide how much you can afford to spend without digging yourself into debt. You have heard of going sugar-free. Well, the goal this holiday is about going credit-free! 

With major cities still in lockdown, this might be the year that you stick close to home, sort photos, play board games, enjoy socially distanced winter sports, create new traditions, and forego extensive gift buying for yourselves and others. 

Reining in your spending now — rather than when an avalanche of holiday bills arrives in the New Year — will give you a jump on keeping or getting your finances back on track. Think of how good you will feel to ring in the New Year with a plan already in place.  

What are some tips for a credit-free Christmas?

Let this be the year you go into the holidays feeling relaxed and energized knowing holiday debt won’t be following you into the New Year. Here are some tips for having a credit-free Christmas that will get you started.

1. Create a budget that takes all holiday costs into account, i.e. gifts, food, decorations, postage, wrapping paper etc
2. Make a list of everything you need to buy and don’t rely on credit to purchase it
3. Consider a re-gift exchange, a group gift, or homemade gift etc., such as baked bread or your favourite cookie recipe
4. Instead of the usual gift-giving, why not recite a poem, sing a song, or do a skit to entertain your family and friends. Your gift of love and laughter will create a special memory that lasts for years to come.
5. Opt-out. Yes, that’s right. You won’t be the only one. According to a recent study, 59% of 1,034 American adults surveyed plan to alter their gift-giving practices. The decision to opt-out stems from financial concerns shared by many Canadians

If you’ve already been shopping and feel like you may have overspent, the first step is to understand that you’re not alone – there are options out there such as non-profit credit counselling to help you get back on track.  Our credit counsellors work with your best interest in mind, offering objective advice that is right for you, not for profit.  Understand that money woes don’t disappear on their own, and that it’s important to reach out for help at the first working signs that you might be over your head with debt.  Need help now?  Contact us.  We are are here to help.

We would love to hear some of your ideas! Tweet us and let us know what is working for you this holiday. We may just update this blog with your super helpful idea.

As financial educators, a big question we get from parents is about kids and money. How do I talk to my kids about money and instil good financial habits in the face of the pandemic?

My answer always includes ideas on situations they will face or money factors for the time of year. Make the conversation you have relevant to their currently reality, or experiences they may have in the future. The holiday season can be a great backdrop for helping you start the conversation on saving, budgeting, spending, charity and credit. Even if you do not give gifts at Christmas, you cannot miss the advertising, spending and extravagance of the holidays.

Here are some things you can do in theory or practice to teach your child about holiday spending. Try all of the steps, or incorporate one or two based the age and attention span of your child.

1. Make a list (check it twice 😊) of the people they would like to buy for, and what they would like to buy. Ask your child, why would you like to buy the item for the person? Why do you think they will like it?
2.  Write down what they would expect each item on that list to cost. This can be completed by searching on-line or going to a store.
3. Determine their holiday spending budget; how much do they have to spend? For instance, will they save up their allowance?
4. Add up both the cost of the listed items and the budget amount. Ask your child, do they match? Is your holiday spending more than you have? Will you have money left over?
5. Pick a cause. Have them donate their time, a toy, cash, toiletries, clothes, food etc.  Not all donations will cost money, talk about options and which ones may suit your child best.

The question may come up about what to do if you do not have the money for the holidays, your child may even ask to borrow from you or borrow from future allowances. Whether you decide to or not, have the conversation about what borrowing means, and how they will pay back the money. You can make up a payment schedule and discuss what having less money may look like, when you are trying to pay back money that you owe.

Developing good money habits young will go a long way. A parent’s job is to guide their children into making good financial decisions based on the current circumstances.

Related Blog Post: Best Books for Teaching Kids About Money: Our Top Picks

We would love to hear some of your ideas! Tweet us using the hashtag #MoneyTalk and let us know what has worked for you!

Submitted by: Tamara Kelly, Credit Counselling Services of Atlantic Canada

The holidays can spark joy and harmony in our hearts and can also drain our pocket books and energy. It’s possible to create a credit free Christmas but it’ll take a bit of planning and these five steps. Roll up your sleeves, get some paper out and a nice cup of hot chocolate and get in the spirit.

1. Decide how you want to feel after the holidays. Do you want to feel peaceful, energized, excited for a new year, or perhaps some other feeling? Now ask yourself – why is this important to me? Let’s be honest, if it’s not important to you, why bother? An example could be that I want to feel peaceful and energized and this is important to me because I want quality time with my family and friends, and I want to start the New Year with energy and excitement.

2. Decide what kind of holiday you would like to have. Would you like to have a low-key, chill kind of holiday? Or would you like to spend your time with lots of family and friends (and food!)? Or perhaps you would like to get away for the holidays. Share your thoughts with your family and make a decision that works for everyone. Taking about the holidays ahead of time puts everyone to the same page with no surprises.

3. Now that you know what kind of holiday you and your family would like, you need to create a budget for it. How much will this holiday cost? Take all holiday costs into consideration when building your budget including but not limited to gifts, food, baking, clothing, parties, decorations, events and activities, hostess gifts, wrapping paper, and anything else not listed here. Add up the estimated cost for everything and decide if this is doable. If it is and you have the money in savings, you’re ahead of the game! If it’s doable and you still need to put some money aside each payday, decide how much you need to set aside. And if it’s not doable, ask yourself and your family, what can be changed to ensure that it works without using credit.

4. Make a list of everything that needs to be purchased. Look for coupons, sales, and deals. Consider using your points to buy gift cards. Use cash! Credit tempts us to go over our budget and it’s not worth it for some points. Most importantly, once you’ve made a purchase, cross it off the list and don’t go back for more.

5. Let others help you (you know they offer every year) and enjoy the holiday. It may not be perfect but it’s not meant to be – holidays are meant for family and friends and good food, that’s it!

Some other ideas for a credit free Christmas include making as much as possible – gifts from the heart and hands are more meaningful anyway. Consider a gift exchange, a group gift, or gifts for just the kids.

Finally, keep in the front of your mind and heart how you want to feel during and afterwards. If something is interfering with feeling peaceful or loving, change it or change your perspective. It’s the only thing we have control over!

Submitted by: Stacy Yanchuk Oleksy, Credit Counselling Society

Stacy is the Director of Education and Community Awareness for the Credit Counselling Society. She has over 15 years of facilitation experience, and managed the Counselling department for 3 years.

Know Your Options

Drowning in debt and don’t know how to get rid of it? Lost your job, or had your wages cut due the global pandemic? You’re not a alone. Many people in debt have a hard time knowing the best way to take care of it. If you’re having trouble keeping up with debt payments, speaking with a nonprofit credit counsellor can help. A trained, accredited, nonprofit credit counsellor can review your debt situation.  They’ll  walk you through the best options for improving your finances. Unlike many services out there, a nonprofit credit counsellor works for you, not for profit.

Start with a Nonprofit Credit Counsellor

If you’re one of the millions of Canadians with mounting debts problems and more and more demands vying for your hard-earned dollars, you don’t have to go it alone. No debt situation is hopeless. With the right help, you too can break free of debt.

A nonprofit credit counsellor is the best place to start. Nonprofit credit counsellors have your best interest at heart. They help you understand all of your options, organize your credit accounts, and put together a household priority budget. They can even connect with you a variety of helpful community supports. Depending on your situation, a nonprofit credit counsellor can work with you to set up a doable debt repayment plan.  In fact, your plan will include terms that are more favourable than any you could achieve on your own.

Caring and Non-judgmental Support

As an impartial third party, a qualified nonprofit credit counsellor provides advice and tips to help you move forward.  Moreover, the advice you receive is tailored to your specific situation. Here’s how to decide whether you could benefit from working with one.

How Can I Find a Good Nonprofit Credit Counsellor?

To find a reputable nonprofit credit counsellor, look to members that are accredited by Credit Counseling Canada. The Financial Consumer Agency of Canada recommends and works with Credit Counselling Canada.  Better still, we maintain a directory of member organizations — all them nonprofits — that meet our high quality service standards.  Above all, our members offer unbiased, non-judgmental accredited credit counselling services for free, or at low cost to consumers.

Check out this article for more on this important subject.

What Can I Expect When I Meet with a Nonprofit Credit Counsellor?

Your first meeting with a nonprofit credit counsellor should last about an hour.  Whether the meeting is in person or on the phone,  It’s best to prepare for the meeting by gathering the basic facts about your finances.

After the meeting, the counsellor will typically provide a written report.  The report will contain details of your situation and any key advice. For your convenience, the report summarizes what you discussed and the next steps, which you likely discussed as well.

What Other Options Do I Have?

While there are other for profit motivated options out there, such as debt consolidation, bankruptcy or consumer proposal (another type of bankruptcy), you owe it to yourself to speak with an accredited, nonprofit credit counselling as your first best choice. A certified nonprofit credit counsellor will review all the available options with your best outcome in mind, recommending the best path forward for you and your family based on your individual situation.

To learn more about how we can help, speak with a counsellor in your area.