Archive for March, 2010

College Grants For Single Mothers in Canada

Thursday, March 25th, 2010

Every country will agree to the fact that the women require adequate education to move ahead in life, especially the mothers. Single mothers have special needs as they are the only support to their family and kids. Money, time and confidence are three obstacles in their path to acquire education. Canada, like any other country, has identified these problems and hence, has started college grants for single mothers in Canada.

The Canadian government realizes the problems faced by single mothers and has started various grants to help the mothers cope with the problems by providing required education for them. Like in the United States, to apply for federal grants in Canada, one needs to apply it through the FAFSA centre. The FAFSA is an online centre set up for receiving the applications for the federal and state grants. The applicants usually need to submit their previous year’s tax records as it is the eligibility criterion for receiving the grants.

The latest feature regarding the college grants for single mothers is the Canada Student Grants program (CSGP) which has clubbed the various federal student grants into a single program and is earnestly trying to reach out to single mothers who like to pursue their studies. This new program helped 245,000 students in the academic year 2009-2010 and is very easy to apply for. Some of the grants under this program have been listed below:

1) Canada Student Grant for Persons from Low-Income Families: This grant provides $250 per month to students of low-income household who also are eligible for a federal student loan, and is available to undergraduate and college school program.

2) Canada Student Grant for Persons from Middle-Income Families: As the name suggests, this is granted to a middle-income class student also qualifying for a federal loan. The selected student will receive $100 per month of study.

3) Canada Student Grant for Persons with Permanent Disabilities: This grant is only for those students who are handicapped or crippled. The state offers $2000 every academic year for these students to cover their education costs and tuitions.

4) Canada Student Grant for Services and Equipment for Persons with Permanent Disabilities: Those handicapped students who face exclusive expenses for interpreters or tutors are provided $8000 annually from the state.

5) Canada Student Grant for Persons with Dependents: This grant is exclusive for mothers. $200 per month of study is provided to them for each child which they have under 12 years of age.

6) Canada Student Grant for Part-Time Students with Dependents: This is for single mothers who are pursuing part-time education. For every child under 12 years of age, the single mother is entitled to $40 per week of study. Single mothers with three or more children are entitled for $60 per week.

7) Canada Student Grant for Part-Time Studies: This scholarship is only for part-time students. The state grants up to $1200 per school year for the eligible part-time students.

The Government of Canada is very keen on its CSGP and realizes the marked changes this program has brought about in the lives of the deserving students, who are only held back due to the financial crisis. College grants for single mothers in Canada is becoming a reality and this can observed from the improved lives of the mothers.

Many places offer scholarships just for being in a specific group. Take just a few minutes to get a scholarship just for being a mother. That’s $10,000 that does not have to be paid back. Here it is, Scholarship for Mothers and it’s free.

Government Grants FAQ:

Question: Can Americans Get Student Grants or Student Aid in Canada?
I’m American, wanting to go to college in Canada so that I can be closer to my boyfriend. Will I be able to get a grand or student aid in Canada since I’m American? I’ve also heard that if I applied for a United States Government grant that I could use it at a Canadian school. Is this true?

Answer: While you cannot get Canadian student aid, you can indeed get US government aid for most Canadian schools.

Question: Is there any grants for single moms in Canada?

Answer: There is a grant called the Canada Study grant for students with dependants, you will most likely get one if you qualify for a Canada student loan

Ask at your financial aid office too, they may not have grants specifically for single moms, but they may put you into whats called a special consideration class, which means you have more priority than say a single student.

Also check out studentwards.com they have info on a lot of scholarships and grants including for single moms

Question: Single mom in Canada needs money to pay for tuition to finish degree?
I need to find a grant for tuition and books to finish my degree at university of Victoria in Canada. Don’t qualify for student loans. Very determined. Any suggestions or info on grant opportunities?

Answer: Why not try and see if there are any national helplines for education in Canada that you can try. I would also be contacting the University you attend and see if they can put you in touch with a student advisor who can help you.

Question: Grants for single mothers going to school in Canada?
I am a single mom and I want to go back to school very soon. I am struggling just to get by at the moment and I will need a great deal of help to get through schooling. I am currently living in Calgary, Ab but will be moving to Thunder Bay, Ont at the end of April.

Answer: Check out OSAP (Ontario Student Aid Program). You have to apply for a loan first and you will automatically be considered for a grant. You should contact the financial aid advisor in Thunder Bay and they can help you out the best. There also may be bursaries at the school.

Question: How can I get a loan for university?
I am a Canadian student and I want to go to university in America. My marks are great, but I’m the child of a single mother and we’re very poor. I heard that the Canadian government will not grant a large loan for a student that will not study in Canada. Furthermore, a bank will probably not grant me a loan since I do not have any credit history whatsoever.
I do not want to give up on a dream. Help!

Answer: My advice is to speak with a financial aid advisor from the University you would like to attend. The best advice is to not get a loan through some private company because they have terrible interest rates. Even if you have no credit, an advisor will tell you the best option. Most college students have little or no credit, so they are in a similar boat. There are other options, and the college should be working with you to find out the best option to pay for your future education.

Question: Can you get any grants/financial aid at university when you have a baby?
I’m 17, graduated from high school and 6 months pregnant, and I’m going to university in September. I live on my own and get no financial support from my parents. Is there a way to get my tuition fees lowered, or get a discount of some sort at the university? I’ve heard that young mothers can get special grants, but I’m not sure how it works. I live in and will be going to school in Ontario, Canada.

Answer: You can apply for OSAP. There is a clause that asks how many people you have dependent on you, which basically means if you have kids, or possibly parents you care for, and that will determine how much of a loan you can get. Also talk to your school about scholarships and bursaries, they are available for people in lots of different situations. Look into a joint daycare program with your school, some have that as well.

Question: Going to School in Canada can I use Pell Grant?
University of Winnipeg is listed in FAFSA school code lookup and I want to go to school there, but can I use my Pell Grant money? I know they take Stafford loans and the Admission office says they work with all forms of US Finacial Aid, but I don’t think they know what they’re talking about because I’m getting mixed reports online for US needs based grants for out of Country Schools. I am having a hard time getting in touch with the Financial Aid office and I need to know this information now.

Answer: If the school has a federal school code then yes, you can use USA federal financial aid to attend. This includes the Pell grant and stafford loans and such. Just be aware that not everyone qualifies for the Pell grant. You have to be pretty low income to qualify for it. And since you are going to an out of country college it will be MUCH more expensive. It is doubtful your Pell grant would cover all the costs.

Question: For moms going to school and work and raising a baby?
Baby is due in October. Hubby will be on parental leave from work for 6 months the date the baby is born. So, I want to take advantage of him being home to go to school full time. My University considers full time education as 9 cred hrs. and that will still qualify me for student loans and grants. So, question is, do you think 15 cred hours would be too much?

Answer: I think 15 hours is too much to start – especially with a new baby. Even with dad taking care of it you will be pooped. Babies are demanding, sleep schedules are hard to come by…and for fifteen hours – you need to factor roughly three hours for reading/homework per class per scheduled class time .. that is a lot of time to stay current. Take the nine hours and ease into it so you can see where you fit into the baby’s schedule and your work schedule. Also, if I remember right, full time is full time and the loans do not distinguish between 9 or 15 credits…so use that money to help you transition as well.

Maximize Income Tax Returns – Be Generous and Keep Your Money in Your Pocket

Thursday, March 25th, 2010

Taxes in Canada are a real financial issue for many Canadians. As a Canadian you pay out large amounts of cash every year for Income Tax and will usually see little or no return. Very few of us are financially free and you may well have to consider extending your working life or, worse, having to deny your family those little important things on a daily basis just so you can meet your mortgage payments.

Ring any bells for you? It did for me.

During the last 5 years, together with my wife, I have been researching ways to be financially free. That is, to find ways for me to live the kind of life I want and deserve. We started looking into the ways we could maximize our income and reduce our expenses, which is when we came across the figures outlining the crazy tax burden of Canadians.

Whereas most Canadians pay $500,000 in tax over their lifetime, their average savings stand at only $5000 at the age of 65. Does this seem right? I am not saying we should not pay taxes; we have a healthcare and education system most of the world does not. It is just that during my research I also found out that 99% of Canadians are not using the tax system legally to get everything we are entitled to. It is this that made us focus on reducing the Canadian Income Tax burden for us.

Your money….in your pocket

Although the Canadian Revenue Agency does not advertise this fact, if Canadians make charitable donations intelligently they can maximize Income Tax returns for their benefit. This really blew my mind at first so I will explain it as clearly as I can. I discovered tax shelters. This is NOT tax evasion, which is entirely illegal (otherwise known as tax fraud); this is tax avoidance, which is what the rich use to get richer.

The details…how it works

Basically:

· Tax shelters are ways, thought up by very smart lawyers and accountants, to use the tax system legally to benefit you.

· Under the terms of Canadian law we are all expected to save as much tax as possible, even if the tax man doesn’t like it.

· This is the legal principle which allows tax shelters to function, much to the frustration of the Canadian Revenue Agency.

There are many different types of tax shelters, as with any industry, some are really not a good idea and you should really do some good research before deciding on a particular shelter. After a lot (really a lot) of research my wife and I went for an Open Market Structure program, one of the main reasons for this decision was:

· This shelter uses fair market value, which means that, when an item is donated to charity, they get an independent evaluator to make an appraisal of the item, rather than someone connected to the program. So far, only tax shelters that have not followed this rule have ended up in court. Make sure your program does not have this issue.

Below I will try and outline the principle as I understand it:

· I want to buy 100 laptops for children in India. So, I go to a bank and I ask loan for the money for the 100 laptops.

· The loan will be for 4 years and I will immediately pay off the interest for 3 years of the loan. I then go to a technology company who give me 100 laptops.

· I get an agreement from them that I can return the same item back to them and get the full money I spent returned to me.

· I now donate the 100 laptops to a registered Canadian charity and get a donation receipt for the amount I paid. I attach this to my tax return and get 50% tax credit.

· 3 years and 1 day later I take my 1 year’s worth of interest payment I have remaining and go to the overseas market and buy 100 laptops much cheaper than I could get from the Canadian technology company.

· After returning these to the technology company, they give me back my money which I use to pay back my loan in full.

· My tax benefit is bigger than my cost, which is the definition of a tax shelter in the Income Tax Act of Canada.

Actually, the tax shelter program does all of this process for me, so all I really had to do was to pay the pre-paid interest on the initial loan.

It worked for me!!

This is the system me and my wife used last tax year and received a big, fat cheque from the Canadian Revenue Agency for our efforts!

I chose this system after a lot of due diligence research, a lot of which I have included in my blog (details below), so please feel free to use this as a spring board for your own research!

Remember the only thing stopping you from being financially free is your dedication to being financially free; use financially intelligent solutions to increase your income and minimize your expenditure. Live the life you deserve!

Resource box:

Taxes in Canada can be reduced! A free, easy to follow, step-by-step guide is available on my website at http://www.mytaxmoneyback.com

Income Tax FAQ:

Question: When doing income taxes in Ontario, where should Alimony be claimed?
My fiancee has all of his paper work to claim the alimony he pays his ex, and we were told he is allowed to claim it but we cannot figure out where it should go on his return? We are doing our income taxes ourselves and using Studio Tax 2009.

Answer: Support payments made go on lines 220 and 230 of the tax return (in the “Net Income” section of the T1 General).

Question: Can I claim the mortgage interest in my tax return?
I’m in Ontario, Canada. I also want to know if I can claim the home and car insurance as an expenses. My main income is from rental properties.

Answer: It all depends, are you renting some or all of the house. If you are renting some or all you can claim part of the amount you are renting out (20%, 30%, 50% or 100%) you get the idea.
As for the car if you have more than one rental unit in more than one location you could claim a part of the expenses on the car. You may want to check out the CRA site, it should answer all your questions.

Question: I am working in Canada. My son is in the Philippines. Can I claim him on my taxes as I send money to support?
I send money back to the Philippines regularly to pay for schooling and upkeep of my son. Where can I claim this on my income tax?

Answer: Unfortunately, if you are a Canadian Resident, you can’t. To be considered a dependant, your son must live with you (even if he goes away to school).

If CRA considers you a Deemed Resident, but your tax home is in the Philippines, and you maintain a home there with your son, then you can claim him as a dependant. If you are not filing as a Deemed Resident, this is not the case.

Question: QuickTax – First time filing taxes online (Canada)?
My dad’s accountant usually filed taxes for me but I didn’t like his new accountant so I thought I would try it myself this year. Anyone have any experience with Quick Tax? I chose this option only because you can do it online (ie. I don’t have to go and buy a program to download to my computer). I don’t have very complicated taxes. Pretty much just my income tax and I’m a home owner…which leads me to my other question. Anything I should look to claim being a home owner? So far I know:
- Property Tax
- Home Renovation Tax Credit and that’s it!

One more question, I hear you have to have a U File number to file online – how do I go about getting this?

Answer: Quicktax is great and handles very very complicated taxes. The interview will guide you through all the things you need to claim.

I think you mean “NETFILE”, not “U-File”. Your four-digit access code that enables you to use NETFILE is printed on the information sheet of your T1 personal income tax return package.

Question: When was income tax introduced in Canada? date?

Answer: July 25, 1917. It was introduced as a temporary measure, “the War Tax Upon Income.”

Question: Taxes and Bankruptcy (Canada)?
My husband filed for bankruptcy last year and is discharged. Any refund he gets from this tax season will go to his trustee. As his income is lower he would normally claim the children (there are 3 of them). If I claim the children my refund goes up. (Yeah) If he claims them my refund goes down and his goes up and straight to his trustee. Who should claim the children, me or him? Is it mandatory that the lower income earner claim the children?

Answer: There is no rule as to who must claim them as long as they all lived with both of you the entire year. Either one of you can claim them, so long as that one person claims ALL of them. You can’t split children.

Question: Do I have to pay tax in Canada if I made under $20 000 and am a full time student?
I am a student and I made under $20,000 last year, I did my return on quick tax and I’m told I have to pay but when I did it last year with similar income I got a refund. Does anyone know why?

Answer: It depends on what kind of income you got. Student loans are not taxable, but scholarships are, and having a higher proportion of your income as working income will also change your return. So, if you got more scholarships/grants and worked more, you could end up owing more even if the income is technically the same.

If you had unused tuition and education amounts from last year, they can be carried forward to this year to reduce your tax owing. You file an adjustment request to do this.

Question: Income tax in Canada?
I’ve turned 18 last November, live in British Columbia. I was told that this year I am required to do income tax return before April. Last year I’ve only earned about $500 from a summer job. Is it definitely required for me to file the income tax return? If so, could you tell me how/point me to some website that have guides?

Answer: You should check out the CRA website. It has general info about taxes, and info about doing your taxes.

You aren’t required to file, but it is a darn good idea. You’ll qualify for GSTC after you turn 19 next November. If you file now, you’ll get GSTC starting the payment after your birthday. They go out quarterly.

Generally, a person is only required (under the income tax act) to file if they owe money, or if they are asked to file. If you don’t owe, it is usually a good idea to file so you can get any credits, refunds or refundable tax credits you’re entitled to.

Lots of people pay to have their taxes done, or buy software to do them. You don’t really need to. The forms have instructions right on them, and there is a guide. It does seem daunting at first, but just follow the forms, and read the relevant section of the book if there’s something you don’t understand on the form.

Some Points Regarding Payday Loans

Tuesday, March 16th, 2010

Typically payday loans are unsecured short term loans for a couple of $100 and are especially intended to help people out of an unexpected tight financial crisis. Of late such loans are becoming more popular and such payday loans in Canada are offered by both regulated private institutions and lenders apart from banks.

The concept of payday loans first appeared in Canada around the 90′s when people wanted loans for small amount for a very short duration of time. And now this has grown into a very large industry in the country.

In Canada the amount a person can borrow is limited to about 40% of his paycheck. To be eligible for payday loans in Canada an individual has to be employed and possess a bank account and usually the term for a loan of this kind is between 14 to 30 days depending on the amount borrowed.

Generally the lending service, be it a bank or a private financier, does not request for credit checks from the borrower because such loans utilize the individual’s next salary as a kind of security. This proves to be a Godsend to people who are in a tight spot especially if they have a bad credit history.

The best and simplest means of availing a payday loan is to use the internet to apply through an online service. Most lenders of loans in Canada have a website and approve of an individual’s request with a few hours and once it has been processed, the money is electronically transferred into the borrower’s account either by the end of the day or latest by the next working day. Such online services are very convenient when considering that one can request for a loan sitting at home.

When applying for a loan one has to ensure that the lender has been in business for some time and has a good and reliable reputation. The person has to ascertain that what ever information he submits will remain safe and secure.

Payday-loans services generally charge high rates of interest for these short term unsecured loans. One has to be wary of the lending institutions as many services offer multiple loans to the financially weaker customers who eventually find it difficult to pay back the loan, enabling many payday loan companies in Canada to make a pretty packet.

The criteria for an individual to obtain payday-loans in Canada are:

  • You have to be a Canadian citizen
  • He must be over 18 years of age and his income should be at least $1000 periodically
  • The individual’s income must necessarily be directly deposited into a Canadian bank account

By and large payday loans in Canada are the simplest means of obtaining small amounts of money in an emergency. But one has to remember that such loans should be taken only when it is absolutely necessary and not to make any impulsive buying. As with any other kind of loan, payday loans can also have an impact on your financial state, so use caution and apply for one only when there is no other alternative.

Parmar Keyur is an experienced writer and Internet marketing professional based in Ahmedabad, India.

Payday Loans FAQ:

Question: What is a good payday loan company online that will instantly give me money in CANADA?
Looking online for payday loan in CANADA? Looking for high limits too. $300 bucks for first time lenders don’t cut it, any suggestions?

Answer: Any chance you could go to a family member, someone in your church, a credit union, a friend? A payday loan should be your last resort.

Question: A payday loan question?
I made the mistake of getting a payday loan a couple months ago that I wasn’t able to pay off. I had made an arrangement to make a payment to this loan 2 weeks ago, but I wasn’t able to keep that arrangement. Now, today I had a ‘Collection Debit Memo’ come out of my bank account for the full amount of that payday loan including the late fee and interest owed. It left me with $35 in my bank account and a car payment to pay. I called my bank and asked about the debit from my account, because I didn’t know about it. The guy said maybe I could get it reclaimed back to my bank account and then make arrangements to pay the company, but he didn’t know if it would be possible or not and said to call tomorrow and they would put me through to my bank manager. Has anyone ever had this happen?

Answer: If you check the paperwork you signed when you took out the loan, you’ll probably find that you agreed to let the loan company attempt to take the money directly from your account if you defaulted on the loan. If this is the case, the bank won’t be able to reclaim the amount.

Question: Direct payday loan lenders?
I need loan as soon as possible.

Answer: I would stay away. They will all charge you a very high interest rate. You may end up putting yourself in a worse situation. The few people that I know that have gone there have regretted it. Use that as a last option.

Question: I wrote some checks for a small payday but the checking account is closed. I always pay the loan back on time.
I never bought any merchandise with those checks I just get my same payday loan. Now I’m in trouble. What will happen to me? What do I have to do?

Answer: If they deposit your check, it’s going to come back on a closed account. In many places that’s a pretty serious offense (much worse than “no funds”. They consider it a form of fraud). Hopefully, they will just pass it on to a collections company. But it could go either way. Better tell them what’s up before they put it in the bank.

Question: Best payday loan site to apply?

Answer: Nobody has had good experiences with ANY payday loan. They are all loan sharks.

Question: Payday loans, anybody know of any good legit ones?
I’m looking to get one of those quick payday loans online. I know a lot of them don’t give loans with bad credit and being self employed. I work as a nanny making about 1000 a month and I need to borrow about 1300 to pay my late rent.

Answer: The answer to your question is NO. There are no good, legit payday loans. Pay what you have now, and talk to your landlord about getting the rest to him/her as soon as you can. Payday loans are a really bad idea. Once you start, it would be very difficult to pay it off without getting another one, which then leads to another one, which then….you get it, right?

Question: Where can I get an online payday or short term loan?
I’ve already tried speedy cash and I was denied for money mutual.

Answer: Most, if not all legit places know if you have an outstanding payday loan elsewhere and won’t loan until the other loan is paid.

Question: Can a debt collector sue for fraud?
My husband (foolishly & without my knowledge) took out a $150 payday loan last year, which he defaulted on after being laid off from his job. We have a debt collection agency telling us that if we do not pay them, they will sue my husband for breach of contract & fraud. I can understand suing for wage garnishment, but fraud? And yes, we have attempted to offer them a payment plan, but they are refusing it, saying that we must pay in full.

Answer: Fraud has a pretty broad definition, but it basically means monetary gain by deception.

In this case, yes, they can charge your hubby with fraud, as it’s a part of the “bad check”. PROVING it is fraud, however, is a different problem, as they have to prove your husband INTENDED to deceive them. If you really go to court, they’ll probably drop the charges if you can prove that your hubby was actually laid off, and he had every intention to repay, except unforeseen circumstances intervened. The difference here is INTENTION.

As for payment plan… All collectors sound harsh and demand full payment. That’s their job. Your best bet is get a loan from a relative, pay off the collector, THEN make payment plan to your relatives.

Want to Give Your Spouse an Interest-Free Loan From the Corporation? Tax Considerations

Friday, March 12th, 2010

Please note that the information provided herein is not legal advice and is provided for informational and educational purposes only (and is only current to the date that it was written). If you need legal advice with respect to tax issues, you should seek professional assistance.

So you have a Canadian corporation and you want to give your spouse and interest-free loan? What could go wrong, you say? Well, the tax implications may not make it worth your while.

For starters, s. 15(2) of the Canada Income Tax Act provides that if a person is “connected” with a shareholder of a corporation and receives a loan from that corporation, then the amount of that loan is to be included in that person’s income for the year (and hence tax must be paid on it). Here, the word connected is defined in s 15(2.1) to include person with whom the shareholder does not deal at arm’s length with (which includes your spouse).

What about the interest free part of the loan, you say? Well, under s.80.4(2), the spouse may have to include the amount of interest that would have otherwise been paid in their income tax (and hence pay tax on it): once again, if a person is “connected” with a shareholder of a corporation (i.e. which includes a spouse) and receives a loan from that corporation, then that person will be deemed to have received a taxable benefit (i.e. must pay tax on) equal to the difference of the interest they paid in the year and the interest they should have paid in the year (i.e. a prescribed rate).

Overall, therefore, a shareholder of a corporation who offers his or her spouse an interest free loan could be doing more harm than good: the principal and the interest might end up being included in the spouse’s income for tax purposes.

Please keep in mind, however, that there are other provisions in the Canada Income Tax Act which modify or make these sections inapplicable; it really depends on the particular situation. One such example deals with repayment of the corporate loan within one year. Section 15(2.6) of the Canada Income Tax Act provides that, if the corporate loan to the spouse is repaid by the spouse within 1 year after the end of the taxation year (of the lender/creditor in which the loan arose), then it would not need to be included in the spouse’s income (and hence no taxes would need to be paid). So, the spouse would not need to include the amount of the loan in his or her income and pay taxes on it so long as the loan was repaid within 1 year from the end of the corporation’s taxation year. To better understand this situation, take the following example. A corporation’s year end is August 31. A shareholder’s spouse took out a loan on December 31st, 2008. The clock would not start ticking until August 31st, 2009 and the spouse would only need to repay it by August 31st, 2011 to avoid including it in his or her tax return.

The Canada Revenue Agency Interpretation Bulletin (IT-119R4) on shareholder loans helps explain what is meant by the phrase “series of loans or other transactions and repayments” (found at the end of s. 15(2.6):28. It is a question of fact whether or not a repayment of a loan is part of a series of loans or other transactions and repayments. In most cases, when there are only a few loans or other transactions and a few repayments made during a taxation year of a lender, there is no such series. However, when only one loan or other transaction and one repayment occur in each taxation year of a lender, a series of loans or other transactions and repayments may still be in evidence. This could occur, for example, when a repayment is of a temporary nature, such as a loan that is repaid shortly before the end of the year and the same amount, or substantially the same amount is borrowed shortly after the end of the year. Such a repayment of a temporary nature is not considered to decrease the loan balance in applying subsection 15(2) and paragraph 20(1)(j) to a series of loans or other transactions and repayments.

So if a shareholder’s spouse were to take out a corporate loan and repay that amount before the year end (e.g. August 31st), and then shortly thereafter take out “substantially the same amount” as was repaid before the corporation’s year end, then the Canada Revenue Agency may deem such transactions to be “a series of loans or other transactions and repayments” – for which the spouse will need to include the amount as income under s. 15(2).

Remember, if you need tax and/or business advice, you should seek professional assistance.

http://www.DynamicLawyers.com – Need a Lawyer? Make a Post (it’s free and anonymous!). Get FREE Quotes!

Business Loans FAQ:

Question: How can I raise 2 million dollars to start my own business?
I’m civil engineering and I want to know how can I raise 2 million dollars to start my construction firms. Also is it true start a business like corporation is easier to get a loan? I’m from Canada

Answer: Only if the corporation has ASSETS. Your best bet is venture capital. It s expensive, but could be well worth it. Sites like vfinance are accredited and do all sorts of funding.

Question: Could I get a 150000$ business loan?
I estimated that my yearly profit will be 200000$. This is not just a random number, I calculated it. It is AFTER taxes, and expenses and all that. It would be the net income. So I could pay it off no problem. I have it all on paper (where the loan will be going, how my net income was calculated, expenses etc). I have just turned 18 and I make about 20000 per year. I have a 10% (15000$) down payment set up. I live in Canada if that matters.

Answer: Sorry to burst your bubble, although it will be very hard for you to get a loan for such a large amount. It depends on many different factors. First of all, how is your credit score and history? This is a very important factor in the loan application process. Secondly, do you have a co-signer who will back you up? If so, how is THAT person’s credit score and history? How much debt do have? What kind of business will you be investing in and what will its assets be? Is it a franchise? What are is your current income and the value of your personal assets? How much will you be investing of your own money (10% is not very attractive to the bank). Will you be willing to be sign a personal guarantee? What collateral will you be putting up? What bank will you be going to order to obtain this loan? The loan officer will also examine your level of education, work experience, and your personality/character. Its kind of hard to think that in this kind of economy you can re-pay a large loan in one year and still be up by $50,000 in profit. Businesses are struggling and banks obviously know that, therefore they will be very reluctant which goes against your favor.

Question: What corporation papers are needed at bank?
When my wife & I signed at lawyers regarding our business now becoming incorporated here in canada, there was a legal paper that the lawyer mentioned, that was or could be used for things like bank loans etc. Does anyone know what paper he was referring to?

Answer: Memorandum and Articles of association.

Question: Term Business Loan Canada?
Our company is looking for a term business loan in Canada. Where can we get a term business loan?

Answer: For a term business loan in Canada I would try Rubix Financial.

Question: Business Loan Credit Canada?
I need a business loan. How do I know how much credit my business has? What is a good business loans company in Canada?

Answer: Business credit is based on how well or not your business does or is expected to do, how you manage your business acct ie nsf cheques will lower your business credit steadily. If you’re just starting up a business they will also take into account your personal credit which you should check up on at least once a year to know where you stand and if anything is being reported incorrectly. Also, feel free to shop around at least to find the terms of the business loans, they can be quite different and some banks offer incentives for clients who have their personal and business accts in the same place so they’d be more likely to make you happy.

Question: Wondering how becoming common law in Ontario-Canada affects taxes?
Currently, I am self-employed and own a corporation that I draw a salary from. Together we have 2 children. And in the past I have claimed 1 as spouse and 1 as dependent. Now, if the father of my children starts living with us and we become common law. Then I will lose this feature although I will still continue to deduct both children from my income tax. Just the one will not be claimed as spouse. So, what I am wondering is how big of a deal is this for my tax return this year?

Answer: Check with CRA to see if you would be common-law. If he would be living in a self-contained unit with a separate entrance and no shared rooms, they may consider that you’re not actually living together. On the other hand, they may think it a little fishy and say you’re common law since you’re technically living in the same house.

If he is renting out the basement apartment at at least fair market value, then you would have to claim that as income… meaning more taxes. Plus you would no longer be able to claim the eligible dependant amount since you would technically have a spouse. You could still claim the amount for children born in 1991 or later on line 367 (if applicable) but not a spouse or dependent amount.

You can not claim BOTH amounts for eligible dependent AND spouse. If you have been getting away with it somehow, be prepared to pay back any credits you received for the spouse amount with hefty penalties and interest. Claiming the Spouse amount of Non Refundable Tax Credit for your child is tax fraud.

Question: Business license needed or not?
I have searched high and low all over the internet and cannot find a definitive answer to my question. I am an affiliate marketer and promote products and services of others for commissions (such as clickbank, cj.com, etc…). I work out of my home and as an affiliate marketer I do not have nor store any product or have business traffic in my home. All my activities are done online. Do I need a business license as an affiliate marketer? It would probably be a good idea to let you know that I am located in Alberta, Canada.

Answer: Most of the states – even in Canada — do not require a business license for an affiliate business. Except California which requires every type of business opening in the state to get a business license. Even the Alberta government’s website does not state anything about getting a license for this type of business.

Question: Has anyone conducted business with Interest Financial Services? Are they legitimate or a scam?
I was offered a 300,000 home loan from Interest Financial Services, but they are requiring a collateral deposit of $8,200. I can understand the need for the deposit, since I am high risk with bad credit, but the company wants me to send the money via western union to someone in Canada. I am looking for ANYONE who has done business with this company.

Answer: Scam. Loan amounts are REDUCED by fees. You NEVER pay the fees up front. Scammers hope you don’t know that, offer you fake money and try to get you to send the money via Western Union (it’s untraceable and they can pick it up without ID).

A Historical Look at Guaranteed Investment Certificates

Wednesday, March 3rd, 2010

Guaranteed Investment Certificates, (GIC) are Canadian investments that provide a guaranteed rate of return over a fixed period of time. GICs are normally provided by banks, credit unions, and trust companies.

The earliest forms of guaranteed fixed-income investments included such investments as bank notes and mutual funds. The first Canadian fund, Canadian Investment Fund Ltd. (CIF), was established in 1932. It changed its name to Spectrum United Canadian Investment Fund in 1996, and this fund changed name at the end of August 2002 to CI Canadian Investment Fund. Investing in guaranteed investment certificates, or GICs, has been the safe and sound choice from the time when registered retirement savings plans became available in 1957. GICs were created to give people a guaranteed return on an investment. Back in the 1970′s, interest rates on investments were higher averaging about 7.7 per cent and as much as 15.8 per cent in 1982. Part of that high interest rate was due to higher price inflation than today.

Interest rates are lower now. Over the past five years, GICs with a five-year term have paid an average of less than 3 per cent a year. Because Guaranteed Investment Certificates are low risk, there is normally a lower rate of return. With a GIC, the financial institution will borrow the person’s money for a specified amount of time which can be six months, one year, two years, or up to 10 years. When the GIC period has ended, your initial investment will be returned plus any accrued interest.

To own a GIC you must deposit at least $500.00. When the period has ended, one can then cash them as taxable income or renew it for another term. If you cash out before the term as ended, you will be required to pay a fee. GICs tend to pay a higher interest rate than bank savings accounts, but less most other investments. Interest rates tend to range from 1-9%.

There are other types of GICs such as Market Growth GICs. Their interest rates depend on the rate of growth in the stock market. This is a bit more risky as the market rates tend to fluctuate. Just like regular GICs, Market Growth GICs are low-risk because your original investment is guaranteed to be returned.

GICs are a popular investment choice due to their safety and security, guaranteed growth. (The interest rate is guaranteed with fixed-rate GICs,) flexible terms, and flexible payments. With some GICs, you can decide how you collect the interest you earn, such as monthly, annually or at maturity.

Guaranteed Investment Certificates make for a sound investment if you want a protected place to save your money. GICs could be used as a part of a fixed income portion of your portfolio, used for retirement supplemental income, or just to hold your money until you come up with a number of long-term financial strategies.

Guaranteed Investment Certificates have had a long history of providing Canadians with low risk financial planning investments for retirement or other investment endeavors. Investment portfolios will benefit from having an investment with a guaranteed rate of return. As well, these investments are often selected during periods of market volatility.

Whether you’re looking for mortgage rates or great GIC rates, with Meridian Credit Union you’ll have a customized financial plan that makes sense for you. Just for you.

GIC FAQ:

Question: Will you being buying stocks when the bear market finally comes to an end?
Lets say it is March 2011, and the DOW has finally returned to its long term trendline around 3000. Cramer is on TV screaming to the 200 viewers he has that are still watching him how this is the opportunity of a lifetime. Your bank is offering 7.5% on federally insured GIC’s, will you be a buyer of stocks?

Answer: Buying stocks when interest rates are rising is not a good idea even when the bear market is over. Just because stock prices might have stopped declining a couple of years from now doesn’t mean they will be going up.

Question: What Canadian bank has the highest interest rate for a savings account or even a gic for investing over 25,000?
I have about $28,000 to invest. I would prefer to have access to it but the most important thing is the interest rate, and my money must be secure so no stocks etc.

Answer: Short Term GICs are either the same or less than High Interest Savings accounts.

Question: Canadian option for investing in Britain?
I am planning on moving to Britain in about 6 months and want to transfer some of my savings into pounds to hedge against currency movement. I’d like to be able to invest in a UK money market fund or GIC or something like that. My current investment account (through Royal Bank) doesn’t seem to allow me to do this. Are there any options out there for me to do this?

Answer: Yes there are ways to do that. One of which I can suggest is to open a currency trading account and select no leverage on your account. That way you don’t have to buy any investments to convert your money, just invest in the currency of your choosing. When you want to switch it back you just exit your position, this saves you the fee that banks will charge you to convert cash. You will profit if the pound has increased in value while your money was traded. When you want to take the money out of the account there is no fees, penalties, or problems of liquidity as there currently are in the money markets.

Question: How to invest money, right now I can earn 4% from a GIC but I want to get more?
I really want to do stock/Foreign Exchange which people do but I don’t have any clue how to.

Answer: I’d suggest starting with an ETF (Exchange Traded Fund) or Mutual Fund. Even with those routes you should research your choices.

From there start teaching yourself about the markets. Each country will be different. BRIC (Brazil, Russia, India, and China) are good places to start your research. They all all high, risk high reward. The first two links are a bit old, but a good place to get familiar. The last link is from yesterday, but is more general.

Do your own research. Don’t invest if you aren’t comfortable with the risk. In today’s world the stock market is just another form of gambling. Though less risky than blackjack and poker if done right.

Question: Best thing to do with equity refinance money?
The house we were going to make an offer on was taken off the market. My equity refinace has already gone through so I’m sitting on a chunk of money. It may be awhile, 4 months or more before another house may come on the market that we would want to purchase. What’s the best thing to do with the money in the meantime? Stick it in a savings account? Put it in a short term investment such as a GIC? Any serious suggestions?

Answer: Put the money in a money market fund. This is a no load mutual fund where the daily price does not change. What could change is the percentage of interest you will earn. It will give you the most bang for your buck while not locking it up for any length of time. You can even find ones that are insured by the Federal Govt.

Question: I have $12,000 from insurance, and want to invest it for a month.. Whats the best option?
I just got $12000 from insurance, and want to invest it into something for 30-60 days, will be buying a car in a couple months. What is the best thing to invest in? GIC’s pay barely anything, but Im not sure what a better option is.

Answer: You should keep the money safe from risk since you plan on using it very soon. This results in your options being pretty limited and low-yield.

Look for a very high interest rate on a savings account at a local bank. Your money will be safe and very easy to access with this option.

Question: Any tips for getting pre-approved for a mortgage or loan?
In Canada, and would like to get a loan for 100 to 200K for either buying a house, or if not that than for investing in GIC’s or something (it provides tax benefits). I’ll be switching jobs soon, so I’d like to get the pre-approval before I move jobs in mid January. Any tips? I won’t be buying a house right away but I don’t want the job switch to scare off lenders.

Answer: If you leave your current job and start a new job in the same line of work then usually lenders will just want you to pass probation. Here’s where you may get a problem most brokerages can get you a rate hold of up to 120 days maximum. So that would only give you 30 days to find and move into a new home.

Question: Federal bank interest rate to rise. What does this mean to the TSX?
The Bank of Canada rate is going to rise. What is the correct investment strategy now that everyone know this? GIC’s or Stocks?

Answer: Clearly , it may be in your best interest to spend time at the Library reading up on investing. Good start: The Intelligent Investor by Ben Graham – it’s a classic. Also read up on Warren Buffett.

How Does Debt Management-Consolidation Work?

Wednesday, March 3rd, 2010

When an individual feels that they are so far in debt that there is no way out, they may look to a debt management company to help them find a solution. This is because a debt management company provides their clients with a number of options to help them get themselves back on track.

For example, the debt management company may offer a service in which they negotiate the debt with the creditors. This means putting a freeze on interest rates, negotiating a lower payment, and even lowering the amount of the debt. This can save an individual a lot of money and help them get out of their debt faster so that they can start over when the program is finished.

Debt consolidation

Another service that is offered is debt consolidation. This is where you take out a loan that pays off all of your unsecured debt for you. Unsecured debt is that debt in which collateral is not used to secure the loan. For example, a bank may require a car be put up as collateral on a personal loan. This insures the loan because the bank can take possession of that car to recover the money that they would lose if you were to default on the loan. That is why you cannot include secured debt in a debt consolidation loan or any sort of debt management.

The reason why unsecured debt is allowed is because the creditor will be at a great loss if you do not pay the debt or you file bankruptcy. Through a debt consolidation loan, you are given the loan and you use that money to pay off your creditors. It is then that you have just the one loan payment. That payment can actually save you money on interest and can be less than what your individual debts were costing you each month.

Credit counseling

It is usually called credit counseling when the debt management company has to negotiate with the creditors. Now this is where you may see an adverse effect on your credit score. However, the adverse effect is not as severe as it would be if you filed bankruptcy.

You can expect to be in a credit counseling program for a period of up to three years. The debt management company talks to your creditors and negotiates certain terms with them. For example, the debt management company says to them, “If you do not agree to these terms, this person will file bankruptcy and you’ll get nothing.” The creditor would much rather get something than nothing at all, so they will negotiate lower rates, lower interest, and any other terms that you have discussed with the debt management company.

When it is over

The debt consolidation loan is rather simple because you take out the loan and make your payments to pay off the debt. But it is the credit counseling aspect that requires some time. Negotiating lower payments and lower interest is not something that comes without consequence. If it did, then it would be too good to be true.

When the program is over, you will have to work on rebuilding your credit. This can be done by simply charging on one credit card and paying it off before your due date each month. Making payments before your due date is important because many creditors take up to 48 hours to post a payment and that can still result in a late fee. Nevertheless, you can have your credit rebuilt and you can ensure that you don’t fall in the credit trap ever again. That way you can keep your credit score intact.

Amy Nutt is a freelance writer who writes on a variety of financial topics including personal budgeting and debt consolidation. For more information about personal finance and credit counselling, ConsolidatedCredit.ca is a tremendous resource on the topic for Canadians.

Debt Management FAQ:

Question: How to know about the safe amount of debt?
I am planning for loan. I don’t have any idea about the debt management. Anybody suggest me the safe amount of debt?

Answer: The debt ratio depends on the lender’s income. There is no standard safe amount for debt. The safe amount varies according to the income of the person. Lenders typically prefer a maximum debt-to-income ratio of 1:3. Save up your money and then buy something you can afford with cash, rather than incurring a big monthly payment for several years to come. The safe debt also finally depends on your comfort level.

Question: Should you attempt to Debt settlement Companies directly with the creditor?
How can we attempt Debt Settlement Programs and Debt Management Companies?

Answer: Most debt settlement companies aren’t doing anything that you can’t do yourself and they often charge an arm and a let to do it. Contact your creditor(s) and let them know of your situation and see what they offer up. Once you have that offer, come back with one of your own that’s a tad bit more aggressive and then try to negotiate something in between. Once you’ve done that, do NOT send them a single penny until you get the offer in writing. At that point you can move forward in settling your debt.

Question: I have 55K in charged off, 7 year old credit card debt. I have been told CCCS/MMI is the best route.
Although this debt is 7 years old and some reports reflect the removal of the accounts, I would like to satisfy the debts. What is the best route? The original creditors will not speak with me as they have been sold many times over and one is currently in collection. I have heard that CCCS is the best route to manage the debt. I work for the government and CCCS is pretty much the only recognized debt management company. What should I do?

Answer: CCCS will not be able to help you with defaulted debts. Their debt management programs work to reduce interest and payments on open, active accounts.

These debts are about to age off your credit report and will no longer impact your history or score. It is also very likely that the debts are beyond the Statute of Limitations (SOL), the time frame to bring lawsuit. Typically the SOL starts from the date of last activity or last payment.

If you feel you want to repay these debts for moral reasons, then you need to contact the collection agency who currently owns the debt. You should be able to settle with them for about 10% to 20% — these collectors paid less than pennies on the dollar for 7 year old debts. Lump sum payments only. Don’t even consider payment plans — you restart the SOL.

Get any settlement in writing before you pay anything. Keep that agreement and your payment proof forever. Do not give the collector direct access to your bank account.

Question: How can I get a hit on my credit report from veterans affairs removed from my credit report?
They gave me $375 too much money a year ago (or so they say) for my GI Bill and asked for it back which I forgot to do. So it was forwarded to VA debt management and they reported it. I paid it off but the hit is still on my credit report. If I call and request it removed will they help me or tell me to screw off? What should I say when I call them?

Answer: You can call and very politely ask the collector to remove the item, but don’t be surprised if they say no. In that case, it will stay the balance of the 7 year reporting period. It is a legitimate item and part of your history.

Question: Struggling with debt?
I am struggling to keep up with my debt repayments, and a friend told me about debt management plans. Where can I find information on debt management in the UK?

Answer: Be very wary of using debt management companies. All they do is arrange a new loan, to be paid off over a longer time than your existing debts, possibly at a higher interest rate, and they add their own fees to what you owe. All of these things will increase the total amount you have to repay, and will keep you in debt and potentially struggling for much longer.

If you are struggling you can talk to the lenders yourself, and you may be able to renegotiate payments etc. Even if you do want to take out a long term loan to pay off some debts, you will almost certainly get a better deal if you do it yourself.

Question: How Much will my credit score improve?
I have about 5 Collections on my credit report and my husband has 9 Collections. We are working with a Debt Management Plan (Non Profit) and are paying monthly. Will our credit score improve or will it just stay the same since were giving the debt a new date each time we make our payment?

Answer: Although your credit score will be very low at the moment, it certainly will not get any worse so long as you are keeping up to date with your monthly repayments. Your score will increase slightly however it won’t have the boost that a healthy credit card has for example.

Question: How can I clear these bills?
I have mounting bills from my previous address which includes british gas yorkshire water ect. I have rung them all up and tried to arrange a payment schedule which I can afford but they are wanting a big deposit and bigger payments per month which I cannot afford as I don’t work. I’m a full time mum and my partners wage just pays the bills and rent ect. Is there any way I can get help to write off these debts or enter a debt management?

Answer: No. You need to find a job and pay them. Perhaps you could work from home to make extra money?

Question: Has anyone in the UK ever used a debt management company called Pay Plan, if so what do you think of them?
I was referred by a C.A.B debt advisor to this company, who will take a set amount from my income and distribute it to my creditors, I’m a bit wary of giving them my money as I have never heard of them and they do this for free.

Answer: The CAB will only direct you to a reputable company and if they are not charging you for their services at all then this is further proof that they have good intentions and are not in it for the money they can make out of you.
Other companies such as Baines and Ernst are better known but charge quite a lot of money for their ‘help’. This money could be better spent paying off your debts so don’t ever think about taking on a company that charges you at all.
I have never heard of Pay Plan but there are several non-profit-making companies that do a similar thing. Really, they are only doing things for you that you could do yourself, but their guidance and control make it easier to manage your money.
If you have any doubts just give them a ring and ask them to explain how they work and how they are funded. They are probably set up as a charity and they also probably get that request quite a lot so should be able to tell you everything you need to know.

Debt Management Programs Destroy Your Credit Rating

Tuesday, March 2nd, 2010

A debt management company is where an individual turns when they feel too overwhelmed by their debt. They are looking to debt management because they are hanging on by the skin of their teeth or they have already fallen off the wagon. They can’t make their payments with their current income, so they have to find something other than bankruptcy that can relieve the issue.

When they turn to debt management, they may find that there are a number of services that are offered. The first of those programs is debt consolidation. This involves taking out a loan that consolidates all unsecured debt into one payment. For example, unsecured personal loans and credit cards can be combined. The interest rate can be lower and the payment can be lower than what all of the separate payments were before.

However, you have to be careful because this can have an impact on your credit rating in a number of ways. It is true that the idea behind debt consolidation is to keep your credit rating in tact, but you have to keep some things in mind.

Your credit rating

When it comes to debt consolidation, some people make the mistake of closing their accounts. It is actually not wise to close accounts for the fact that this lowers the amount of available credit that you have to your name. One of the things that contribute to your credit score is how much of your available credit you are using. If you have open accounts with balances of $0, that will have a positive impact. However, if you close your accounts and you have a debt consolidation loan that has no available credit, this can be harmful to your credit score.

Even if you’re not using debt consolidation and you are using another type of debt management, there may be a negative impact on your credit score. For example, you may not be able to take out a debt consolidation loan, so you need a debt management company to negotiate lower interest rates and a lower payment with your creditors. They may also be able to lower the amount of the debt. When this is done, this can affect your credit score negatively.

How does it help?

However, the repercussions that come with debt management are much less than that of bankruptcy. The consequences of debt management may last a period of three years, but bankruptcy can last ten years or more. So this is something that you should weigh when looking for a way to get out of your financial situation.

As for the benefits that you will experience in the present time, you will find that you will have more money in your pocket. Better yet, you can take that money and deposit it within a savings account. That way when you get back on your feet after your debt management program, you are able to have money in the bank that can help you out of a tough situation later on.

Nevertheless, you will have to work on building your credit back up after a debt management program. This means you’ll have to use your credit and make on-time payments. This is one reason why you don’t want to close accounts. You can take an existing account, charge a little on it, and then pay it off before your due date each month. This will allow the creditor to report positive marks on your credit report. This will also raise your score. Most of all, having to go through a debt management program can help you learn a very valuable lesson. After that, you shouldn’t find yourself having credit problems again.

Amy Nutt is a freelance writer who writes on a variety of financial topics including personal budgeting and debt consolidation. For more information about personal finance and credit counselling, ConsolidatedCredit.ca is a tremendous resource on the topic for Canadians.

Debt Management FAQ:

Question: Is it legal for a collections company in Canada to call from 000-000-0000?
I’m currently enrolled in a debt management program and informed the collections agencies dealing with my accounts. One company still called so I sent them a letter stating I wanted all further communication through the mail and not over the phone. They called me once tonight from *one* of the many numbers they use and didn’t leave a message. 15 minutes later I get a call from 000-000-0000 and no voicemail. I know it’s them – this company does shady things all the time. Is it legal for them to call me from a weird number like that?

Answer: Yes, it is legal. I used to work for a collections agency and 90% of the phone numbers that show up when they call are “dummy” lines anyway. You call the number back and it doesn’t work.

Also, in Canada even if you want further communication through mail and not calls, they legally can still call you. You have a debt, they can call and speak to you up to 3x a day. They can call as many times as they like if they do not speak to you. Even if you request communication through mail, they can call you. Many debt collection companies do not leave voicemails as 3rd party disclosure laws are quite strict

Question: Starting debt management plan, should I pay credit cards?
I am going to be starting a debt management plan with CCCS this month with a payment due on March 20th…should I pay my credit cards for the month? I am not sure I can afford the credit card payments and a debt management payment in the same month without skipping payments on utilities but I don’t want to ruin my credit either.

Answer: Call CCCS and ask your counselor how this should be handled.

Question: I’m thinking of getting a Debt Management plan with a company called ChurchwoodFinance. Are they any good?
They are asking for a payment up front, and then a monthly direct debit for 36 months.

Answer: Never go with a debt management company that demands payment upfront. This company will charge hefty fees to do what the Citizens Advice Bureau will do for free. Visit the citizens advice bureau in your town. Or you can contact your local united way, and they have free debt management help available.

Question: Can a wife claim 30% of her ex-husbands salary?
My son’s ex-wife is demanding 30% of his net salary. He is left to pay a huge mortgage plus debt management payments. After council tax, utility bills and running costs for his car which is essential to keep his job, he will be left with negative income. Can this be done?

Answer: She can demand all she wants, but there is no way she can actually take any amount of his salary. Now, if you are referring to something like child support…that’s slightly different. She still can’t take whatever she wants, but he will have to pay her money every month to help support any kids they may have together. As far as how much…a judge would make that determination, and most likely base it off his income.

Question: Is it legal to have a debt management plan and save on the side?
I mean to go on a debt management plan to reduce interest on your credit cards and in the mean time save on the side to clear the balances in one payment?

Answer: Yes.

Question: Give some debt management tips?
I have more than one debt but I am properly maintaining the payment. I need some debt management tips.

Answer: The first step is to stop buying things on credit. The second is to pay off the debt already incurred.

There are two schools of thought on how to pay off debt: 1) the highest interest 2) the lowest balance. Paying the highest interest debts will save money in the long run. Paying the lowest balance account will reduce the number of accounts owed and free up those payments for other debts sooner. Keep making the minimum payments and apply additional payments to either the highest interest or lowest balance account.

Question: Do I go for debt management?
I am about £10,000 in debt and it has really gone to far and I desperately need to get it sorted. Can anyone advise me whether or not debt management is the way forward and who would the best people to go with?

Answer: Google “CAB” or “citizen’s Advice Bureau”. This charity will contact all those that you are in debt to, to arrange a manageable repayment plan. Debt management companies are currently under investigation in the UK because they appear to be offering a solution which only succeeds in making financial problems worse. They charge for their advice (which can be obtained free from the CAB). They reschedule your debt – and they take a hefty commission (typically between 15%-30%), so creating a higher debt for you.

Question: What are my options after being canceled from my debt management program?
I was in a debt management program. I am $51k in debt. My last payment was in Oct. and I informed them that my job cut my hours 60% and delayed my payments for 2 months, but I never was able to get back into the program. I was dropped from the program in January. One of my creditors has now Charge off my loan and is on my credit report. I have not made payments to my other creditors and I am not sure what to do. I am avoiding their calls, because I feel completely lost. I thought about bankruptcy but my husband is self employed and I’m not sure how that will affect his business, and we own a home. I need some advice. I am sure others are experiencing the same or similar circumstances.

Answer: Book a meeting at your bank branch. The people there are nice and see people like this everyday. They will give you the best advice for your particular situation. Just try not to let it get you down too much, financial stress is a heavy one. Bankruptcy might be the best issue, but the bank employee will know if it will affect your husbands business.

How Do You Qualify For Debt Consolidation?

Tuesday, March 2nd, 2010

Many Canadians struggle with credit card and other types of consumer debt. Some are even stuck in a cycle of opening one credit card to pay off another. In some circumstances, debt is racked up as a result of dealing with unexpected expenses such as home or auto repairs, illness, joblessness or divorce. With soaring interest rates, it is easy to become buried under consumer debt.

Most Canadians that pay only the minimum on each credit card bill are knowingly or unknowingly extending the life and cost of the debt. An unmanageable amount of debt can be very frustrating – especially when you start to feel discouraged about ever paying it off. There are, however, some ways to improve your debt situation and get you closer to paying everything off. Debt consolidation is a great way to make multiple credit card and other loan payments easier and reduce your interest rates at the same time.

What Kind of Debt Consolidation is Available?

There are two main forms of debt consolidation available to consumers. The first involves qualifying for and taking out a loan for the amount necessary to pay off all your credit card or other consumer debt balances in full. After applying for and being approved for a debt consolidation loan, the newly borrowed funds go directly to pay off all your debt. In many cases, your credit accounts that were in good standing are allowed to remain open, which can help your credit score considerably by showing that you have much available credit. The benefits are the simplification of multiple credit card bills into one, manageable monthly payment. The even greater benefit of debt consolidation loans is the reduction of the interest rate you will pay. For example, if you are currently paying 13% to 23% on several accounts, and a new debt consolidation loan gives you a 9% interest rate, you will save money and pay your debts off more quickly.

The second type of debt consolidation refers to using a credit counselor, or intermediary to negotiate with your creditors on your behalf. In this scenario, you debt is not necessarily consolidated (though it can be), but your total amounts are settled with the creditors. In this case, you may satisfy a debt in full by only paying a portion of it, but you may pay for it with your credit score if the account is closed.

Who Qualifies for Debt Consolidation Loans?

In order to qualify for a debt consolidation loan in Canada, you must meet several requirements. You will have to go through an application process that will determine whether you meet these qualifications. The requirements may vary some from financial institution to financial institution, but some general qualifications remain the same across the board.

Budget

The lending institution you select will review your monthly income and expenses. They will go over your monthly budget thoroughly in order to assess whether you will be able to meet the debt consolidation loan payments.

Income

Qualifying for a debt consolidation loan is like qualifying for any other loan – you must be able to afford the payments. You must be able to show that you have a stable job or other source of income. Generally banks will require that you submit paycheck stubs or copies of your most recent tax return, so it’s a good idea to have these on hand when applying for the loan.

Assurance

If your lending institution has even the remotest doubt about your creditworthiness, they will want to see some assurance that their funds will be repaid. Most commonly, assets that serve as collateral are listed or a co-signor is sought.

Amy Nutt is a freelance writer who specializes in providing great financial information for Canadians. When searching online for debt counselling or credit counselling, be sure to visit the resources available at Consolidated Credit; offering a variety of debt counselling services and financial planning tools to help Canadians get their debts under control.

Debt Consolidation FAQ:

Question: What is the best company for credit card debt consolidation loans?
I am planning to consolidate about $4000 in credit card debt by personal loan. What are the best lenders to approach?

Answer: It isn’t wise to seek credit card debt consolidation loans to consolidate credit card debt. You’d be trading off unsecured debt for secured debt. The lenders you will find are secured debt consolidation loan lenders that would require you to put up the equity on your property as collateral to guarantee loan repayment. Then guess what happens if you don’t pay up. You guessed it, they can foreclose on your property. So, it is best to do a balance transfer into a lower interest credit card account.

Question: Should I do debt consolidation or declare bankruptcy?
I have a large amount of credit card debt and I’m having trouble with wanting to declare bankruptcy because of it. Mainly because I don’t want that bankruptcy stigma over my head for 10 years. Also I can’t really afford the monthly amount that some debt places have given me. Advice?

Answer: Its true that if you file under chapter 7 that it will be on your record for ten years. If you file under chapter 13 it’s slightly less, seven years. But the truth is, that though it will be on your record for 7-10 years, the negative effects will immediately begin to diminish and by the third year you should be able to get credit cards and even FHA loans at normal rates. So it’s really not the end of the world like many think.

Question: Who are the credit card debt consolidation groups that are reputable and don’t rip you off? One that can help me?
I’m in deep credit card debt and I think the only way I can get help is through one of these programs. I heard Credit Card Advocate is a helpful one. Please let me if anybody has tried these and did it help?

Answer: There are many reputable debt consolidation groups. Essentially, they are non-profit consumer credit counseling services. But if you have exorbitant debt, the question you should be asking isn’t “are they reputable” but rather, “will they be able to help me get out of debt?”

CC Advocate has some good reviews. It certainly helps, you just need to be aware that you still have debts, and not to get into new ones even if you seem relieved from all the pressure of multiple companies trying to charge you. A personalized plan is your best shot, you can get it for free online.

Question: How do you know which debt settlement or debt consolidation program to choose?

Answer: Try Consumer Credit Counseling instead. The Financial Consumer Agency of Canada (FCAC) advises Canadians to do their homework about credit counseling services before entering into an agreement. According to the Agency, consumers should shop around and compare services of credit counseling bodies and take note of the different fee structures of for-profit and not-for-profit credit counseling, as well as what services are offered for those fees. Consumers considering entering into a DMP should also be aware that an R7 credit rating will be entered in their credit report and that their credit report will show that they used credit counseling, a notation that will remain on the report for at least two to three years. Prospective lenders, employers and landlords may view information in an individual’s credit report, if the application forms consumers sign grant them permission to do so.

Question: Bankruptcy, consolidation, or debt reduction?
I’m looking at an uncomfortable situation. My family has a considerable amount of debt. We’re talking around $30,000. We are currently able to manage payment on our cards, but we’re not able to get anywhere. We’re at a point of near desperation. So I was wondering what was best? Should we file for bankruptcy, try to get a loan for debt consolidation, or try one of the debt reduction programs out there?

Answer: Bankruptcy should be the last thing to pursue unless you want to risk the forfeiture of your property in order to repay your creditors. Filing bankruptcy also damages your credit for 10 years.

Getting a loan for debt consolidation is very risky. It would require you to trade your credit card debt for a “secured” loan where you’d use your property as collateral to guarantee loan repayment. If you miss a debt consolidation loan payment, the lender can do a foreclosure on your property to collect on the outstanding debt. So generally, a debt consolidation loan isn’t a practical idea.

In terms of trying out a debt reduction program, you have two choices – consolidating your debt with a credit counseling debt management plan (DMP) or settling your debt with a debt settlement program. In terms of debt reduction benefits, here are the key differences between the two. A credit counseling DMP consolidates your credit card debt by reducing your interest rates and a debt settlement program eliminates your debt by reducing the debt principal and interest.

Question: Could debt consolidation hurt my credit rating?

Answer: Keeping your debts will hurt it more. The secret is to find a reputable company, and one that suits you well, considering not only the amount you owe, but your situation as a whole. Get a complete profile, ask questions, read the fine print.

Question: Is debt consolidation worth it?
Any advice you have would be much appreciated. I have about 6 grand worth of debt.

Answer: By consolidating your debt you would hope to reduce the amount you have to pay by securing a lower interest rate as well as reducing the time over which the debt is to be paid. However whilst you may realize those benefits by consolidating your debt, it does however come with some real risks that could damage not only your credit score but also put your home at risk. So before signing for a consolidation loan you really should know the risk that you are exposing yourself to.

Question: Creditors trying to Garnish Wages?
I have a creditor who is trying to garnish my wages. I am asking this question is because I am making regular payments to them and it is being done through a consumer credit debt consolidation agency; yet the creditor is trying to garnish my wages. Can they garnish even if I am paying them through a consumer credit agency?

Answer: They would have to get a court judgment against you first and the court would have to order garnishment. If they are just threatening you, then they are the ones misbehaving. Talk to your debt consolidation agency.

How Does Debt Consolidation Work?

Tuesday, March 2nd, 2010

Racking up consumer debt is very easy to do. You may have done so without even noticing. A few charges here and there and bam! You’re hit with high interest rates that make it practically impossible to make a dent in that debt. You may have special circumstances that forced you into debt – illness, divorce, the unexpected death of a loved one, or even unexpected home or vehicle repair expenses. The problem is that while credit card debt is piled up, interest only grows. If you pay only the minimum amount due each month on any given credit card, you are very unlikely to ever pay it off fully. You may even feel so deep in the hole and discouraged about ever paying off your debt that you may consider bankruptcy. Before you give up, you should know that there are ways to work around your debt and get ahead despite those soaring interest rates. In these tough economic times, paying even just the minimum due on each of your credit card accounts can prove to be quite difficult. If you are looking for ways to reduce household costs or increase monthly income, consider how getting rid of your debt will affect your finances.

Debt Consolidation Loans. One proven way to improve your debt situation is to consider a debt consolidation loan. The most common form of debt consolidation consists of the following: – The ‘in-too-deep’ debtor applies for a debt consolidation loan. – The lending financial institution issues a new loan for an amount that is sufficient to pay all of the debtor’s outstanding debt. – The debtor uses the newly borrowed funds to make final, lump sum payments on all his outstanding debts.

Does it sound simple? That’s because it is! As long as you’re able to get approved, you should be able to simplify your life and improve your debt scenario. You may be wondering what the improvement is, since you are still in debt for roughly the same amount you owed. The advantage lies in the interest rate. Debt consolidation loans are likely to carry a much lower interest rate than those carried by your various credit cards and other types of debt. In addition to that, you’ll be simplifying your life by having just one substantial monthly payment to make rather than several smaller ones to keep track of.

Debt Consolidation Specialists. Another way of consolidating consumer debt is to employ the services of a debt consolidation specialist. The specialist will actually negotiate with the debtors various creditors. Usually these specialists have relationships with creditors and are able to leverage them to get the best possible outcomes for their clients. In addition to that, debt consolidation specialists are experts who know what the creditor will able to concede and will also have a good sense of what the debtor will be able to afford in terms of monthly payments. The debt consolidation specialist will work as an intermediary between the debtor and creditor until a feasible and mutually acceptable plan is outlined. Debt consolidation professionals will not intentionally make arrangements that will put a debtor in a position to fail.

There is Help If you are feeling buried by debt and discouraged about ever finding your way out, remember that there are resources available to you. Canadian debt consolidation can help financial obligations seem more manageable and can also help to improve your credit score. Before signing up for anything, make sure to review all the options. Try to get references or look for customer testimonials about any service you consider using.

Amy Nutt is a freelance writer who writes on a variety of financial topics including personal budgeting and debt consolidation. For more information about personal finance and credit counselling, ConsolidatedCredit.ca is a tremendous resource on the topic for Canadians.

Debt Consolidation FAQ:

Question: I have about $5000 in debt and its all starting to catch up. My credit sucks, how can I get out of this mess?
I live in Canada and have tried to get a debt consolidation loan but because my credit sucks I am not approved. Any other ideas?

Answer: If you have several credit cards, I suggest you pay the minimum on each card except for one. On the one card make the highest payments each month that you can until you have paid it off. Once you are done with that one concentrate on the next one also making high payments while paying the minimum on the others until you are done.

Question: Separation, Bankruptcy and Credit Card Debt?
My husband of 29 years recently walked out on me and our three girls. I’ve been awarded spousal support and child support through the courts. $400 spousal, and 500.00 Child support. Ever since he left, I have fallen behind on all of my bills, but mostly my two Credit cards which are solely in my name. These are in my name because he had a business bankruptcy about five years ago, and was not able to obtain any credit. These cards are both maxed out to a total of nearly ten thousand dollars, and the phone calls have just begun. I try my best to keep my payments up, but I’m not even meeting the minimum.

Answer: Look to the government for some support, you’re likely able to qualify for food stamps / financial assistance at this point. Call your creditors back and ask for hardship assistance. Tell them that you want to pay the bills off, but at this point if they can’t be flexible then you’re thinking of bankruptcy. That will get some wheels turning a bit more. Don’t be afraid to ask for a supervisor if you don’t get what you want, this is your future on the line.

Question: Consolidation/Bankruptcy?
I am $97000 in debt and I am thinking of consolidation or bankruptcy (in BC, Canada). Every couple of months I get an application from MBNA for their consolidation loan which I am thinking of applying for. But what I am scared of is, if I do take this consolidation loan, and for some reason I can’t pay monthly payments and therefore I decide to declare bankruptcy, will I be able to do so?

Answer: Opt for a debt consolidation loan: The easiest method of getting a debt consolidation loan is to utilize the equity of your home. Equity of your home is calculated and determined by the difference in the amount you have paid and the amount you owe. If the amount you have paid is more than the amount due, you can use it as collateral. This allows you to borrow money on lower interest rates. Besides, you also get tax benefit on this type of loan. Consult your tax advisor before opting for this loan.

Question: Bad credit loans?
Does anyone know of a company in Canada that will give personal or debt consolidation loans to people with bad credit?
I have a visa in collections, which is the only credit I had. I don’t have any assets and nobody will give me a chance. I have a good paying job now and only want to borrow 6000$. I also don’t have a co-signer. Any ideas?

Answer: 1. Use that good paying job to pay off the collection.

2. Save the money that you were planning to borrow.

3. Get a saving secured credit card to rebuild your credit reputation.

When the only credit you had went to collections is it any wonder no one will lend you money? It may sound harsh but it is the truth.

Question: Credit/Collections steps?
My credit cards are maxed out and I have been unable to make the minimum payments (or any payments) for a while now. I am with Royal Bank of Canada, if that makes any difference. After collections, they can garnish my wages, correct?

What are the steps that happen in order and how long does it usually take before I am officially screwed (ie, will I get sued? 7 years no credit?). Apparently I do not qualify for debt consolidation. Not sure what my options are, as my minimum payment for my credit debt (550) is almost as much as my rent (769).

Answer: Not sure what the laws in Canada are but in the US it is this. (1) They will cut off your credit and turn it over to collections (2) If it is a large sum for one company they can take it to court (3) If they take it to court the judge can garnish your wages for up to 75%. They can also take everything you own and sell it for payment.

Some credit repair places, the legal ones, can stop the interest and set up a payment plan. You will pay by this plan because your income check will be direct deposit and the money withdrawn from your account. A freeze will be placed on your bank account for the monthly amount of the payment. Your rent, food etc is of no concern for them.

Needless to say, your credit is shot for 7-10 years AFTER the last payment to the last company. You might be lucky and they will just write it off

That is the bad side. Talk to the credit repair folks, get a legal one and not a fly by night group, and they can help.

Question: Avoid bankruptcy in Canada?
My husband has debt of over $60,000 and he is thinking of bankruptcy. My question is; my husband has been avoiding calls for two and a half years, what is the best option now bankruptcy or consolidation? At this time my husband doesn’t have a job and we have a family of 5. If he consolidates how much of the loan will be written off?

Answer: Avoiding phone calls for that long constitutes fraud. Expecting companies to charge off the interest is ludicrous. You need to become responsible. He should have been telling those he owes as to why he’s not paying the bills. Your husband needs to get working. If your children are out of the diaper stage then you too need to be working. Just think, the more kids you have the more trouble you will get into. In the USA there is a group set up by the government called Consumer Credit Counseling. Find out what the equivalent there is in Canada and have him set an appointment with them for consolidation. In the meantime stop spending.

Question: Collection agency saying I owe but I’ve paid everything Help!?
My husband received a letter today from Financial Debt Recovery claiming that he owes $6200+. We took out a consolidation loan a year or two ago and paid off all bad debts. I also work for a bank and was able to obtain our credit reports. According to the bank we both have clean slates. I sent a request through to TransUnion Canada for my husband’s full credit report and there are a couple items on there from years ago that were written off – but don’t add up to anywhere near 6000. This law firm and Financial Debt Recovery are legitimate businesses. What’s going on here?

Answer: Did you get a written settlement agreement when you originally paid off the bad debts? Collection agencies are notorious for agreeing to settlements over the phone then denying that any settlement was made once they get your “settlement” money. They usually resell the debt to another collection agency, which inflates the amount due and starts the whole collection process all over again.

Debt collection laws in Canada are handled by provincial laws, rather than one national standard law as we have here in the USA. Send them a letter via Certified Mail + Return Receipt (NOT regular mail) stating:

I am requesting written validation of this alleged debt, which includes:
- a copy of the original signed contract with my signature
- a fully itemized statement showing how the amount you are asking was calculated.

Question: What are the disadvantages of getting Debt consolidation?
I know the advantages of it but I want to know the risk too of it.

Answer: Cons:
Get Into More Debt. It may be tempting to continue to use the credit cards that you’ve paid off. This is one of the reasons why debt consolidation is not a cure for credit problems. In fact, it could actually make problems worse, by allowing a person to get into more debt than they started with.

May Cost More Overall. Even though the monthly payments and interest rate might be lower, you can end up with a longer-term loan in which you end up paying more interest in the long run.

May Take Longer to Pay Off. If you don’t end up using the extra monthly savings to pay off your loan (and perhaps even if you do), it could take you longer to get out of debt.

Could Lose Your Home. If you go the route of a home equity loan, the lower interest rate that comes from listing your home as security might not be that beneficial if you default on your loan and lose your home.

One Payment. In some cases, it can be beneficial to pay off smaller loans with higher-interest rates first. You don’t have that option if you’ve lumped all your debt into a single loan.

May not Qualify for a Loan. It’s possible that with so much debt, you may not qualify for an additional loan. Or, if you do qualify, the interest rate might be high.

Disreputable Debt Consolidation Companies. Not all non-profit debt consolidation services are looking out for your best interests. Some companies may be downright scams.

5 Tips on Starting a Budget at Home

Tuesday, March 2nd, 2010

If you need to save money, it is very important that you start a budget at home. Although you may think that there is no way you can cut corners, the truth is that there are ways you can do it. You can cut corners in areas that range from your utility bills to how much you pay for groceries each month. If you save money in just these two areas alone, you may be pleased to find that you can save quite a bit of money. If you apply this to all areas of your life, you will be amazed that saving money is so easy.

So what are 5 tips that you can use to start your budget at home?

- Organize all of your bills each month and determine what it is you are spending on average each month. It is important for you to determine this so that you can get an idea of how much money is actually going out.

- Make sure you accurately figure how much money is coming into the home on average. By doing this, you are able to compare what it is you have going out and what it is you have coming in. If you do the math, you can then see what it is you have left each month. If not a lot, you may want to consider credit counseling on your unsecured debt.

- After you have determined how much money you have left each month, it is time for you to take a look at your bills and see what you can reduce and what you can’t. For example, you may not need that text messaging package on your cell phone. You may also not need all of those minutes that you’re using. This will save you a significant amount. This also means you need to do things such as not run excessive amounts of water in your home, turn off lights when you leave a room, and turn down the heat and the air conditioning since they result in high heating and cooling bills.

- When it comes to grocery shopping, it is not always necessary to buy the name brand. Sometimes the store brand is just as good, depending on what it is. For example, you may not need to buy the name brand pain killer because the store brand pain killer has the same quantity and the same exact ingredients. The main difference is the price, which usually around $2 or more less than the name brand.

- If you find that you are doing a lot of unnecessary spending, you need to see what is necessary and what isn’t. This means you need to stop buying all of those unnecessary things. You may not need to go out to the movies every week. Every other week may be fine. When you see that new outfit on the Internet, question whether or not you really need it. If you don’t, then you can move on and use the money for something that is necessary.

There are so many small things that you can do to make a difference in your budget. You would be amazed how much money you spend and shouldn’t spend. It is rather amazing, really. We all spend thousands of dollars per year that could be used to reduce other expenses such as credit cards, loans, mortgages, car payments, and so much more.

If you find that you are in a tough financial situation, you may want to try something such as debt counseling to help you with your budget. Credit counseling is another solution that you may wish to look into. If you have a lot of loans, then debt consolidation may be an option. Many individuals go the credit counseling route when they feel that there is nothing they can do to make their budget work.

Amy Nutt is a freelance writer who writes on a variety of financial topics including personal budgeting and debt consolidation. For more information about personal finance and credit counselling, ConsolidatedCredit.ca is a tremendous resource on the topic for Canadians.

Home Budget FAQ:

Question: Terrible credit. It just seems like one thing after the other. Any budget ideas to help me?
I am 25 years old and I am really feeling overwhelmed. When I was a teenager I was a little irresponsible. But since then I obtained a copy of my credit report and got on the track to paying back what I owe. I already paid off my school loan which in itself is a load off my back. I moved onto the next thing which was all my old cell phone bills. Now I’m looking at my credit report and I’m having a hard time moving on to the next. I have about $3000 left on my credit to pay off which I can do. But I just found out I owe my first college $10,000 from early withdrawal and library fees. How will I ever pay these things off? I can have the 3000 paid by the end of the year but the 10,000 is surely going to hinder me from buying a home. Any budget ideas?

Answer: $10,000 just from early withdrawal? That sounds pretty extreme. Contact them and ask for a breakdown of charges. The best way to do it is how you are. One thing at a time. That way, as you pay them off, they’ll come off one at a time. If you try and pay a little at a time to all at once, they’ll all remain on your report until the last payment. Keep your head up and you’ll be ok. You’ll manage. Also, get on some sort of payment plan with the school and that should prevent anymore charges being added to it.

Question: Home budget question?
I’m plugging in my expenses into Quicken to determine my incoming/outgoing balance. Do I input my VISA purchases AND my VISA payments as expenses in the same month? When I get a breakdown of outgoing money, it looks like I’m spending a huge amount of money on VISA. Am I doing this correct?

Answer: By entering both the Visa expenses and the Visa payment you are in effect entering the same amounts twice and therefore doubling what you have actually spent. The way you need to look at it is, you only spent the money once from your account, i.e. when you made the payment to your Visa. The charges on the Visa were on credit – using the bank’s money not yours.

A couple of suggestions would be to have a separate document for your Visa expenditure, itemising the expenses if necessary, and only entering the actual Visa payments on your original document.

Or, if you pay the Visa in total each month you could enter your Visa charges as per your statement, but not enter the payment as well. For this to calculate properly, your Visa expenditure and your Visa payment must be the exact amount.

Question: What’s a simple and efficient home budgeting software?

Answer: Quicken Personal is my favorite. It’s a check register, but it also does pie charts and graphs of where your money is going. I also believe it has a budgeting tool – just look at the package. I’m not a budgeter, I’m a saver; If I don’t save then I don’t spend. Ex: Easy to see in a pie chart if you are reaching your goals like saving 10%.
I would be lost without it. About 30 or 40 bucks at walmart – it might be by the printer cartridges.

There are fee sites on the net such as Mint.com. But you have to give the site your personal bank ID and your password. Plus sites like mint don’t have the check register that I need to keep track of my checkbook. They just show you the past and where your money went. Give it a try – but I would change your password at your bank after you try it.

Question: Need answers on how to budget my money?
My wife and I just had a our son 7 months ago and had to move back home. Now we have enough to move back out (I think) so I just wanted advice on how to budget my money for us to be able to afford an apartment or house.

Answer: Make a list of every bill you have- rent, utilities, phones, etc. Figure out about how much you spend on groceries and other absolute necessities per month (toilet paper=necessary, new sneakers=probably not). Then add all those numbers together and subtract that number from your total monthly income. Whatever you have left over is what you’re allowed to spend on non-necessities or put into savings. Since you have a kid you should probably build a 3-6 month savings cushion, so severely cut back or completely stop buying non-essential things until you have that safety net.

If your spending is greater than your income, figure out how to reduce it- cheaper apartment? Get rid of the cable TV? Pack your lunch? Find a better-paying job?

Money isn’t for spending- it’s a tool to help us live our lives. If you have $900 in your checking account, that’s not $900 that you can spend if you have a $700 rent payment due next week.

I find it helpful to mark payments on a calendar in red and write in when you get paid and how much in black. I also check my balance online often and have decided that I’m not allowed to spend any money if my checking account balance falls below a certain amount.

Question: When budgeting, how much should I subtract for taxes?
I am trying to make a budget for myself, but when referring to my monthly income, I only know what I make gross. Is there a way to estimate how much I should take from taxes to get a roundabout figure of what I bring home?

Answer: Roughly 30%. And if you’re only collecting gross income (i.e., no taxes withheld), then you must make “quarterly estimated payments” to the CRA. Which is a fancy way of saying “do your own withholding, and mail a check to CRA every three months”.

Question: Budget Baby Blues, How to make it work?
I have a 3 year old son, I am 22 will be 23 in June. Hubby and I are ready for a new addition to the Family. I am stay at home mom, and Hubby works at nights. Money is a little tight, but its always been that way, but we always made it through just fine. Hubby and I have been together for 7 years and married for 3. Any advice you can give to make this happen for me on a budget?

Answer: I know people who make plenty of money at 30 and over who are afraid to jump into starting a family. There is no perfect time to start (or continue) having babies. As long as you can provide a warm home and good food for everybody, go for it.

Question: Free home budget software with charts and graphics?
Please suggest some sites for Free home budget software with charts and graphics. I tried google search but all softwares were just with 30 days validity period or such.

Answer: I know this isn’t exactly a budgeting program, but there is a free checkbook/accounting application called GnuCash. It does come with a budgeting tool built in. You can graph/chart your income/expenses etc. I use GnuCash to track expenses, and compare that to a simple budget spreadsheet in Open Office.

Question: Looking for a very simple home budget planner?
Can anyone recommend a very simple easy to use home budget planner that I could download and use free of charge? Nothing fancy or to dramatic, just enough to keep track of monthly income and monthly expenses?

Answer: If you have office you can setup a monthly budget in excel using a spreadsheet.