Planning for a Debt-Free Life

A recent poll by CIBC find that Canadians expect to be debt-free once they reach 56 years old. However, some Canadians see themselves paying debt until over 60 years old. Additionally, 29% mentioned they have no debt and 13% say they will remain in debt.

More than 50% of Canadians over 65 years old mentioned they still have debt, with lines of credit and credit card as the most common. This group of respondents also said that they expect to pay off the debt by 70 years old on average.

On the other hand, younger Canadians have a more optimistic view about debt. Those in the age group of 25 to 34 expect to pay off debt by 47 years old. Current statistics suggest that this is an overtly optimistic outlook. More than 68% of Canadians 45 years old and over still, have debt, while 31% still have to pay mortgage.

Of Canadians with credit, 32% mentioned that they budgeted or sacrificed to manage and reduce their debt.

Different ways will help you achieve your goal of becoming debt-free even if you accomplish it by 60 or 50.

Budgeting

A budget is what you need when you plan on retiring early and staying debt-free. Examine your finances and make difficult decisions on where to spend your money and where to reduce.

A budget acts as your blueprint when you plan your daily to weekly to monthly expenses. Reduce expenses on luxuries as you inch closer to your chosen retirement age.

The Save Vs. Spend Dilemma

As you age, you will make decisions about saving, spending or investing constantly. These decisions will be difficult, but they have to make them. Set money aside as savings as soon as you get your paycheque or source of income; paying off debts can wait. However, pay off mortgages if you have enough disposable income as interest rates will add up over the years.

Avoid dipping into your savings when an emergency arises, especially if you are still capable of making that money back. Use credit cards as a last resort for emergencies instead of paying for luxuries.

Slowly but Surely

It may take you a while, but paying off debt and staying that way is possible as long as you make the tough decisions and save money for the future. You do not have to be completely risk averse, choose investments that you are comfortable with. Find an additional source of income such as freelance work or part-time jobs to add to your nest egg.

Source: CIBC Poll http://finance.yahoo.com/news/debt-freedom-canadians-expect-debt-080000225.html

Payday Loans: Know Your Rights

Payday loans in Canada are legal under section 347.1 of the Criminal Code of Canada as long as the province where you borrow money enacted legislation about payday loans. Some provinces do not have existing legislations about a payday loan; in such cases, they are within the limitations of usury laws, with rates over 60% per annum considered against the law.

In 2006, an amendment to the Criminal Code of Canada allowed provinces to regulate companies that provided payday loans. Most provinces aside from Newfoundland, Labrador and Quebec have some form of legislation that deals with payday loan restrictions.

British Columbia

Since November 1, 2009, British Columbia has enacted Payday Loans Regulation. The maximum charge for a short-term loan is at 23% of the principal covering both fees and interest.

You can cancel the loan at the following day’s end after signing without additional charges. You can only get one loan at a time and the creditor’s ability to access your employer or bank has restrictions. A lender cannot lend more than 50% of your salary or require you to pay the loan before your next paycheque arrives.

Saskatchewan

The Saskatchewan government announced restrictions and regulations on payday credit similar to British Columbia since June 2010. The legislation has an interest cap of 23% of the principal, 30% on a defaulted loan and a limit of 50% of the net amount of your salary. Companies that offer this type of financial service have to pay a licensing fee of $2000 per location.

Ontario

The province has the Payday Loans Act 2008 that limits the fees charged on your loan to 21% of the amount you borrowed.

Newfoundland, Quebec and Labrador

These three provinces have decided to prohibit payday loans. Quebec has limited interest rates on all loans to 30% per annum; Labrador and Newfoundland does not have any legislation on the subject, which means any restriction is at the cap of 60% set by the federal government.

Other provinces have different legislations regarding any type of loan. Check with your local government to determine if your creditor is taking advantage of you.

Payday loans are a way out, if you have difficulties with handling and managing your finances. These are short-term solutions to short-term problems; at the end of the day, it is up to you to get out of debt and stay debt-free. Use the money you get wisely to avoid the cycle of credit.

If you are taking out a payday loan, work with duly registered lending companies governed by provincial laws. Companies such as GoDay even take it a step further by being a member of the Better Business Bureau and the Canadian Payday Loan Association, so you can rest assured that you are working with a reputable and reliable payday loan company.

How Short-term Loans Can Get You Back on Track

Balancing finances can sometimes be difficult. Whether it is an unexpected emergency or other immediate financial needs, being derailed before your next paycheque comes can be emotionally draining. Getting back on track may seem impossible, but there are actually solutions out there to help you. Short-term loans help you overcome financial crises and enable you to get back on track.

Immediate Financial Relief

Borrowing money and staying in debt is a cycle that is difficult to break. Bills and credit will keep on accumulating on top of interest rates and late fees. Short-term loans provide you with financial relief and allow your wallet to breathe, even for just a moment.

With the accessible cash provided by a short-term loan, you can save money, pay for bills without incurring late fees and pay other debt without worrying about mounting interest rates.

Short-term loans offer a way out, but it is up to you to responsibly pay or borrow money. Avoid borrowing more than you can pay for, especially when you apply for a payday loan.

Preparing for Life Without Debt

Getting out of debt and staying debt-free may seem like a dream to some, but it is possible. Short-term loans provide you with the cash you need to pay off debt. The financial flexibility provided by this type of loan enables you to save more and maybe invest.

Short-term loans open the door for a debt-free life; it is up to you to manage the money given to you.

Investment Plan

Short-term loans provide you with the extra cash you need to put money aside or invest.

You need money to make money; invest in mutual funds, bonds, stocks or other financial products that provide you with residual or passive income.

Instead of spending on luxuries, use the cash you get from payday loans wisely. Doing so, will get you back on your financial feet and stay debt-free.

Short-term loans such as payday loans give you financial flexibility when you need it most. It can help you recover from situations where you are in a tight financial bind. The key to getting back on track when using a payday loan is to use it responsibly.

There are a lot of lending companies out there, choosing a reliable one can be difficult. Companies like GoDay offer a trusted payday lending service with fast and easy processing which means you can get your money in as little as one hour. It offers a secure online process and upfront fees disclosure.

Elements to Look for When Choosing a Payday Loan Company

Payday loans are short-term loans that give you access to quick cash when you need it. Whether it is to cover an emergency, like hospitalization or when your car breaks down, these types of loans are useful and can really help you out when you need it the most.

When choosing a payday loan company to work with, here are 5 elements that you can look at:

Ease of application:

There are three types of payday lending companies out there. Those that have retail stores and online payday loan companies, and those that have both. Of the three, the online companies offer private accessibility and an even easier application process. While retail lenders require you to go to the store or to fax some items, you can get a loan with online lenders with just a few clicks.

Cost of the loan

One of the important things you should look for is full disclosure of fees. Some lenders do not reveal all of their fees right until the last moment. The promised rate balloons as extra fees and interests begin to add up. You end up spending more than you wanted because of the additional fees. In Ontario, the cost is $21 per $100, and in British Columbia, the cost is $23 per $100.

Choose a creditor that shows the full pay back up front. Ask the company about their rates and determine if you have to pay extra before the release of the loan.

Quick approval

The nature of payday loans makes it an important financial instrument for emergencies or immediate monetary needs. A payday loan company that can give you a fast approval is the best one to work with. In some cases, you will need the money on the same day to pay for bills or medicine.

Security and privacy

If you are dealing with an online lender, make sure to protect your personal information by checking on the company’s privacy policy to ensure that your data is not used without your authorization. Check also on any security measures they take. They need to use top level encryption to protect your data. A quick way to check is if the URL says https when you are in the loan application page.

Responsible lending

Choose a company that lends money responsibly. You can identify them by the amount of money they lend. They do not exceed the income of a borrower to make sure that they get to pay in full.

These elements are what you need to look for when you search for a payday loan company. GoDay is a payday loan company that offers fast processing with instant approval, upfront fee disclosure and cash in as little as one hour. Find out more about GoDay at www.goday.ca

Debt Repayment Versus Saving

A survey commissioned by Edward Jones revealed that Canadians are likely to choose debt repayment over saving for the future. When receiving lump sum payments, the survey showed that one-in-three were likely to use the money to pay debt, while one-in-ten will save the money to build a nest egg.

Paying debt first may seem like the prudent choice, but it is not the case all the time. In some situations, it is actually better to save rather than pay for debt.

These are some scenarios where you can compare the benefits of saving for the future versus paying debt:

Graduated with student debt within the last six months

Saving is a better idea in this scenario even if interest accumulates during this timeframe. You can forego making payments on your loan for the first six months after graduating. Saving money is ideal while you look for work; you might have to purchase a car or find a new place to live once hired.

You Have the Benefit of a Low, Fixed Rate Mortgage

If your mortgage is reasonable and you can take the rates, pay the minimum only and use the rest of the money to balance your portfolio. If your mortgage is high, around the half-million dollar mark, it is better to accelerate the payments without sacrificing your ability to invest.

You Want to Pay Off Mortgage in 10 Years

If your finance strategy is to pay off debt and make saving more serious later in life, it is ideal to max out the mortgage pre-payment annually. This strategy may be extremely conservative, but at least you are on your way to owning your own place within a decade. This gives you financial flexibility later in life.

You Finished School More than Six Months Ago But Didn’t Quality for Loan Forgiveness

This scenario puts you in a tight situation as interest will rise and will give you little flexibility with your finances once you hit the job market. Pay off debt by working multiple jobs to pay off the debt slowly, as this will likely grow over time.

Workable Line of Credit

Leave credit to emergencies and pay them off as soon as you can to avoid temptation to run up debt. Small things add up in the end, keep yourself debt-free as possible.

These scenarios and your options will help you make a decision about either paying debt first or saving for the future.

Debt Delinquency Down to 2.58%

TransUnion, a credit monitoring agency, revealed in their reports that Canadians seem to get better in handling consumer debt with an overall delinquency rate of 2.58% on non-mortgage consumer debts from 2.69% rate in 2014. Delinquency rate is described as the ratio of all accounts that are 90 or more days past due.

TransUnion’s director of research, Jason Wang, thinks that this is encouraging news.  According to him, this speaks to the fact that both sides (borrower and lender) are bearing in mind the importance of responsible lending.

Auto loans increased from 1.06% to 1.10%, credit cards by a mere 1% from 2.17% to 2.18%, installment loans went down from 3.65% to 3.12% and lines of credit from 0.81% to 0.74% showing 8.37% decline next only to installment loans.

“Delinquency rates of all credit products are relatively low, but even so we have observed a pronounced improvement in some of the most popular credit products such as lines of credit. This is a positive sign that Canadians are both increasingly aware of the importance of making payments on time, and have the capacity to do so. The recent interest rate cuts may have in part made it easier to manage lines of credit, which typically carry variable rates,” he added.

Educating people on financial management is very important to meet the expectations of both the lender and the borrower. For example, Canadian Payday Loans Association (CPLA) ensures payday loan companies in Canada help their customers make informed financial decisions. This aids in consumer protection while preserving the companies that take the risk when they loan their resources.

While it is best not to incur debt, for some, it is actually inevitable. This happens when a household is strapped for cash for certain emergencies or unforeseen yet unavoidable household expenses. To avoid this in the future, we strongly advise strong financial management with our clients such as setting an emergency fund for these kinds of situation.

We sincerely wish to help our customers when they come to us needing financial assistance. We offer fast, transparent and hassle-free transactions that help alleviate our client’s financial stress.

At GoDay, we believe that if we can help you get through a few financial hurdles, that would be terrific; but if we can help you avoid them altogether, even better.

Bringing a child to the world is a wonderful thing.

Bringing a child to the world is a wonderful thing. Your little bundle of joy will finally complete your family in ways that you can never imagine. Every parent wants the best for their child. That is why it is very important for new parents to now think of how they will be able to support their little one as he or she ventures into this wonderful world – emotionally, spiritually and yes, financially.

Being new parents comes with a great responsibility. This means that you need to set aside money for your child’s needs and more so, for his or her future. It is therefore very important that new parents start writing down their savings goals for the family especially with the new addition.

Here are a few tips that new parents can learn from when setting up their new household budget:

1. List down your household’s cash flow. Small or big, take note of everything that you earn and spend for. In this way, you will be conscious of the things that take a big chunk from your budget and can properly do your allocation.
2. Allocate a certain percentage for your child. Make sure that your child will get the best of everything in the future. From enrolling him to day camps for self-development or sending him to the best school, these needs should to be thought out carefully so that you can already foresee the things that you are most likely to spend on in the future and save for them.  
3. Do not be extravagant, spend on what matters. Most new parents would spend  hundreds of dollars in clothes and baby stuff that their child will outgrow in just a few months. Be mindful of the things that you buy: spend on what you really need and be frugal on the things that you can save on. Remember, every dollar you save today is money that you are investing in your child’s future.
4. Save up for an emergency fund. While we do not wish for any emergencies to happen, it is best to set up an emergency fund for the times when your child gets sick. In this way, your household budget will not be affected when these situations arise.

Having a household budget and sticking to it is more important now that you have a child to take care of. Learn sound financial management so that you can efficiently manage your household fund. If however, you are caught financially off guard, you can mitigate your immediate financial need with payday loans from GoDay.

GoDay’s service delivers in as little as one hour. Have the full flexibility to decide on how much you borrow. GoDay will help you get back on track when caught in a financial bind.

Got Unexpected Cash? This is What You Should Do With It

Paying off debt and bills and other expenditures give you little financial flexibility. However, a sudden windfall may give you a way out; what should you do when that happens?

Do Nothing

Most people feel compelled to make a decision immediately once they get a windfall. However, sometimes it is better to postpone making a decision.

Doing nothing enables you to look at the situation from a detached point of view, giving you more time to assess what to do with the windfall. Take the time to think about whether investing or paying off debt is the best option for you.

Pay Off Mortgage

Mortgage is one of the biggest loans that most people pay for late into their life. The windfall you get gives you the opportunity to start paying your mortgage faster. Check the rates with your lender to determine how much is left and how fast you can pay it off using the extra money you have.

Paying mortgage provides you with the financial flexibility you need heading towards retirement. You get to use the extra money you keep for other things such as investments, travel fund or other expenses.

Pay Off Other Debt

If you are uneasy about fast tracking your mortgage payment, think about lowering your line of credit or start paying off credit card debt.

Paying off credit card debt frees up your finances more than you think. Paying the minimum will get you into trouble if you stretch it over a long time. The windfall you get will help you pay off other debt faster; and gives you an extra financial boost to do the things you like, save or make your money grow through investments.

Invest

The windfall you get provides you the opportunity to start investing, even if you have a retirement plan in place. Investing enables you to grow your wealth even in your old age.

Before you invest there are a few things you need to consider. Are you a conservative investor comfortable with slow but steady gains? Are you at the end of paying off mortgage? What do you plan on doing after retirement? These pertinent questions and your answers to them help you make a decision.

Saving for School

Sending children to school is one of the biggest expenses every parent encounters. Because it is of great importance, many people are eager to find ways to prepare and save for their children’s educational needs. Even independent youngsters who take care of their own school fees need all the help they can get.

There are small but sure ways on how you can save a fraction of the amount you usually set aside for the next school year opening. Here are a few tips that can help you out in saving for your children’s school fees:

1. Know in advance how much you will have to spend and divide it by 12.

This way you can set aside small amounts of cash per month, and the weight of the expenses won’t be as big as it would if you had to take it off all at once. Imagine what little things you can sacrifice to save small amounts of money every month. You will have a lot saved already before the starting day.

2. Register your children early.

And no, this isn’t just about saving time and avoiding the stress of having packs of people around when you enroll them. This tip can actually save you money. Some schools give a small percentage discount to those who register early. If the school you’re planning to enroll your child to is one of them, then this is an obvious move for you to take.

3. Always be on the lookout for “Back-to-School” sales around your town.

You can save a lot when everything is on sale. They might not take 50% off those items but eventually the savings will stack up and you will start noticing. You can also check for vouchers and coupons that give you freebies or bundle discounts.

4. Secondhand books are a good money saver.

Just make sure they are still in very good condition. Also check if the books are of the same edition that the school requires. On another note, you can also hold a garage sale where you can sell your child’s previous books.

5. Packed lunches save you a lot compared to store bought lunches.

Not only talking about savings, there is another benefit in giving your children packed lunches for school. Through this you can make sure your child eats healthy and nutritious meals.

These are just small things any parent can do. These tips will help you prepare for your children's future. However, there will be situations when you are strapped for cash when school opening starts. If you ever are in this tight spot and have nowhere to go, GoDay offers payday loans to assist you with financial needs such as this.