Many Canadians find getting their credit card debt under control impossible. It seems as you start making headway on all the repayments that something else springs up out of the blue and all of a sudden you're forced to spend money fixing whatever it was. This means your good intentions of paying down the cards go straight out the window and instead you're slapped with an even higher interest rate as you're either forced to miss a payment, make a late payment or half payment. So what can you do to get on top of it all?
Most people have several credit cards on the go at once. You might not realize they can have very different interest rates, monthly costs and repayment structures. It's worth a few hours of your time to sit down and work out how much each card is costing you a month. You want to know:
Knowing how much a card is costing you, just in fees and interest a month, brings us to the next step...
Paying a little off all the cards won't work. Most cards are set up to make the bare minimum repayment required. This means that while you could pay the card off much quicker, when the bill arrives and you see you only need to make a small payment, that's all most people will make. This can mean you're paying interest off for years. If you paid the total owed today, it might be $500, however by the time you make the bare minimum repayments and keep adding to the cards debts, you'll be paying off a maxed out card for years to come. You want to stop this right away.
Having already just worked out the card that costs you the most a month, in fees, interest and so forth, you want to start paying off that card as quickly as possible. Get that one to zero and then start paying off the next highest costing card. A really neat trick most people are afraid to do: -Max out your lower costing cards by using them to pay off the highest cards. This immediately means you don't have to worry about losing money on that high interest account.
If you shop around for the best value credit card, you'll see the banks have plenty on offer in Canada. When you've paid off the highest interest card, close the account or talk to the bank about switching to a card without monthly administration fees and one that will give you a lower interest rate. If you've paid off a big amount the bank won't want to lose you to another bank, so they'll be happy to talk to you about other cards they offer. There are a ton of different credit cards in Canada, so don't be afraid to close that high interest account and switch to a cheaper card with another bank.
If you've tried all these tips and still can't seem to get a handle on your negative financial situation, then taking out a debt consolidation loan might be the best step for you. These consolidation loans allow you to pay off all the maxed out credit cards at once, then you just owe money to the bank. The bank will charge you a much smaller interest amount and the money you're saving by not paying interest and low monthly repayments at all the previous places, you can put toward the loan repayments to get your debt under control.
In a Wi-Fi world where you can purchase anything with a single click, it's become more important than ever that we teach our children the financial skills they'll need throughout life. The best part is not a lot has actually changed when it comes to teaching kids the value of money, the same principles you were likely taught as a child work just as well with kids of today. So below I've put together some useful tips you can use to begin teaching your child about how money works.
One of the first things you want to teach your child is how money is earned. Instead of just giving you child $10, offer them $10 if they help you with some basic tasks. Things like:
Depending on your own financial situation and where you live, the chores you can offer your child or the amount you can afford to give them for different tasks will also vary in value. Even if you have to go without a coffee one day of the week, so you can start them realizing the value of a dollar at a young age by letting them dry the dishes, that coffee you went without, will really help them learn how important money is.
Like life, you don't always get the money paid to you instantly, it's important to teach your child the value of waiting to receive their money. While at first you might have paid them on the spot with a dollar here or there, as they get a little older you want to have them keep track of what they've done. Write it down on a piece of paper and stick it to the fridge. Each day let them cross of the tasks they complete. This teaches them financial responsibility. If they want the money they have to work for it.
An added bonus is as the child crosses their chores off the list, like mowing the lawn, washing the dog, they'll feel proud about what they've done. Feeling proud about your work is another really important value all kids should get.
Teaching young people to save is another lesson you should give them. Show them that after so many weeks they could afford to buy an Xbox, whereas if they just waste their money on candy and soft drinks they won't be able to afford the Xbox. If you haven't already opened up a savings account for your child now is a good time to do so. They'll appreciate doing a grown up thing and you can teach them young how to look online at their savings growing. Plus when it comes time to get their first job it won’t be another thing they have to overwhelm them.
If you're going to buy take out for dinner, give the child a chance to decide if you should spend the money on fast food or make something at home and put the money into a savings jar for a family vacation. Either decision is right here, though if you find they never put money into a jar for the family holiday, maybe change it up to a day at a water park or visit to the zoo, something the child will actually want to save for. Teaching them how to sacrifice going without something, by letting them make the decision for something else, is one of the best monetary lessons you could ever give them.
Teaching any young person these values is something all parents should take the time out to do. It’ll not only teach them a bit about how the world works, but they'll grow up to be much better off financially than the unfortunate kids whose parents didn’t take the time to teach them these core financial principles.