Many times when thinking about our budget, and how much we have left-over for spending on our wants, we forget about the irregular expenses or unexpected costs that pop up. That is why having a detailed budget (with an appropriately sized miscellaneous category) along with an emergency savings fund is essential to keeping us out of debt. Let’s review some of the commonly forgotten costs that can lead to financial hot water:
“Do you not understand she’s dead? What part of dead don’t you understand?” West said. “There’s no one to pay this bill.”
What if you were nervous to open up your mailbox because you would be reminded of your deceased child?
Personally, I can’t even imagine this scenario; however, a parent featured in a recent news story was going through this every day when Bell Canada was attempting to collect a debt owed by her deceased daughter. Sadly, Christine West of Ontario lost her daughter, Katie, to suicide in December of 2011. Katie’s cell phone with Bell Canada had an outstanding balance of approximately $215, and for three years the company attempted to collect it, even though she had passed away and Christine had provided proof Katie’s death certificate to Bell (numerous times).
When people are struggling with credit card debt, lines of credit and other unsecured debt, they have a few options available to help them. One popular choice is to refinance your home (if you own it with enough equity) which means to increase your mortgage and use that extra money to pay off your credit cards and unsecured debt. That way the unsecured debt you had will now be part of your mortgage, a secured debt. The benefit to doing this is saving money on interest, thus making it more affordable to repay. Mortgages these days have very low interest rates, thanks in part to being a less risky loan for the banks because they are secured by the home. If you cannot make your payments, the bank simply repossesses your home to recover its money. In contrast, credit cards can have much higher interest rates and make repayment of the debt very difficult.
Last week, Vancity (one of the top credit unions in BC) introduced a new product called the Vancity Fair and Fast Loan.
Here’s the good news: it’s a lot cheaper than payday loans. As reported by Kevin Griffin in the Vancouver Sun, “If a credit union member borrows $300 for minimum term of two months and pays it off in two weeks, it would cost $2.20, a 19 per cent annual percentage rate.” Whereas a payday loan from the Cash Store for $300 (with a 14 day term) would cost $69, which is 23% interest on the principal and equates to an annual interest rate of 599.64%.
And here’s the bad news:
We find comfort in the belief that more money would solve all of our problems (or at least most of them). It gives us something to work for (more money), hope for (winning the lottery!), and dream about (what would I do with all of my money?). When it comes to having more money, the possibilities seem endless – you could finally travel, spend more time with your children, buy that fancy car that you deserve, or purchase that lakeside cottage you’ve always wanted. You could go on shopping sprees, jet set to exotic destinations, spoil your family and friends with lavish gifts. All of your debt would be paid off and you could finally quit your soul sucking job.
Contrary to popular belief, more money doesn’t guarantee more happiness. Obviously too little can make us miserable; however, research has shown that once you reach a certain earning point (between $50,000 to $75,000 are the figures that I have read here), you are not more happy than an individual with a salary in the six figures or more. It seems confusing, right? We are constantly inundated with advertisements and other media and insists that we would be happier with more – more of everything! So how is it possible that more money wouldn’t make us happier?
Insurance is a hot topic once again. Hot for all of the wrong reasons. Many people have heard about a number of claims under travel insurance policies that have recently been denied by Canadian banks. I say many people because I couldn’t find the story quickly on the internet. It didn’t seem to get a lot of coverage in the local newspapers either. It’s a good thing I watch the news on television.
One case involves the CIBC where a 69 year old senior bought travel insurance and paid an extra $100 premium to make sure her insurance would cover her high blood pressure – and after getting sick abroad and then filing her claim, the bank denied her claim.
The Solutions™ Credit Counselling Inc. family:
Solutions Credit Counselling is trusted by:
