In the U.S. Black Friday is the American equivalent to the Canadian Boxing Day sales. Every year it inspires mobs of shoppers who line up for hours so they can be the first through the doors at midnight and fight...
In the U.S. Black Friday is the American equivalent to the Canadian Boxing Day sales. Every year it inspires mobs of shoppers who line up for hours so they can be the first through the doors at midnight and fight their way to the best deal.
Black Friday is big business. Our friends in the U.S. spend on average $400 per person on Black Friday. And thanks to the Internet, Black Friday has been creeping northward, with it’s sneaky cousin, Cyber Monday.
With the addition of Black Friday and Cyber Monday to the holiday shopping season, Canadians are now offered two heavily marketed sales periods just over a month apart. This increases the risk of over-spending and racking up unnecessary debt during the holidays.
Are the Black Friday and Cyber Monday deals really worth it?
While there are some good deals available on Black Friday and Cyber Monday, the sales aren’t necessarily as good as those made famous in the US. Stay away from online sales in U.S. dollars as the poor exchange rate often makes the item more expensive then if you had just bought it at home here in Canada.
If you don’t actually need an item, it doesn’t matter how enticing the sale may be, it’s not worth it.
Spending money on purchases that you don’t actually need will never be a good use of your hard earned cash. It’s very tempting to buy something on sale, and even more so when that sale is rolled out with so much fanfare and hype. The sales and marketing teams do an expert job of making the idea of these sales so incredibly alluring.
Do your research and stick to what you plan to buy
If you are actually on the market for certain items, it’s important to do your research first. What is the normal retail value of the specific item you are looking for?
Marketers have been known to actually raise prices during these sales periods. The hype gets people into a frenzied buying state and impulse purchases skyrocket. Retailers also known that people spend 12-18% more with credit cards and they spend the most at the first store they visit, so they just want to get you in the door.
To help avoid falling prey to these sales, get do a reality check. Do you really need to go shopping? If so, make a list of what you need and what your budget is. By doing your research in advance, you can avoid the tricks retailers make and only make a purchase if the sale is worth it.
What about Boxing Day Sales?
These new pre-Christmas shopping trends for Black Friday and Cyber Monday are still fresh in Canada and there's not yet enough trending evidence to show how these early sale prices compare with our traditional shopping week between Christmas and New Year’s.
Shop smart, avoid debt
When going shopping, it’s best to prepare yourself with a decisive list of items that you actually need. Then, research the regular prices for the item. If you do see an attractive sale in late November, you’ll have a choice; you can make the purchase, or you can choose to wait. If the sale price is not convincing enough, don’t feel rushed. You can always wait for Boxing Day sales. Waiting can be a bit of a gamble, but when it comes to getting the best deal possible, sometimes patience is a virtue.
No matter how and when you spend your money, don’t let the mob mentality of these consumer holidays throw you off your game. If you don’t need it, don’t buy it. And don’t turn into a shopping zombie in the process. No matter what remember; there are more important things in life than these material purchases. Have a safe and happy holiday season.
Are you looking to reduce your transportation costs?
The Real Cost of Car Ownership
According to the Canadian Automobile Association (CAA), 6 out of 10 Canadians under-estimate the amount they spend on car ownership each year by $4000 or more. When considering gas, insurance, licence fees, financing, maintenance and depreciation, the average compact car costs about $9500 a year, more for larger cars.
When taking all of these costs into account, it’s easy to understand how the numbers start to add up. However, there are ways that you can start saving money on transportation costs right now. In this article you'll find 11 ways to save money on your car and transportation costs.
1. Use The Driving Costs Calculator To Learn How To Reduce Your Spending.
The Driving Costs Calculator is a handy tool that lets you see the costs associated with every model of car, based on your province. You can use this tool when you are buying a car, or if you are looking to downgrade to a cheaper option.
2. Use An App To Find The Cheapest Gas
Recently St. Catharines, Ontario made national news when people were flocking in from nearby cities to get a deal on gas. Customers were benefiting from a gas station war with prices were dropping to as low as $0.80 a litre. While only just a few streets away, the gas was still listed at $1.08.
Mobile device app Gas Buddy helps you search by location to get the cheapest gas around. It's updated in real-time by people who are buying gas so it's worth checking out the next time you want to fill up.
3. Shop Around for Insurance
Don’t just settle for an insurance plan because it’s easier to stay with your current company. Prices vary. A lot.
Check out Lowest Rates Insurance to get educated and then speak to your insurance company. If you have good credit, you have a good driving record, or your mileage is low, some insurance companies offer discounts. Ask for discounts, give comparison costs and ask them to beat it. You can haggle with your representative, particularly when you can quote numbers from competing insurance companies. Do you research and get the best price.
4. Care For Your Car
Staying on top of basic car maintenance like getting regular oil checks and keeping your tires full of air can help your car to run more efficiently. More efficiency means fuel economy so you’ll be saving overall. And that’s without even considering the resale value.
5. Skip the Car Wash
Wash your car by hand and save. Make sure you turn off the water while you lather up to also be friendly to the environment.
6. Catch On to Carpooling
Between co-workers who live nearby, and friends and neighbours who attend the same community events that you do, there are often a lot more ways to create an easy carpool than people realize. Splitting the cost of gas or taking turns as to whose car you take when can add up to big savings. Think $500-$700 a year. And that’s without even considering the positive effect carpooling will have on your environmental footprint.
7. Join a Car Share
Rent a car or join a car share. If you don’t drive often, joining a car share network can be a great way to secure a vehicle for times of need, like a big grocery shopping once a week, without the costs of daily use. You can avoid maintenance fees, repair costs, parking spot fees, and more by joining a car share without sacrificing much of the convenience.
8. Trade your Car for a Scooter
Join the two-wheel renaissance! If you have a short commute to work, consider trading your car for a fuel-efficient scooter for savings of $3000+ a year. From a Vespa, to a Yamaha, Moped, two wheels could equal big savings and a lifestyle shift that you’ll enjoy. Visit Popular Mechanics for more information on scooter selection: 6 Scooters that Zoom and get Great Mpg, Too.
9. Go Public
Public transportation is a solution not to be overlooked. Unless you live on a farm, you probably have access to some sort of public transportation system that is worth taking advantage of. When it comes down to it, your method of transportation comes down to both habit and convenience. If you become acquainted with the bus, train, or streetcar schedule in your area, public transportation can become an easy habit and just as convenient as driving, with far fewer annual costs.
10. Exercise Your Way to Savings
Embrace a more active lifestyle that will save you money, help the environment, and take a few inches off your waistline all at the same time. How often do you drive places that are in reasonable walking or biking distance simply because you’re in the habit of reaching for your car keys. Shift your thinking to two wheels and two feet for two win:win money saving solutions.
11. Shop around for the best flight deals
Google Flights allows you to look across all airlines and see the cheapest flights with a monthly view so you can see the best days to fly. Google might not always have the cheapest flights listed, so it’s also a good idea to check Cheapoair and Kayak.
When it comes to transportation, most of our travel comes down to habit and convenience. With a small amount of effort, you can adjust your way of thinking and form new habits that will add up to big savings.
When it comes to debt, it’s good to be cautious but not fearful. Feeling cautious can be healthy. Being paralyzed by fear is not.
It’s not surprising that many people have an uneasy relationship with debt. Debt can be scary. But ignoring your debt is kind of like avoiding stepping on the scale after an indulgent vacation; just because you don’t see the number on the scale doesn’t mean that you haven’t gained 5 pounds.
1. You Are Not Your Debt
Thinking about debt can be very emotional for a lot of people. It can evoke feelings of shame, anxiety, blame, and anger. Our emotional reactions to debt can hinder us from looking at the balance in our bank accounts or opening a bill when it comes in the mail.
Debt can cause you to feel out of control. It’s important to separate yourself from the debt and remember that we are not our debt.
2. Face Your Debt.
If you don’t face and acknowledge the debt, you won’t have the power to take charge and do something about it. You need information in order to take positive action.
Being cautious about debt helps prevent you from taking on more debt without thinking. If you allow your fear of debt to rule you, it can prevent you from formulating a plan to help you manage your finances in a balanced way. It’s important to make financial decisions based on reason, not on emotion.
3. Make a plan to get out of debt
When you let go of the emotions that are associated with the debt and face the factual elements of the financial situation, you can formulate a plan to deal with it. With a plan in place, the debt will become manageable. Feelings of fear will be replaced by the comforting knowledge that everything is on track and it will all be taken care of in due course.
When it comes to debt, caution is good. But when caution turns to fear, it closes off your ability to manage the debt in a practical way. Recognize your emotions, accept them, and move on to a place where you can plan and take action. You have nothing to fear but fear itself.
If you need help with your debt, sign up for a Free Debt Debt Consultation or us on 1888-774-3596.
Better money management means paying off debt and saving money. It means reducing impulse buying and not spending money on things you don’t need that don’t get used.
Most people have far more stuff than they actually need or use. It turns into clutter or gets packed away in boxes and after a while donated or thrown out. But in a lot of cases this clutter can be turned into cash. And what people will buy might really surprise you!
Craigslist, Ebay, Amazon and even Facebook have made selling your unwanted stuff easier than ever. Stuff you can sell online includes:
Appliances and household items
How to sell your stuff
Depending on how much you have, selling your stuff can be a big project. If this is the case, keep it manageable by breaking it down one of the following ways:
Room by room
Larger items first
What’s most visible
As items start to sell, you might find you are motivated to do bigger chunks. The important thing is to keep it manageable so you don’t get overwhelmed and stop.
Step 1: Decide what to sell.
You don’t have to sell everything you own, just get real about what you don’t use or need. Start by taking an inventory of what you have.
Here’s when you should probably sell:
It hasn’t been used in 12 months.
You forgot you had it.
You don’t like it.
You have more than one.
It’s been grown out of or doesn’t fit.
It’s still in it’s original packaging or has tags on it and hasn’t been used.
It needs repairs that you aren’t going to do but still has value.
Step 2: Where to Sell Your Stuff
Finding the right site to sell your stuff will not only help it sell quicker, but also get a good price. It’s important to do some research because something valuable to one person will sell for less to someone else who doesn’t understand the value.
For example, I could sell a pair of 2nd hand lululemon brand fitness pants to a second hand store, on Craigslist or at a garage sale for $15. In a lululemon Facebook group, I could sell them for $50.
What You Can Sell
Craigslist & Kijjij
Everything, especially good for large items that require local buyers.
Speciality and collectors items.
Speciality interest items.
Vintage clothing, furniture and art. Handmade items.
Books and Video.
Step 3: Create Your Ad
When listing your item online you’ll need:
A description of the item including any serial numbers or important details.
The condition the item is in and any damage.
Pictures adequately showing the item.
The price you want with room to negotiate.
Don’t add your phone number, email address or home address to the ad. Buyer’s can use the website’s message system to contact you. Ask them to provide a phone number and you can call them. This will weed out people who aren’t serious.
Once you list your ad, you might not get instant response. Some items sell quickly and have a lot of demand, others take time, but still sell. Be patient, the right buyer will come along.
Step 4: Negotiating a price
There's a bit of an art to selling stuff secondhand. Some people will try to negotiate a better price and it’s handy to know when to drop your price and when to hold firm.
Here’s some tips on pricing:
Have in mind what your lowest price is and don’t go below it.
If you get a lot of interest from an ad quickly, hold firm for your price. If one person doesn’t buy, another will.
If someone is negotiating a lower price and the item has accessories, consider separating them so you can sell them separately.
Take time to think about it if you feel unsure.
Consider dropping your prices if you have had an item on sale for a long time and have a prospective buyer.
Discount your prices when someone is willing to buy multiple items.
Step 5: Making the Sale
It’s impossible to know who you are communicating with over email or phone, so make sure you take safety precautions for yourself, your home and your stuff.
Safety precautions can include:
Avoid giving any personal or financial information.
Meeting in public when possible and bring a friend.
If people are coming to your home, have someone else with you.
Remove geotags from photos before you post them. Read more about how to do that here.
Only accept cash for person to person sales.
If posting an item to an online buyer, keep the receipt as proof you sent the package.
What happens if it doesn’t sell?
After a while, if something doesn’t sell you still have options to sell it. Organize a garage sale with everything you have left. Get your neighbours involved for a fun day that attracts lots of potential customers.
Whatever is left after a garage sale can be donated.
So with that in mind, remember to break a project like this down into manageable chunks. If you want to spend a weekend doing it all at once (and you will actually do it), great, do that. But if you have a lot of stuff you can sell and the thought of starting makes you feel overwhelmed, start with one thing at a time.
Small steps are better then no steps. Get selling!
Yet 55% of Canadians are spending on average $185 a year on their chequing accounts when they don’t have to.
Why pay for something you don’t have to?!
The banks like your money, so they will happily keep you in the dark about the fees you are paying unnecessarily. There are a lot of ways that banks sneak fees in. And people pay them because banking is a necessity of day to day life.
9 Tips to reduce your bank fees
1. Shop around for an account that fits your needs
Check out the Financial Consumer Agency of Canada's Account Selector Tool. This tool allows you to sort by different services and fees and compare banks and credit unions. The right account can help minimize fees spent on exceeding your monthly transactions for withdrawals and cheques.
2. Get a no-fee bank account.
If you don't need to use in-branch services, consider a no-fee bank account. You can avoid all bank fees by using one of these accounts and staying within their guidelines.
3. Check out credit unions
Credit unions can be a good choice, especially if you are in a group that has their own, such as police. They often have lower fees or discounts.
4. Ask your bank to reduce your fees
Tell you bank you would like reduced fees if you have multiple services with them. If you get an expected fee, ask them to remove it. In many cases they will and this will allow you to avoid it in the future.
5. Avoid using ABMs that have extra charges
Using ABMs from other banks and convenience locations can be very expensive! Fees can be up to $7 when you include the charges from both the bank of the ABM and your bank's fee.
Youth, students, seniors and service people are often eligible for discounts.
7. Avoid accounts that require a minimum balance you can’t maintain.
Accounts that offer higher interest are only worthwhile if you can keep the miminum balance. If you find you are frequently going under, switch to an account with no restrictions.
8. Get overdraft protection if you are regularly getting charged for insufficient funds.
Accounts with overdraft protection usually have monthly and usuage fees as well as interest. Depending on your bank, you'll be charged between $25 - $65 every time your account has insufficent funds. If this happens regulary, consider overdraft protection.
9. Understand all your fees before you open an account
Some banks charge up to $25 when you try to close your account. Crazy but true! Make sure you understand all your fees.
It’s time for some real talk about Credit Cards...
If you are in debt, you probably shouldn’t use them.
Credit cards MAKE you spend more money.
Banks know this. They count on it. Credit cards are designed to make banks money. Banks want you to pay them interest, that’s how they make money.
5 Scary Facts About Credit Cards
46% of Canadians have credit card debt.
1 in 3 people don’t pay off their bill each month.
32% of people don’t track their credit card charges until they get their bill.
26% of people of people end up in more debt after using all their available funds to try to pay off their cards.
1 in 3 people say credit card debt is a significant source of stress.
Get the monkey off your back, use cash
In our last post 4 Ways To Break Bad Money Habits, we talked about how important it is to make small changes. One small but significant change you can make is using cash instead of your credit cards.
Charges with credit cards feel less tangible then cash - it doesn't feel as real. It’s easy to forget what you’ve already spent and underestimate how much you are going to owe at the end of the month.
This is how you get into debt. That’s how you get money stress.
People who use credit cards spend 12-18% more than those using cash.
That’s before interest. That’s $12-$18 for every $100 spent.
7 Signs you shouldn’t be using credit cards
You can’t afford to pay the balance on your card off at the end of the month.
You don’t pay your bills on time.
You have been paying off credit card with another.
You aren’t sure what your available credit is. This is a sign you aren’t currently managing your money and should stay away from credit.
You want to buy something to make yourself feel better. Credit cards aren’t a therapist.
You are going out drinking. Inhibitions and budgets go out the window.
The provider has increased your interest rates.
When Credit Cards Work
Credit cards are only useful when you can pay off the balance in full every month. Otherwise, you are creating debt and it’s best to avoid them.
As long as you can manage your budget and pay off your balance each month, then using credit cards can have some great perks such as travel benefits, insurance, extended warranties and more.
Banks use these perks as incentives because they know that most people are going to be paying more in interest than they get back in incentives. Benefits and rewards aren’t a good enough reason to use credit cards if you are in debt.
Get started now
1. If you haven’t already, start budgeting.
In our post Budget or Bust: Why You Need A Budget To Get Out Of Debt, we talk about the You Need a Budget software (YNAB). One of the benefits to using YNAB is it doesn’t see your bank accounts and credit cards as separate, it calculates your income vs your expenses across all of your accounts. You always know how much money you have and what your budget is.
2. Start using cash
Try using cash in situations where you are most at risk of overspending. Give yourself a cash budget and stick to it.
If you do have to use your credit card, only spend what you already have. Make sure to transfer what you spent straight away. This will help you be accountable and prevent interest charges.
Bad habits can feel impossible to change. And when you are trying to get out of debt it can be overwhelming and frustrating.
In our last post we talked about making saving money an everyday activity. Changing habits needs the same approach, making small decisions over time. People often set themselves up for failure by trying to make major changes immediately.
Every small step, no matter how small is a win. With this attitude you’ll keep moving in the right direction and eventually the habits will change.
Stop trying to be a super hero and just be a regular hero.
4 Small Money Habits That Will Have Big Results Over Time
1. Save while you are paying off debt
While it’s important to prioritize paying off debt to reduce money spent on interest, saving a small amount not only helps create a habit of saving, it also makes you feel happier.
A study found that “Those who saved while simultaneously having debt felt more optimistic and in control of their lives than those with debt but no savings”. (Furnham, 1997).
2. Set up an automatic savings plan with your bank
People with automatic savings plans generally save more money than those without. Have the amount you want to save moved automatically into your savings account right on payday to resist any temptation.
3. Pick the easiest thing to do right now
Break your bad habits down into small, easy steps. Ask yourself, “what is the easiest thing I could do right now that will take me in the right direction?”.
For example, instead of trying to quit a daily coffee from Starbucks cold turkey, I could start ordering a smaller size. When I was ready, next I might decide to start making coffee at home every second day.
The key is to choose something that is so easy, there is no reason not to do it. Leo Babuta applied this principle when trying to start the habit of flossing his teeth. He started by flossing 1 tooth. Eventually he was flossing all his teeth.
4. Avoid Shaming Yourself for your mistakes.
A study found that people who felt guilty about impulse buying used positive coping strategies such as adjusting budgets and trying to reduce the impulse in the future. People who shamed themselves avoided, denied or lied to themselves about what happened.
Guilt is “I made a mistake”. Shame is “I’m terrible, I can never do anything right”.
Drop the “screw it, I blew it” attitude.
Getting off track doesn't mean you blew it. Making new habits takes time, so you need to be patient. If you made a choice that wasn’t in the direction you wanted to go, that doesn’t mean you ruined everything, you haven’t undone any of your other choices.
Don’t use one poor mistake as an opportunity to go crazy. Just get back on track.
3 Ways to Get Started Now
Pick a money habit you want to change. Start now with easiest thing you can change.
Call your bank and make an automatic savings plan. Even if all you can afford is $5 a month.
Watch the following TED talk on Shame and the effect it has on people's lives.
If you are in debt, you are likely thinking about money all wrong.
And it’s been causing you to get deeper into debt. It’s literally costing you money.
The good news is, you can easily change how you approach money.
People who focus on their end goals - who see being out of debt, or saving a certain amount of money - are less likely too save. This seems counter-intuitive to conventional advice which is have a goal and work towards it, but studies have shown that type of thinking isn't effective.
If you are stuck in debt, that's an elephant of a problem!
Let’s say you want to pay off $10,000 of debt. You know it’s going to take a while, but you feel optimistic. Let’s say you pay $100 off. It’s easy to think that you haven’t really gotten anywhere since there’s still so much left. And, since there is so much left, it’s easy to put it off today with the intention of catching up later.
Focusing on the end goal, striving for the future, is called Linear thinking. Focusing on the whole elephant is overwhelming and we put off what overwhelms us.
How You Need To Approach Money
Instead of thinking about the whole elephant, make smaller goals based on what you can do now. People who think like this are called Cyclical thinkers. And they know how to eat their elephants… bit by bit.
People who break down their savings goals into cyclical time frames, like weeks or months, save 78% more money than people who solely focus on a far-off future goal.
Cyclical thinkers focus on what they can do now, in this pay cycle.
The difference between Cyclical and Linear thinking
What do I want to save today?
Focus on what you can do now.
Considers saving an everyday task.
What is the big goal I want later?
Focuses on the end goal.
More likely to put things off until the future.
Get Started Now
Make you money mantra “What can I do today?”. Every time you get overwhelmed notice that you are focusing on the long term, rather than what you can do now. Think of it as setting a schedule, rather than setting a deadline.
If you haven’t already, check out our last post, Budgeting Or Bust: WhyYou Need A Budget To Get Out Of Debt. We talked about the amazing budgeting software YNAB. One of the reasons YNAB is so effective is that it moves you from thinking about money on a linear time line, to working on a monthly cycle.
Do you want to take control of your money so you can get out of debt or save for the future?
Whether you are in the process of credit counselling, consumer proposals, bankruptcy or just want to be better with money, a budget can help you to save hundreds, if not thousands of dollars a year.
Without a budget it’s hard to know where money is spent
People who don’t budget their money often play catch up for what they have already spent. This can quickly spiral out of control.
It’s easy to forget what you’ve already spent money on especially when you are using a credit or debit card. You over spend and little by little and then unexpected expenses pop up. The bigger the gap gets, the harder it becomes to manage.
A budget helps:
Cut back unnecessary spending.
Save money on bills.
Tackle your debt.
Prioritize your money goals.
Save for the future.
An effective budget is about the present and the future, not the past.
A good budget helps you manage your monthly expenses now, while getting you ahead in the future by paying off debt, allocating money for unexpected expenses and savings.
Budgets aren’t necessarily about being frugal, they are about living better.
When you manage your money, you plug the holes where money is leaking out unnecessarily. This can mean that you save money you didn’t know you had. You still can spend money intentionally on things that are important, but you can also rest easy. No more sleepless nights worrying about money.
YNAB - The Best Way To Budget
You Need A Budget, or YNAB for short, is an amazing piece of software that helps you stop living from month to month, helping you to get out of debt and save money.
YNAB has found their users on average are $200 better off in their first month and $3300 better in 9 months.
This is because they don’t just have a piece of software, they have a methodology changes how you manage money. This is based on 4 rules:
Rule 1: Give every dollar a job. This makes it harder to spend money without thinking. Every dollar has a purpose.
Rule 2: Plan for bigger, less frequent expenses. By breaking your larger, less frequent expenses into smaller chunks, you’ll have the money when they come up.
Rule 3: Roll with the punches. As you spend money, make adjustments. You can move stuff around and still make it work.
Rule 4: Live on last month’s income. YNAB helps you to get to the place where you have a monthly buffer. You’ll stop living month to month and start being ahead. You might not get there straight away, but you’ll be on the road to changing how you manage you money.
Get started now
By making small changes, over time you’ll see big results. By starting to budget now, no matter what your financial situation is, you’ll be taking steps towards better financial wellness.
YNAB has a free 9 day money mastery course that’s worth taking, even if you don’t get the software. You can apply the principles on paper or in a spreadsheet. The YNAB software has a free 34 day trial.