Financial Wellness Series
Presented in partnership with the National Affordable Housing Corporation, Read Saskatoon and Affinity Credit Union.
Winter 2015 Schedule
Budget Boot Camp
Meeting Room, Cliff Wright Branch
Jan. 14 6:30 pm to 8:30 pm
Get your finances back on track this year. Learn tips and strategies to move toward your financial goals.
Presented in partnership with READ Saskatoon.
Credit Building Program Workshop
Auditorium, Cliff Wright Branch
Feb. 2, 17 and 23, 6:30 pm to 8:30 pm
The Credit Building Program consists of three separate workshops. Although you are welcome to attend any one individually, you will receive a certificate of completion for attending all three. Presented in partnership with NAHC. To register for one or all of these workshops, go to nahcorp.ca
Workshops currently offered include: Credit Basics (Feb. 2), Money Management Budgeting (Feb. 17), and Becoming a Homeowner (Feb. 23)
Home Owner Preparation Education (HOPE) Course
Auditorium, Cliff Wright Branch
Feb. 26, 6:30 pm to 8:30 pm
The HOPE Course ensures the success of each new homeowner receiving financial assistance from the information to first-time homebuyers on maintenance, budgeting and condo living, among other topics. The course is completed during one four-hour session. Presented in partnership with NAHC. To register for this workshop, go to nahcorp.ca
Financial professional Scott Maxwell from R. Scott Maxwell Financial joined Lisanne Anderson on Good Morning Texoma with some tips on how to pay off those bills and reduce your holiday hangover.
Q: Are shoppers concerned about the amount of debt theyre getting into?
Yes, and paying off credit cards is becoming a priority for a lot of people. In fact, more than half of people (53%, according to a November, 2014 study conducted for Charles Schwab) said what they wanted most this holiday season was cash to pay off their credit card debt. Money beat out other gifts including clothes and gadgets.
Q: If we have credit card debt, how do we start paying it down?
I have 4 steps for reducing your holiday hangover:
1. Get Organized
Your credit card debt may seem daunting or overwhelming. Thats why I recommend starting with something simple- getting organized. Start by gathering all of your statements, and writing down the balance, payment date and interest rate on each credit card. You can utilize a debt worksheet, like the one on my website, rscottmaxwell.com. Once you have your debt organized, you can create a plan to pay it off.
2. Build Momentum
Start with the credit card with the lowest balance and devote as much of your income as you can afford to paying off that one card. (Make sure you are paying the minimum balance on every card to avoid fees and penalties.) Once you pay off the balance on the smallest card, move to the next smallest balance. That rush you get from paying off each card will help build momentum and keep you motivated.
3. Get a Lower Rate
Credit card companies want their money back, so theyre often willing to work with customers to pay down debt. Ask if you can get a lower interest rate. If they arent willing to do so, shop around for a lower rate and transfer your balance. But make sure you know what youre signing up for. Credit card companies often offer a low introductory rate and raise it after a few months or a year. Also pay attention to balance transfer fees.
4. Look to the Future
You dont want to do all this work to pay off your holiday debt only to find yourself in the same situation next year. Take the total amount you spent on the holidays this year and divide that number by ten. Now, commit to saving that amount each month from January through October. For example, the average shopper was expected to spend about $755 on gifts, decorations and entertainment in 2014 (according to a November, 2014 Experian survey). If you can put away $75 each month, youll be in good shape once the 2015 holiday season rolls around.
Q: Debt isnt just a holiday problem- this is a year-round issue for many people, right?
Definitely. In fact, 18% of people now expect to die in debt (according to a December, 2014 study from creditcards.com). That includes mortgage debt as well as credit card debt. I work with a lot of people in or near retirement, and I recommend paying off all debt before you quit working. Consider this, nearly six in 10 workers ages 55 and older have less than $100,000 saved for retirement (according to the 2014 Retirement Confidence Survey by The Employee Benefit Research Institute). If you are still making debt payments when you get to retirement, that will take a big chunk out of your fixed income.
Interest rates might be low, but theyre not going to stay that way forever. And when they do rise, the chance to save a bundle will vanish. In spite of that, most Americans wont take advantage of this window of opportunity.
A new survey from HSH.com, a site for comparing and calculating mortgage rates, finds that only 9% of Americans plan to refinance a mortgage this year, while only 30% say theyre going to pay off credit card debt.
This means were leaving money on the table in a big way. Given that most credit cards are variable-rate, a rising interest rate environment would tend to be more costly over time, so there is even a greater benefit to retiring balances as quickly as possible, says HSH.com vice president Keith Gumbinger. When the prime rate goes up, so will your monthly rate, even if you havent added to your overall balance.
As far as mortgage refinancing goes, its a matter of opportunism, Gumbinger says. At the moment, fixed mortgage rates are at about 20-month lows, and very close to as much as 60-year lows. While there are more variables to consider when refinancing, such as if your credit is good enough to qualify for the lowest rate, how much equity you have in your home and whether or not you plan to stay in that home for a while longer, Gumbinger says the opportunity for greater savings and month-to-month cash flow can make refinancing worth it under the right circumstances.
Marion Syversen was in for this weeks Finance is Fun to give tips on how to pay off your credit card debt.
A typical New Years resolution is to pay down/off debt. If this is your 2015 goal how can you do it? Heres some ideas to help you succeed.
Choose your strategy - Do you want to pay on the card with the highest interest or the card with the lowest balance? You decide, but from an emotional satisfaction perspective, choosing the smallest balance and aiming to pay that off gives your goals a huge boost because you can actually PAY A DEBT OFF in a timely fashion with that method.
Additionally, do you want to aim your extra cash towards ONE credit card or pay the extra $300 equally towards all? That, too is a decision that you make. Though I would once again suggest that focusing on ONE credit card could provide quicker satisfaction by achieving your partial goal by paying of a few smaller cards with laser focus.
Simultaneously save? - What about simultaneous saving? Some folks discourage any but TOTAL focus on all extra money going towards repayment. But that leaves you nothing for the next broken appliance fiasco or car repair. So I think saving for both long-term (retirement) and short-term (emergencies) is an important disciple in this time. My suggestion would be to save small amounts as the bulk of your funds are paying off debt. But saving at the same time would be great for your future.
Stop the madness- Of course, you need to not add to your debt while you are paying things off. It will hard to do that as there will be emergencies and life will not go as planned. But if you wait it out and look for alternative solutions to the immediate use of credit cards, things will open up and you will find perhaps a much better solution not seen in your past because of the pressure you felt to act NOW and use the card.
Good luck on this excellent goal.