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
While being wary of credit card debt is a good reason to avoid credit cards altogether, that decision could come back to bite those who wind up needing credit at any point in their lives. Opting not to build any kind of credit history could make it difficult to take out a loan for a house or car in the future, especially if your current credit report is virtually blank. How can lenders loan you money when they have no way of knowing if you've ever repaid anyone back?
Statistics show the average American family spent around $780 on Christmas gifts this year.
Thats up $75 dollars from 2013. And a large number of those purchases were put on credit cards.
But now many of those bills are about to be due.
So how do you avoid a financial meltdown and not go into serious debt?
Americans have turned to credit cards to pay for everything. Some are able to pay off the balances every month,
Paying that down is a good thing, said Calhoun Community College economist Derek Berry.
But the real trouble comes when people either cant or dont get a handle on the balance.
It seems to me a lot of young people especially just focus on the minimum payments," said Berry. Doing that, youre going to stay in that debt trap for a long time.
According to creditcards.com, the average American household carries $5,700 in credit card debt. And financial experts believe Christmas spending is only helping drive that number higher.
You can wander into debt, but you certainly cant wander out," said Dana Holt.
Holt said she learned that lesson the hard way. But this Christmas, the Shoals mother didnt go further into debt.
You have to have a plan," said Holt. "You have to have a goal."
Holt and her husband started attending Christian based radio talk show host Dave Ramseys Financial Peace University. The program was set up through their church several months ago.
Its just changed our lives. We have freedom now to do things we couldnt do before," said Holt.
According to the Shoals mother, the 9 week program taught her family how to spend and save money but more importantly helped pay off their debt quickly. Dave Ramsey uses the debt snowball method. The strategy is simple. Get on a written budget. Right down all your debts from smallest to largest and wipe them in that order.
And you attack it with a vengeance," said Holt. "You take every dollar you can out of your budget and you attack that baby. When its gone you roll that payment to the next one and that snowball just picks up snow every time it rolls. You can make tremendous progress."
But it is okay if the debt snowball strategy sounds like a little too much for you.
Theres a lot of resources out there," said Huntsville bankruptcy attorney Jeffery Irby. "I have a pen in my hand right now... and this is called credit counseling.
Irby refers people down that road all the time. Some have a lot of success. Bankruptcy is another option. However, Irby said its more of a last resort.
The goal is to help them," said Irby. "Period. Thats the end of the story.
He suggests the best way consumers can avoid a trip to his office and help themselves is to wipe out that Christmas credit card debt. Thats why he offered this tip for those who went little over budget on gifts.
If you have a tax refund coming in, then bite the bullet and send all of your tax refund money to pay off your credit card debt.
Finally, most financial experts say if youre feeling overwhelmed by your holiday debt, take a deep breath and relax. But ultimately make the decision to take control and get on a plan.
Christmas is on December 25 every year. Its not a surprise. You know when its going to come," said Holt. "If you put a little bit of money away every month, you could have Christmas and not worry about it, and it be fun for a change.
If youre interested in the debt snowball method, we have a debt snowball calculator that can help you get started. It also shows how long it could take to get out of debt.
Also beware of common misconceptions about settling your debt so you dont get cheated.
Click here for a free, interactive budget worksheet.
Copyright 2015 WAFF. All rights reserved.
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.