1. Not planning: your budget is your spending plan. It will allow you to live within your means
2. Overspending: A full 76% of the average shopper’s spending decisions are made in store aisles, according to a 2012 study by retail marketing group POPAI. The not-a-big-deal amounts like dinners, take-out, gas, coffee, etc. that can really sneak up on your wallet.
3. Credit cards: Buying on credit encourages you to spend more than you can really afford. Studies have shown that when people pay with cash they spend less.
4. Not having long term investment for retirement: Many people are discouraged from saving for retirement because they feel their small contributions won’t make a difference.
5. Making decisions based on emotion: It’s also easy to fall into the habit of judging your spending by that of those around you or by your mood at the time.
6. Focusing on Quick financial gains: Steer clear of people who pressure you to make decisions, promise you high investment returns. Focus on making a regular investment on diversified investment strategy.
7. Not having insurance: No matter what your financial position is today, an unexpected event can see it all unravel very quickly.
8. Focusing too much on money: Your health, relationships with family and friends, career satisfaction, and fulfilling interests are more significant. Money will dictate that you work tons of hours and exhaust yourself. Money can cause stress and health problems. Live for your relationships and things that matter to you.
Today’s guest is Ato Yohannes Ferdinando Drar, mental health expert. Mr. Drar lives in Ottawa, Canada and our discussion was conducted over the phone.
Many people today live beyond their means and carry a large amount of stress as a result. Financial stress can have a direct impact your family’s health. In 2017 survey of 5,200 people by a financial services consulting firm (Seymour Management Consulting) has uncovered a staggering level of repressed financial stress. Forty-seven per cent of participants agreed that money worries cause them extreme emotional stress and 40 per cent said money worries cause them to lose sleep. Families under financial stress are more likely to suffer poorer health.
Spending beyond our means is forcing families to work longer hours and spending less quality time with their loved once. It’s extremely stressful for the adults and quite often very scary for the children in the household. When parents are stressed, tense or anxious, the children no longer feel secure. It’s important to try to keep a positive outlook (especially in front of the kids) and remain attentive and loving toward the children. If they’re old enough, be honest and explain to them what is going on and reassure them that you’re in this together, as a family.
While there’s no quick or easy solution, you have to start somewhere. Simplify your way of living and learn to live off less. Make a budget and stick to it. You have to take expert opinions in how much you can afford in buying a house or other big ticket items. We have to focus on what is important to us and to our families. Be practical.
Vehicles that would have been completely unaffordable two decades ago are now financially accessible. Many consumers can buy cars with no money down, for a monthly, bi-weekly (or even daily) payment that has somehow become “affordable.”
Most car-buyers often don’t understand that long-term vehicle financing can set up a cycle of greater and greater debt with subsequent vehicle purchases.
According to many dealers more than 50 percent of customers with trade-ins have negative equity.
Before agreeing to an extended term loan for a vehicle purchase, consumers should educate themselves and stick to their budget. Less focused on the weekly or bi-weekly payments. Also ask for full disclosure of the payment structure.
In the episode, I will explain what an RRSP is, how it works and it’s benefits. As the same time I will briefly talk about Canada Pension Plan.
A Registered Retirement Savings Plan, or RRSP, is a special type of investment account designed to help Canadians save for retirement. The main advantage of an RRSP account, as compared to a regular investment account, is the tax benefits it offers.
The Home Buyers’ Plan (HBP) is a program that allows you to withdraw up to $25,000 in a calendar year from your registered retirement savings plans (RRSPs) to buy or build a qualifying home for yourself.
The Canada Pension Plan (CPP) provides contributors and their families with partial replacement of earnings in the case of retirement, disability or death.The amount of your Canada Pension Plan (CPP) retirement pension is based on how much you have contributed and how long you have been making contributions to the CPP at the time you become eligible
In this episode Eden explains the process of finding the right Real Estate agent, making an offer, finding a real estate lawyer, finalizing the purchase and closing day.
Finding the right real estate agent
One of the first steps will be to interview a few real-estate agents before choosing one. You have to be really comfortable with the person and know they’re the right one to guide you through your purchase as you face a lot of pressure and decisions. Ask what you can expect so you’ll know they’re communicating in a way that makes you comfortable enough to ask questions and discuss things as they are happening.
Real estate lawyer
It’s important to hire a lawyer who specializes in real estate. You could find yourself in a bidding war for the home you want, and it doesn’t hurt to have a lawyer look over any offer to purchase before you submit it. A real estate lawyer will also conduct a title search and check for outstanding taxes and liens on the property.
Make the Offer
Your agent presents the offer to the seller. This document includes the price, conditions, deposit and closing date. The seller either accepts, rejects or counters the offer (also called “signing back” the offer).
Finalizing the deal
Finalizing the deal will include the final approval of your mortgage, a meeting with your lawyer to finalize details like insurance and conditions, and the results of a title search. If you rent, you must give your landlord notice.
Closing day is the day you legally get possession of the house. Your lawyer completes the paperwork (so the home is in your name), payments are finalized and you receive the deed and the keys.
Eden K. Tewelde
In this episode Eden K. Tewelde will discuss the step by step process of buying home for the first time.
Step 1. Educate yourself to understand Real Estate Market and familiarize yourself with the Real Estate market trend in the area you are planning to buy.
Step 2. Find out how much you can afford. Different lenders use different calculations to find out how much you can afford. Points you should consider;
a: Your monthly housing costs should be equal to or less than 32% of your average gross monthly income.
b: Your monthly debt load should be equal or less than 40% of your average gross monthly income.
C: Your purchase price should not be greater than your annual income multiplied by 3 or 5 times.
Step 3. Get Pre-qualified & Pre-approved for your Mortgage. You need to provide some financial information to your mortgage banker (ie, employment letter, your income , amount of savings & investments you have). At this stage, you will find the purchase price of the homes you should be looking at.
Step 4. Find the right Real Estate Agent. Things you discuses with your agent should include the location, the type of home you are interested and your other needs.
Eden K. Tewelde
Credit reporting agency collects information about where you live and work, how you pay your bills, whether or not you have been sued, arrested, or filed for bankruptcy. All of this information is combined together in a credit report.
A credit score is a numerical expression based on a level analysis of a person’s credit files, to represent the creditworthiness of an individual.
In order to access you credit report contact both Equifax and TransUnion.
Order a copy of your credit report from both Equifax and TransUnion. Each credit bureau may have different information about how you have used credit in the past. Ordering your own credit report has no effect on your credit score.
Equifax Canada refers to your credit report as “credit file disclosure”.
TransUnion Canada refers to your credit report as “consumer disclosure”.
Consider requesting your report from one bureau, then wait six months before you order from the other bureau.
In this episode I will discuss about ways to paying off debt. I will also share some additional strategies to manage debt.
A debt management plan sets up a payment schedule for you to repay your debts. By voluntary agreement you deposit funds with your credit counseling agency each month. They send those funds directly to your creditors.
Bankruptcy is a legal status of a person or other entity that cannot repay debts to creditors. Most of the times, bankruptcy is imposed by a court order, often initiated by the debtor.
Consumer proposals are offers made by debtors to modify their payments to creditors. For example, debtors may propose paying a lower amount each month over a longer period of time, or paying a percentage of what they owe.
In this episode, Yonas shares his personal experience on buying insurance. He shares practical advice on how to do due diligence before buying insurance products. It is never late to start planning to invest into the protection of people you love in your life through insurance.
Critical illness insurance is an insurance product in which the insurer is contracted to typically make a lump sum cash payment if the policyholder is diagnosed with one of the specific illnesses on a predetermined list as part of an insurance policy.
Final Expense life insurance policies are really like most other senior life insurance policies, meaning you can get them in a wide range of coverage amounts.