Evaluate your spending: $100=8 hours of work=A pair of shoes

Evaluate your spending by calculating how many hours of labour (life energy) will need to be spent for each purchase. I can assure you that the value of money will become more real if you ask yourself the following questions:

• ·         Did I receive fulfilment, satisfaction, and value (from this purchase) in proportion to life energy spent?
• ·         Is the expenditure of life energy on this purchase in alignment with my values and stated life purpose?

Two hundred dollars has an abstract quality. It becomes more real when comparing various purchases that can be made for that amount. It becomes most real when put in terms of the eight or sixteen hours of labour needed to earn the money to buy this new item you want.

Whenever you want to make a purchase, try to compare the cost of the item to the hours of time needed to earn the money to pay for it and decided if the purchase is worth it. This excise will teach you, your spouse and kids the value of money.

Money is a stranger without a destination, it comes and goes. Money is hard to find or get but it is easily spent. Always evaluate your spending by comparing your purchase to the value that you hope to get from it.

Teach your kids the value of money by explaining how many hours of work you have to put in before you can afford to buy a toy, game or a phone for them.

There are people earning $10 per hour and $375 per week and my 11-year-old son is asking me to buy him a new phone in September that will cost over $600. This is why I gave my son our lawnmower and sent him around our street to mow lawns. He managed to make a total of $30 after 5 hours and he soon returned home exhausted. I then asked him how many more hours of work he would need to save up for his new iPhone. After barely two minutes of consideration, my son decided that he wouldn’t need the new iPhone after all. He thought about how much time and labour it took just to earn $30 and how much more time it would take him to earn the $600 he needed to afford the phone. This is why my dear son decided to reward himself with a $10 burger from A&W instead; keeping his remaining $20 as a souvenir in his wallet. I don’t know how long the $20 will last, but I’m sure that he won’t quickly forget his lawn mowing experience.

The long and short of the story is that you should STOP and THINK before you SPEND! Evaluate your spending habit.

Please subscribe and follow me on my blog and email your questions to info@margmortgages.ca or call your community Finance Coach on 780 901 8060.

PRACTICAL STEPS TO GET OUT OF DEBT OR MANAGE YOUR DEBT

Going into debt by buying a depreciating asset like a car, or anything that doesn't produce an income (like borrowing for a holiday) is not always helpful in getting out of debt.

The following principles can help you manage your money and also lead you to financial freedom.

Create a budget and track your expenses: Creating a budget is simply developing a plan in which you tell your money what you want it to do. Tracking your expenses with a budget is like using scales. As it allows you to see how you are doing and motivates you to be more careful with your expenditures.

Create a budget and monitor your expenses

How much do you earn per month -        $5,000.00 (b4 taxes)

After-tax income                                              $4,250.00

Expenses:

Rent/mortgage                                              $1000

Food                                                              $500

Utilities                                                          $150

Cable, Internet & Phone                                  $90

Insurance                                                        $100

Gas/transport                                                  $100

Savings                                                          (10% of your net)

Proverbs 27

           ²³ Be sure you know the condition of your flocks, give careful attention to your herds;

            ²⁴ For riches are not for ever: and a crown is not secured for every generation?

            

2.       Simplify your lifestyle – live within your means

3.       Establish an emergency fund: An emergency fund is an account separate from chequing or long-term savings that is set aside specifically for emergencies. Some experts recommend beginning with $1,000 and building that to three months ‘worth of income. When you have this amount, you won‘t need to use your credit cards anymore. If you must use a credit card, such as when traveling or making purchases online, be sure to pay off the debt immediately.

                Pay off your credit cards, use cash/debit cards for purchases, and use credit wisely: I like                     advising my clients to prioritize paying off the credit card with the highest interest rate.

                Another suggestion is to pay down the smallest debt first, experience that victory, and apply for                 your payments from the first card to the second, and so on, creating a snowball effect to pay                off the cards ASAP.

Canadian debts are at its highest in years because interest rate is at its lowest but banks will increase interest rate as soon as the economy starts to improve. So DEBTORS BEWARE

4.       De-accumulate or sell possessions and assets that you no longer are using, that are beyond your ability to maintain, and/or that can be sold to generate additional cash. 


5.       Learn how to be a smart shopper: Limit the opportunities advertisers have to seduce you with their baits.

6.       Use insurance only to protect against catastrophic losses: Consider auto and medical. 


7.       Get creative: Whenever an apparent financial need surfaces, determine a minimum of two, preferably three, price quotes and/or solutions on how to solve this specific need.

8.       Practice long-term savings and investing habits: Saving money is the number-one wise money management principle everyone should practice. There are three types of savings we should have:

9.       emergency savings;

10.   savings for wants and goals e.g. saving for personal or children education, buying a car, furniture and,

11.   Retirement savings.

12.   There must be budgetary control

                                                                      i.   Plan you budget: it will keep you from overspending and debt trap

                                                                    ii.      Follow your budget: stick to your budget plan

                                                                   iii.      Prioritize your expenditures

Feel free to email me at info@margmortgages.ca or call 780 901 8060 with your questions. And subscribe to my blog for future updates. margaretadekunle.blogspot.ca

The Reality of Debt (Proverbs 22 verse 7)

Debt is a bondage that weighs down the mind and sometimes affects genuine relationships. Therefore, it is very important to make sure that your financial goal aligns with your life goals. You are aware that the best way to manage your money is to stay out of debt and have a strategy in place before the expenses or temptations arise.

Proverbs 22 verse 7: “The rich rules over the poor, and the borrower is a servant to the lender”

Don’t be enslaved by debt, financial education and proper planning is the key to a healthy financial life.

Suggestions that can give you financial freedom includes but not limited to:

1.       Work hard, live simply and save wisely

2.       Value family togetherness by discussing money with your significant other and your    kids

3.       Be honest, fair , and generous in all financial dealings

4.       Avoid borrowing, especially for consumable or fast depreciating items

5.       Do not use credit cards unless you have the money to it off each month

6.       Pay your bills promptly

Some Reasons Why People get into Debt

1.       Reduced or loss of major source of income and expenses remain basically the same

2.       Unexpected price increase for basic necessities such as utilities, insurance food etc.

3.       Medical expenses

4.       Lack of self-discipline and contentment

5.       Impulse purchases

6.       Not living within our means

7.       Covetousness:  This is one of the major causes of indebtedness. You  become covetous  when we eagerly desire things which belong to other people, even when you do not have the power economically to purchase such things. It is common knowledge that wrong desires produce wrong actions.

8.       Poor money management: Mismanagement of your income will create a gap and you might constantly be in need of money which will lead to borrowing regularly to close the gap. Proper planning and money management will prevent unnecessary spending and guide you to keep your spending within budget.

9.       Banking on a windfall: Charging your credit card or spending money for special projects or purchases in hopes of a special gift or another source of income that you are “hoping” will be coming soon.

10.   Saving too little or not at all

11.   Financial illiteracy: Build a relationship with your money and understand the burden of debt. Learn more about your personal finance.

Feel free to email me at margmortgages@gmail.com or call 780 901 8060 with your personal finance questions. And subscribe to my blog for future updates.

How To Reduce Your Bill Payments and Save Money

You understand the importance of saving money on a monthly basis but the stress of paying your high bills creates uncertainty. High bill payments could force you to live from pay cheque to pay cheque but there are ways to manage your monthly payments and start saving money.

·         Phone and Utility bills: For your phone and utility bills, call the companies to discuss the possibility of reducing your bill payments. Take a closer look at your phone bill; do you really need 3-way calling or international texting features?  Be aware of how much you’re paying on a monthly basis by monitoring your bills for the next 3 months. Then think about removing the features that you don’t need or use.

·         Cable bill: You spend 8 hours or more at work and you are probably too tired to watch TV when you get home. If his is the case, why are you paying for a premium cable package?  I do advise my clients to take out special channels such as the sports package or HBO. You can save $15 to $20 monthly by eliminating some channels.  

·         Credit Cards and Loans: If you’re paying an annual fee, what are your benefits?  If you are not using the benefit that comes with the fee, I will suggest that you get a credit card without an annual fee.  An average credit card has a 19.99% interest rate but you can call your credit card company to see if they have a credit card with a lower interest rate.  Or look into debt consolidation loans to pay off your credit cards.  

Your car loan is due for renewal yearly, make sure that you negotiate your interest rate rather allowing the loan to auto renew. If your loan is less than a year, how much you’re paying in interest? If your interest rate is higher than 10%, you might want to call your bank to renegotiate the loan after 6 months.

·         Rent payment: How much are you paying in rent on a monthly basis? After you pay your rent and other bills, how much do you have left to save? If your rent is $1300 and over, you can afford a mortgage payment for a $200,000 home (this is just a rough calculation). If your rent is $1300 or more, you might be spending too much on rent. I will advise that you get a place with lower rent payment so that you can start saving for the down payment to buy your own home. Your mortgage payments minus interest will become your equity which is a form of savings for the future.

·         Mortgage payment: You should make your mortgage payment bi-weekly or weekly if you can. The frequency of your payment can help reduce the amount that goes towards interest payment. Any amount saved from interest payment will go towards the equity in your home.

Conclusion

Pay attention to the dollar amount of your monthly bills and look for ways to reduce your payments. Call your service providers to take out the services that you’re paying for but not using.

Feel free to email me at margmortgages@gmail.com or call 780 901 8060 with your money questions

Build a Good Relationship with your Money

Life is hectic. Sometimes we have to juggle so many things at the same time. This is why most people don't have the time to build a relationship with their money.

Building a relationship with your money means constructing good spending habits. Make the right choice about your wants and what you really need. It is also very important that you know the financial products that you have knowledge is key, awareness about the financial products that you use can be the difference between a happy life and a life fraught with financial anxiety and trouble.

What to do:

• Go on a financial diet
• Live within your means
• Say no to your kids at the grocery store(tough one)
• Buy what you need and only take on debts that you can afford
• You have to spend time to know and understand your finances

Financial knowledge is a powerful force that can help you gain an holistic control of your life. Your ability to make good financial decisions could be a deciding factor to your well being.

A good relationship with your money is better than a good relationship with your bank. When you are so loyal to a particular bank, you will stop paying attention to your service charges. There are  people who have 4 unlimited chequing accounts at 4 different banks and with a monthly service charge of $14.99 each. Having 4 chequing accounts is excessive because the extra paid fees can be directed towards a savings account.

What not to do:

• Don't put money management on the back burner
• Don't buy things because they are on sale
• Don't ignore your monthly bank statement

Building a long lasting relationship takes time. Education is key!
Please free to email me at margmortgages@gmail.com for any question(s). You can also leave a comment below and subscribe to the blog for future updates.

 

Financial Freedom

-The borrower is a slave to the lender

Proverbs 22:7

If you own one, pick up your bible and read Proverbs 22:7. if you're not a Christian you can Google it. The best way to have financial freedom is to be debt free. When you're debt free, you will be in control of your earnings.

I want to ask that you spend today or tomorrow to look at all your credit cards, loans and lines of credit. Add up all you owe, who you owe and list how much you're paying in interest  on a monthly basis. Once you are fully aware of how much debt you have and the amount of interest rate, it will be easier for you to understand that your income gets deposited into the bank by the company that you work for. Then the money passed through your hand back to the bank, mortgage companies, and credit card companies.

My goal is to help you get out of debt and stay out of debt because debt is a big burden that won't let you get ahead or achieve your financial goals. Can you imagine what you can do with all the money that is spent on the interest rate?

I want you to start imagining a life without debt and a life with emergency funds, liquid cash in your chequing account, investment properties, kid's education funds and a retirement plan. A debt free life is not far away from you, all it takes is self-discipline.

Self-discipline is easier said than done but it can be achieved when you realized or pay attention to how much you owe and how much you're spending. And the truth is, you might just need guidance on how to stay on track or get out of your current situation so that they can start afresh.

Don't become servants to your lender, don't just work and pay bills, say no to living from pay cheque to pay cheque. If you find yourself in this situation, seek help before it's too late.

Feel free to call me on 7809018060 or email: margamortgages@gmail.com

Make sure you subscribe to my blog to get updates on personal finance.

Overspending

Have you ever walked into a grocery store to pick up cookies for your kids or to get one item that was left out of your previous grocery list? You only planned to  spend a few bucks, but instead of buying one item, you left the store with 3 bags of groceries that you didn't plan for. Then you sit in your car, pondering why you have 3 bags of groceries instead of one box of cookies.

Do you go grocery shopping because your coupons are about to expire? Maybe you are a compulsive spender who keeps your spending habits a secret from your partner for months to avoid conflict.

You've probably repeated this phrase to yourself multiple times' I'll never spend like that again". Sorry to be the bearer of bad news, but the truth is that most of the time, you will do it again. I would know since I have been down that path before and I know that it always happens again.

One of the reasons why you might overspend more than once is that budgeting is not that easy and it takes a lot of willpower to say no to all the clever advertisements and sales that you may see in the stores.

Here are two common reasons for people overspending and ruining their monthly budget:

• Sales, Bargains, and Promotions                                                           An obsession with bargains is a big problem for many people. You will buy things that you don't need if you focus on sales or promotional items. I like telling my clients to stop and think before they buy things that are within their budget for the month. You can definitely take advantage of good bargains but it is not a bargain if you have to put the cost on a credit card. Buying a sales item with a credit card means you can't afford it and you will likely be paying more for the sales item with the cost of an interest rate on the credit card. If your child needs a pair of shoes for school and you didn't plan to buy a shoe, then it will make sense to buy the shoe that you found on sale. But you see a pair of jeans that you don't really need and choose to buy it because it is 50% off, that means you are buying the jeans for no reason. Keep in mind that bargains are used by retailers as an incentive to get you to spend more than you anticipated.

• Spending based on emotions                                                                                 If you go shopping because are upset about something, or if spending money is a form of therapy for you then you might be an emotional spender. An emotional spender isn't necessarily looking for bargains but shops because it makes them feel good. If you are someone who buys expensive things just to be accepted as part of a group, you will be challenged with keeping to a budget.Material possessions do not define who they are. People will love and accept you if you are genuine.

A finance coach can help you structure your monthly spending, create a budget and holds you  accountable for your spending habit.

Please feel free to email me at margmortgages@gmail.com if you have any question(s). You can also leave a comment below and subscribe to the blog for future updates.