Why You Need A Finance Coach

A finance coach is a money coach who is an expert on personal finance. A finance coach is very knowledgeable about savings, credit, debt, budgeting and spending habit. A Finance coach will work with you to improve your money management skill.

Why do you need a finance coach?

A finance coach will take a look at your overall financial health and help you accumulate wealth, reduce debt, plan for your retirement or manage your credit situation.  A coach will use a holistic approach to help manage and design the right financial plan for you. This will include your current life stage, work-life balance and other life challenges that could impact your finances. The coach will listen to you and help you make the right financial decisions.  Financial freedom is a mental, emotional and an educational process.

What will a financial coach do for you?

• Work with you for 3-6 months to create an achievable budget
• Spend the time to know you and all aspects of your personal finance
• Coach you through savings, credit management, freedom from debt and wealth development
• Design and help you execute a strategy to get out of debt
• Hold your hands through your financial journey
• Help you track your expenses and balance your chequebook

A financial planner works for the bank while a finance coach works for you. A finance coach will look at you personal life goals and help you match those goals with your financial strategies. Because you are paying a finance coach for the service, you will be in the driver's seat.

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

Financial Freedom

Debt, in my opinion, is a form of slavery. When you owe a bank money you become a slave to the bank because most of your earnings will go towards the payment of your debt.

If you owe the bank $10,000 on a credit card with an annual interest rate of 19.99% ( this is technically 20% per year). This is a form of slavery.

If you pay a minimum 2% of a monthly balance that is $200, it will take you over 9 years to pay off a $10,000 credit card, and you will pay $11,660.67 in  interest. By the end of this 9-year term. your total payment would add up to $21,660.67. You have paid double the amount that was initially  charged to your credit card. Can you imagine if you currently owe $50,000 or more in credit card fees? How much will you have to pay back, and how long will it take you to pay back what you owe to the bank or credit card company?

This is why I say debt is a form of financial slavery. You can work 8 hours a day, 38 hours a week and still not be able to save a single cent if you're in debt.

How People Get Into Debt

1.      Accepting Credit You Don't Need

If a bank approves a $20,000 credit card for someone who makes less than $10,000 a year, how will the person pay all of it back?

Sometimes, you will walk into a bank to pay a utility bill and you will be told that you have been pre-approved for a $10,000 line of credit and income verification is not need. No income verification can compel people to accept the line of credit because there is no hassle of proving income. You can easily get into debt if you don't say no to offers from banks and credit card companies.  

1.      Spending Money You Don't Have

You can get easily into debt by spending money without a plan. If you are a person who likes to buy things on sale, you have to take some time to reevaluate your purchases.

My advice is only to buy what you need when you need it. This way, you will be able to keep to your budgeting routine. Cultivate the habit of using your debit card for purchases. If you happen to have a points credit card or one with a  cash back reward, you can use your it for purchases as long as you have enough funds in you chequing account to pay it off immediately. You can also pay it off before your card's days grace period. A grace period is the amount of time that you have before your card's interest rate kicks in. Different cards have a different grace period length.

How to stay out of debt

If you are already in debt, don't be discouraged  because you're not alone. According to an article done by The Globe and Mail on March 11^th, 2016, Canadian households are spending $1.65 for every one dollar earned.

It is sometimes difficult to admit that your debt is more than you can handle. The realization that you might not be able to pay back what you owe can also be overwhelming but you can do something about it now by putting a plan in place. 

Start by adding up all your debt, who you owe and the terms of your loan such as interest rate.

Then look into the possibility of getting a consolidation loan to pay off everything at once. Make sure that all credit cards except one are cancelled.

If you want to go for a vacation that will cost your family $3000, it is advisable to save $250 per month for 1 years or $125 per month for 2 years. If you put the vacation of a credit card and you pay a minimum payment of 2% which is $60 per month, with  18% in annual interest, it will take you 8 years to make the payment and you will pay almost $6000 back to the bank. Always save for your upcoming expenditures.

If you're having trouble doing this by yourself, Please go to my blog for more information or contact me directly via email.

Signs that you are in trouble with debt

·         New bills arrive when the old bills aren't paid yet

·         You always have late fees or over-limit charges on your utility or credit card statement

·         You are getting NSF charges from the bank

1-TAKE ACTION

2-MAKE A PLAN

3-BECOME DEBT FREE

Self-awareness is key and the earlier you do something about it, the better it will get. I have helped many people and I can help you too.

Feel free to email me at margmortgages@gmail.com or call 780 901 8060 for 30 minutes free consultation.

Saving and Spending Money

Based on today’s economy it is very challenging to keep up with bills, food and the basic cost of living. If it’s difficult to keep up with bills, how can you set aside money for your savings?

The advice I’ve been giving clients is to learn how to budget. Budgeting will help you prioritize what you really need compared to what you want. This will help you achieve your saving goals.

Start with a budget

A budget gives you a visual of your monthly income, monthly expenses, and money left over after your expenses. Using a budget can help you plan how much you need to save on a monthly basis.

Most people don’t bother using a budget to plan their monthly spending or saving.  I come across many people on a daily basis that feels crippled by debt. Some people are in debt because of poor spending habits, while others sink into debt because of the higher cost of living.  Whether you are in debt because of your spending choices or in debt because of a poor economic situation, keeping a budget will help you get out of debt faster or prevent you from getting into debt.

 You generally want to begin your budget at the very beginning of a month. Keep the receipts of all your expenditures in the month so when the end of the month rolls around you can add up all your purchases and figure how much you spent and the things that you spent money on.

Budgeting Tips

Below is some handy advice that I like to give my clients about setting up a monthly budget:

•  Your household income

Calculate your monthly household income. Don’t forget to include child tax benefits, interest income etc. This is the actual amount that goes into your chequing account on a monthly basis

•  Manage and prioritize your monthly expenses

This is a good time to take a look at the receipts that you have kept in the month. How much did you spend on essentials like food, shelter, electricity and many other things that are necessary for your survival? Now think about how much you spent on the things that aren’t necessary for survival, luxuries, such as a new pair of sunglasses, a fancy dinner, daily coffee, junk foods, and other similar comforts. For an accurate amount, I advise that you take 3 of your monthly expenses and average it out. If you are someone who is fully aware of their basic needs, then one month of expenses should be fine for your budgeting purposes.

•  Subtract monthly expenses from your monthly net income

If you have money left after the subtraction, then you will be able to plan for long-term savings and some emergency funds. But beware, if you have a negative number, this means that you are spending more than you’re currently earning. If you find yourself in a situation where you’re spending more than you’re earning, it might be a good time to look at the receipts that you have been collecting and remove the things that you can do without.  Be warned, if you decide to get an additional job to help cover some expenses, as this might not always work. It’s not about how much you make, but about how much you spend.

Once you have a monthly budget in place and you know what your expenditures are, you can now work on your monthly savings plan. Most people save money for retirement, emergency funds, vacation funds, etc. 

Whatever your savings goals are, these tricks seem to always help out my clients:

         I.       Pay yourself first:  Based on my experience, the best way to save is to have a preauthorized deposit from your payroll go into a savings account or investment. If your savings goal is for retirement, you might want to look into diversifying your portfolio by talking to mutual fund specialist or a financial advisor. If your savings goal is for an emergency, I advise my clients to put the funds in a regular savings account or in a TFSA where it is easily accessible.

I I.   Start by saving $25-$50 monthly. I know that most mutual fund accounts will accept a preauthorized deposit of as little as $25 bi-weekly or monthly when you open the account.

Please keep in mind that it is advisable that you spend 30% of your income on shelter, another 30% on your loans and miscellaneous expenses and 10-20% on your monthly saving but not less than 10% on savings. I want to assure you that the 10% savings rule is achievable.

 If you have challenges saving or feeling overwhelmed with credit card payments. It might be a good time to contact me.  I have helped a lot of clients pay down debts, buy their first home and save for raining days. I can help you too.

Leave a comment to let me know if this information was helpful or let me know the topics that you will like to read about.

Feel free to email me directly at margmortgages@gmail.com or call 780 901 8060 with all your personal finance questions.

Financial Literacy for Children-Start them young

As parents, we often teach our kids good morals, our primary values and the importance of good education.

I wonder why financial literacy is often left out.

I asked my 5-year-old daughter a question this morning, "I asked what is money?" she answered "money is for buying stuff". I am sure that any kid her age will probably give the same response. 

Most kids understand the basics of spending because we do our best as parents to buy them most of the things that they ask for. Do they understand the basic principles of saving?  I think most adults shy away from having conversations about money with kids because of their own money management skills or is it lack of confidence due to their own spending habit.  

Adults have experience and perspective that kids do not have when it comes to money management. Therefore, it is very important to start having conversations with kids. If kids are not taught about money management at home they will learn it from their friends. I bet most kids believe that the children of rich parents are born lucky.  if kids associate luck with wealth  how responsible will they be with money?  It is very important that we explain to them from a very young age that people work hard to get money and once you have the money, you have to also make the right decisions with the money in order to get rich. 

Teaching children about money will help them understand the relationship between working to earn money, spending and saving money.  Kids need to understand the value of money, and I believe financial literacy will give them that foundation. 

You can start this process by teaching the little ones how to count coins. The next time you go grocery shopping, let your older kids hold the shopping list and make sure they keep to the list, then explain why they have to keep to the budget.

If you have any question, email me at margmortgages@gmail.com or call me on 780 901 8060