A need is a necessity of life – we all need shelter, food, clothing and transportation for employment purposes.  A want is something you would like to have but could live without.  When implementing a budget, you should first ensure your needs are met.  Your wants are secondary and can be saved for in your goals.

A budget is a spending plan based on income and expenses.  Tracking all of your expenses for a couple of months will allow you to understand the cost of your basic needs and then set a budget as to how you would like to allocate excess funds for “wants” and savings.

A goal is what you want to achieve.  If you would like to attend a concert or go on a trip with your friends, setting a goal to set aside funds in your budget will allow you to save to reach your goal.

To assist you in reaching your goal, they should be SMART goals:

Specific – what you want to save the funds for
Measurable – a set amount
Achievable – you can afford the monthly amount
Relevant – important to you
Time Bound – set time frame for you to achieve the goal

Implementing the above financial habits will allow you to enjoy a purchase you have budgeted and saved for and avoid buyer’s remorse.

Please feel free to reach out to us for a free consultation or refer to the Office of the Superintendent of Bankruptcy website at https://ised-isde.canada.ca/site/office-superintendent-bankruptcy/en/you-owe-money/you-owe-money-consumer-proposals for more information.  

By Kathy Lenart – Insolvency Partner, Licensed Insolvency Trustee
CPA, CA, CIRP
Canadian Association of Insolvency and Restructuring Professionals (CAIRP)

The post How To Avoid Buyer’s Remorse appeared first on Fresh Start Now.

Around the world, there are many traditions to ring in the new year and to invite good luck in the next 365 days. From eating 12 grapes for each clock chime at midnight (Spain) to opening every door and window in your home (Ireland) to walking around your house with an empty suitcase (Central and Latin America), each tradition is hoping for good fortune in the following year.  

If you have struggled in 2023 with your finances, I recommend that your New Year’s tradition be to make a plan to reduce your expenditures in 2024. If you haven’t been tracking every dollar you spend, you may be surprised by how much your monthly grocery expenditure increased in 2023. The budgeted amount for other expenses may have to be reduced to reach your financial goals.  

Plan to concentrate on reducing one expense every month in 2024.  

January – Reach out to your cable/internet provider to see if you can reduce your services to lower your monthly bill.  

February – Review your insurance premiums and shop around to see if you can get a better rate.  

March – Plan ahead for low-cost/free activities to entertain the kids during March break.  

April – File your taxes early so you continue to receive any benefits you are entitled to. 

May – Cancel one streaming service and sign up for a library card for free movies and books.  

June – Plan to walk to work instead of driving or using public transportation.  

Breaking the financial goals down to one per month will be less overwhelming and provide momentum for the next month when achieved.  

From all of us at Taylor Leibow Inc., we wish you health and financial stability in 2024!  

By Kathy Lenart – Insolvency Partner, Licensed Insolvency Trustee
CPA, CA, CIRP
Canadian Association of Insolvency and Restructuring Professionals (CAIRP)

The post New Year – New Financial Goals appeared first on Fresh Start Now.

The post Tips to Adjust for the Increased Cost of Living appeared first on Fresh Start Now.

The cost of living has increased significantly, with gas prices at all-time highs and food prices expected to continue to climb by 5-7% in 2022. We understand budgets may be tight, but we challenge you to save $100.00 in the next 30 days. That works out to only $3.33 per day but will add up to $1,200.00 in a year. 

Think of the peace of mind you will have knowing you’ve accumulated savings of $1,200.00 after twelve months for emergencies or to reach a financial goal. Here are a couple of tips to help you meet our 30-day savings challenge:

• Use a spending journal to track every dollar you spend so you can then make an educated decision on where to decrease your discretionary expenditures
• Take a look in your pantry and plan your weekly meals to utilize the items you already have
• Always use a list when grocery shopping – studies show you will spend 25% less than shopping without a list
• Put your spare change in a piggy bank – even though we don’t use cash as much as we used to, that change will now be loonies and toonies and accumulate much quicker
• Use accumulated points – redeem your air miles, optimum or gas points and then put the saved cash in your savings account
• Contact your service providers (cable and internet) to see if you can reduce your monthly billing
• Reduce your hydro bill by doing laundry during off-peak hours at significantly reduced rates
• Manage expectations – avoid “keeping up with the Joneses” and spend based on your own family’s priorities
• Plan minimal cost family fun – a picnic at the park, visit Hamilton’s many waterfalls, movie or game night, stroll through a Farmer’s market, etc. 

We would be happy to hear your success stories and any additional tips to save money in our comments.

By Kathy Lenart – Insolvency Partner, Licensed Insolvency Trustee
CPA, CA, CIRP
Member and Secretary of the Ontario Association of Insolvency
and Restructuring Professionals (OAIRP)
Canadian Association of Insolvency and Restructuring Professionals (CAIRP)

The post Take the 30 Day Savings Challenge appeared first on Fresh Start Now.

A recent internet search for “the average number of credit cards per Canadian” provided the following interesting facts:

• There were 76.2 million credit cards in circulation in 2021 (Source: Statista)
• 78% of Canadians have a reward linked to their credit card (Source: Payments Canada)
• The average Canadian carries 1.4 credit cards (Source: Canadian Bankers Association)
• As of 2021, the lowest among Canadian credit card rates is 8.99% (Source: Rate Hub)
• During the pandemic, 60% of Canadians paid for transactions using credit cards (Source: Bank of Canada)

Let’s face it, using credit cards provides many benefits like earning rewards, contactless payment and a grace period to pay cash for the purchase.  Accumulating several credit cards, with increasing balances and high interest rates offsets any potential benefits.  If you are struggling to pay off multiple credit cards, here are a couple of tips:

• Speak to your bank manager to see if you are eligible for a debt consolidation loan to pay off all your credit cards in full and then only have one monthly loan payment.  
• Make minimum payments on all of your credit cards but concentrate on paying down the highest interest-bearing card first.  Review your monthly expenditures and see where you can cut back on discretionary expenses (like entertainment, eating out, etc.) to increase the payments on your highest-interest-bearing credit card.
• While you are paying off your credit cards, put the cards away in a safe place to avoid easy access to use.
• Once a credit card is paid down, decide whether to cancel the card to avoid future abuse or if you want to retain it for responsible use once all your cards are paid off.
• Try to use only one credit card for budgeted purchases (food and gas) and pay that card in full as due each month.  
• Once the highest interest-bearing card is paid, concentrate payments on the next highest interest-bearing card.  

If you are unable to pay off your credit cards on your own over a reasonable time period, contact a Licensed Insolvency Trustee for a free, initial consultation of debt relief solutions like a debt management program, consumer  proposal or bankruptcy.

By Kathy Lenart – Insolvency Partner, Licensed Insolvency Trustee
CPA, CA, CIRP
Member and Secretary of the Ontario Association of Insolvency
and Restructuring Professionals (OAIRP)
Canadian Association of Insolvency and Restructuring Professionals (CAIRP)

The post How to Pay Off Credit Card Debt appeared first on Fresh Start Now.

Have you ever calculated exactly how much you spend over the holiday season?  It may be easy to add up your gift purchases, but have you considered all the extra expenses for holiday meals and clothing, parties, hostess gifts, cards and gift wrap?

If you have never added up all your expenditures in relation to the holiday season, take the time this year to track everything you spend in relation to the holidays so you can work that amount into your budget for 2022.  Once you know the total amount – divide by 12 and set that amount aside every month in 2022 so you are prepared next year.

Now, before you run out and shop this year, keep these holiday spending tips in mind to minimize any regret when bills need to be paid in the New Year:

• Make a list of who you would like to buy for and how much you would like to spend. Add up the total for everyone and make adjustments if the total is above your means.
• Be creative – a homemade gift, baked good, or good deed can save you money while adding a personal touch.
• Check online for sales – research the cost of items before purchasing to see if on sale at another store.
• Don’t wait to shop last minute when you may be paying full price.
• Avoid “buy now and pay later” deals unless you have the money in your account to pay in full when the amount becomes due.
• Share party cost – don’t feel like you have to do it all. Host a pot luck dinner or ask friends to bring beverages.
• Look for free, family events over the holiday season – skating, exploring festive light displays, or wrapping presents for a charity.

Make the most of the holidays this year by safely spending quality time together.  Wishing you all the best this holiday season and in 2022.

By Kathy Lenart – Insolvency Partner, Licensed Insolvency Trustee
CPA, CA, CIRP
Member and Secretary of the Ontario Association of Insolvency
and Restructuring Professionals (OAIRP)
Canadian Association of Insolvency and Restructuring Professionals (CAIRP)

The post Holiday Spending Tips appeared first on Fresh Start Now.

CERB

CERB was available to employed and self-employed individuals who met the eligibility requirements and ceased working for reasons related to COVID-19 for at least 14 consecutive days.  CERB of $2,000 was paid for four-week periods from March 15, 2020, to October 3, 2020, for a maximum of 38 weeks.

If you received CERB payments, no taxes were withheld at source and you will be required to claim the payments as income on your 2020 personal income tax return.  There is no clawback of CERB payments based on your annual income, but if you received CERB that you were not entitled to, you will be required to repay any overpayment.

CRB

CRB is available to employed and self-employed individuals who meet the eligibility criteria and who are not entitled to Employment Insurance (EI) benefits.  Applicants must have been seeking work and not turned down reasonable work during the 2-week period they are applying for.  If you had a 50% reduction in your average weekly income due to COVID-19 you may be eligible for CRB even though you are still working.  CRB of $1,000 ($900 net of 10% taxes withheld at source) is available for a total of 38 weeks from September 27, 2020, to Sept 25, 2021, and you must apply for each 2-week period.

CRB payments must be reported as income on your personal income tax return.  If you earn more than $38,000 (excluding CRB payment but including CERB payments) in the calendar year, you will have to reimburse $.50 of the CRB for every dollar of net income above $38,000.  The clawback will be due at the same time as your income tax return for the year.

Interest Relief

Many benefit recipients didn’t plan for the tax effect of benefits received and will find they owe personal income tax on their 2020 income tax return which is normally payable by April 30, 2021.  Canada Revenue Agency (CRA) is providing interest relief until April 30, 2022, on your 2020 taxes owing if you received COVID-19 benefits in 2020; your 2020 taxable income is less than $75,000 and you filed your 2020 income tax return.

Please refer to information on the tax effect of COVID-19 benefits on CRA’s website at https://www.canada.ca/en/services/taxes/income-tax/personal-income-tax/covid19-taxes.html.

By Kathy Lenart – Insolvency Partner, Licensed Insolvency Trustee
CPA, CA, CIRP
Member and Secretary of the Ontario Association of Insolvency
and Restructuring Professionals (OAIRP)
Canadian Association of Insolvency and Restructuring Professionals (CAIRP)

The post I Received Government Benefits – Now What? appeared first on Fresh Start Now.

Steps to Create a Budget

The first step in creating a budget is to make a list of all income received. Most seniors are eligible to collect Old Age Security (OAS) benefits to a maximum monthly amount of $613.53 in 2020. The benefit is paid the second last banking day of the month, starting the month after a 65^th birthday. Many seniors are also eligible to receive Canada Pension Plan (CPP) benefits to a maximum monthly amount of $1,175.83.  The monthly benefit is based on how much and for how long you contributed to CPP, with the average monthly amount seniors received in 2020 being $710.41. CPP is usually received on the third last business day of the month. Seniors may also be eligible for the Guaranteed Income Supplement depending on the total amount of income claimed on the prior year’s tax return. The monthly supplement benefit maxes out at $916.38 per month. Most seniors will also be eligible for the Ontario Trillium Benefit, which will be paid once per year or on the 10^th day of each month. Ensure you are applying for all benefits that you may be eligible for to maximize your monthly income.

The next step in creating a budget is to make a list of all expenses incurred in a month. Fixed expenses like rent, insurance and utilities are easy to list. Track the amount you spend on food, gas, clothing, etc. For a couple of months, calculate the average monthly amount spent. Think of annual expenses like Christmas gifts and summer travel and divide the amount spent by twelve to determine your budget’s monthly amount. Seniors are eligible for the Ontario Drug Benefit Program the month after they turn 65, which hopefully covers most prescriptions and other medical expenses.

If your income exceeds your expenses, pay your fixed expenses via Pre-Authorized Payments or automatic transfers as soon as your income benefits are received. Request equal monthly billings from your electricity and gas providers. If you grocery shop weekly, divide your food budget into four and ensure you do not spend more than the weekly allotted amount. Some people find it easier to put the weekly amount in separate envelopes and only spend that amount each week.

If your expenses exceed your income and there is no ability to increase income, you must reduce your expenses. Contact your cable or telephone provider to see if you can reduce services to lower your monthly bill. Consider your “needs” (required necessities of life, such as a place to live and food) versus “wants” (new clothing, entertainment, etc.). Eliminate the wants. Plan your weekly meals and watch for sales and senior discounts. If you are really struggling, utilize your local food banks or Meals on Wheels to ensure you obtain the proper nutrition.

There are many resources available on the internet to develop a budget, and don’t be afraid to ask friends, family or a professional for help. Local not-for-profit credit counselling agencies (like https://www.cfshw.com) will work through a budget with you at minimal costs and have additional resources for seniors. Take the first step for a better financial future today.

By Kathy Lenart – Insolvency Partner, Licensed Insolvency Trustee
CPA, CA, CIRP
Member and Secretary of the Ontario Association of Insolvency and Restructuring Professionals (OAIRP)
Canadian Association of Insolvency and Restructuring Professionals (CAIRP)

The post Budgeting for Seniors Guide appeared first on Fresh Start Now.

Student loans provide a six-month non-repayment period once you complete your studies, although interest may be charged during this period.   There are many repayment options you can explore at https://www.canada.ca/en/services/benefits/education/student-aid/grants-loans/repay.html to find the repayment plan best for you.  Review and adjust your budget to ensure you can afford the monthly student loan repayment and make sure you are paying on time every month.

Creating Your Budget

If budgeting is new for you, start by keeping track of every dollar you spend for a couple of months, then create your budget with the following steps:

• Write down all sources of income and how often you will receive them:

Wages – weekly, bi-weekly, bi-monthly or monthly
Trillium benefits – monthly
GST cheques – quarterly

• Make a list of your expenses broken out by fixed monthly costs for student loan payment, rent, cell phone bills, insurance, etc. and fluctuating monthly costs for food, gas for your vehicle, clothing, etc.
• Allocate your fixed expenses to specific income sources (i.e. rent from a first bi-weekly paycheque, student loan payment from a second bi-weekly paycheque, etc.) You will want to ensure your fixed expenses are paid on time each month to build your credit rating.
• Write down an estimate of how much you plan to spend on your remaining monthly expenses. Be sure to consider annual expenses that you must budget for monthly (car sticker, gifts) so the funds are available when the amount becomes due.  Credit should not be used to fund expenses that you have not budgeted.
• If your monthly income exceeds your total expenses, consider how much you want to put aside for savings for future financial goals, if you want to pay off your student loan quicker or if you will allow yourself to increase some discretionary expenses.
• If your expenses exceed your income, re-evaluate if you can decrease any expenses or need to increase your income (part-time employment, small jobs, etc.). Consider the difference between your “needs” that are necessities and your “wants” and adjust your plans to spend.
• Keep track of your expenses every month and compare to your budgeted amounts and make changes as necessary.

If you are struggling or unable to make your student loan payments, the Repayment Assistance Plan may provide you relief.  Eligibility for the plan is dependent on your income and can be researched at https://www.canada.ca/en/services/benefits/education/student-aid/grants-loans/repay/assistance/rap.html.

By Kathy Lenart – Insolvency Partner, Licensed Insolvency Trustee
CPA, CA, CIRP
Member and Secretary of the Ontario Association of Insolvency and Restructuring Professionals (OAIRP)
Canadian Association of Insolvency and Restructuring Professionals (CAIRP)

The post How to Budget While Repaying a Student Loan appeared first on Fresh Start Now.

Starting to create a budget is the hardest part, so here are a few tips to get you going:

• Make a listing of all sources of income the family receives monthly (wages, pension, Ontario Works, child tax benefit, etc.). Keep in mind that if you get paid bi-weekly, you will receive an extra paycheque two times a year. You may want to allocate paying periodic expenses (i.e. insurance, clothing) with these extra paycheques.
• Make a list of additional sources of income that are received periodically (i.e. quarterly GST cheques).
• Make a list of your expenses broken down by categories that make sense for you. A couple of categories may include:
  • Housing – mortgage payment, property taxes, rent, and utilities
  • Living – food, laundry, grooming, and clothing
  • Personal – entertainment, gifts, and donations
  • Transportation – car payments, gas, repairs and maintenance, and public transportation
    Write down the best estimate of how much you spend on each item.
• If your expenses exceed your income, re-evaluate if you can decrease any expenses or need to increase your income (part-time employment, small jobs, etc.). Consider the difference between “needs” that are necessities and “wants” which are a desire and adjust your plans to spend.
• If your income exceeds your expenses, then consider how much you want to put aside for savings for future financial goals or if you will allow yourself to increase some discretionary expenses (i.e. entertainment).
• Keep track of every penny you spend for a couple of months to compare to your estimates above. You may find you spend significantly more or less on several of the expenses.
• Re-evaluate the budget you created and make necessary adjustments to meet your family’s goals.

There are many great resources available to guide you through preparing a budget.  Take a look under the Resources tab of our website at www.freshstartnow.ca for budgeting tools, or the Office of the Superintendent of Bankruptcy provides templates and videos on preparing a budget at https://www.ic.gc.ca/eic/site/bsf-osb.nsf/vwapj/Insolvency-Counselling-Program-02-Budgeting-Module.pdf/$file/Insolvency-Counselling-Program-02-Budgeting-Module.pdf.

If you are really struggling to prepare a budget on your own, contact a local not for profit credit counselling agency (like Catholic Family Services at  https://creditcounsellingcanada.ca/locations/credit-canada-debt-solutions-st-catharines/ ) for assistance.

By Kathy Lenart – Insolvency Partner, Licensed Insolvency Trustee
CPA, CA, CIRP
Member and Secretary of the Ontario Association of Insolvency and Restructuring Professionals (OAIRP)
Canadian Association of Insolvency and Restructuring Professionals (CAIRP)

The post Tips on How to Create a Family Budget appeared first on Fresh Start Now.