Cost of transit: Metro Transit adult pass: 70 per month=$840 annually

Cost of Owing a Vehicle:

Average car payment: $450 per month =$5,400 annually

Average MacPass cost: $1.40 per day x 5 days a week x52 weeks =$364 annually

Average Auto Insurance: $1,200 annually

Average Monthly Parking Downtown: $140 monthly =$1680 annually

Average Cost of Repairs: $1,200 annually

Average price of Gas: $90 week x52 weeks= $4,680 annually

Total Average Cost to maintain a vehicle annually: $14,524

Vehicle costs such as gas, insurance and bridge passes are continuously rising while wages remain relatively unchanged. The cost benefit of using public transit allows many consumers to redirect those proceeds to pay a mortgage on a home they could otherwise not afford or pay for a child’s university education or afford other lifestyle choices. For many Metro residents, however, it simply allows them to live within their means without incurring debt to supplement their income.

There are many of us who truly need a vehicle as condition of our employment. For those that do not, perhaps they should pause and consider if the vehicle is truly a need or simply another desire. And if a want, what would you do with the annual savings of $13,684 by taking the bus? Can we afford not to take advantage of the savings?

With recent studies reporting Canadians spending $1.50 of every dollar earned, the face of bankruptcy is also changing. Let’s call them the “working poor”. The face of bankruptcy today is your neighbour, your co-worker, your child’s teacher, the hospital nurse, even the bank employee. The list goes on and on. Debt affects everyone nowadays. We are quick to criticize people who seek bankruptcy protection, however, often the true causes of bankruptcy have nothing to do with over-spending or poor money management. Illness, marital breakdown, a series of unfortunate events, reduced household income as a result of the death of a spouse, cessation of child support, or even temporary job loss can cause a person who has been living just at their threshold to get behind the eight ball enough that they never recover.

Most individuals have already been to their banks requesting a consolidation of their debts and have been turned away for a multitude of reasons, such as debt-ratio being too high, seasonal income, no co-signers or poor credit score. Many consumers resort to high-interest payday loan companies to bridge the gap.

The federal Bankruptcy & Insolvency Act affords an honest but unfortunate insolvent individual protection from creditors. Granted, there are always a few bad apples that spoil the bunch, but very few people WANT to file for bankruptcy. It is usually out of necessity.

The fact that someone recognizes a debt problem and seeks assistance for their financial circumstances should not been seen as a sign of weakness but rather a sign of strength. It takes a much bigger person to admit to a debt problem rather than hide from it.

If you take my challenge, as so many of my transitioning debtors have done, I can promise you many things will happen.

You will notice patterns immerging. You buy a morning coffee on your way to work. You stop on the way home to pick up take out because you are tired. It’s easier to give the kids money for what they desire then argue about if they really need it.

You start to pay attention to your spending. Imagine someone stole $100 from your wallet. You would be upset and would want justice. Now imagine you take out $100 from an ATM on Saturday morning and head to the Farmers Market. Within one hour, poof, the money disappears but you have no sense of remorse or unjust feelings as it was your choice. Writing down purchases makes the spending real. We see it, we believe it. We acknowledge it and are either angered by our decision to spend or satisfied with our choice.

You begin to question needs vs wants. Life is expensive and most of what we desire in life is also expensive. Pausing for a moment to write down purchases makes us take the time to self-analyse and determine if the purchase really matters to us or can we let it go and still be happy.
You challenge yourself. After noticing that you spend daily, you play a game with yourself. You begin to see if you can go one day without spending anything or perhaps even two. You recognize your spending behaviour and try to modify it.

You value the dollars you earn. I love the slogan `you are richer than you think`. Saving for what really matters can happen even on a modest income if you pay attention and make even the simplest of daily choices.
I`ll let you in on a little secret about how to save money. SPEND LESS. It`s that simple.

Organize: If you are like most, you have a place to “dump” documents or papers that rarely gets updated or cleared out. It could be a drawer in your desk or a box in the closet or a messy filing cabinet. There are so many documents that we need to keep and keeping them organized can be a chore. Don’t wait until Spring to spring clean. Set time aside and sort through those papers. Find the most recent statements for investments, utilities, life policies, bank account statements, tax returns, loan documents including mortgages, car loans and leases. Gather and sort the information into categories. If you don’t already have an accordian file folder, I suggest you run out and buy one. It’s a must to house all important documents. A file drawer or even a box can work if properly separated with file folders. Label each folder, file alphabetically and tuck them away neatly in one location. Do not be a hoarder. Shred old unnecessary documents.

Analyze: Take the time to review and understand all statements. Know the balance of current liabilities and determine when loans will be completed on current repayment arrangements. Review all investments to determine if your portfolio is meeting your expectations. Are you sufficiently insured or over insured? Do your research. It is your money and no one should care more about it than you!

Prioritize: According to a recent poll conducted for the CIBC, 23% of Atlantic Canadians are making paying down debt their # 1 financial priority for 2012. So what’s your financial goal this year? Will this be the year to pay off your car loan or credit card debt? Come up with the down payment for that new home? Start retirement savings or university education funds for the kids? Stay focused. Set one goal at a time. Be clear on your objectives.
Strategize: Consider opportunity costs. Forgoing that vacation in February may be necessary if your goal is to make an annual lump sum mortgage payment or maximize your RRSP contributions. Create a spending plan (budget) and stick to it.

Energize: Celebrate each small financial goal. Be proud of yourself. Everyday is our life in miniature. All too often we are so focused on the final result that we don’t appreciate each tiny change we make along the way to achieve our end goal.

Realize: As kids we fell down. Bruised and a bit worse for wear, we got up and carried on. As adults we need to realize we are no different. We are not perfect and we will make mistakes. It is never too late to fix what is broken but it will not repair itself on its own.

It doesn’t matter what happened yesterday, it’s what we do today that counts.

Like a boy scout, being prepared is the key to successfully maneuvering through the crowds and uncovering the real deals.

Prioritize your shopping: Make a list of the must have’s and only shop for those items. Do not browse. Grabbing items you don’t need leads to overspending. Avoid the chaos by not getting distracted.

Do your Research: Study flyers days prior to determine exactly what you want. Know your products and prices. Retailers are smart. They stock similar products side by side and hope that we as consumer get confused and end up buying a different and sometimes more expensive item. Beware of imitations.

Cash vs Credit: I have always found that cash line ups on Boxing Day are the shortest as opposed to those paying by debit or credit. Also, cash allows you to stay within a reasonable budget. When the cash is gone, time to go home. That being said, credit allows you a 30 day grace period to pay for the items you purchase and collect reward points. However, be aware of your spending limit. You certainly do not want to add an additional 20% (due to interest charges) to your purchases if you cannot pay the credit card in full when it comes due.

Start Early: They don’t say “the early bird gets the worm” for no reason. Some of the best deals and often the most popular sizes disappear within the first few hours of a store opening.

Shop Smart: Don’t waste money (and critical time) on food and drinks at the food court. Eat a big breakfast and hydrate.

Avoid Impulse Shopping : Many sales on Boxing Day are final sales and cannot be returned or exchanged. Don’t convince yourself that the pair of shoes on sale will stretch and eventually fit. You may get stuck with something that you should never have bought in the first place. Remember it may be on sale but it’s not free.

Consider the Year Ahead: This may be a perfect time to find items for upcoming birthdays, anniversaries and even baby showers.

Boxing Week vs Boxing Day: While the hot ticket items may be gone within the first few hours of Boxing Day, retail sales often extend into the week between Christmas and New Years. Pace yourself.

Shop On-Line: Hate the crowds but love the deals? Shopping on-line allows you the ability to stay in your pj’s and still find that special something on sale.

Most importantly, enjoy yourself. Relish in that discounted purchase and don’t forget to embellish to friends how early you got up to get that deal!

Growing up in Dartmouth, we didn’t always get everything we wanted under the tree but the one thing that my parents did have was creativity. If they couldn’t give us what we desired at the very least they could trick us into thinking what we were going to get was something amazing.  Case in point:

One year I begged my parents for a new pair of skis. I set them up months in advance to know exactly what pair I wanted. Christmas Eve came and there, leaning on the wall behind the tree, was a tall lean present about 150cm tall as specified by moi. When the flag was waved to allow us kids to open what we wanted, I sauntered over to that present and did one of those “wonder what this is?” and ripped away. But to my surprise what I found was my OLD pair of skis wrapped up and my parents in unision shouting “fooled you”.  Cruel, I know. Oh yeah, and I never did get that new pair of skis but what I did get was a great memory.

Years passed and there was always a hockey stick wrapped up but the gift was taped to the blade or a big box that contained a rock and a note saying “look under your bed  for the present” which sent me on a wild goose chase.  I continued the tradition with my own children and they know that what appears to be one thing can turn out to be quite the opposite.  The gift, while appreciated, is less important than the experience that precedes it.  Each year the wrapping gets more outrageous and we laugh and reflect on those treasured family moments of the past. The gift has long been forgotten but not its presentation.

Unless you are getting an engagement ring for Christmas, that teeny tiny box under the tree can be a bit of a downer. With Christmas, size does matter. I encourage everyone to get the biggest box you can, load it with crumbled up paper and some really off the wall objects like a bag of marbles or a tambourine and then throw in your gift. The expression alone when the person opens it will be priceless.

Many of the things that we desire in life are expensive. But the truth is that the things that really satisfy us are totally free-love and laughter.  The fun of Christmas existed long before technology. We should always strive to make Christmas less about the dollar value of gift giving and more about the experience and the memories that it invokes.

I wish you all a wonderful Christmas and here’s hoping I finally get those skis this year!

Effective holiday planning takes time. This late in the game, it’s all about managing the funds you have to play with or managing the smart use of debt to buy those items.

Creditors make credit available at a premium. They help us get what we need or want, but they’re in it for a profit. Sure, charging gifts on credit cards allows a financially savvy individual to take advantage of creditors money to fund their purchases while allowing them to budget into the future to pay the balance in full. You might also use credit to earn points for future travel or gifts. However, accumulating interest charges means the final cost of gifts increases quickly if the balance is not paid in full by the due date. For example, if you carry a balance of $2,300 on your 19.5% annual interest Mastercard and your intent is to make only the minimum monthly repayment payments, it will take you over 45 years to pay it off! Ouch.

My friend had the right approach:

-Review normal monthly expenses and pay these as a priority;

-Determine an overall limit available for holiday spending;

-Consider all holiday expenses including gifts to teachers, “secret santa” office gifts, party hostess gifts, wrapping paper, stocking stuffers, increased groceries costs and alcohol;

-Make a gift list with the type of gift next to each name and an estimated price, then cross it off when the gift has been purchased.

-Keep your receipts and get gift receipts for gifts. Your taste may differ from someone else’s and a gift receipt allows the recipient to return the item for something they actually want;

-Avoid impulse purchases by leaving your credit card at home and paying cash;

-If you intend to use credit to make purchases, do your homework. Use the lowest interest credit card or your line of credit, especially if you believe you will not be able to pay the entire balance at the end of the billing cycle.

-Be creative and whimsical! Challenge your spouse to spend no more than a certain amount but agree that at least 2 gifts must be purchased for each other;

-Give the gift of time. Offer to babysit for a friend or cook them a dinner;

-Give a donation to a charity or sponsor a child in the name of several people.

Most importantly, keep it all in perspective. Make the holidays about giving and not about the actual gift. The people you care about probably already know how you feel and the gift, while appreciated, may be long forgotten by Easter.

In the end, I contacted my bank, cancelled the cheque and rewrote another. Yes, rewrote another cheque. I’m still old school. Who knows where that original cheque ended up? All I know is for a month I felt like I did something wrong when I didn’t. Felt like I was running from the calls, which I wasn’t. And had to explain my actions to a company I had faithfully paid for years except one time when the cheque was late. I can only imagine the stress of dealing with creditors day in and day out for months at a time when a bill couldn’t get paid because you don’t have the money. It made me view this situation in a whole new light.

On another note: I cancelled my Rogers account the next day.

There is no time to wait. Financially planning for this blessed event should take place no matter what your budget. This allows you time to organize who is on your “good” list and who to eliminate to your “naughty” list. Keeping in mind that most Canadians are living well beyond their paychecks I’m willing to bet most family members would probably welcome the ability to save money. Consider drawing family names from a hat or limiting gift giving to children only.

Prepare a set amount for each person on your list and stick to it. The trick here is to stop buying once you have reached the limit. This can be especially challenging if you buy early as we are often tempted to continue buying right up to December 24. Did I buy a gift for that person yet? Make a list and check people off twice when you are finished.

Consider all Christmas expenses not just presents. Don’t forget there is wrapping paper, ribbons, bows, Christmas dinner and even alcohol. These extra expenses can really add up. It’s all about choices. Perhaps having turkey on the table means more to you than an expensive bottle of wine.

For more helpful Christmas hints, please visit my November 2009 blog:   http://mydebtsolution.net/2009/11/

Several days passed and I asked him if he had changed his mind and bought a new phone. Instead I was told he was researching his options. Calculated in his approach, he said he considered purchasing a new iphone 3 or 4 but it was going to cost him upwards of $700 for a no-contract phone without tax. He checked on Kijiji and Ebay and found he could buy a used iphone for about $250. Several days later, upon visiting him (instead of having the luxury of calling him on a phone) I pressed the issue again. When would he get back to the real world and get a phone? His final option was to visit a company in Halifax that repairs iphones and a replacement screen cost him only $79!

This whole experienced got me to thinking about needs vs wants. While most of us may want a new iphone 4s or the latest tech gadget, perhaps a repair is all we really need.

Unfortunately, I had to put the same thought process to use about a week later when my ipad crashed to the floor and I heard the dreaded words “Mom, come here”. Turns out the same repair place fixes ipads, too, at a fraction of the cost of buying a new one.