Debt Free In 30

On today’s podcast we explain how, even though your house may have increased in value, if you don’t have enough cash to meet your monthly expenses, you are house rich but cash poor. We give four tips to avoid being house poor.  The most important tip: decide what kind of life you want, and use that decision to decide on the house you really need.

Every year, the focus of the holiday season is on consumerism and the need to spend money on the perfect gifts, the perfect decorations and creating the perfect dinner. And every year, Canadians end up spending too much money, putting them at risk for financial difficulties once the holiday season is over. On today's show we rebroadcast a podcast from 2015 where my guest is Heather Cudmore, who at the time was the manager of Credit Counselling at Carizon Family Services in Kitchener, and is now a credit counsellor in the Hoyes Michalos London office. Heather has lots of great advice on how to make a memorable Christmas, without spending a lot of money.

Should you ever loan money to family and friends? It’s a tough question. Some of you might say, “sure, why not?” And others might think, “Maybe just to family.” Well, if you do decide to loan money, I’d recommend asking yourself this question: Do I have to borrow money to do it? If you do have to borrow to help, you shouldn’t loan money… even if it’s to family and even if they say they’ll pay you back. Now I realize that sounds harsh, but it’s in your best interest to not get yourself into financial trouble. On today’s show I discuss why you should never loan money to family and friends, and I explain how you should help them if they are in need.

On today's show, I review 10 personal finance books that would make great gifts and/or would be a great start to your own personal finance library. All 10 books are listed below, with the time stamp from the podcast, if you wish to jump ahead and listen to my comments on a particular book: General Money Management The Wealthy Barber Returns by David Chilton (2:35) Wealthing Like Rabbits by Robert Brown (3:20) 397 Ways to Save Money by Kerry K. Taylor (9:40) Stop Over-Thinking Your Money by Preet Banerjee (11:06) Debt-Free Forever by Gail Vaz-Oxlade (11:54) Protecting Your Money – A Guide to Identity Theft and Fraud by Kelley Keehn (14:24) Real Estate When the Bubble Bursts by Hilliard Macbeth (19:32) Burn Your Mortgage by Sean Cooper (23:26) Retirement Victory Lap Retirement by Jonathan Chevreau and Mike Drak (27:19) Thinking Thinking, Fast and Slow by Daniel Kahneman (28:48) Of course, I am also quite proud of my own book, Straight Talk on Your Money, which I discuss briefly at the end of the show

Have you ever wondered why a credit card isn’t called a debt card like it should be? Think about it. That’s what a credit card really does – it gives you debt. Well, I’ll tell you why. Because it’s not good marketing. And credit card companies know this. In Myth 4 of my book, Straight Talk on your Money, I point out that financial institutions know we are guided by our emotions. Banks and credit card companies have manipulated you into thinking that credit is good, and they do it constantly. Credit can also be used to describe a source of pride or honour like, 'you are a credit to your family.' Here's another example: "I'm a good person because I have a high credit score." How many times has been idea been shared? That maintaining a good credit score means you're responsible with your money and you're not a reckless spender. I disagree. Although my focus today isn't on credit scores - I already discussed that on my podcast a couple weeks back, episode 167 - I will say that a credit score, which should (once a

On today’s show we discuss the different forms of income that can be garnisheed (or not).  Here are the types of income, with the time stamp if you want to fast forward to that section: Wages – 3:21 Ontario Works – 8:31 Disability Pension – 9:58 ODSP – 10:00 Retirement Pensions – CPP – 12:36 OAS – 13:35 Basic Income – 19:19 Full links to all legislation mentioned in the show are on our website at https://www.hoyes.com/blog/wage-garnishments-what-income-can-be-garnisheed/

How important is your credit score?  In my book, Straight Talk on Your Money, on page 48 I discuss the “Credit Score Scam”, and on page 52 I say that you should not focus on your credit score.  (Apparently I’m not a fan of credit scores).  It was those passages from the book that prompted Ross Taylor, a mortgage broker, to email me and say: I noticed when reading your book we do not completely agree on the importance of one’s personal credit history. I emailed Ross back and said “great, come on the podcast and let’s discuss it!”, and that’s exactly what we do on today’s show. My view is that credit scores are for the benefit of the bank, not you.  I explained this in a past post Why our credit reporting system is broken. Credit scores are a tool to help a lender decide how much money to lend you.  A person who has never borrowed money but has $1 million in the bank may not even have a credit score.  A person who has five credit cards and owes money on each of them may have a high credit score, because they ar

November is financial literacy month in Canada, and for the seventh straight year the government will encourage Canadians to: take concrete actions to better manage their money and debt, including making a budget, having a savings plan and understanding their financial rights and responsibilities. So, the solution to all of our financial problems is to make a budget. I disagree. In my experience, budget’s don’t work for most people, because they don’t stick to them. They get discouraged, and they end up worse off than before. I've talked a lot about what I believe is a better alternative to budgeting, and on today’s show I’ll give a better alternative to how we are currently promoting financial literacy.

Registered Disabilities Savings Plans are geared towards helping families and individuals who are living with a disability. RDSPs can only be setup for someone who is eligible to receive the Disability Tax Credit. If this is for your child, you can only begin making contributions after your child is diagnosed with an eligible disability. This is one of the main reasons RDSPs aren't as commonly used, or as frequently discussed. On this week's podcast we're welcoming back Alan Whitton, the voice behind the Canadian Personal Finance blog. This is a subject close to Alan as he and his wife found themselves having to set up an RDSP for their son. After familiarizing themselves with the ins and outs of the Disability Tax Credit, they sought help from their doctor to obtain it. On today’s show we discuss how they work, who is eligible, and what happens if you have an RDSP and file bankruptcy.

Everyone thinks that a house provides both stability and financial security, but on today's show, we'll explain why that is not always the case. It is true that if you live in the same home for many years, you have stability. But there are significant costs to owning a house. You pay real estate commissions when you move, but you also pay a penalty to break a fixed mortgage. As we explain on today's show, the penalty for breaking your mortgage can be a lot higher than you expect. The big banks have found a loophole that allows them to charge a bit Interest Rate Differential penalty, even when rates are rising, and if house prices are not increasing, the penalty to break your mortgage and closing costs can eliminate the profit on your house. Before you buy a house and sign up for a five year mortgage, be sure that you are not likely to need to move for five years, and confirm that you can afford to pay all of the costs of living in your house (since costs are more than just a mortgage payment).

In some cases it is your fault, if your debt was a result of reckless spending but, in my experience, most people get into trouble because "life happens". Many of my clients have debt problems caused by a job loss, or reduced income, or a life event like a relationship break-down or a medical condition that forces them to take time off work. On today's show we hear the story of Mary, how has debt problems. I'll leave it to you, the listener, to decide if her problems are her fault, or if there was anything she could have done to prevent her money problems.

There are recent interest rate increases from the Bank of Canada that will affect many Canadians. But the question of the day is: Do you know how a 1% interest increase will affect your budget? Today's guest is here to discuss just that. Brent Hughes and his team discovered that there are two times throughout the life cycle of a mortgage that people receive professional advice: the beginning, and the end. His company Monitor my Mortgage helps give people the information they need to make the right choices between years 1 and 30.

On today's show, I discuss the news that data from Equifax was "hacked". It appears that "only" 100,000 Canadians were impacted, but even if your data was not impacted by this event, it's a good wake-up call for all of us: So how can you protect yourself? My full comments are in my post on Equifax Data Hack: Insolvency Trustee Gives Advice on How to Protect Yourself but here's an important point: your data is already out there; you can't pull it back. If you have ever applied for credit, you have a credit file, even if you have paid off all of your debts. That means your data is vulnerable, so it's up to you to keep an eye on your data. At a minimum, review all of your credit card, bank and loan statements regularly; don't wait until the end of the month. I check my statements online every few days. If you see a problem, report it immediately. More advice on today's show.

For more than a decade the "go to" source for Canadian personal finance information has been the Canadian Personal Finance Blog operated by Alan Whitton, more commonly known as the Big Cajun Man (listen to the show to find out where that name came from; having met him to record this podcast, I can confirm that he is a big guy). The Big Cajun man has accumulated the best resources on the internet on RDSPs, so next month he'll be back to do a full show just on that topic.  On today's show we addressed a very common issue: What can you do when you lose your job? Alan worked for the biggest company in Canada, Nortel, for 20 years, and he survived many rounds of layoffs until, at age 47, he was laid off.  Even though everyone knew the company was in trouble, layoffs are almost always a shock.  The Big Cajun Man tells us what it was like to live through that time, with a wife and four kids, and he explains how he survived 11 months of unemployment before starting a new career. On today’s podcast he gives practical

Over the years I have had hundreds of clients who financed a house, or a car that ended up being more expensive than they could afford, and that one purchase caused other debt problems. When I ask them why they made that purchase, even though in hindsight it was obviously more than they could afford, they give me many rational reasons. They tell me the mortgage payments were cheaper than rent, or they financed a new car covered by a warranty to avoid car repair costs. Humans Can Be Irrational Those are rational reasons, but when I ask more questions it becomes apparent that they bought the house for emotional, not rational reasons. They were afraid house prices would keep going up, so they bought now, or all of their friends were buying, so they did too. On today's show I discuss how our emotions can cause us to make bad financial decisions, even when we don't realize we are being influenced by our emotions.

Student loan debt is a massive problem in Canada.  The average student loan debt resulting from a four year degree program is over $26,000, and a student could end up paying more than $10,000 in interest before the loan is repaid. A government guaranteed student loan is only discharged in a bankruptcy if you have ceased to be a student for over seven years at the time you file bankruptcy. So it is very sad that 15% of our clients still have student loans at the time they file with us, meaning they've been trying to pay that back for seven years already. Even worse, the burden of student loans are disproportionately felt by women. On today’s show we discuss the problem, and propose some solutions for both society and individual students.

Welcome to the first show of Debt Free in 30 Season #4. I know this isn't a TV show, and you're not supposed to have "seasons" on a podcast, but I think seasons are a good way to organize what we do here on Debt Free in 30. As I discuss on today's shorter-than-usual show, we will continue to have great guests discussing personal finance and debt issues. But this season I also plan to delve deeper into the debt issues that impact society. Next week we'll discuss whether or not student loan debt is sustainable, and I'll give my thoughts on possible solutions. We have many great shows planned, so welcome to Season #4.

The book is called Straight Talk on Your Money – The Biggest Financial Myths and Mistakes…and How to Avoid Them. I wrote the book because based on my 30 years as a professional accountant, and after personally meeting with over 10,000 people, I believe there is not enough straight talk about money.  There are lots of sales pitches, but that’s not what we need. On today’s show I explain why I wrote the book, how you can get a copy, and why I think all experts are biased, and how you can make better financial decisions. Full details at www.StraightTalkMoney.ca  

For our final rebroadcast of the summer, we are rebroadcasting our most downloaded show from the past year.  Sean Cooper returns to the podcast today to talk about his new book, Burn Your Mortgage, to be published on March 1, 2017.  Sean worked up to 80 hours a week for many years to save for a down payment, and then he managed to pay off his mortgage in less than four years.  He held a mortgage burning party that was covered by the CBC, and that's where the fun began.   Some people applauded his frugal lifestyle, but others said that it's not realistic to work that hard just to pay off a mortgage quicker, earning him a lot of online haters, which is where I got involved in the story when I was interviewed by the CBC in a follow up article. I believe that some of Sean's strategies will work for some people; the key is to listen to his ideas and apply what you are able to do, given your financial situation.  As Sean Cooper says, the starting point is: “Setting a goal, because for so many people what keeps them

This is a special rebroadcast of one of our most downloaded shows: it’s my father-in-law, telling me how he retired at age 48, and has now been retired for longer than he worked at his job!  If you are like most Canadians, you dream of a long and enjoyable retirement. Is it possible to retire early and achieve that by the age of 48?  While it is an anomaly, my guest today did just that. Bob Lassaline worked for 30 years and retired when he was 48 years old. He is 80 years old today, so he has been officially retired for longer than he was employed. How did he do it? Full details are in the podcast.