The reason for budgeting is to help you spend less than you earn. It shows you where your spending weaknesses are and provides the structure for you to get stronger in those areas.

2. Have a specific, concrete long term goal in mind.
For many people, it’s debt freedom. For others, it might be saving for a house or for the ability to make a career change. Whatever it is, having a big long term goal in mind, particularly something that would have a big impact on your life, is useful when planning a budget.

Why? An effective budget is likely going to involve a few difficult choices. You’ll likely be agreeing to cut your entertainment spending and probably planning to do a few other things that on the surface seem like they’ll reduce the quality of your life a little. Knowing that these little choices are in fact adding up to something specific and tangible – and something that you really want – makes the process much more palatable.

3. Know how much you actually make.
The correct answer here is not just your annual salary, nor is it dividing your annual salary into twelve parts for a monthly budget. Instead, you should be basing your budget on your take-home pay per month.

If you make $48,000 a year as a salary, you’re likely knocking off somewhere around $8,000 in income taxes, and likely much more than that when you look at other work benefits and costs you’re paying up front for them, like health insurance. Because of that, using $4,000 a month as the basis for your budget simply isn’t correct – the correct number is likely much closer to $3,000, and possibly below that.

Make sure you know exactly what you’re bringing home as a paycheck, because that’s the number you’ll use as the framework when you budget.

4. Have some accurate data when it comes to your spending, both monthly and irregularly.
Similarly, when you go to plan a budget, it works best if you plan it based on real numbers. This means pulling out your bills and your receipts for the last month or two – all of them – and figuring out what you’re actually spending. Your first “budget” shouldn’t actually be a budget at all – it should instead reflect your spending in an average month.

Don’t forget the irregular bills, either, like homeowners’ insurance, car licenses, auto insurance, property taxes, and so on. These bills shouldn’t be “unexpected surprises” – instead, you should be planning for them throughout the year by socking away a little each month for them.

5. Have checking and savings accounts that have useful budgeting tools incorporated by default.
Does your bank offer automatic transfers from your checking account to your savings account ? Does your bank offer online bill pay? The answer to both of these should be yes.

Now, does your bank charge you maintenance fees on your account? Do you have to pay a lot of ATM fees? The answer should be no.

In short, if your bank is doing these things, they’re actively working against you in terms of making a successful budget work. Many banks offer these features – online bill pay, automatic transfers, no ATM fees, no maintenance fees, and often a nice interest rate to boot.

6. Have a simple budgeting tool that you understand how to use – start with pencil and paper if you have to.
If you’re starting off by sitting down with Quicken or Microsoft Money and you’re quickly overwhelmed by the complexity of the software and the huge number of options available, it’s going to be a lot harder to convince yourself to keep going with this. Your first budget should be incredibly easy to use and manage – and you should understand it from the inside out.

That’s why the best bet is usually to use pencil and paper for your first budget.

That’s not to say that Quicken or Microsoft Money aren’t great options – they are. The problem is that they offer so many options that it can often overwhelm the new user, and if you’re overwhelmed, you’re quite likely to just give up because “budgeting is too complicated.” Don’t let that happen – start with simple tools, then move to more complex ones if you feel a need.

7. Be realistic.
Budgeting is like diet planning – it’s not going to work if you make huge, unrealistic assumptions right off the bat. If you’re trying to diet, moving to a lettuce and tofu diet might work for a few days, but eventually you’ll crack. A much better solution is to be realistic – instead of drinking a sugar and fat-heavy coffee in the morning, cut down to a low fat version, and instead of eating a double cheeseburger for lunch, bring your own cold cut sandwich. Small steps work; big steps result in failure.

The same rule applies to budgeting. Don’t pledge to reduce your entertainment spending by 80% – it won’t work over the long haul. Instead, just average out what you’ve spent on entertainment for the last few months, and pledge to a cap of just 5 or 10% below that average. Then, after some time and some success, trim it a bit more. Going whole hog right off the bat will almost always end in failure over the long run.

When you have the Knowledge but not the Experience

Firstly, congratulations for completing your education goals!  You deserve applause!  But unfortunately, your hard work is not over.  You need to find employment in a very difficult job market.  Confidence and charisma is key, but a few job search tips doesn’t hurt either.

• A resume that stands out from the others is key!  Don’t make it too flashy or crazy, but make it interesting enough to catch the reader’s eye. Make them want to learn more about you. Tailor each resume to fit that job description. Highlight your best points on the cover letter.  What can YOU offer them?  How can you make their company better?
• If your work experience is brief or non-existent, play up your volunteer or internship positions, talk about your best education experiences, any awards you may have received, or professional memberships.
• Use references that will talk highly about you.  If you don’t have work experience, ask someone who chairs on an organizational committee, or a professor that knows your highlights. A volunteer coordinator who may have been impressed by your initiative.
• Research the company thoroughly. Who are their customers?  How can you attract more business?  Think about how you will fit into the organization. Know their products or services enough that you can talk about them with ease.  This will really impress the interviewer.
• Be ready for interview questions about yourself and how you would react in certain situations.  While researching the company, think about the work scenarios and how you would react.
• Don’t neglect your school’s career department to get tips on where to look for employment.  Talk to your professors.  They have a wealth of knowledge and experience.
• Clean up your social media presence.  Join Linked In.
• If there’s a job you really want, don’t be too shy to deliver your resume in person.  Ask for the hiring supervisor, dress professional, shake hands, and look them in the eye.  Make it so they will remember you.
• Keep your skills current while looking for work.  Volunteer at an organization that compliments your professional career. Make friends with the supervisor and get all the tips you can from those working in the field.

Interest
Interest, sometimes called the annual percentage rate, is the fee paid for borrowing money. Conversely, if you were lending the money, that fee/interest compensates you for giving up the ability to spend that money today

Credit Card Debt- Discover the Benefit of Increasing Your Payments
Let’s say John and Jane both have $2,000 debt on their credit cards, which require a minimum payment of 3%, or $10, whichever is higher. Both are strapped for cash, but Jane manages to pay an extra $10 on top of her minimum monthly payments. John pays only the minimum.

Each month John and Jane are charged a 20% annual interest on their cards’ outstanding balances. So, when John and Jane make payments, part of those payments go to paying interest and part go to the principal.

Here is the breakdown of the numbers for the first month of John’s credit card debt:

Principal: $2,000

• Interest: $33.33 ($2,000 x (1+20%/12))
• Payment: $60 (3% of remaining balance)
• Principal Repayment: $26.67
• Remaining Balance: $1,973.33 ($2,000 – $26.67)

These calculations are done every month until the credit card debt is paid off.

In the end, John pays $4,240 in total over 15 years to absolve the $2,000 in credit card debt. The interest that John pays over the 15 years totals $2,240, higher than the original credit card debt.

Does this make sense?   Please call Melanie about further information on credit cards at 416-663-2733 Ext.250

A lot of people have been asking me information in regards to their renting situation.  Here is the answer to a few of those questions. Everything below is a quote from the Residential Tenancies Act.

For further information contact the Tenants Hotline (416-921-9494)

 You Have a Right to Privacy

A landlord must give you 24 hours’ notice to enter your residence unless there is an emergency.

Your Deposit

A landlord may ask for rent deposit. A landlord is not allowed to ask for deposit on things like damage security, or if you have children or pets. Neither a landlord nor a tenancy agreement requires a tenant to provide post-dated cheques or set up automatic pay.  It is up to the renter to decide how he/she wants to pay rent each month.

Rent Increases

• Allowed only once every 12 months
• Must give 90 days’ written notice
• Increase guideline is currently 3.1%
• If the rent increase is above the guideline, it may be acceptable if a lot of money was spent on building (windows, new balcony, better security, ect.)  But then the landlord needs to make a report to Tenancy Act.
• Landlord may ask for rent increase because of “air-conditioning” But if it’s not in the lease, you do not have to pay.

Much Needed Maintenance

• To get maintenance, write a letter and take a picture of problem.
• Collect proof, keep a log (date, time, what happened)
• If the landlord doesn’t do it, call the city at 311. It could be in regards to property standards, such as heat or broken fridge or may be a public issue, such as bed bugs, mold.
• If the city is called, the city will issue work order to landlord
• When the city comes, they will be expensive plus they will be taking notes on other things to be fixed in the property
• If landlord is not doing anything about bedbugs, he can be fined up to $50,000.  Tenants may be fined up to $5,000 if they don’t do anything about their bedbugs
• If a tenant breaks something, you legally have to pay for it.
• From Sept.15 to May 31^st, temperature must be a minimum 21 degrees.  If not, call 311

Rules of Eviction

• Pay rent on time
• Do not damage the apartment
• Do not bother neighbors
• Do not commit an illegal act

Process of Eviction (there is a lot of help and support with The Tenant Hotline)

• Notice of eviction is a warning letter, written in an official format (E.g. Pay rent 7 to 14 days if you want to avoid action)
• Hearing at the Landlord Tenancy Board.  Client must show up.  Takes 2 weeks to a month.  If eviction order is given, tenant has to vacate in 11 days. Costs the tenant $170.
• Sherif is appointed by a judge and is allowed to change locks.  This may cost tenant $350.00.  Has 72 hours to vacate.

Terminating Your Tenancy

• 1 year lease.  60 days in writing before the lease ends
• Month to month. 60 days before you leave

This is a short synopsis of my understanding of the Residential Tenancies Act in relation to the questions asked to me by participants in the FAPS program.

For further information contact the Tenants Hotline (416-921-9494).

People think negatively about credit cards, but they can be an incredible useful financial tool, if used correctly.

Many cards provide travel insurance, identity protection, reward points, cash-back, and more. If you carry a balance, your number one goal should be to get the lowest interest-rate possible. If you make monthly payments, then selecting a card becomes more difficult.

Here are a few tips for when selecting a credit card:

1.  Don’t settle on the first credit card that is offered in the mail – do research
2. Use the Internet to research your best options; you’ll even see ads with great offers
3. Think of getting different cards for different types of purchases. Think about what you are using the credit card for.  Some cards give two or three times more points for some purchases. Many people will have an airline card just for travel purchases
4. Look at past statements and figure out how often you carry a balance, how much interest you’ve paid, and how often you’re late with payments
5. Check your credit score at least once a year
6. Carry the minimum amount of credit cards possible.  One or two credit cards should satisfy your needs.  If you carry too many credit cards, it reflects badly on your credit score

Everyone knows why university students eat so much Kraft Dinner and frozen pizza.  It’s cheap and quick! But it’s important to keep those ever-working brain cells fueled with nutritious vitamins.  You’ll feel better, have more energy for late night study sessions, improve your memory and your mood. Here’s some budget minded money saving food ideas that will keep you from making McDonalds and Michelina’s your food staples.

• Cook in large quantities and freeze portions whenever possible. Stock up on some dollar store freezer bags. You can freeze individual portions or large portions that can be used at a later time.
• Chicken thighs and legs are cheap and easy to bake in the oven. Slow cookers are awesome, especially for cheaper cuts of meat.  Pay attention to the weekly sales flyers or go to the grocery stores on Sundays, when they usually reduce the price of some meats by 30%.
• Use frozen vegetables in soups and stews.  Buy seasonal fruits and vegetables and freeze on cookie sheets. Local fruit vendors or Asian supermarkets usually have great deals compared to larger grocery chains. Beet and carrot tops and broccoli stalks are all edible and nourishing.
• Rethink what you toss away. Bones, onion skins and trims as well as celery and carrot can be used to make nourishing soup or stock which can be frozen in recycled yogurt containers and used at a later date.
• Buy large bricks of cheese on sale. Again, pay attention to weekly flyers.  Even Shoppers Drug Mart can have great deals on cheese. (less than 5 bucks) Grate it and freeze it.
• Use storage-friendly items such as onions, cabbage and carrots.  These are affordable and nutrient-dense, and store easily. If you have the produce for a while, check through the bag to make sure some of the produce hasn’t gone bad. 

• Choose dense proteins.  Eggs and beans are powerful, nutritious proteins. Learn how to soak and cook dry beans. They are even less expensive and contain less sodium than canned ones.
• Oatmeal and peanut butter are cheap and filling, but don’t be tempted by sugar-filled oatmeal packets. The price is double and what you’re paying for is sugar.
• Watch your food inventory – and use everything. Buy smaller amounts from bulk stores, especially dry goods. Don’t keep money tied up in inventory.

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With a little planning and organizing, not only will your meals be more nutritious than sodium packed, pre-made foods, but they’ll be easier on your wallet and your tight schedule. Stock up on dollar store freezer bags, grab a partner if you can, and start cooking!

http://www.youtube.com/watch?v=Hr9opVY9suk&feature=share&list=SPE17225CD389B18EB&index=1 … via @youtube

If you know any youth between the ages of 13 and 18 in the Jane and Finch area, that may be interested in joining, please drop us a line.

We will meet for 5 sessions beginning in April. A Financial Literacy trainer will train youth on various topics such as budgeting, applying for OSAP, getting the best cellphone plan, how to use credit wisely.  All participants will receive a certificate at the end of the 5 sessions, designating them as Financial Youth Leaders.  There will also be prizes and food at every session.

For further information or to register, please call Melanie at (416)663-2733 Ext.250

Our free 2013 tax clinic is set to begin!

To qualify, your income must be less than:

$30,000 – if you are single

$35,000 – if you are single with 1 child ($2,500 extra for each child under 18 years)                                 

$40,000 – if you are a couple ($2,500 extra for each child under 18 years)

You must bring …

• Income slips: wages, social assistance, ODSP, pension, E.I., etc.
• Proof of rent and landlord’s name
• Expense receipts: donations, tuition, medical/dental, child-care,
• TTC passes, children’s activities, etc.
• Your own interpreter, if required

We CANNOT do your taxes if you earn Self Employment or Rental Income

To book an appointment or for more information,

Call 416-663-2733