{"id":5087,"date":"2019-05-15T10:03:39","date_gmt":"2019-05-15T14:03:39","guid":{"rendered":"http:\/\/caissealliance.absoludev.ca\/?p=5087"},"modified":"2019-05-15T10:03:39","modified_gmt":"2019-05-15T14:03:39","slug":"a-case-like-mine-and-a-financial-planners-advice","status":"publish","type":"post","link":"https:\/\/www.caissealliance.com\/en\/personal\/budget-and-financial-management\/a-case-like-mine-and-a-financial-planners-advice\/","title":{"rendered":"A case like mine and a financial planner\u2019s advice"},"content":{"rendered":"
\n

Here are 3 profiles of people in serious debt, bordering on debt overload. All wanted to rid themselves of the stress and constant pressure they were feeling from their debt load.<\/p>\n<\/div>\n

Luke<\/strong><\/h2>\n

Profile<\/strong>
\nLuke, 34, freelancer in marketing
\nNet annual income : $36,000<\/p>\n

Dreams about buying a home.<\/h3>\n

Brief description<\/strong>\u00a0of financial situation<\/strong><\/p>\n

    \n
  • Doesn\u2019t own a car.<\/li>\n
  • Has no emergency fund.<\/li>\n
  • Rents an apartment in Montreal.<\/li>\n
  • Owes $5,000 on a student loan.<\/li>\n
  • Owes $12,000 in other forms of debt (credit cards and lines of credit).<\/li>\n
  • Pays $60 a month in credit charges.<\/li>\n
  • Pays the $1.50 additional ATM fee at any ATM without any question.<\/li>\n
  • Doesn\u2019t take the time to assess his financial situation or make a budget.<\/li>\n
  • Has gotten used to the idea of being in debt.<\/li>\n
  • Luke asked for a salary advance last month.<\/li>\n<\/ul>\n

    Recommendations<\/strong>\u00a0by a financial planner<\/strong><\/p>\n

      \n
    • Draw up a budget.<\/li>\n
    • Organize your finances.<\/li>\n
    • Plan how to pay off lines of credit and credit cards.<\/li>\n
    • List priorities in terms of spending.<\/li>\n
    • Cut back on miscellaneous expenses (figure out what they are by making a budget).<\/li>\n
    • Get into the habit of paying bills off in full.<\/li>\n
    • Compare interest rates to pay the highest debts off first. Negotiate with creditors (lenders).<\/li>\n
    • Consolidate bank accounts as much as you can (to save on service charges).<\/li>\n
    • Take out an unlimited transaction plan that costs no more than $15 or $16 per month.<\/li>\n
    • Use credit and debit cards sparingly the entire time you make paying your debts off a priority.<\/li>\n
    • Set up an emergency fund that covers at least 3 months of living expenses.<\/li>\n
    • Save at least 5% of net income in an RRSP or TFSA.<\/li>\n
    • Consult experts to determine the need for insurance, a will and a mandate in case of incapacity.<\/li>\n<\/ul>\n

      Max and Donna<\/h2>\n

      Profile<\/strong>
      \nMax, 40, network administrator
      \nNet annual income: $60,000<\/p>\n

      Donna, 35, graphic artist
      \nOn maternity leave and pregnant for the 2nd time.<\/p>\n

      They have 1 infant and another on the way.<\/p>\n

      Rent an apartment in a wealthy neighborhood.<\/p>\n

      Would like to buy a duplex apartment this year.<\/h3>\n

      Brief description<\/strong>\u00a0of financial situation<\/strong><\/p>\n

        \n
      • Spend 67% of their joint income on food, clothing, gifts and day-to-day cash purchases.<\/li>\n
      • Expect another child in 7 months.<\/li>\n
      • Like luxury items (stainless steel appliances, new car, leather sofas, LCD television, etc.)<\/li>\n
      • Donna likes to pamper herself (hairdresser, aesthetician, day spas). She also buys a lot of clothes for herself and the children.<\/li>\n
      • Max eats lunch out a lot and goes downtown on a regular basis to meet his friends for a drink.<\/li>\n
      • Max has a gym membership he hasn\u2019t used since his first child was born.<\/li>\n<\/ul>\n

        Recommendations<\/strong>\u00a0by a financial planner<\/strong><\/p>\n

          \n
        • Determine priorities in terms of spending.<\/li>\n
        • Assess financial ability to buy a duplex.<\/li>\n
        • Transfer funds out of savings and into RRSPs.<\/li>\n
        • Contribute to RESPs for the children.<\/li>\n
        • Plan out the expenses that will be incurred for the arrival of the second child.<\/li>\n
        • Set up an emergency fund that covers at least 3 months of living expenses.<\/li>\n
        • Consult experts to determine the need for insurance, a will and mandates in case of incapacity.<\/li>\n<\/ul>\n

          Chris and Susan<\/h2>\n

          Profile<\/strong>
          \nChris, 47, mechanic
          \nNet annual income: $40,000<\/p>\n

          Susan, 47, manager
          \nOut of work the last 2 months.
          \nNet annual income: $65,000<\/p>\n

          They have 3 children: 9, 14 and 16.<\/p>\n

          Brief description<\/strong>\u00a0of financial situation<\/strong><\/p>\n

            \n
          • Spend a lot and save little.<\/li>\n
          • Owe $110,000, on top of their mortgage.<\/li>\n
          • Use 9 credit cards to pay for their various purchases, including groceries.<\/li>\n
          • Pay extremely high monthly credit charges.<\/li>\n
          • Owe $175,000 on their mortgage.<\/li>\n
          • Live the high life: big house, 6 televisions, expensive family outings (rock concerts, movies, shopping sprees). They take a winter vacation every year on credit.<\/li>\n
          • Own 3 cars, 2 of which leased and 1 bought used for their oldest child who just turned 16.<\/li>\n
          • All 3 children have their own iPod, laptop computer and television in their room.<\/li>\n<\/ul>\n

            Recommendations<\/strong>\u00a0by a financial planner<\/strong><\/p>\n

              \n
            • Consolidate loans and other credit cards on current mortgage.<\/li>\n
            • Make a budget and stick to it.<\/li>\n
            • Make choices when it comes to luxury purchases.<\/li>\n
            • Consider selling one of the 2 cars to cut back on transportation costs.<\/li>\n
            • Resist the temptation to travel on credit and make impulse purchases (clothing, electronics).<\/li>\n
            • Bring your lunch to work and make your own coffee in the morning instead of paying high coffee-house prices.<\/li>\n
            • Do clothing exchanges with friends or family members who also have children.<\/li>\n
            • Consider family outings that are free.<\/li>\n
            • Contribute to an RESP for the youngest child.<\/li>\n
            • Review insurance, wills and mandates in case of incapacity to make sure they\u2019re up to date.<\/li>\n<\/ul>\n

              The next step<\/h3>\n

              You too can take steps to\u00a0see where you stand financially. Take the time to contact one of your financial institution\u2019s advisors or financial planners. These experts are available to guide you.<\/p>\n","protected":false},"excerpt":{"rendered":"

              Here are 3 profiles of people in serious debt, bordering on debt overload. All wanted to rid themselves of the stress and constant pressure they were feeling from their debt load. Profile Luke, 34, freelancer in marketing Net annual income : $36,000 Brief description\u00a0of financial situation Doesn\u2019t own a car. Has no emergency fund. Rents […]<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"_monsterinsights_skip_tracking":false,"_monsterinsights_sitenote_active":false,"_monsterinsights_sitenote_note":"","_monsterinsights_sitenote_category":0,"footnotes":""},"categories":[107],"tags":[],"class_list":["post-5087","post","type-post","status-publish","format-standard","hentry","category-budget-and-financial-management"],"acf":[],"yoast_head":"\nA case like mine and a financial planner\u2019s advice | Caisse Alliance<\/title>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/www.caissealliance.com\/en\/personal\/budget-and-financial-management\/a-case-like-mine-and-a-financial-planners-advice\/\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"A case like mine and a financial planner\u2019s advice | Caisse Alliance\" \/>\n<meta property=\"og:description\" content=\"Here are 3 profiles of people in serious debt, bordering on debt overload. 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