I want it all and I want it now!

This attitude has been suggested to consumers over the past few years through subtle advertising.  As well as the message “I AM ENTITLED TO HAVE IT NOW”.  Advertisements told us about low monthly payments, not the cost of financing or the total cost of acquiring that lovely new car or TV set or vacation.

Well, we are finding out that having it all now and thinking we are entitled to have it all comes at a cost.  Credit has been used to fund the purchases of “all” and now the bill is coming due.  People are losing jobs and don’t have enough money to pay the credit card and loan minimum amounts.  Monthly mortgage payments are more than someone can afford on a reduced paycheque.   Jobs are scarce and EI is running out, so income will be reduced even more.
Here is an example of how expensive it can be to use a credit card to finance a purchase:

• $5,000 purchase taking 3 years at 18.8% to pay off
• that would total $6,579.72 in payments
• you would need to earn (prior to paying taxes of about 25%) $8,772.96 to make those payments over the 3 years

Do you have that much income before deductions to give to the credit card company? Probably not.

What can you do?

First you can cut up the credit cards so they won’t be used further.  Then you can review your budget to see how much money you can cut from various expenses such as gas for your car, meals eaten out in restaurants, vacations, gifts.

If there still is not enough money to cover the minimum payments to the credit cards and loans, you may be required to do a Debt Management Plan with a credit counseling agency or a consumer proposal or personal bankruptcy with a trustee such as ourselves.   We meet with people to help them with the steps described above.  We discuss the various options that are available and how they work.  We help you develop a plan to get you back on the right track to saving money to fund your purchases instead of using credit.

If you need help with your financial situation, give us a call today at 310-PLAN, or send me an e-mail and let’s get started.

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