For our first financial makeover, we have a young family in the Greater Toronto Area (GTA) who has a decent income but are struggling with debt, including monthly payments.   They have requested some advice on how to best to improve their financial situation.

The Client(s)

Steve and Sue are both 32 years old and have a 2 year old son.   Steve is a technician earning $55,000 per year and feels that he has a fairly secure job.  Sue earns $45,000 as an office administrator and is concerned about her job, ‘it could be gone any day’, she says.

The Problem

This couple feels that they have a comfortable lifestyle; however, they have realized that they have made some bad decisions in the past few years, including opting to go deep into debt to upgrade their home and staying off work for the entire year to be with the new baby.

They now have monthly payment obligations far in excess of their net income and are consequently getting further in the hole.  They’ve already cashed in all of their RRSP’s to fill the hole, so they have no further  financial cushioning left.  Fortunately, they have in-laws who watch their child for no charge.

Financial Snapshot

Here is a financial snapshot of the family’s finances.

Monthly income

Net income $5,300

Monthly expenses

• Mortgage $1,700
• Property taxes $250
• Utilities $250
• Phones, Cable, Internet  $300
• Food $500 Read More…

  

When people look for savings in their monthly budget, I find that they are hesitant to look at their grocery bills. Food is near-sacred, and thinking of cutting such expenses invokes visions of living on Kraft Dinner (KD), sacrificing health, and quality of life.

As with all of my other ideas on cost cutting, I always focus on living better, just for less. This is not the oxymoron it appears to be: you just need to find ways to buy the same things you normally would but for less. You also need to know how grocery stores work to get the money out of you. I am here to help you maximize your grocery savings.

Listed below are ideas I use to maximize my savings on grocery. Read More…

With all the talk these days of impending high inflation, I find my thoughts turning to ways that I can reduce or avoid the impact of this, if it does indeed happen.  In many cases, it just isn’t possible to avoid the effects of inflation, but where there are ways to do so, I can show you how to go about it.

Let’s look at some common expenses most Canadians have and see what can be done to protect yourself. Read More…

When you break down the idea of investing to its basic purpose, you’ll find that it’s not just taking your extra money and hoping to earn a decent return from it .

Investing, in essence, is simply something that you do to ensure that your future cash needs are met.  Usually that entails “squirreling” money away for future use, but it can also take the form of spending now to save later.

If you can spend some of your savings now that will result in a cut to your living costs by a certain amount, then that cost savings is equivalent to a return on your investment.  Done wisely, you can earn a return that is tax free, low risk, and higher than you could earn for equivalent risk traditional investments. Read More…

The Canadian dollar has seen a sharp spike up in recent months, as we’re seeing it get closer to par again. That means opportunities to save money!

Some of these opportunities will happen automatically, as in lower prices on goods you buy that are imported into the country, lower prices on some foods, etc.  Others you will have to think about and decide if it’s worth it for you to explore.

Here’s some ideas to consider: Read More…

Most people are very hesitant to try and find savings in the food department, as they assume it means a reduction in healthiness, taste, or quality.  None of these need be true if you can emulate how my family manages to eat well for less than $5 per person per day! Read More…