Volume 1, Issue 8 

(written by Kelly Olsen, AMP, Mortgage Intel)

Hi. Welcome back to Money, from a woman’s perspective here at The Money Case.

I came across an interesting article on the credit scoring system and wanted to share it with you.

Your credit score is created when you first borrow money or apply for credit. Credit scores range from 300 to 900. The credit scoring system was created to accurately determine what type of financial risk you might be over time. A healthy credit score would be over 650, however, there are many mortgage products that adept to scores below 650. On a regular basis, companies that lend money or issue credit cards to you – including banks, finance companies, credit unions and retailers – send specific factual related financial transaction they have with you to credit reporting agencies. The credit reporting agencies organize and store this information so that it can be referred to in the future with your consent. The two main reporting agencies are Equifax and TransUnion. To receive a copy of your credit report you can call Equifax at 1-800-465-7166 or TransUnion at 1-800-663-9980. Once you have placed your request, the credit reporting agency will then mail your report to you. It is recommended that you get your report from both agencies to ensure accuracy.

Basic credit scoring formulas consider several factors from your credit profile. Payment history accounts for 35 per cent of your credit score. Consistently paying your bills on time will help increase your credit score. Outstanding debts reflect approximately 30 per cent of your credit score. If you carry balances on your accounts that exceed 50 per cent of credit limits you are harming your score. Make sure you aim for balances under 30 per cent. The length of your credit history makes up 15 per cent. Having established accounts is better than having a closed account. Lenders like to see a history of consistent repayment. Think twice about closing a well rated account before applying for credit. You might be hurting yourself. Ten per cent of your credit score is evaluated on your recent inquiries. Avoid being a credit seeker as this has a negative impact on your score. Always remember that lenders investigating your credit will leave an inquiry on your credit bureau.

The last area of your credit score which accounts for 10 per cent is the type of credit used. A healthy credit profile has a balanced mix of credit accounts and loans. When applying for a mortgage lenders will look at credit cards that have a limit of at least $1,500. Limits lower than that will not be taken into consideration with most lenders.

As an extra precaution against fraud, credit reporting agencies are offering customers the option of placing an ‘Identity Verification Alert’ message with corresponding telephone number on their credit report. This is in response to new legislation that allows consumers to place an alert on their credit file as a precaution against identity theft. If an Identity Verification Alert appears on the bureau, the customer will be contacted at the number provided to make sure they have applied for the credit. Another telephone number cannot be used. The credit will not be extended unless the customer has been notified.

Mortgage brokers can help guide you and give you suggestions as to how to improve your credit so you can get into that home sooner rather than later.

Enjoy your week, and I’ll be back next Tuesday here at The Money Case. 

Republished with permission. The Scugog Standard, April 25, 2008. Written by Kelly Olsen, AMP, Mortgage Intel

Volume 1, Issue 7

Money – From A Woman’s Perspective

Hi. Thank you for joining me again here at The Money Case.

I believe that it is very important to recognize the entrepreneur in your child, and to nurture that spirit.

If you are an entrepreneur you will, of course, seize the moment when you realize that your child has such a tendency and you will do everything in your power to foster this skill.

However, if you are not an entrepreneur you need to be keen when your child starts to give off those signals and set your antennae to full reception.

I fell into the latter category. I was working in a secure environment, with good salary and benefits plus a generous pension plan. So I was oblivious to fact that my son was a budding entrepreneur, at age five.

Over the years his business ventures were many, and seasonal. It started out one Spring, when he and his friend went around my garden collecting water frogs. I saw them for a whole week, after school, busying themselves in my rose gardens but I thought nothing of it. By the end of the week, someone came to my door trying to sell me a magazine subscription, and singing the praises of the young lad selling water frogs at the bottom of our driveway. She said there were fifteen tiny frogs and she bought them all for her neighbour who wanted frogs in her garden, at a total cost of fifteen cents. I was speechless because I wasn’t aware of this business venture going on under my nose. Needless to say, I felt obliged to take out a subscription with the saleslady. Later I found those fifteen cents scattered on the garage floor.

It’s summer now, and time for a new business; a pink lemonade stand. My son organized every detail for this business, all done without our knowledge or consent. I only became part of his plan when it was time to make the lemonade. And he wanted pink coloured lemonade. He set the date, the time, made directional signs to his lemonade stand, recruited his mate from two doors down, set up the stall with an umbrella at the bottom of the driveway, and arranged for his dad to video the venture. As luck would have it, that Saturday turned out to be the hottest day in July, and neighbours were moving in next door. Within minutes he was sold out, and placing an order for me to make more lemonade. Amazing, when I look back. I can’t report on how much money he made because I’m don’t know.

There was a lull in autumn, but come winter, the snow shovel was out, and he was clearing snow for one buck after school. Imagine getting your two-car driveway and walkway cleared for a dollar? Well, I wasn’t too keen on this labour-intensive business in bitterly cold weather. So I would employ him to clear our driveway and walkway first, by which time it was too dark for him to take on other jobs. And I would pay him the dollar. He subsequently did take on jobs for some of our neighbours. What a deal they must have mused.

There are numerous business ventures that my son undertook, and he continues to develop phenomenal business models.

You would have noticed two things missing in every example.  First, parental  encouragement for this young entrepreneur, and secondly the money part was missing. However, I know for sure that his water frogs, fifteen of them, brought in fifteen cents. I’m not sure how much he earned from his other business ventures.

In my first blog, Issue 1, I wrote about my fear of money. And unfortunately, during my children’s formative years I was oblivious of my relationship with money and hence I was unable to advise my very young entrepreneur son about financially managing the income from his business ventures. I must say, however, that on his own he has learnt money management and budgeting after some very difficult money lessons.

I would advise that if you have a budding entrepreneur in your family spend the time to talk about the ventures, and the financial side of the business ideas. Talk about the need to develop a budget process for each venture. Discuss how your daughter or son can invest the profits, regardless of the amount. This little bit of guidance on the money side of things will cause that young entrepreneur to enjoy the fruits of her or his brilliant ideas, while introducing and cultivating a new perspective in their business ventures. This will ultimately encourage and enhance their entire experience of entrepreneurship.

Until next Tuesday.  Enjoy your week, and we’ll meet again here at The Money Case.

Volume 1. Number 6

Hi everyone. Welcome back to Money – from a Woman’s Perspective here at The Money Case.

Last Tuesday we chatted about developing a Money Hour. Were you able to plan a Money Hour? I followed through with my promise. On Thursday at work I enjoyed my home-made rice pasta dish topped with vegetables in tomato sauce and sprinkled with parmesan cheese. I went out for my walk delighting in the spring-like weather. Since I didn’t intend to do any personal shopping, I have the minimum savings of ten dollars from my Money Hour.

Today I want to share with you an article that was recently published in Toronto’s Metro News featuring a Money Club that was started by five young women living on the west coast of Canada. The article is reprinted was permission as follows:

     “Have fun with your finances: Vancouver-based Smart Cookies offer their tips.

     Money. It’s a part of everything you do, and there never seems to be enough of it. But how often do you actually have real conversations about money with your friends, family, or colleagues at work?
 

     With the pressures of running a household, owning a home or getting ahead in your career, there are a million reasons why your debt continues to rise or you just don’t know where your paycheque is going.Two years ago, we were a collective financial mess. We were running from collections agencies, hiding shopping sprees from our partners and blowing our hard-earned savings on designer jeans and lattes.

     We were smart, successful women in our 20s and early 30s with good careers and a lot on the go, but for some reason, we just couldn’t seem to get ahead financially.

Then in early 2006, we saw an episode of The Oprah Winfrey Show that focused on getting a handle on your debt. We’d each been searching for a way to take control of our finances so we thought, why not do it together? We decided to form a money club – kind of like a book club, but instead of reading and discussing books, we’d be reading our bank statements and discussing ways to pay down our debt and make more money.

     Barely a year after the Oprah episode aired, which inspired our money club, we were being featured on her show ourselves, talking about our achievements? We paid down our debt, saved $15,000 and increased our salaries by $45,000.
Smart Cookies are not about deprivation. Rather, we’re about living the sweet life without the sacrifice. Each week we will bring you topics that matter and answer questions like how to get a raise from that prickly boss, how to make the leap from your parent’s basement into your own condo, how to plan a fabulous night out without breaking the bank and much, much more. For more, check out www.smartcookies.com”

I did check out their website, and liked with I found. It’s a well-designed site that’s easy to navigate. I like their tag line – be smart, be rich, be fabulous. I was particularly interested in learning more about the Money Club. Under the Tools section the Smart Cookies have listed a number of tools that will help us go from “financial mess” to “financial success”. Among the many tools are detailed tips for starting a Money Club.

All of us, regardless of education level and income level struggle with managing our finances, and there is the shame that we experience in our inability to get this aspect of our lives straight. Hence we choose to live in isolation carrying, on our backs, a heavy burden of consumer debt. The idea of working as a group is therapeutic and forces each member to be absolutely honest.

Unlike a book club, members of a Money Club must be non-judgmental since everyone has to reveal the second most intimate information of their lives. This commitment is key if you want to leave debt behind and step into a new arena of financial freedom. Members have to be prepared to share information about their incomes, spending habits, and their debt loads. The Smart Cookies have recommended this requirement in their guide.

Another noteworthy tool is The Smart Spending Plan. This tool is presented in an MS Excel spreadsheet. This is a good start, but it is my opinion that the Smart Cookies ought to incorporate the budgeting tool that is available for free from The Money Case.

Smart Cookies need a Smart Budget.

Have a wonderful week, and we’ll meet again next Tuesday on The Money Case.

Debra

Volume 1, Number 5

Hi everybody. Welcome back to Money – From A Woman’s Perspective at The Money Case. I’m delighted that you’ve joined me again. There are always new and exciting developments happening here at The Money Case. You’ll notice that we all have our own blog section.

Today I’ve decided to take a page out of “Earth Hour” to develop our “Money Hour”.

According to the World Wildlife Fund (http://wwf.ca/earthhour/) “Earth Hour” held last Saturday, March 29, 2008, was a resounding international success. Over 150 cities participated in this symbolic event to raise awareness into the man-made global environmental crisis and to inspire long-term action.

In the twenty-first century we’re faced with the dichotomies of consumerism/saving, instant gratification/patience. Simply put we’re in a state of individual and collective confusion in its totality. We have consumed to such an extent that we have to be told to “turn off the lights” albeit for one hour. This initiative was started in 2007 in Sydney, Australia, and has spread to more than 24 countries, with millions of people and businesses participating.

It is hoped that this global Earth Hour will become an annual event. It is my hope that in the days, weeks, and months ahead we will commit to lowering our electricity consumption and continue to “turn off the lights”. As time goes by, with a new consciousness of attempting to repair the damage that we have inflicted on our planet we will find other ways to conserve our natural resources.

I draw a parallel with our money. Are we prepared to commit to having a “Money Hour”? Can we choose an hour every week when we conserve our money. I would like to suggest that everyone decide according to her/his spending habits how much this amount will be, and what time of the day, in every week, will be your “Money Hour”.

I will commit to making every Thursday at 1:00 pm EST, my “Money Hour”. That’s my lunch hour, therefore, I will commit to brown bagging my lunch, and going for a walk in the residential neighbourhood. This decision will take me in the opposite direction of the downtown core, the restaurants and boutiques. I calculate that I spend a minimum of $10 to a maximum of $80 each week on myself. This means that I can save between $520 to $4,160 annually. As added value; I’ll be getting my exercise for the day and enjoying my walk which uses all of the muscles in my body: 600+.

So if, similar to “Earth Hour” we measure, collectively our savings, using the minimum amount, and let’s say 150 cities, at 2 million residents per city, that would bring in a total of $21,840,000,000. And that’s the minimum according to my personal “Money Hour”. At my maximum savings amount the total would skyrocket to $174,720,000,000. That’s more than encouraging from our global community.

Now what would we do with this abundance of money?

Awareness is the idea behind our “Money Hour”. We start to shift out attention away from consumerism and instant gratification, and commit to live our lives in a consciousness of savings and patience. As a bonus, we will each have extra money in our lives.

A penny saved is a penny gained. (An old English proverb)

On the topic of consumerism and instant gratification I came across an article written by Michael Peterson, a Credit Counselor with American Credit Foundation, (www.debtguru.com) that was written for Women Today Magazine under “Money” Section (www.womentodaymagazine.com). He explained that “with consumer debt at an all time high it’s time we take control of our finances and get out of the “debt trap”. If you own $2,000 on a credit card with a 21% interest rate, and you only make the minimum payment each month that you will owe on this account for approximately 19 years and pay a total of $6,725.64 in principle and interest?”

So this means that by the time I pay off for my new spring wardrobe, my new-born would be in second year university. And to make matters more depressing I would have bought those items on sale, trying to maximize my spending power, albeit plastic. And worst still after 19 years I won’t recall any of those purchases.

Michael Peterson outlined a plan for the consumer to pay off this $2,000 credit card debt in about 8.5 years, saving approximately $2,387 in interest.

He further advised consumers that “if you were to invest that same monthly payment (the one we were making on the $2,000 debt) at the end of the 8.5 years for the next 10.5 years (you remember, 19 years total) at a return of 12% you would have approximately $10,682”. (www.debtguru.com)

Michael’s idea of the notions of saving and patience certainly fits in with our “Money Hour” initiative. We don’t want the credit card companies to be in control of our money. We negate this obsession with consumerism and instant gratification. Instead we align ourselves to live in the oneness of abundance.

On that note, let us enjoy our new-found freedom. Happy “Money Hour” and have a wonderful week. I look forward to meeting you next Tuesday here at The Money Case.

Debra

Volume 1, Number 4

Money – From A Woman’s Perspective

Hi everybody. Welcome back to The Money Case. I trust that you had a great week.

There are lots of good reasons to celebrate. In the Northern Hemisphere, it’s Spring, and in the coming days and weeks the snow will have to take a back seat to new and abundant life forms. We’ll see the trees and shrubs starting the process of their rebirth. Crocuses will poke their colourful heads out of the ground. Then the tulips will be ablaze in Amsterdam, the cherry blossoms in Japan, the forsythes in Canada, and the USA. In the South, it’s the opposite, where nature is ripe and mature.

Indeed it’s that time when fertility is at its peak, and the planting of crops will begin.

Another good reason to celebrate: The Money Case has just announced that their subscription fee has been waived. Access to this revolutionary on-line budgeting software is now free of charge. You read right. No more subscription fee is required to hightail your way to financial freedom.

Having this free access to The Money Case makes perfect sense. The intention behind this budgeting software site is to encourage all - everyone - adults, students, young and older entrepreneurs, and seniors, regardless of your financial status, to form a good habit of budgeting. If you already follow a monthly budget, this is an opportunity to switch to The Money Case’s free site.

Respect begets respect.

Previously we took our money for granted, no more. When we commit to using a budget we are committing to treating our money the same way we would treat our valued friendships and relationships; with love, kindness, and respect. When we live our lives respecting others that quality is reciprocated back into our daily lives. The same principle applies to our money.

When we handle money with respect we become a magnet for money. The opposite happens when we treat our money haphazardly, without conscious thought. Our money flees. And we wonder why when we come into a lump sum, maybe a tax refund, it goes back out with lightening speed.

Think of your money as a good friend, someone who will be in your life through thick and thin, provided you respect and are kind to her/him. I encourage you to do the same with your money.

I invite you to accept this generous offer from The Money Case. Sign up for your free account and begin your journey into a new dimension where your money is an important part of your life.

A good product must be made easily available to everyone, everywhere, without barriers or obstacles. You may quote me on this.

Have a great week. And I look forward to meeting you next Tuesday on The Money Case.

Debra

Money – From A Woman’s Perspective Volume 1, Number 2

Hi. I’m delighted that you’re here with me again at The Money Case.

“Your money is governed by how you treat it; it’s that simple. It thrives when you are being responsible, respectful, and doing honorable things with it. For many of us, debt is too big a part of our overall money picture not to give it the respect that it is due. How we treat our debt and the people who are a part of that debt play a major role in our path to financial freedom.” – Suze Orman – The 9 Steps to Financial Freedom (p 158)

After a tiring day, I decided to relax and watch TV, nothing in particular. I was soon struck by the number of commercials advocating that debt consolidation was my way to be debt-free. Is that so? I think that these companies are selling false hope. They are not going far enough.

Walking a mile in a debtor’s shoes, I believe that if my plan is to become debt-free by consolidating my debts, I must also have a budget in front of me. I ought to know how much is coming in versus how much is going out. In the absence of a budget, it’s a given that I’ll get into debt over my head, and need to consolidate all those credit cards, car loan(s), mortgage(s): first, second, and/or third, plus student loans, and other miscellaneous loans.

Since the subject of debt consolidation piqued my interest I started to notice numerous advertisements in the daily newspaper from companies specializing in consolidating debt. I then went on to read the help wanted section observing the various job ads from collection agencies - “that due to expansion” our [collection] companies have immediate openings…

Needless to say, I googled debt consolidation and came up with 33,000,000 matches; a lucrative industry, and growing every time I do a new search. The tools are there to help people get out of debt, but in my opinion it doesn’t go far enough. Yes, the companies will cut up our plastic, give us a manageable monthly payment, but the rest is up to us. We need money management. We need to start building and relentlessly using a budgeting system if we want to regain our peace of mind, and move on to be free financially.

What’s the cause of this phenomenon where debt consolidation and collection agencies have become such huge businesses? I’m not going to address this here because it warrants its own space. I’ll write about it in another blog.

What I do know is that once we decide to consolidate all our debts we must be vigilant about our money. As I said earlier, we have to know how much money is coming in and how much we are spending. So while we’re seemingly getting ahead of the financial game by paying off our debts, we need to simultaneously start a budgeting process. Yes, like at work; a compulsory process. Except for personal use this process is easy and fun. Budgeting has to be a part of our daily activities - like breathing. It’s that vital. The deeper we breathe the more energy we experience. Likewise, the more we become engaged with our finances the more freedom we experience.

The Money Case offers an on-line budgeting software that let’s us see how we’re spending our hard-earned money. Using this tool in conjunction with the desire that we all want to clear off our debts, we will begin to see a change in our lives – a change towards financial freedom.

Cause and effect. Suze Orman advises us to respect our money, handle it responsibly, do good things with it, and we will be carving our own path to financial freedom.

The next time I decide to relax in front of the TV, I’ll choose a commercial-free movie instead.

Have a debt-free week, and see you here again next Tuesday at The Money Case.

Debra

Money – From A Woman’s Perspective

I am delighted to be writing a weekly blog for The Money Case

A fear named is a fear gained.

Money was something I was always afraid of. Something I would not touch with a ten foot pole. In other words, in my household, money had been an unspoken taboo subject. Although I contribute financially, and my spouse and I have joint bank accounts, I held no bank card, no pin number, never looked at the monthly bank statements so I had no idea about the amount of money that was coming in or going out. I never even paid attention to my monthly pay stubs. I had absolved all financial responsibility.

Mind you I always made sure that I carried a quarter in my purse in the event I had to use the public telephone, although I recently discovered, to my chagrin, that the cost to make a call had increased by one hundred percent which was unwelcome news when I needed to call for a ride one afternoon. I ended up walking ten blocks in minus thirty degree weather all because of that missing quarter.

I take full responsibility for my suffering.

I have been consciously trying for the last two years to confront this demon of mine. I have read, and continue to read self-help books because I desperately needed to find the root cause of this fear I had for money.

It is a long story and I will spare you the gory details but I am happy to say that I finally became aware of the fact that my approach to money comes from a place of lack and limitation. Epiphany!

I realized that all of my actions and subsequent experiences pointed to this mind-set of scarcity, and that was the reason why I chose to be oblivious about my finances. I preferred to remain in denial because if I took responsibility I thought that knowing would signal the death of my financial life. That there would be no money left, and the idea of replenishment never entered my mind. No doubt, I was attached to an illusion.

I delved deeply into my childhood years and found a huge cobweb. From there I extricated myself from its stranglehold and started to carefully analyze every decision that I made concerning money, being absolutely, and painfully honest with myself. I begin to observe the motivations behind each decision and/or action. I discovered patterns reoccurring year after year.

Once I confronted the reasons for my fear of money I realized that I had to own my financial life. What is our combined income? What are our expenses, is there enough money to meet all of our financial needs. And that is when I became conscious of the fact that we did not have a written budget, everything was in my spouse’s head. No wonder he’s losing his hair.

Oh well, I am happy to say that The Money Case is the tool that has helped me focus and understand our finances. I have taken on this responsibility in our household, and I am learning the principles and benefits of budgeting personal finances. I am thoroughly enjoying using this tool, and I am actually having fun with my financial affairs. And now I keep two quarters in my purse. I feel empowered; I feel free, and I sense a definite growth in my on-going awareness. I am in control of my money, and not visa versa. Whoa, that is a major shift in my personal development.

Enjoy your week, and see you again here at The Money Case next Tuesday.

Debra