Today's budget tip from Credit Canada is on seasonal guests and the financial problems associated with long term house guests. Hosting guests is a lot like how we perceive snow fall.
The first flurry in December is magical; its crisp white blanket is a refreshing change to autumn’s dull brown canvas. It brings the promise of holiday excitement just around the corner. Skip ahead a few months to February however and we've all had enough of the white stuff! Similarly, having family or friends stay for a while can be a wonderful reunion but if it starts putting a strain on your wallet, it may be time for a talk with Great Aunt Sophie. If having an extra mouth to feed is causing you financial stress, let your guests know they are appreciated but that you also need to control your expenses.
While it sounds taboo to ask your guests to pitch in for groceries, if you don’t make it clear that you need help, don't be surprised if you don’t get it. Hopefully they will understand that you are only asking out of necessity. But what if your guest is just plain broke and needs some great budget tips of their own? What then? Maybe that is why they need to stay on your couch in the first place.
It's great to offer to help someone out of a tough situation but make sure you can afford to. Keep in mind, it’s not uncommon for people to go into debt with the intention of {C} helping out family and friends. Just like in an emergency, we are told to put our own oxygen mask on first and then help others. The same goes financially. Before you take someone into your home or lend someone money make sure it won’t be pulling you down as you try to save someone else from drowning. Your generosity can quickly snowball when credit card payments are suddenly not kept up to date or payday loans are utilized.
Don’t be afraid to kindly turn someone down and explain to them your situation. If you can't help them financially you can offer help to a family member or friend in other ways like referring them to employment websites, social services and of course Credit Canada to help with budgeting and dealing with debt issues. Guiding someone to empower themselves and head in the right direction is definitely being a good friend. Under the same umbrella is adult children living with their parents. This has become a new trend in North America with adult children often returning home due to unemployment, divorce or any number of other reasons.
Again, this is fine as long as everyone involved is comfortable with the arrangement and ideally is contributing in some way (if not financially then with cooking, cleaning the gutters, whatever). Don't be afraid to ask your son or daughter to pay some rent if need be. And sons and daughters, don't take it personally if your parents ask you for a few hundred dollars a month. Chances are they need it in order to stay within their monthly budget. So there it is. Having your best friend Tom over for the long weekend? Great! He stays until Thanksgiving and the bills are piling up, not so great. Better sit him down for a chat.
Frequently Asked Questions
Have a question? We are here to help.
What is a Debt Consolidation Program?
A Debt Consolidation Program (DCP) is an arrangement made between your creditors and a non-profit credit counselling agency. Working with a reputable, non-profit credit counselling agency means a certified Credit Counsellor will negotiate with your creditors on your behalf to drop the interest on your unsecured debts, while also rounding up all your unsecured debts into a single, lower monthly payment. In Canada’s provinces, such as Ontario, these debt payment programs lead to faster debt relief!
Can I enter a Debt Consolidation Program with bad credit?
Yes, you can sign up for a DCP even if you have bad credit. Your credit score will not impact your ability to get debt help through a DCP. Bad credit can, however, impact your ability to get a debt consolidation loan.
Do I have to give up my credit cards in a Debt Consolidation Program?
Will Debt Consolidation hurt my credit score?
Most people entering a DCP already have a low credit score. While a DCP could lower your credit score at first, in the long run, if you keep up with the program and make your monthly payments on time as agreed, your credit score will eventually improve.
Can you get out of a Debt Consolidation Program?
Anyone who signs up for a DCP must sign an agreement; however, it's completely voluntary and any time a client wants to leave the Program they can. Once a client has left the Program, they will have to deal with their creditors and collectors directly, and if their Counsellor negotiated interest relief and lower monthly payments, in most cases, these would no longer be an option for the client.
