Tips for Everyday Living

Prevent huge holiday debt

Christmas is a season of major spending where families sometimes accumulate huge debt. Caught up in the spirit, many of us resort to the plastic, thinking to ourselves: I'll pay off my holiday credit card bills by February or March "at the latest." It will actually take most of us six to 18 months, according to the experts.

This is what's called a "holiday hangover." Here's how you can avoid it.

Set a budget and stick to it
Establish the total amount you can realistically pay back in full within two months. This amount should not be exceeded. If you compare it with a ballpark tally of last year's total holiday expenses you can determine where you should cut back on this season's spending

Make a list and stick to it
List your gift recipients and other seasonal necessitates (wrapping, cards, wardrobe, party supplies, etc.). Estimate the cost of each item. If the total cost exceeds your allocated budget, start editing your list - delete, revise or rethink your initial purchases until the budget covers expenses.
Your final list is now "set in stone." Keep it on you while shopping to help resist impulse buying.

Treat credit card purchases as part of your total budget
Count everything you put on your credit card toward your set budget. You may even want to leave it at home to resist impulse buying, giving yourself more time to consider the purchase.

Shop as early as possible - and shop alone
Market research tells us that shopping with a friend or family member cause people to spend more money. Once you're out shopping, stick to your list and depart promptly. The more time you are in a store, the more temptation for impulse buying. You may find less temptation with mail-order or online shopping

Create cherished gifts for little or no cost
Sometimes your budget won't cover the expense of gifts you originally planned. But you can make creative use of your personal skills and resources. Here are some suggestions for low-cost gifts that convey the spirit of the season: enlarged photographs, gift wrap made by your kids, hand-painted mugs and pottery, homemade cookies, candy, jams, wreaths and tree decorations, a child's costume or handyman's toolkit assembled from second-hand stores - or, for distant relatives, a video or audio tape of your family

Start planning for a truly stress-free Christmas season next year
A little planning throughout the year can make next season's holidays a debt-free celebration
January: Start a Christmas Club savings account now and put away just $10 or $20 dollars per week. You'll have a great head start on your holiday budget
March - October: Buy your gifts throughout the year to take advantage of sales and bargains that won't be available closer to the holiday season. While it might not feel festive, you'll eliminate December's last minute-rush and related financial woes - making your spirits brighter over Christmas.

September-December: Pay bills ahead of time - or add an additional 20 percent to each credit card payment a few months prior to Christmas. You'll be grateful for the decreased financial pressure come January.

The deal with extended warranties

We've all been confronted with the issue of extended warranties. But beware, those last-minute decisions never come cheaply and you may not be getting the protection you think.

Follow these procedures and you will be more certain of your decision.

Before you buy:

• Pick dependable brands by doing your homework. Most breakdowns, motor vehicles not included, occur within the first few weeks when the item is still covered by the manufacturer's warranty
• See if your credit card offers extended a warranty for goods purchased on it. Some credit cards offer extended warranty that goes beyond the manufacturer's warranty. It's an valuable bonus if your credit balance is in good shape
• Read all of the fine print. What exactly does the warranty involve? Is it at all different of the manufacturer's warranty? Is it insured completely with no deductibles?
• Ensure the expense of the warranty does not exceed 10 - 15% of the total value of the product. Vehicle warranties are frequently the common offenders when it comes to this.
• You do not need to acquire a warranty to qualify for a loan, no matter what a dealer might tell you
• Don't buy the warranty if the salesperson can't produce a copy of the policy book or contract within a reasonable amount of time

After you buy:

• Read the manual and test all the features of the product while the factory warranty is viable so that you may return the item if something is not functional.
• Keep the manual in a safe place

• Perform routine maintenance and be aware of the warranty expiration date.

The down-low on donations

We have all had individuals and organizations approach us about donating money to a worthy cause. These requests can come from a variety of angles such as door-to-door, telephone, mail and online solicitations.

But how would you ever know if your hard-earned dollars were making it to the desired destination? By following a few basic guidelines you can avoid giving your funds to fraudulent charities.

Safeguard yourself:

• Call Revenue Canada to determine if an association is a registered charity or check online at www.revenuecanada.com. The web-site also includes beneficial tax information on charitable donations.
• Check with your regional Better Business Bureau at www.bbb.org to see if any grievances have been charged against the charity.
• Ask questions. Legitimate charities will give you written information about their finances and programs.
• Never give cash. Always write a cheque to the official name of the charity and get a receipt.
• Never give out credit card, social security, or chequing account numbers.
• Be aware that frequently only a fraction of proceeds from counter displays that offer candy for a donation goes to the actual charity.
• Many charities use the Internet to solicit funds and so do criminals. Never give your credit card number or any other personal information unless you are certain the charity is genuine.

Other options to giving money

• Do volunteer work, organize an effort in your office, donate food, clothing and household items. Check recommendations at www.ccp.ca.
• Contact social service agencies in your area to find out where help is most needed.

Enjoy a debt-free vacation

Family vacations are something most of us look forward to. But rising gasoline costs and other unforeseen expenses mean your summer holiday could be an expensive adventure.

Here are a few ways to keep costs down while having fun in the sun.

• Construct a budget plan that includes the cost of food, lodging, gasoline or airline tickets.
• Travel a week or two before or after peak season, if possible
• Organize travel, medical and insurance documents. Make copies of everything and keep in a safe place.
• Have a reserve stash for emergencies such as automobile repairs, flight delays, illness
• Make early reservations for accommodation, including camping, to avoid costly, last-minute bookings
• Ask for the hotel's lowest room rate and take advantage of any package deals
• Renting a suite with a kitchenette can actually save you money by making your own snacks and meals. Get the kids involved and save money on eating out
• Avoid credit card abuse by planning a trip that highlights outdoor activities and avoids shopping malls, theme parks and other forms of high-priced entertainment.
• If your kids insist on theme parks, ask for family packages and discounts
• Summer is an excellent time of year for festivals and most have free performances and events for the whole family.

Remember it’s not about the amount you spend, it’s the time you spend together.

Protect yourself from the rising threat of fraud

Statistics show that fraud costs North American consumers billions of dollars every year. The spiel for money can come through telemarketing, the Internet or the mail.

• 94% of Internet fraud victims are between the age of 20 and 59.
• Almost all telemarketing fraud victims are over the age of 60. Many elderly people live alone and are susceptible to crooked telemarketers who pretend to be caring and friendly.

How you can tell if a request for a charitable donation or Internet product is legitimate?

• Use your common sense. If it sounds too good to be true, it probably is. Don’t believe in get rich quick schemes, including multi-level marketing and network marketing plans.
• If you are asked to send any money to collect a prize, it’s a con. Genuine contests do not request money from winners.
• Protect yourself:
• Never give personal or financial information over the phone or the Internet, no matter how convincing the individual is on the other end.
• If you are contemplating giving to a charitable group that you've never heard of before, examine it by calling the Better Business Bureau. Find your local organization at: www.bbb.org.
• Be cautious of giving your credit card digits over the phone or to a web-site. Your card could be billed for charges you have not approved.

One of Canada's growing scams is telefraud and criminals are progressively more bold and imaginative in their cons. It's estimated that telephone fraud costs Canadians hundreds of millions of dollars every year. No one is sure of the precise figure; most victims are often not willing to contact the authorities.

You have just won! ….

A frequent fraud involves a telephone call notifying the listener that a big prize, such as a new car or a luxury cruise, has been won. All that's required is a minor fee to cover incidentals such as delivery charges and taxes. Of course, the money is never recovered.

One con-artist scammed 700 Canadians with this technique for a total of almost $1 million dollars. He was caught, convicted and sentenced to a year in jail. At the same time, another con-artist well known to police has scammed upwards of $20 million; unfortunately he's never been caught.

Do not dial 90# for anyone!

A current scam involves a phone call from someone who distinguishes himself/herself as a telephone-company technician. The individual states they are conducting a test of telephone lines and asks the victim to simply dial "90#." Then he/she courteously hangs up. Nothing seems wrong until the unsuspecting victim obtains the following month-end telephone bill. The bill contains hundreds of dollars worth of long-distance calls illegally billed to the subscriber's number.

The 90# series is a code that gives the caller complete access to your telephone line, including long-distance calls.

Be cautious dialing 1-900 numbers!

Another telephone-based scam involves phoning 1-900 numbers. It works like this: you're informed that you've won a major prize. There are no fees or taxes to be paid. Merely dial a number, starting with 1-900, for details. When you call, you're put on hold while your file is being "located." Then, a long-winded person delays for some time. Finally, you recognize that something is wrong and you hang up. When your next phone bill arrives, you've been charged an extremely high per-minute charge for the 1-900 call.

But be aware, there are other area codes starting with an "8" that are just as dangerous, because people often assume that they must be toll free but they definitely are not. Since you have technically made the call, you are not eligible for a refund when you grasp what has happened.

Telephone fraud prevention tips

• Never send money up front if someone calls to say you have won a prize. This is the most frequent type of fraud.
• Never buy or invest over the telephone before you authenticate the company; ask them to send you validating credentials.
• Never disclose information about your credit cards, bank accounts or other finances to unwelcome callers. Legitimate callers already have this information.
• Disconnect if you're the least bit apprehensive.

These sites offer information that can assist in preventing you from fraud: www.phonebusters.com, www.scambusters.com.

Protect Yourself from Identity Theft!

Do you know what your personal credit history looks like? Most people don’t. But it’s important to understand and manage your credit history for a couple of reasons. First, credit unions and other financial institutions use credit reports and credit scores when making lending decisions, so it’s important to ensure the information on file about you is accurate. Second, checking your credit report helps protect you against fraud and identity theft.

Information that appears in your report is gathered from many sources, such as your creditors, public record sources, and collection agencies.

The Ontario Ministry of Consumer and Business Services advises that you check your credit report at least once a year. You can request a copy of your credit report by contacting a major credit reporting agency such as Equifax.