Debt Free in 30

Latest Episodes:

191 – Pay Off Debt First or Follow Your Passion? Apr 28, 2018

Show notes

As a Licensed Insolvency Trustee, I'll always advise that you prioritize debt repayment. Why is it important to pay off debt first? So that you are no longer burdened by it. While that is the most prudent course of action, not everyone wants to wait until they are debt free before pursuing their dreams. For example, if you are a recent graduate, you might not want to delay starting a business until you've paid off all your debt.

This is exactly the decision that my guest, Alex Grodnik, made. Still owing $75,000 in student loan debt, he left a stable job to follow his passion. But, should you follow in his footsteps? Alex says it depends on the kind of person you are and if you're willing to take risks.

More on Alex's story, and some practical advice, on today's podcast.

190 – The 80/20 Rule of Money Management Apr 21, 2018

Show notes

Money management is hard. That's why so many people don't do it. Over the years at many credit counselling sessions with clients I've explained budgeting, and spreadsheets, and budgeting apps, and lots of other techniques to manage money. Some of my clients love the process of recording every transaction. Others, not so much.

So, what can you do if you want to keep track of your money, but don't have the time or the inclination to keep a spreadsheet or spending journal?

You cheat.

By cheat, I don't mean "act dishonestly", I mean "avoid something undesirable by luck or skill", like eating healthy to "cheat" getting sick.

On today's podcast I give my thoughts on how to manage your spending without a budget, and I explain how the 80/20 rule, known as the Pareto principle, can be used in all areas of money management, and in life.

189 – Can Blockchain Technology Save the Credit Scoring System? Apr 14, 2018

Show notes

I've said it before: when it comes to credit rating agencies like Equifax or TransUnion: You are not their customer. You are their product. Your data and loan history are for sale to any lender who is willing to pay for the data. But what if this could be flipped upside down? What if you could own your own credit history and control who gets to see it? Well, our guest today says that can be made possible with the power of blockchain technology.

Derek Silva is the head of community relations at Bloom Protocol. Bloom is an end-to-end protocol for identity verification, risk assessment, and credit scoring and it runs entirely on the blockchain.

Is it possible that Equifax will be replaced by Blockchain technology?

That's our discussion today on Debt Free in 30.

188 – Why More Women are Filing Bankruptcy Apr 07, 2018

Show notes

In our latest bankruptcy study, we discovered that over the last 5 years women have been filing for bankruptcy in higher numbers. In 2012, 42% of women filed insolvency and by 2017 that number reached 48%. But, it's not that women are suddenly using more debt. What we've noted from our client data is that female debtors face a unique set of challenges that drive women to turn to debt to makes end meet and then prevent them from being able to keep up with their debt repayment. For example, two thirds of women are either single or divorced and struggle to manage expenses on a single income. Moreover, women earn 9% less than male debtors and are also 3 times more likely to be a single parent than a male debtor.

This is what our average female client looks like. But, why is it that women are increasingly finding themselves in trouble with debt? What can they do to better tackle debt problems in addition to other life challenges? Sharing their expertise today are guests Gail Vaz-Oxlade, Kerry K. Taylor, and our Trustee in the Oshawa office, Alison Petrie, with co-host Sharon Hoyes.

Gail Vaz-Oxlade agrees with our findings that women's life circumstances are completely different from that of men's. That's why she suggests women need a different approach to money:

We need to be far more vigilant about what we're doing because we're going to have to live on whatever we save for a lot longer time.

So, how can women protect themselves in life emergencies?

According to our experts, preparation for sudden life changes is key. Gail believes women need to change their mindset of being caretakers of everyone else and not themselves. She suggests that although there may be love and trust in a marriage, there's no downside to having "his and her" accounts:

If you end up getting divorced, if your husband ends up getting smashed to pieces on the highway, you will be so glad you have money in your own name. I don't understand why that is a problem.

And if you're a stay-at-home mom, Gail says you should pay all the bills and whatever money is leftover should be split 50/50 between husband and wife.

Kerry Taylor seconds this and believes women should try and "disaster-proof" their lives:

Just because I know bad stuff happens to good people all the time and you need to account for the future as well as the present.

All that and more on today's podcast

187 – Advice for Tenants Renting a Property Mar 31, 2018

Show notes

How can you find a good place to rent, even if you have damaged credit? Today's guest runs her own property management company, and she gives us the inside scoop on how to find a good place, and how to convince the landlord to rent to you.

186 – Why It's Difficult to Prevent Online Fraud Mar 23, 2018

Show notes

Credit card fraud affects many stakeholders. It's damaging not only to consumers, but also to merchants and financial institutions. In addition to losing money, credit card fraud can ruin a customer's relationship with a retailer as well. But with advancements in card security like having a chip and PIN, how does fraud continue to be such a big problem? How can Canadians protect themselves? What can retailers do to limit their losses? Those topics and practical advice on today's show.

185 – 3 Types of Bankruptcies We Expect in 2018 Mar 17, 2018

Show notes

At the end of last year, Ted Michalos and I predicted three types of bankruptcies we expected to see more of in 2018:

People will be denied for debt consolidation and refinancing.
Ontarians will be dealing with lower home equity and as a result, end up filing for more proposals
We will see crypto-currency related bankruptcies in the New Year.

To review those predictions now that the year has started and to share his insight, I'm joined today by our Manager of Consumer Insolvency, Scott Terrio. We'll look at issues like whether the new mortgage rules impede Canadians' ability to consolidate their debt and what impact home prices will have on insolvencies.

184 – Debt: Why is No-One Listening? Mar 10, 2018

Show notes

Household debt to income levels in Canada continue to rise. We now owe $1.71 for every dollar earned. But, with no shortage of experts discussing the risks of high debt and how to repay it, why is it that we continue to spend? Why do we find it so hard to say 'no'? Are we just comfortable with debt now, as a society?

To discuss these questions, I'm joined today by a panel of experts: Gail Vaz-Oxlade, Kerry K. Taylor, and Robert Brown. Using their years of experience and insight, we dig into why it seems no one is listening to debt warning signs.

First off, should we even worry about debt? Let's say I'm someone who owns a home in Toronto. It's worth a million dollars today. My mortgage on the house is $500,000 and I make $250,000 because I'm a lawyer. My personal debt ratio is 2:1. But, that's not a big deal because the debt to income ratio includes mortgage debt.

So, does it even matter if I owe so much? According to Gail Vaz-Oxlade, yes, it still does:

When you are in debt, what you have done is eliminated your options.

Gail says that in everyone's life, rain falls. So, if you have no savings, and are over-extended on your mortgage, you won't have choices to make other than to service your debt.

For Kerry Taylor, debt not only reduces your options, but it reduces your ability to stay healthy because of the added mental stress. So, yes, having debt matters.

If having debt matters, why do we keep owing so much?

Robert Brown argues the reason for high debt could be that people tend to make money decisions based on their "now situation," but don't consider what could happen in their future, like a job loss, or a rise in interest rates:

What if they tighten up mortgage regulation rules? Well they have...and all of a sudden, a situation that was barely, barely manageable not by a reasonable standard but at least somewhat manageable becomes unmanageable because they had absolutely no room to move.

What Robert is referring to is called "present bias." Kerry explains:

We look at our present self and we live in the present. We don't really have the ability to look into the future and see how those present decisions such as spending money, eating poorly, not exercising will play out in the future.

Lots more discussion on today's show.

183 – A Balanced Look at the Real Estate Market Mar 03, 2018

Show notes

Talking real estate isn't a first for the Debt Free in 30 podcast. We've had many experts like Hilliard Macbeth, Ben Rabidoux, and Alex Avery provide their insight on whether renting is better than buying and vice versa.

But we've never had the most obvious guest to talk real estate: an actual realtor. On today's show, we're chatting with Scott Ingram. Scott's not just a realtor, though. He's also a Chartered Professional Accountant. But what really sets him apart is that he likes to empower his buyers by educating them.

On today's show Scott Ingram tells us how many realtors there are in Toronto (it's a huge number), and he tells us what real estate statistics we should watch, and which ones we should ignore.

182 – Why Payday Loans Won't Go Away Feb 24, 2018

Show notes

In early February, we released updated research that shows 3 in 10 Ontario insolvencies involve payday loans. Payday loans have been a fairly popular discussion in 2018, as the Government of Ontario changed laws lowering the cost of borrowing for these types of loans and the City of Hamilton stepped in to be the first municipality in Ontario to limit the number of payday loan locations.

Yet despite all the warnings and changes, payday loan use among our clients is on the rise. Why aren't these changes working? Why are indebted Ontarians in fact taking out bigger and bigger loans from payday loan companies? To answer these questions and discuss the unintended consequences of recent changes to the payday loan industry, I talk with my co-founder and fellow payday loan antagonist Ted Michalos.

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