Debt-Free Forever Gail Vaz-Oxlade (best ereader for epub TXT) 📖

the “loan.” One woman wrote me to say that she was appalled when her statement came in and she had more than $160 in bounce fees.

I hate all kinds of overdraft protection. I hate the idea that overdraft protection gives people a licence to ignore their cash management. They can spend whatever they want, whenever they want, because overdraft protection is there to catch them like a safety net.

The banks don’t mind one bit when you go into overdraft, since overdraft interest rates are often well above regular lending rates—one bank I checked charges 21% interest on your outstanding overdraft—and going into overdraft automatically triggers a monthly fee. If, in fact, overdraft is just for the odd slip, as the marketing material says, then why do some banks offer the option of going $5,000 or more into overdraft? That’s not a little slip.

The answer to running into overdraft is not overdraft protection; it is to better manage the cash in your account so you don’t try to spend money you don’t have, bounce cheques, and rack up exorbitant fees.

1.Get yourself a notebook.

2.When you put money in your account, add it to your balance.

3.When you spend money from your account (be it a cheque, bill payment, a debit card transaction, or a cash withdrawal), debit that amount from the balance in your notebook.

4. Keep your eye on your balance.

If you think that sounds like too much work, you’re a dope. You’d work at least this hard to find where gas is selling for a penny less, or where tuna is two for $1.39, or where wings are all-you-can-eat for $3.99. Staying out of overdraft is one of the best deals going.

Getting Out from Under Student Loans

If you went to university or college and borrowed money to get you through, you may still be walking around with student debt as part of your debt portfolio. Often people graduate from school with more debt than they can manage to repay on the incomes they earn from their first jobs. It can get pretty depressing to be five years into your working career and still be paying off your student loans.

Well, you could declare bankruptcy! No, that won’t work. Even if you owe more money than you can afford to repay, you’ll have to suck it up because you’re not allowed to discharge student loan debt through bankruptcy until you’ve been out of school for at least seven years.

Many people don’t realize that the student loan system actually charges more than banks and other lenders for the use of their money for two reasons:

1. No interest accumulates on your student loan debt while you remain in school … so it’s interest-free borrowing until you leave school (to a maximum of seven years).

2. They give you a six-month window during which you do not have to make payments after you’ve left school, so you have some time to find a job. You are, however, charged interest. Believe it or not, more than half of all student loan borrowers don’t know this. Hello! Didn’t you read the fine print?

So why don’t people just consolidate their student debt with a regular lender after school? First, they may not qualify. That’s right, having taken out whopping loans to get a ho-hum degree, which has left you earning $10 an hour, no other lender may consider you a good-enough risk, And while the student loan system is happy if you take forever to repay your debt—the interest clock just keeps ticking—most lenders won’t be happy with you taking 10 years to repay your student loan. If you go to another lender, you had better be dead serious about repaying your loan.

Second, as long as you’re part of the student loan program, you may pay through the nose, but you have options. Canada Student Loans or Integrated Student Loans (offered by Saskatchewan, Ontario, New Brunswick, and Newfoundland and Labrador) will let you

• temporarily take a pass on payments. Unemployed or not earning much money? If you are unable to make payments, you could be eligible for interest relief through which the government will pay the interest on your loans for you.

• decrease your monthly repayment amount by extending the amount of time it will take overall for you to pay off your loan up to 15 years.

• reduce the amount of your student loan up to three times to a maximum of $26,000, if you face exceptional long-term financial difficulties and have been out of school for at least five years.

• eliminate your loan completely if you have a permanent disability—physical or mental—that restricts your ability to perform the daily activities necessary to go to school or work.

There are also several tax relief measures that have been brought in to try to help students deal with the growing debts with which they’re graduating:

• A 17% tax credit on the interest you pay on your student loan each year

• An education claim of $400 per month on your tax form for full-time studies

• A non-refundable textbook tax credit of $65 for each month you’re enrolled in a course that entitles you to a full-time education tax credit

• A full tax exemption for all post-secondary scholarships and bursaries. You’ll still receive a T4A slip, but the amount doesn’t need to be reported on your income tax return.

If you do not make your student loan repayments on time, the government will send your account to collections, you will be badgered, and you’ll end up with a really crappy credit history. You could end up paying more in interest. They will hold your tax refunds. And you could face legal action.

The only way to deal with this is to get yourself on a debt repayment program, find the money, and pay off the loan(s). Your life may suck for a while as you pour all your extra money into getting to debt-free, but it beats the pants off watching your credit history go down the crapper.

YOU CAN DO IT!

You don’t have to