All About Cars

cars

Do you have trouble understanding the terminology for the different types of cars on the market? We’ve broken down and defined 7 of the most common cars available for consumers.

Sedan

cars

The sedan is one of the most ubiquitous types of cars you’ll see on the road. It typically has 4 doors and a standard size trunk separate from the cabin of the car. There are several sub-categories for the sedan including the compact, sub-compact, notchback, and fastback models.

 

Hatchback

cars

Hatchbacks feature many of the same functionalities as a sedan but have a rear door that opens completely rather than a separate trunk.  Hatchbacks are great when you need quick and easy access to storage, and while most are a four door configuration, there are also two door hatchbacks available.

 

SUV

cars

SUV stands for Sports Utility Vehicle. It’s a powerful car with a big, boxy build that’s typically valued for its off-roading and soft-roading capabilities. 

 

Crossover

cars

A crossover combines the best of both worlds – the compactness and fuel economy of a hatchback with the power and the roominess of an SUV. Like their SUV counterparts, crossovers have soft-roading capabilities. Unlike SUVs, they’re constructed like a car and use a unibody construction rather than a separate body on frame platform.

 

Coupe

cars

A coupe is a sporty two door car with a fixed roof. It generally only has 2 seats (one for the driver and one for the passenger) and a smaller rear than a sedan. The meaning of the word coupe has changed and evolved over time and now can be used to describe four door cars with sporty, coupe-like proportions.

 

Convertible

cars

A convertible is any car with a removable top. The roof is either a retractable hard top or a soft folding top and can be raised or lowered at the driver’s convenience. This car is typically only seen in warmer climates or during the warm summer months in countries that experience all 4 seasons.

 

MPV

cars

An MPV (also known as an MUV) is a multi purpose or multi utility vehicle designed to offer lots of space and roominess for passengers inside. MPVs are often referred to as ‘people movers’ or ‘people carriers’ and many have an interior that can be easily reconfigured.

Ready to take the first step towards owning your own car? You can apply online right here!

Increase Your Savings

savings

Do you struggle with putting aside some extra money at the end of each month? Read our tips to help you increase your savings without putting yourself under too much financial strain.

Set Up Auto Saver

Most banks have the option to automatically put aside a certain amount of money each month. Whether you have a savings account or a TFSA, it’s an easy way to ensure that you’re adding to your savings each month. Some banks even offer the option to move a dollar into your savings account every time you make a transaction.

Give Yourself a Savings Goal

Whether it’s 5 dollar or 50, come up with an amount of money that you will make sure to set aside every single month. Whether you put it in a physical savings account/TFSA or put cash into a piggy bank, having a concrete goal to focus on will help you be proactive.

Remind Yourself Why Saving is Important

Focus on the big picture. Think of every potential emergency situation (car repairs, vet bills, medical emergency, school tuition increase etc) that could require some extra money being available.

On the opposite end of the spectrum, remember all of the positive benefits that can come from being a good saver; vacations, buying a new car, putting a down payment on a home, splurging on a new phone or some new shoes you normally wouldn’t be able to afford etc.

Be a Realist

Make sure that you’re realistic about your goals. If you’re barely able to scrape by each month as it is, give yourself permission to only put aside what you can absolutely afford. If you can’t afford to put anything aside that month, that’s completely fine too. Taking care of yourself and making sure your bills are paid, that you have a roof over your head, and that you have food to eat are the most important things you can spend your money on.

Need help with your savings goals? You can apply online right here!

Are You Going into Debt?

going into debt

Is it more and more of a struggle to pay your bills each month? Do you find that you have less money left over at the end of the month (if any)? Here are some questions to ask yourself if you think you might be going into debt.

  • Has your financial situation changed significantly?
  • Are you making less money than you usually do?
  • If so, is it temporary or will it likely be a long term adjustment?
  • Is there anything you can do to increase your monthly income?
  • Do you have any new debt or any lingering debts that you’re unable to pay off?
  • Do you feel like you’re just barely able to stay on top of your finances as it is and even the slightest added debt could push you over the edge?
  • Are you paying for everything yourself or do you share the financial burden with a partner?
  • Do you have any money left over at the end of each month or does all of it go to your expenses?
  • Realistically, will you be able to maintain your current financial momentum 3 months from now? 5 months? A year?

Force yourself to look at your financial situation as objectively as possible. Look at all of your accounts and create a log of exactly how much you owe. Then take your feelings out of the equation and ask yourself: Are you going into debt?

If the answer is yes, then it’s not the end of the world. In fact, the sooner you accept that there’s a problem the easier it is to get yourself back on the right track.

Much like with a health problem, catching the problem early is key. Even if your credit score hasn’t actually started to suffer yet, prevention is absolutely vital.

If you feel like you could use some guidance, feel free to fill out our online application here.

Credit Problems for Canadians

credit problems

Pretty much every single adult out in the world is burdened with some kind of monetary problem or another. Whether it’s bad credit, no credit, or slow credit, here are the ten most common credit problems Canadian consumers face today:

Bankruptcy: Bankruptcy is easily one of the biggest and most common credit problems. It’s an ongoing process that can last anywhere from 9 to 21 months. In order to qualify, you must owe a minimum debt of $1000.00. It’s important to note that your bankruptcy will stay on file for six or seven years from the date of discharge (depending on your province).

While it’s true that it can do a number on your credit score, the people filing for bankruptcy in the first place tend to already have horrible credit so it’s not much of a drop. Bankruptcy can be a saving grace in the long run because it eliminates debt so you’re free to start building your credit again from scratch.

Consumer Proposal: Consumer proposals are also fairly common for Canadians with credit problems. Entering into a consumer proposal is the ideal step before bankruptcy. The best candidates are those who have debts over $5,000 but not over $250,000 (including your mortgage), have a good job and are able to swing at least some payments each month (though can’t afford to make full repayments with interest), and who can’t get a debt consolidation because your debt is too high despite your steady income.

In its simplest form, a consumer proposal is an arrangement you reach with your creditors with the mediation of a trustee. You sign a legal contract and are immediately protected from debt collectors, and you also agree to a partial repayment of the unsecured debts you owe (with your creditors agreeing to forgive the balance).

Bad Credit: Bad credit is one of the most common financial ailments plaguing Canadians today. Whether you’ve developed bad habits where your money is concerned or you’ve fallen on hard time and can no longer make your monthly credit payments, there are always things you can do to climb out of the hole and re-establish your credit score.

Divorce: While legal costs can be a significant factor in pushing couples seeking a divorce over the edge into bankruptcy, the actual act of splitting up itself is the number one cause of financial woes.

Separating from your partner means your expenses go up but your income goes down. Where before two incomes were able to cover the bills and general cost of living, suddenly your income alone has to cover everything. You have to alter everything about your lifestyle which can do a number on your finances.

New to Country: One of the most important things a new immigrant to Canada can do is come up with a solid plan to establish a good credit score. No matter how excellent your track record was in your home country, you have to start from scratch when you immigrate.

Being in good standing with the major credit bureaus is a vital part of being able to successfully build a new life in Canada. Once you’ve proven to creditors that you can and will pay your bills on time, it’s easier to get access to more credit (or to have your limits raised).

Slow Credit: Credit cards can be an amazing resource, but what happens when you’re not able to pay your bills on time? Credit card debt is one of the biggest and scariest types of financial trouble you can find yourself in and it causes many long term credit problems, but there are a few surefire ways to avoid falling into it. Slow credit (consistently making your payments late) is often the first step towards bad credit. Here are some of the biggest causes of credit card debt: living paycheck to paycheck, bad budgeting, misunderstanding how interest accumulates, loss of or reduced income, and irresponsible spending.

Missed Payments: Staying afloat when you have too many bills to pay and not enough money is a challenge, and it’s understandable that certain payment due dates start to slide. Between credit card bills, mortgage payments, student loans, and car payments, the priority for paying off debt often goes to some rather than all of the bills you owe.

It’s easy to see how car, mortgage, or student loan payments can be missed but it’s vital that you contact your lender as soon as possible to prevent your loans from going into default.

Defaulting on Your Loans/Collections: The typical time it takes for a car loan to go into default after missed payments is between 60 and 90 days. If you miss your student loan payments for 270 days/9 months or more, your loan shifts from a state of delinquency into default. The time it takes for a Mortgage to go into default can vary but it’s always better to talk to someone at your bank before the problem grows. Most lenders don’t want to force you out of your home and will only do so as a last resort.

No Credit: As many frustrated applicants have discovered, it’s very difficult to get access to credit if you don’t already have a good (established) credit score. Whether you’re new to the country, young, or just coming out of bankruptcy, getting your hands on a credit card can be a challenge. But there are a number of things you can do start building a credit score that don’t just rely on co-signing with someone else (starting with applying for a secured credit card).

Repossession: The two main types of repossession happen to your car or to your home. In Ontario, if you’re late or behind on your car loan or lease payments, the lender (often the bank or the dealership where you purchased the car) has the legal authority to repossess your vehicle. They are also allowed to sell it so they can recover the amount of your loan still owed.

When your home is repossessed, there are two different terms that pop up: judicial foreclosure and power of sale. Different provinces prefer different tactics, but both result in you losing your home.

Need help getting your credit back on track after credit problems? Fill out an online application here.

Does a Car Loan Help your Credit?

car loan help your credit

Does a car loan help your credit? The short answer is yes. The long answer is a little bit more complicated. Before we get into detail about how a car loan specifically factors into your credit situation, it’s important to understand how credit is calculated.

Every adult has both a credit score and a credit report. Your credit score is a 3 digit number (much like a grade on a report card) while your credit report is the report card itself. Both of these things are affected by your credit habits.

If you have credit from a number of different sources and always pay your bills on time and in full, chances are good that you have a pretty great credit score. If you only have one type of credit and either don’t make your payments on time (this is known as slow credit) or don’t make your payments at all (this is known as defaulting) then your credit score is going to be bad.

A good credit score gives you access to better deals, better interest rates, and saves you tons of money in the long run. A bad credit score, on the other hand, can prevent you from being able to get a loan from any reputable lender (which means you’re stuck borrowing money from loan sharks or other subprime lenders with absurdly high interest rates).

So how can a car loan help your credit? It helps you create variety on your credit report (auto loans and mortgage loans are ‘installment loans’ which are considered a different category than credit cards) and, so long as you make your payments on time and in full, can help you prove that you’re responsible and can be trusted to borrow money from other lenders in the future.

It’s also important to understand how the amount of available credit used can affect your score. Much like with credit cards, it’s not about how much you owe it’s about how much you’ve paid off/the proportion of credit used.

If your credit limit is $1500.00 and you’ve already put $1300.00 on your card that’s actually worse for your score than someone with a $12,000.00 limit putting $3000.00 on their card.

By the same token, a smaller auto loan that’s only been 15% paid off is less helpful to your credit score than a much larger auto loan that’s 90% paid off.

Do as much research as possible before committing to a loan, and most importantly, remember to request a copy of your credit report each year! Even one error can negatively affect your score (which will then go on to affect the interest rates and types of loans available to you).

Now that you know that the answer to ‘Does a car loan help your credit’ is a resounding yes, why not fill out our online application here?

Trying to Save Money and Get out of Debt? Consider the ‘Adult Allowance’

Save Money

No matter how good you think you are at budgeting, most of us end up hitting the ‘I’m broke’ brick wall at some point before pay day. So what can you do if you’re trying to save money/get out of debt but you’re working with limited funds?

Credit cards can make it easy to give in to impulsive purchases but they can put a major dent in your ability to save when you’re forced to use March’s paycheque to pay back February’s purchases. 

We’d like to suggest an alternative system: The ‘Adult Allowance’

What is it?

It’s exactly what it sounds like – you look at your financial situation (how much money is coming in, how much money is going out, and what’s left over) and figure out how much disposable income you have available. Deduct how much of that disposable income you want to put into your savings and the money that’s left? That’s your allowance.

Depending on how often you get paid (weekly, bi-weekly, or monthly) you might want to break your allowance down further. For example, if you get paid once a month, divide your allowance into 4 so you know exactly how much you have available to you each week.

How does it work?

Now comes the hard part: Take as many of credit cards out of your wallet as possible to avoid the temptation to spend more money than you actually have available. Make sure you have an online banking app installed on your phone or available on your computer so you can actually track your spending and make sure you’re not going over your allowance. Another option is to take out half of your allowance in cash; having the money physically in your wallet is a foolproof way of ensuring you don’t go over your limit.

The Adult Allowance doesn’t work for everyone. If your income fluctuates month to month, then having a set allowance likely isn’t a viable option. But we think it’s the perfect solution for anyone who’s got a fairly stable financial situation and who wants to save money and stay on top of their finances.

If you feel like you need extra help with your finances, you can always fill out our online credit app here!

Finances Spring Cleaning Blog Round Up

finances

It’s officially the first day of Spring which means it’s the perfect time to take a closer look at your finances. Now’s the time to ask yourself if you’ve got everything organized and if your bill paying system is as efficient as possible (or if there is still work to be done).

We’ve curated some posts that we think can help you ensure you’ve got your money in order.

How to Give Your Finances a Good Spring Cleaning: http://www.theapprovalcentre.ca/blog/index.php/2016/04/25/how-to-give-your-finances-a-good-spring-cleaning/

How to Put the Brakes on Debt: http://www.theapprovalcentre.ca/blog/index.php/2016/08/29/how-to-put-the-brakes-on-debt/

Credit Card Faux Pas: http://www.theapprovalcentre.ca/blog/index.php/2016/06/13/credit-card-faux-pas/

Bad Credit Habits (and How to Break Them): http://www.theapprovalcentre.ca/blog/index.php/2016/06/20/bad-credit-habits-and-how-to-break-them/

PIN Safety Tips: http://www.theapprovalcentre.ca/blog/index.php/2016/05/30/pin-safety-tips/

And while it’s not strictly related to money, it certainly falls under the category of Spring Cleaning –

How to keep the inside of your car looking and smelling clean: http://www.theapprovalcentre.ca/blog/index.php/2012/12/14/follow-these-tips-to-keep-your-car-looking-great/

How to Reframe ‘No’ for Your Child When it Comes to Spending

spending

You’re out at the mall and your child sees a toy they’ve decided they absolutely cannot live without. They beg you for it. You look at the price tag and say No, you’re not spending money on that. They throw a fit in the middle of the store. You try to leave the mall as gracefully as possible while carrying a screaming child. You make a mental note to find a babysitter the next time you really need to shop.

Most parents or guardians can relate to the experience of having to turn down their child’s desperate pleas for an expensive toy, game, or item of clothing that they don’t need. So how do you let your child down without also inadvertently triggering a temper tantrum?

Reframe ‘No’.

It’s not easy, and there are times when reframing is not going to be enough to prevent a negative reaction, but over time your child will learn the value of money while also developing the skills they’ll need later on in life to avoid chronic impulsive spending.

So how do you that? Here are a few different methods:

Tell your Child that No doesn’t mean never, it just means Not Right Now.

Tell your child that just because they’re not getting the item they want right now doesn’t mean they’ll never get it. Explain to them that smart spending means not impulsively buying items that are going to cause you to go over your budget or to put yourself in debt. This is also a great time to introduce your child to the 24 hour rule.

Tell your Child that You already got X item, and there isn’t money in the budget for Y

Sometimes your child might have already been allowed to choose something and now they want something extra. If that’s the case, then this is a great way to explain the concept of budgeting to your child (a skill that will help them immensely when they start earning money and/or living on their own).

Tell your Child that they can Earn the Money for it

You might be inclined to give your child the opportunity to earn the money for the item they want. Whether it’s by completing household chores, getting a certain grade on a test, or lending you a helping hand with a project, giving your child the chance to work for something they want is a great way to help them understand how the world works once they’re old enough to get a job.

Tell your Child to Sleep on it and if they still want they can add it to their Christmas/Birthday/Hanukkah list.

This can be a great way to stop a temper tantrum in the fledgling stages. By telling your child to really think about the item in question rather than being forced to make a decision right then and there, you’re helping them to understand the concept of delayed gratification (which is an important skill and one often required to prevent impulsive spending and debt.)

Frugal February Check In

As we’re getting closer to the end of the month, we think it’s the perfect time for you to take a step back and look at the progress you’ve made so far. We’ve come up with some questions to help you reflect below:

How many of your goals have you achieved?

Sticking to all of the goals you’ve set for yourself can be difficult but here’s the perfect opportunity to reflect on the ones that you were able to stick to!

What areas still need work?

It’s rare to perfectly master something the first time you attempt it and it’s only natural to realize that you have some unexpected weak spots. Now’s your chance to work on those weak spots and to try and improve them moving forwards.

What have you learned about yourself?

Self-reflection is important in all areas of life but it’s particularly vital when it comes to your finances. What surprised you about how you’ve handled this month?

What would you change about your spending habits if you could redo this month?

Rather than thinking in terms of ‘success’ and ‘failure’ think about how you can use your missteps and use them to improve!

What lessons will you continue to apply to your monetary habits beyond ‘Frugal February’?

Practicing healthy spending isn’t  just exclusive to this challenge. Take what you’ve learned about yourself and continue developing better financial habits!

Serious About Saving? Take our Quiz

saving

One of the most important components of our Frugal February challenge is ‘saving money’ but how can you tell if you’re saving effectively?

Take our quiz to see where you can improve!

Do you put money aside each month?

  • Yes
  • No
  • Sometimes

Are your savings automated (i.e. does your bank automatically put a set amount of money aside for you)?

  • Yes
  • No

Do you have a Savings Goal?

  • I have more than one
  • Yes
  • No

Are you good at saying ‘No’ to Impulsive Purchases?

  • Yes
  • No
  • Sometimes

Do you have a TFSA or an RRSP Account set up?

  • Yes
  • No

If you answered yes to all or most of these questions, you’re on the right track! If you answered No or Sometimes more often than not then we suggest you take a close look at the areas where you can improve.

Good luck and happy saving!

If you feel like you need extra help with your finances, you can always fill out our online credit app here!