DAVID SKLAR Profile & Helping You Get Out Of DEBT

David Sklar, CPA, CA, CIRP – President. Immigrating to Canada from South Africa in 1979 gave David a true appreciation of what starting over is all about. By 1981 he had earned his Canadian Chartered Accountant designation (he had previously earned a similar designation in South Africa) and later began working in the Insolvency Field where he discovered his personal satisfaction in helping people through financially troubling times and onto a better life.

In 1997, David formed David Sklar & Associates Inc. a caring, professional firm that helps people deal with their financial problems and insolvency issues through a wide range of exceptional services. Over the years, David Sklar & Associates has grown to include six Greater Toronto Area Locations and is one of the largest filers of Consumer Proposals and Bankruptcies in the GTA.

All of David’s Associates and Employees follow the credo “Treat people with respect and understanding and always go the extra mile to make a positive difference in someone’s life.” In the frightening and chaotic world of financial insolvency – David Sklar & Associates alleviates their clients’ current financial fears and provides hope for the future through positive and effective counselling.

David is currently a member of the Canadian Institute of Chartered Accountants and the Institute of Chartered Accountants of Ontario. He is also a Licensed Credit Counsellor, has earned the CIRP designation (Chartered Insolvency and Restructuring Professional) and is a general member of the Ontario Association of Restructuring Professionals.

Helping you get out of Debt

Courtesy: David Sklar & Associates, www.davidsklar.com

Paying more than the Minimum amount

To help getting those loans or credit card debts paid down faster, paying more than the minimum payment per month will help you. With a large loan and making only minimum payments it can take much longer to pay it off.

In a recent article, we showed you how a $10,000 credit card at 19.99% will take 109 months to pay off when you pay only $200 per month. Increasing the monthly payment by $100 to $300 per month will pay off that debt in 50 Months, under half the time. The more you can pay on your loans per month, can help decrease the length of time of the loan, and the amount of interest you are paying out.

See our article on how much interest am i paying on credit card to see how changing your monthly payment amount makes a difference. Every extra bit going towards paying off your debt will make a difference.

Spending Less

If you are spending more than you make per month, your debt will continue to increase and you will need to get this under control. Knowing your monthly expenses and having a plan in place for your allotted expenses is a start to helping see how much you are able to spend, while not gaining extra debt. Spending less than you make is the goal here. If there’s something you want to purchase, make sure you have the available funds to make that purchase without putting it on credit.

Our monthly spending chart http://www.davidsklar.com/blog/monthly-spending-plan/ is designed to help give you the starting place to see all your expenses, and to help see how much you have available for certain allotted expenses. This can help to let you know what you can and cannot afford. Look for expenses that can be reduced or taken out altogether.

Paying Off the Most Expenses Debts

When you have multiple debts you are paying off, it can be a bit overwhelming on what debt you should focus on more, or if you should just pay all at the required minimum monthly amounts. One option that you can choose for multiple debts is to choose the debt that has the highest interest rate. The higher the interest rate, the more you are paying on that loan in interest payments. Work towards paying this one off the fastest and first. Note that it is always important to pay all of your debts each month in order to keep a good credit history. Don’t miss any payments.

Once you have the first debt paid off, you can then work on using that money to pay down the next more expenses debt that you have. Getting your first debt totally paid off will be encouraging, and will show you that you can get your debts paid off and be debt free!

Buy Used or New to You Automobiles

An automobile loses between 15 to 20 per cent of its value each year, on average. One way to help save you and your family some money is to buy a used automobile. Buying a good quality used car, can help you save money and help pay off your debts faster. For advice on buying used cars see. http://www.consumerreports.org/cro/cars/used-cars/buying-advice/index.htm

One Car or Two

If your family has two or more automobiles, consider getting rid of one of them. If this is a possible option for you and your family, this can help free up some money each month into paying down debt faster. Granted having a car at your will and call can be useful, but this can be a costly expense per month or yearly, especially when those unexpected car problems arise and force you to dig in to your pockets to pay that extra expense.

Some alternatives to driving are carpooling, transit system, walking (if close enough), or cycling to work are a few possible options. The cost of ownership per car does add up each month, from gas, insurance and maintenance. Take this extra money and look at paying down your more expensive debts.

Groceries

A person’s grocery bill can quickly add up over the weeks. One way to save more on your monthly grocery bill is to stock up on groceries when there are sales. This is extremely helpful for non-perishable groceries and items that can be put in the freezer. Checking each week to see what items are on sale, can help you to stockpiling these sale items, and help to cut down on your grocery bill each week/month. Naturally there will be items such as milk as so on that can’t be stockpiled, but focusing on the items that can, will be helpful. Being a smart shopper can help in saving more.

Overtime or Second Job

When money is tight, and your debts are not getting paid off fast enough, consider working extra overtime (if this option is available) or look at getting a second part time job. Using this extra income and focusing it towards paying down the debt will go a long way. Find some options where you can make some extra money per week/month. See what hobbies you can use to your advantage and start a side business. Check with http://www.servicecanada.gc.ca/eng/lifeevents/business.shtml regarding starting a business for some helpful tips.

Knowing when and when not to spend

Tracking all of your expenses each month, to see where all of your money is going is extremely important. This is an important task for you and your partner. When looking back at your expenses and spending patterns for the past few months, this can give you some extra insight into where your money has been going.

Refinancing

Mortgage refinancing is the procedure of changing you mortgage with a new mortgage, usually with altered terms than your first mortgage. Refinancing your mortgage can be an option for consideration. First you would need to see the penalties involved and calculate if refinancing is a suitable option for your family or not. If refinancing is an option for you, then this can help free up some money, and help you pay down your debts faster.

If the interest rate on the new mortgage is considerably less than the first mortgage, then the homeowner can save substantial money, and thus have a lower monthly payment. You will need to review this option in detail before considering this, including all the advantages and disadvantages.

Budgeting and Spending Plan

The best way to be in control of your finances is to have a budgeting plan. Know how much money is coming in, and where the money is going.

Not everyone will like making a budget, but it is something that is highly advised to do. Tracking all of your expenses can be very eye opening, and will help you to spot any expenses that can be reduced or cut all together. See our budgeting series for more information on setting up your budget and getting control of your finances.