I am so happy to see that Scotia Bank posted record profits for the last quarter.  I was quite worried that my inflated bank fees might not be enough to keep them propped up amid the global meltdown.  But no, thankfully they were able to watch their pennies, and squeeze out a paltry $C1.1 billion.  And that’s just 3 months.

Just goes to show you, that with a little hard work, some determination, and generously gouging the hell out of your customers, you too can be one of the little success stories.

Today is the annual meeting for the staff of Credit Counseling Services of Atlantic Canada, where I will be recognized as their Client of the Year.   I was asked if I could provide a written copy of “my story” that would be presented at the meeting, complete with a professional voiceover.  I’m curious to see and hear what it looks like, and am supposed to be getting a copy to take home with me.

Here it is… my story…

We always assumed that we could dig ourselves out of debt… later.  Everything always revolved around “later”.  Need a new living room set?  Pick it out now, pay later.  Need a new car?  Get it now.  We can hang on until things get better.  Later.

There are two major flaws with that kind of thinking.  First, our definition of “need” was a little too broad.  When I think back to some of those purchases, I cringe.  We did not live extravagantly by any means, but we certainly lived beyond our means.  Credit was our friend, and we slowly sank deeper and deeper into a financial hole.

The other flaw with that thinking was that eventually…“later” would arrive, and we were seldom prepared for when it did.  Our idea of setting aside money because we had purchased something on “No Payments for an Entire Year!” never worked out, no matter how sincere we were.  There just always seemed to be something else that took priority.

So we continued to pile on the responsibilities.  First a mortgage.  Then a new car.  A baby on the way.  Then another.  A second new car.  We managed to maintain our financial heads above water, barely making our monthly payments, and hoping to be able to hold off just long enough to start paying things off.

Then disaster struck.

I was out of work for 5 months. It’s an unsettling feeling to have to put groceries on a credit card because there is no money in your bank account.  Our line of credit was exceeded.  The phone calls started.  The people on the other end weren’t very sympathetic.  The stress of those daily calls began to take its toll.

Eventually I was back to work and things began to improve.  With the worst behind us, we figured that we could finally begin to dig ourselves out.  But even though we were making payments, the damage was too great.  Our creditors demanded back payment for the months that we had defaulted, and we simply did not have the money to pay them back as quickly as they wanted.  Amazingly their suggestion often was “Is there anyone in your family or a friend you can borrow from?”.  We were being pressured to replace one debt with another.

Enough was enough.  Something had to change.  Friends of ours were clients of Credit Counseling Services, and were quite happy with how they were starting to turn their own lives around.  We talked about it, and decided that we needed to set aside any shame or embarrassment that we felt…  It was obvious that we couldn’t do this on our own.  We needed help.

Our first session was very humbling.  I can’t say enough good things about Ashley, but it was still difficult to hand over a stack of bills and talk about the mess that we’d gotten ourselves into.  She assured us that we had made the right decision and that, together, we would come up with a plan to get back on track.  Then we cut up our credit cards.

Ashley was right.  It didn’t take long before the creditors’ calls stopped, and we were no longer afraid to answer the phone again.  If someone did call who wanted to talk about our payments, we simply directed them to Ashley.  That alone was worth its weight in gold!

We also began to see results in our debts.  I actually looked forward to getting my latest statement in the mail.  I can remember when the first bill was paid off.  It was a very small one, but the feeling of seeing it completely paid, and knowing that more money would now be allocated toward another bill was a huge lift.

Eventually my wife and I would separate, and in doing so, separate our debt obligations.  Once again I went to see Ashley; this time with a list of bills that I wanted to solely take over.  I could have lowered my monthly payment, but was determined to pay off my debt as quickly as I could.  At the current rate of payment, it would take me 16 months to be debt-free.  My goal was to shorten that to 12.

I succeeded.

I’ve long ago gotten over any negative perceptions that I had prior to making that initial appointment.  I wrote a paper in university for my Personal Finance course on my experiences with CCS.  My professor asked me to present it to the other students.  Because I was a few years older than everyone else in the class, I had experienced some of the financial pitfalls that the course aimed to help students avoid.  I was a living example of what not to do, how it could affect you, and how to pull yourself out, while keeping your head held high.  I received an “A” on that paper.

When anyone ever talks about credit counseling, I always say the same thing.  “I should have done it sooner!”  That’s my single regret.  Get past whatever emotion it is that is holding you back, and realize that these people are professionals.  Not once did I ever feel judged or looked down upon.  The assistance that they provide is invaluable.

Now, my financial outlook is making a dramatic comeback.  I continue to set aside money for purchases that I’m interested in, rather than impulsively rushing out and buying something.  I have a clearer distinction between my “needs” and my “wants”.  I continue to make regular contributions into a “rainy day” fund for life’s unexpected challenges.  Things are good.

On a personal note, I would like to thank everyone at CCS, especially Ashley, for everything that you have done to help us over the past few years.  I honestly do not think that we could have recovered as well as we have, had it not been for your assistance.

I would also like to thank you for recognizing me as your Client of the Year.  I hope that you realize the tremendous value that your services provide.  You really do help change peoples’ lives.

Thank you.

I thought that the responses to the poll were interesting.  There’s a pretty wide-spread approach to how people prepare their taxes.  I decided to plunk down $20 and purchase U-file.  It took me a little while before I actually got around to installing it.  I may have been thinking that the longer I hold out, the better it’ll be… because I was pretty sure that I was going to owe Revenue Canada some money… and guess what?

I was right!

Remember the days of actually getting money back?  I think they called that a refund, didn’t they?  Some of you may be more familiar with that word than I am.  These days, I’m better acquainted with the empty your pockets approach.  Yes, it’s partly my fault.  I really don’t put much effort into trying to maximizing my deductions.  RRSPs would be a great start.  I always seem to have an excuse as to why I’m not contributing into them… my favourite one is “I don’t have any money!”

Well I think I’d better start making sure that I have money, because now it’s tax time, and guess what?  I still don’t have any money!  Yet now I have a tax bill!  At least if I was contributing into my RRSP account, I wouldn’t have any money, nor would I have a bill, perhaps I’d have a refund, AND I’d have something to live off of when I retire. 

Because I don’t know if my parents know this yet, but my retirement plan consists primarily of disguising myself as a retired greyhound and trying to get adopted.  That one’s for you Mum, enjoy!

Death and Taxes… Do I get to pick?

I decided to do something different this year, and tackle my income tax forms myself.  It’s been years since I’ve done my own taxes… back when I was single.  Now I’m essentially single again, and figured that I didn’t need to pay someone for something that I’m capable of doing myself.  Sounds great in theory, but I remember now why I preferred to just hand them over to someone else.  It’s not because they’re overly complicated.

I’m just lazy.

It didn’t help that I forgot one of the forms that I needed.  At least that’s the excuse that I told myself as I packed it all up again, and decided to put it off until tomorrow.

I’m curious what other people do with their taxes.

As part of my credit rebuilding mission, I requested copies of my credit report from both agencies tasked with maintaining that information in Canada.  There’s a fair amount of confusion when it comes to these credit reports.

First, in Canada there are two companies that maintain credit files: Equifax and Transunion.

Second, you do not need to pay a penny to see a copy of your credit report.  It’s totally free, but you will need to make your request in writing.  You will also need to include copies of two pieces of identification.  I used my driver’s license and my medicare card.

Third, your free credit report does not include your credit score.  For that, you will need to pay roughly $25.  I did not bother to request my credit score, as I have a pretty good idea what it is already.  (Although as I write this, it might not be such a bad idea to pay to receive my score, so I can get a baseline and do it again in a year or two.)

I dropped both envelopes into the mailbox on the same day, and oddly enough, received both credit reports in the mail on the same day, about 10 days later.  The difference between the reports is staggering.

Equifax’s report literally had 4 lines on me.  It told me that I have a cellphone account, and that it was paid in full.  It made no mention of the mortgage that I still hold in my name, which I thought was a little strange.

On the other hand, Transunion’s report was 6 pages.  It listed every single mailing address I’ve ever had, right back to when I was in high school.  It listed every phone number I’ve ever had, every single credit card that I’ve ever applied for, and every single company that has ever done a credit check on me.  It also listed the mortgage, and all the bank accounts I currently hold.  (Except the offshore one with all my millions that I’m safekeeping until the divorce is finalized…) Once you got past the fact that your entire financial life was being summed up in a half-dozen sheets of paper, it was quite interesting.  Even a little scary.

And there were actually a couple of surprises there in the form of who has done credit checks on me in the past.  Atlantic Lottery Corporation?  Back in 2002?  I don’t remember winning any large sums of money in the past, but I do think that I might have applied for a position with them around that time.  I don’t think that it went anywhere.  There was also a check from Capital One in 2007, which really surprises and annoys me.  That was during the CCS debt management program, and I would never have applied for a credit card.  So I’m a little confused as to why they ran a check on me.

For the sake of a few minutes of your day, photocopying a couple pieces of ID, and the cost of a stamp, I think that it’s well everyone’s time to send away for both of these reports.

Just in case.  You never know.

It’s been 7 years since I signed my mortgage.  Although I remember it like it was yesterday, it still seems like a lifetime ago.  In some ways it is.  My life now looks nothing like my life did at that point.  One of the many things that has changed is the interest rate available for new mortgages.

When I signed back in 2003, I opted for a mortgage that included cashback.  Meaning, in addition to the mortgage, they also provided us with “bonus” money that we used to buy appliances, or something else useful (I hope).  That option was great, but it also meant having a slightly higher interest rate than had we not gone for the cashback.  The final rate ended up being 7%.

Over the last few years the rates have tanked considerably.  They can’t stay this low forever, and someday people are going to be in for a rude awakening, but in the meantime, we enjoy them while we can.  I signed an early renewal at a rate of 2.3% this morning, opting for a short term mortgage because the house should be on the market before the year is out.  Better to save a little money on the monthly payment now, than continue to overpay until the current mortgage came up for renewal.

One less thing to worry about.

Hmm… remember when I said ages ago that I dumped my Sirius stock (SIRI) and was happy just to break even with it?  Well, I glanced at my faux-portfolio and noticed that it’s now trading above $1.  Yup, I could have easily doubled my investment had I just stuck it out and not wanted to get rid of it so badly.  It’s really a shame too… I was pretty excited when I purchase those shares, and really thought that it was going to amount to something. 

Oh well, Life happens.  It’s only money, right? 

I was checking my voicemails on Friday, and there was one from a nice-sounding lady from CCS.  She said that her name was Josee, and that the comments on my exit interview from a few weeks ago had gotten some notice… and that they wanted to offer me something.

Really?  Cool.  Maybe it was a prepaid credit card!   A new car!    The keys to the vault!  I had to find out, so I called her back…

She told me that CCS President and CEO John Eisner read the comments that I wrote on my exit interview form, and thought that they were great.  Apparently they select a Client of the Year, and ask that person to come in and tell their story…  They were so impressed with mine that they were offering me the honour of Client of the Year.

Well, it wasn’t a car, but it was still nice to be noticed.  I’ve been a big fan of CCS ever since I managed to get over my pride and realized that I wasn’t going to dig myself out of debt based solely on my good looks and charm.  There just wasn’t enough of that to go around!  I can’t stress enough how helpful they were, and how I wish that I had gone to them sooner.  I even wrote a university paper on my experiences (got an ‘A’), and was asked to present that paper to my class.  I hope that anyone in debt trouble considers going to them, because I know first-hand how much better my life (and credit rating) is because of their program.

So it all sounded great.  Go in, tell my story, and walk out with a feeling of accomplishment.

“Oh, and just so you know” Josee continued, “we videotape the interview, and show it at our annual gathering, so everyone in the organization can see an example of how their work benefits our clients”

Ummmm… videotape?

Even over the phone, I’m sure that my blood pressure spiked…   I carefully considered how I was going to phrase my response…

“Well.. I’m a little surprised by all of this.. and honoured to be given the opportunity, but I’m going to have to respectfully decline the offer…”

I don’t think that she was expecting that.  Things had been going along so well.  So I explained further…

“I’m great at writing, and I think going in and talking to you would be fine… but sitting in front of a video camera… well that scares the shit out of me.. excuse my bluntness…  I’d be so uncomfortable that I don’t think you’d have anything that you’d even want to show to people…”

She said that she understood, and respected my position… and that she’d still like to take me up on my offer of writing my story, if I would agree to that.  By all means.  Not a problem.  I can hide behind my keyboard, and not have to worry about my hair being a mess.

Still, it was nice to be recognized…