The Consolidation Loan - Part 4
The Pool

First Read: Part 1 | Part 2 | Part 3

John and Sara have been doing well with their new budget.  They’re using their credit cards but paying them off in full each month.  They have been in their home for over five years now and the equity is growing. They are starting to get an itch to improve or renovate!

They approach me for a loan for a new pool. And of course along with the new pool comes a hot tub and if you are adding a hot tub might as well update the deck too, right?

They are doing well – the credit cards are paid down each month and their line of credit is used and then paid down again through a month cycle. Because of all of the positive signs I approve a larger line of credit for the upgrade. They are also going to do a lot of the work themselves to save money.

By the end of the summer costs still ended up being more than they expected. The pool lead to a hot tub and new deck, which also lead to new landscaping.

It took most of the summer to get the work completed and at the end of it Sara was back in.  She realized she does not like the large line of credit. It was too daunting and she couldn’t make any head way paying it off. So instead we set this up as a loan secured by their house to ensure the rate was as low as possible.  Once their mortgage comes up for renewal we will blend it all in to one, why you ask?

Well the funds from this loan were used to improve the value of the property, making their home worth more if they want to sell; although they’re not going to want to leave their new yard for a long time!

Speak to a Libro Coach if you have plans for home improvements. We can work out a plan to achieve your upgrade goals.

Tanya

Posted on June 6, 2011 by Tanya Quipp

The Consolidation Loan - Part 3
Credit cards up again

First Read: Part 1 | Part 2

The last time we left off we discovered John and Sara were spending $500 per month more than they were bringing in.  This was a shocker to Sara, and John thought the numbers were wrong.  But numbers don’t lie.

So we sat down together and looked for ways to cut costs - internet bill, phone bill, gym memberships, insurance costs, entertainment and eating out. These were all large bills and always are. Remember they are on the road traveling with their children for sports and activities – eating out is easy BUT expensive. 

The fix: since I had done a consolidation loan once already if we did another one it would be just a band-aid fix.  In a year or so we would be right back in the same situation, which we don’t want. If you make a mistake and you learn from it, then it’s not really not a mistake but part of the road to success!

So we made a deal – once I month I would check in with them to see how the budget is going.  Sara would record their household spending each month.  If we could get in the positive for three months then I would help them out with a consolidation loan.

The first month, when I called Sara she felt wonderful, even with the credit card bills still there and not quite in the positive yet. WHY you ask?  Because she could tell me exactly where all their money was going; even if some of it was still to some bad habits, (like John’s smoking).  But at least it was in the budget and they could track every penny. The second month they were in the positive and knew they were not going backwards.

By the third month Sara was maintaining the positive number at the end of the month so we completed the consolidation loan and this time reduced the LOC limit down to $5000 for emergencies only.  Sara was ecstatic knowing everything was getting taken care of and they were moving ahead.  They were even gathering money in their chequing account each month, money left over!  Sara hadn’t experienced that since she moved out of her parents’ home!

Life was good!!!

If you see yourself in a similar situation, contact a Libro Coach for help and advice on how to own your life!

Stay tuned for part 4 of this series.

Tanya

Posted on March 24, 2011 by Tanya Quipp

Tax Time Trouble

Tax time can be an incredibly strenuous time as you deal with the busy spring and summer months, while at the same time trying to gather, organize and generally find anything that is income tax related.    Type in “Small Business Tax Tips” and you will find an overwhelming list of literature designed to keep you in line throughout the year. 

In my experience, here are the top three things that you need to keep in mind as a sole proprietor:

1. June 15th may be the deadline for when you need your taxes filed, but don’t kid yourself.  Any income tax owing starts collecting interest as of April 30th.  If there is one thing you do not want to pay interest on – it should be taxes!

2. The Shoe Box drop.  If your tax time routine includes a shoe box stuffed full of receipts in a jumbled mess – make 2011 the year of change.  Develop a system (daily, weekly) of going through your receipts, making sure the amount, vendor and other important items are clearly marked.  If you can’t make sense out of your receipts throughout the year, how can someone else? 

3. Be ready for the tax man.  I see many business owners have amazing years as they grow, but often forget that increased taxes are a reality of that success.  Whether you make instalments throughout the year, or set aside appropriate HST in a savings account – have a system.

What is your best practice?

Brian

Posted on April 19, 2011 by Brian Aalbers

You’re invited to a town hall meeting

Back in November Tania let you know we’ll be taking a fresh look at our website this year. Read her blog here.

It sounds like a simple project, but there’s more to it than refreshing graphics and adding a link to Facebook. We want to build a user friendly website and online banking portal that will be user-friendly and information rich. We’ll capitalize on the knowledge gained from our past websites and take advantage of new technology.

We're aiming to create an online experience that represents Libro's personalized approach to service and enables visitors to gain financial knowledge. Of course we’ll make it even easier to contact a Libro Coach because personal connections are still our priority.

To ensure the end product is of most value to you, we're hosting three town hall meetings in April where we'll show you concepts of new designs and online services we're currently working on. I'm inviting you to sign up to share your feedback as a user of our website and online banking. If you are interested please visit the sign up page for more information. Sign up closes Thursday, April 14, 2011 at 11:59 pm. We’ll provide food and give each participant an honorarium for your time and to thank you for your input.

Watch for the launch of the first phase of our new website at www.libro.ca this fall.

Jack

Posted on April 7, 2011 by Jack Smit

Local Excellence

Last week I had the privilege of attending the Business Achievement Awards at the London Convention Centre.  Each year these awards are given out to many deserving finalists, all of whom operate right here in London.  Throughout the awards ceremony, we are able to see exactly what makes each business successful in their respective fields.  From ground breaking video games, state of the art trading systems, and immaculate quality records – London has it all!

Want to see what makes them so great?  Check out the winners and here:

Business of the Year (Large Business Category) --Digital Extremes

Business of the Year (Medium Business Category) -- East Park Golf Gardens

Business of the Year (Small Business Category) -- Stiris Research Inc.

Quality Award -- CT Innovation

Environmental Leadership Award -- TD Canada Trust

Excellence In Human Resources Award -- Trojan Technologies Inc.

Innovation Award -- Cyborg Trading Systems Inc.

How can Libro help you make this list?

Brian

Posted on March 28, 2011 by Brian Aalbers

John & Sara – the consolidation loan Part 2

In my last blog we met John and Sara – lovely young couple with two cute boys.  Now the boys are a couple years older and are participating in extracurricular activities. The family is on the road a few times each week in the summer driving to ball parks and in the winter they are travelling to hockey arenas.  The kids LOVE it but, what about John and Sara's pocket book?

Sara called this time STRESSED out!  She cannot figure out why all their credit cards are all back up over $5000 on each card. And yes she has multiple cards - three of them actually!  So over $15,000 in debt at 19.99% interest rate!  I'm sure you can understand why she is stressed.

It has been two years since we last did the consolidation and everyone was so happy – remember…  I questioned whether or not this consolidation loan was actually doing them any good.

I spoke to Sara on the phone and she couldn’t figure out what was happening. I requested BOTH Sarah and John come in for a chat, just to talk.  I asked them to bring all of their bills - household, credit cards everything she could lay her hands on.   I’m pretty sure she was not excited about the thought of this appointment.

When they came in we sat down and ran though a budget of what they actually spend in a month.  Well SURPRISE – even though they had a household income over $80,000 annually they were spending approximately $500 more each month then they were bringing in. No wonder the credit cards where getting run up.  It’s never fun to point out to a lovely couple that they’re over spending but, someone has to do it. And who better than a Libro Coach who sticks to the facts?

The problem has been found, now how to fix it?  Another consolidation loan? Line of credit? Watch my next blog for the answer.

Tanya

Posted on March 24, 2011 by Tanya Quipp

John & Sara – the consolidation loan

Hi! I would like to introduce you to a lovely couple John and Sara.  They have been married for seven years and have two cute children ages 5 and 3.  They own their home but they also have a line of credit, credit cards and are just getting by.

So they come to see me about a loan to help out with their cash flow and get everything paid off so they can get away from high interest rates.

This is a wonderful idea!  I assisted them with a consolidation loan and off they go happy!

I thought I helped them. I spoke about paying down the cards each time to avoid the high interest rate, and discussed RESP (Registered Education Saving Plans) for the boys to save for their education.  Both John and Sara work for good companies with some of the best pension plans around.   

John and Sara were happy – we reduced their monthly payments by a few hundred dollars and the interest rate was cut in half on the loan compared to what they were paying on their credit cards.

The question is did I really help them?  Check back for my next blog as we move through John and Sara’s story to see if this consolidation loan really helps them out.

Tanya

Posted on March 16, 2011 by Tanya Quipp

Too Many Passwords?

Personally, I’m pretty good at remembering numbers, and I thought I had a decent system for the passwords I needed in my life.  It wasn’t complicated.  It was private so no one would be likely to guess them.

But I have to confess, gradually over the past couple of years or so, it has fallen apart on me.  I started forgetting my passwords.  Really.  I started logging them in a secure place, but that didn’t really seem convenient either.

Sites and services started demanding more complex passwords and wanting me to change them regularly.  While I understand it’s for my own good, and I would never want my identity or information compromised, habit still kept me from making an overall change to help me manage my passwords.  Well a couple of weeks ago, I admitted I needed a better system, and I figured there must be lots of people out there who have experienced the same frustration.

Try Googling “remembering passwords” and, like me, you’ll find more than enough ideas for systems that are secure yet simple.  Now I have been able to eliminate my bad habit of using the same password in many places – which was simple, but pretty risky.  In a nutshell, most systems recommend choosing a common “core” word that only you know, changing at least one of those letters to a character, and then tacking on a couple of key letters that represent and will be unique to the particular site or account where you need that password.

Happy Fraud Prevention Month – it takes 21 days to change a habit, so let’s all create more secure and still easily-remembered passwords by the end of March!

Tania

Posted on March 8, 2011 by Tania Goodine