Case Study of Success – Sharon

Sharon – A successful case study story we’d like to share with you.

Sharon, a well respected career nurse, suddenly became a single mom. She was left with a large mortgage, a car payment, and $70,000 of credit card & line of credit debt, which by the way she herself did not create. Sharon’s three young daughters were her priority, but she was unable to spend the time required with them due to needing to work to service the debt.

Sharon sold her house and downsized, but that still wasn’t enough and she continued to work her second job on the weekends. Being worn out and not giving the attention needed to her daughters. Sharon had no choice but to look for options to deal with the high cost of servicing the $70,000, after all it was taking roughly $1500 per month out of her pocket.

Sharon went to see a company who claimed to be able to help her with her debt, but their plan was quite unattainable given her budget, and further to that they wanted to take back or collapse the RESP’s that were in place for her daughters future education. Could you imagine? Looking for help, only to find out that the “help” will make things worse.

Thankfully Sharon decided to get acquainted with some of the ins and outs of the “debt help” industry in Canada, and that is how she found us. We were able to prepare a similar solution for Sharon, however our plan ended up being roughly $30,000 less expensive, and she kept her children’s education fund intact! Do you think Sharon was happy that she decided to do some research before making a decision? I say it all of the time; when looking for debt relief, a well researched consumer is a 4 Pillars client every time hands down.

Now that is very quick story without many details as to how we were able to help Sharon get a plan in place. But what I will tell you in short, is that the creditors were at first not interested in her original offer. But because 4 Pillars is an intermediary representing solely the interest of our clients, we were able to bring the offer back to the table multiple times and work on behalf of Sharon to see this deal through to completion.

If a company who claims to be able to help you get out of debt receives their funding from the creditors or is able to keep a portion of the money that is being paid back to your creditors, then they are unable to represent 100% solely your best interest. It doesn’t make them a bad company, simply put their hands are tied in this regard. That’s why more and more people every year, just like Sharon, are choosing to become a 4 Pillars client.

Congratulations to Sharon who now is in a completely different place financially, is spending time with her daughters, and doing the things that truly matter in life!

Ryan Brown

Budgeting for Baby

From pre-natal preparations to preschool to post-secondary, raising a child in Canada is not for the financially faint of heart. The average annual cost for raising a child to the age of 18 has been estimated to be a cool $13,000 which, of course, will not necessarily decrease at that age if you plan to pay for college or university tuition. While overwhelming, it can be useful to remember the old adage that Rome wasn’t built in a day (and neither will your RESP!).

However, if you are expecting a joyful new addition, the time has never been better – or more crucial – for prioritizing your personal finances. Before you begin preparing the baby’s room, set some time aside to prepare your bank account first – as a new parent, you will have enough to worry about in the months to come! Paying down your debt now, building up your savings and planning ahead with a budget are the best ways to set yourself up for financial success.

If you have debt, pay it down now

While you may not be able to pay all of your debt off within the coming months, make sure you are managing it as effectively as possible. According to a survey by TransUnion earlier in 2017, Canadians are spending more on credit even though we are now carrying fewer cards.

Here are a few strategies for taking charge of credit cards:

  • The stacking method – If you want to hit your debt where it hurts most, focus on the card with the highest interest rate first because this is your most expensive debt, and pay at least the minimum on the other cards.
  • The snowball method – If you are more motivated by momentum, try focusing on paying off the smaller, more bite-size chunks first. While you may not be paying down the most costly credit, understanding what motivates you and having the best plan in place for you are important steps toward success.
  • The consolidation loan method – If you have several sources of debt overwhelming you with interest and stress, talk to a Debt Relief Specialist about consolidating your loans into one manageable monthly payment, preferably at a more attractive interest rate.

Don’t forget to save

While it is important to manage your debt, you need to balance your payments with your savings. Debt repayment plans and savings plans are not mutually exclusive. Building up some cash reserves is another important step toward overall debt reduction – the more expenses you are able to cover with cash in hand, the fewer expenses you will need to cover with credit.

One strategy for freeing up more cash in the short-term is to focus less on long-term savings, such as RRSP contributions, which will be less useful if you’re in a lower tax bracket anyway. Additionally, savings help to cushion the blow of any unforeseen expenses or emergencies, such as having to leave work earlier for your maternity leave due to health concerns. Think of your savings as your insurance plan; think of your credit cards as your last resort.

Make your budget your new best friend

The best way to plan for the future is with the help of a budget. While preparing for baby is more fun than preparing your budget, start thinking of your budget as your new best friend. Like any best friend, your budget will help you through the tough times and keep you motivated the rest of the time. The most important advice you need to ask of your budget before baby comes is:

  • How will our income change on parental leave? Figure out how much employment insurance (EI) you are entitled to and any employer benefits you can access. If you can afford to, test out your future income reduction by restricting your budget ahead of your leave.
  • How will our spending habits change with a baby in our life? For example, diapers are not currently part of your monthly spending, so you will need to account for those. Think about everything else you will need to spend more on – such as your water bill – and the things you may get to spend less on – such as gas, if your current commute is a costly one.

Once you’ve created a budget, start using it – now! You can update your budget as your needs evolve, and it will help you to distinguish baby’s needs from parents’ wants. There is a lot of good advice available to new parents, and balancing needs and wants is a common thread.

If you’re expecting a new bundle of joy but feeling overwhelmed by a bundle of debt, don’t be afraid to ask for help now. Debt is a major source of stress, and you will have enough of that to deal with as a new parent. Call your local 4 Pillars Barrie office to set up a free consultation session with a knowledgeable Debt Relief Specialist.

A 10-Step Money Management Plan to Organize Your 2018 Finances

20-year financial veteran Paul Murphy explains his system for building a realistic money management plan. If you’d like an expert to review your debt situation, you can contact your local 4 Pillars office here.

After working in the finance industry for 20 years, there’s one truth that seems to be proven again and again: people who are good with money tend to spend more time organizing, planning, and knowing exactly what’s going out—and what’s coming in.

Now, you might hate spreadsheets. Or dread actually looking at the math behind your income versus expenses. But it’s something that we all need to do every once in a while.

Today, take a few hours and complete the following 10 steps. By the end of this session, you’ll know:

  • Where your money goes every month—and where you can cut expenses.
  • A complete picture of your net worth, total debt, and financial health.
  • Hidden places to cut fees, reduce unneeded expenses, and a realistic plan to pay down debt faster.

Step 1: Assess your situation, know your net worth

If you’re serious about improving your finances, you need to know your net worth. This is an exercise that is helpful to complete each year.

Your first task is to document every debt. You can use a spreadsheet. Or just a notepad, if you like.

First, list all of your debts.

Make a comprehensive list of all of your debts. Make sure to include debts such as:

  • Mortgage
  • Car loan
  • Credit cards
  • Overdraft
  • Utilities you’re behind on
  • Small loans (such as payday loans or in-store credit cards)

Next, break the list of debts down into secured and unsecured debts and list the interest rate by each one. If you don’t know the interest rate, you need to track down these numbers as this will be critical as we move through the plan.

This can be very daunting and scary. But you need to be completely honest and open when you do this.

What’s your total debt? Write it down as you’ll need it for the next section.

Make a list of your assets.

Next, complete a full review of all your assets and the estimated value of those assets. When valuing your assets look at reasonable fair market value.

Include assets such as:

  • Your home
  • Your car
  • RRSPs or TFSA accounts
  • Any stocks or investments

What’s your total asset value? Write it down.

Now, calculate your net worth. This is done with a simple formula: your total debts minus your total assets equals your net worth.

What’s your financial outlook for 2018?

You now have your net worth. It doesn’t matter if it is positive or negative. What’s more important is that you now know where you stand financially.

Don’t throw away this piece of paper or spreadsheet.

Save it on your computer or keep it somewhere safe as you are going to review it at the end of the year and see the progress you have made.

Every year, you will complete the same exercise and review against previous years.

Step 2: List all automated withdrawals

The next step is to figure out where the money goes every month.

List every single weekly, bi-weekly, monthly, quarterly, semi-annual and annual direct payment that comes out of your bank account.

This means going back on last year’s bank statements to ensure you don’t miss anything. It’s a bit of work. But think of all the time you spend at work earning this money—a few hours figuring out where it all goes can really help you improve your awareness of how to improve your finances.

Pay attention to the charges that come out less frequently as they are the easiest ones to miss. For example, your children’s annual Xbox membership.

Don’t forget to check your credit card statements. Include both the annual fee on your travel card for example and include any monthly bank fees.

How much money goes out in automatic withdrawals?

Write this number down. You can later look for purchases to cut. You’ll also be more likely to consider future purchases more carefully.

For example, when I did this exercise I found that I spent over $1,500 in unnecessary subscriptions and impulse purchases—an Amazon Prime account I didn’t really need, an subscription I rarely used, a credit card with a hefty annual fee, tons of books I ordered, a subscription to accounting software I never used, and a host of small charges.

These charges seem small. But if you invested that $1,500 every year, you’d have $297,589 by the time you retire (a $1,500 annual contribution with a 10% return over a 30-year period).

Step 3: List all your income and deposits

Now do the same for your income and any deposits. List all sources of income you had throughout the year.

This includes everything that was deposited into your account including child tax credit, annual tax refunds, gifts from family and bonuses or overtime at work.

Review your bank statements and document every deposit.

Next, categorize it and add it up so you have a total received by category for the full year.

You can do this by manually reviewing your bank and credit card statements. Or you can download all of your transactions into a spreadsheet. You can also use a tool like to help you automate the process.

Step 4: Review and prepare for 2018

For your income and deposits, you need to go through and make a list of what is guaranteed income for 2018.

For the outgoing direct deposits, go through each one and put them into two categories: ‘must have’ and ‘nice to have’.

‘Must have’ includes utilities, mortgage payments, car insurance, and ‘nice to have’ includes things like Netflix or the movie and sports channels you subscribe to above your standard TV package.

Now go through the ‘nice to have’ list and decide if you need the service and how much you used it last year. If you don’t get any value out of it, cancel it. You can always get it back anytime.

When going through the ‘nice to have’ list, be mindful of the value it may add to the family and or other savings it may offer. For example, if having the movie channel means you have family movie night at home versus going to the movie theater then it makes sense to keep it as it saves money in other areas.

Review bank fees and annual credit card fees closely and understand if they are worthwhile.

Lots of banks now offer free chequing accounts which could save you $30 a month on bank fees.

It can be a pain to change bank accounts, but as we said earlier, this is going to take time and effort. If it takes a couple of hours and saves you $360 a year, that’s a nice hourly rate you are paying yourself.

Look at the annual fee on a rewards credit card. For example, a travel credit card can have an annual fee of $120. If you used the card a lot and got more than $120 worth of travel benefits, then it’s worth keeping.

Step 5: Plan your payments and calculate what’s left

Now that you have a clear understanding of what’s guaranteed to come in next year and what is guaranteed to go out, you can start to create a plan. This makes your life and budgeting easier.

The first step is to make sure all your outgoings correspond with your incomings. If you are paid monthly, have all payments switched over to come out monthly shortly after you get paid.

If you are paid bi-weekly or semi-monthly, add up all the outgoing funds and divide by two. Then have 50% come out on your first pay period and the other 50% come out on your second pay period.

Try to balance the amounts coming out as closely as possible so one pay period isn’t much higher than the other. This will make budgeting for the non-discretionary expenses much easier.

Now calculate exactly what’s left over for each pay period.

Step 6: Create a budget

The earlier exercise allowed you to understand your fixed expenses and potentially cut out some of the non-essential fixed expenses.

Planning your spending for when you get paid is the most effective way to manage your money. However, for most people, tracking and planning the variable expenses is by far the hardest part of budgeting.

As you did with the fixed expenses, you need to try to plan variable expenses evenly over pay periods but this won’t be as easy given these expenses are variable.

In order to estimate the budget for each category look back on last year’s expenses for some categories like kids’ activities and sports, school fees, even clothing and gas.

To get an accurate understanding of categories such as groceries it will take a few months of diligent tracking of how you spend your money each month by keeping receipts for every purchase and putting them into the correct category.

Try to avoid using credit as this will hinder the debt repayment plan you are going to put in place and can also create a false and unrealistic budget.

If you do use credit, keep the receipts and transfer the funds immediately. Once you have completed a couple of months of tracking, you will then be able to create your budget and help ensure you are allocating money to the right places in-line with things that you value most.

Tracking spending is a discipline that needs to become part of your monthly routine. It’s not a process that stops you spending money in certain areas such as travel or eating out but helps you make informed decisions.

It’s often filled with moments of self-discovery and what previously seemed important can become an opportunity to reduce expenses and accelerate financial goals.

Step 7: Only use cash

Do you stick to your budget every month? Are you sticking to your debt repayment schedule?

If you answered yes, you can skip this tip. But if you’re having trouble, consider switching to only purchasing things with cash. Spending cash really works. It removes a lot of spur-of-the-moment spending.

Spending physical cash is emotionally harder than swiping a card. For example, spending $300 in Home Depot with a credit card is easy. Handing the clerk a stack of $20 bills makes the purchase more painful and memorable.

Use the envelope or jar method to allocate physical cash to each spending category during each pay period.

Step 8: Start a financial calendar

Whether getting caught off-guard by property taxes or missing your credit card bill (and getting hit with interest), it’s easy to forget to pay things on time.

Print out a calendar for your fridge. Or use Google reminders and Google Calendar to organize your financial life.

  • Add a calendar date for bills that need to be paid. You can have these events automatically repeat every month.
  • Schedule a trigger to review your budget every month.
  • Add a calendar date to start saving for things such as annual vet appointments, car repairs, or property taxes.

Step 9: Tackle your unsecured debt

Secured debt is things like mortgages. They have a fixed monthly payment. And if you keep paying, you’ll eventually reach zero.

In contrast, credit cards or lines of credit can go on forever. You only need to pay the minimum payment. This can keep you in debt and balloon the cost of the initial loan over time.

In step one, you listed all your unsecured debts and the interest rates on each one. You now need to set yourself a goal of having the debt paid off and calculate what this will take.

Use this calculator to work out the required monthly payment for each debt to have it eliminated within the number of years you have set as your goal. You can find other helpful debt calculator tools here.

Now add them all up. Review the required monthly payments against the surplus income you have after all discretionary and estimated non-discretionary expenses and see if this is achievable.

Choose your debt repayment plan (Snowball and Avalanche):

List all the unsecured debts by smallest to largest by amount owed. Don’t worry about interest rates at this point. This method doesn’t include interest rates and is designed for people motivated by results.

Pay minimum payments on all the debts except the smallest one. Then, use all additional funds allocated to debt repayment each pay period to aggressively pay down the smallest debt.

Once it’s paid in full, take the money you were putting toward that debt and allocate those funds to the next debt on the list. Once that one is paid, take that combined payment and go to the next debt.

The point of the debt snowball is a psychological approach to debt repayment. In terms of pure dollars, it makes the most sense to pay down the debt with the highest interest first. But when you focus all your efforts on the small debt first, you see progress very quickly.

Soon the first debt is paid off completely and gives a huge sense of accomplishment and satisfaction. You will see that the plan is working and will commit to the plan and you may have a greater opportunity to succeed in your goal of becoming debt-free!

It makes more sense mathematically to target your debts in descending interest rates. But studies have shown that consumers who used the less rational snowball method were more likely to eliminate credit-card debt.

For the mathematicians out there, the avalanche technique may be the preferred method to create a debt repayment strategy.

The principle is the same: you’re maintaining minimum payments on all debts but one, and then allocating all available funds to that debt until it is paid off, then moving on to the next one. This is different from the snowball method technique because you are allocating all available funds to pay off the debt that has the highest interest rate first instead of the smallest balance.

This technique works best for those who are really disciplined and don’t need the motivation of quick wins in seeing the smaller debts paid off first.

It also works well for those motivated by understanding the math behind your debt, knowing that when you pay off the debt with the highest interest rate first, you will be paying less in the future as you will decrease the amount of interest that you would have paid on the high-interest loan.

Step 10: Get expert help

For some of you, the above steps will help you get a better sense of your finances.

Unfortunately for many Canadians, it won’t be that simple. After completing steps 1-8, you might realize that your debt is unmanageable.

And your calculations might show that no matter the changes you make, your income and budget will at best allow you to continue to make the minimum payments which will never repay the debt.

At worst, you might not even be able to make the minimum payments and you will soon fall behind on the payments.

Advice for families deep in debt

Many unexpected circumstances push us into financial corners we never expected to be in and this can be very difficult to deal with.

The thing to remember is unmanageable debt and financial crisis is only a short-term setback. There are many options available to deal with overwhelming debt, allowing you to restructure the payment arrangements, reduce the principal owed, and stop the interest.

Debt restructuring can help

Debt restructuring (also called debt consolidation) involves consolidating all of your debts. This reduces your overall debt and is a common strategy for dealing with large amounts of debt.

While effective for many people, there will be an impact on your credit rating. But when done right and carefully planned, debt restructuring will bring your long-term financial goals closer, not push them further away.

At 4 Pillars, we’ve helped thousands of Canadians successfully use debt restructuring. Our clients always agree—increased cash flow and removal of financial stress far outweighs the short-term impact on your credit rating.

A comprehensive debt restructuring plan will deal with your debt, get you into an affordable repayment plan, help you create a stable budget, and also reestablish your credit rating in 24-36 months.

Get an expert in your city to review your situation

If you are struggling to repay your debt, please complete the form below for a free, non-judgmental and compassionate review of all the options available.

We have offices across Canada in every city and town.

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Rebuilding Credit – Why Is It Important?

If your credit score has fallen as a result of financial difficulties or filing a consumer proposal or a bankruptcy, you’ll quickly realize the limitations poor credit can impose. In addition to assisting clients with the immediate challenge of debt restructuring, 4 Pillars Debt Solutions of Sudburycan also help clients rebuild credit with a look to future financial success. Improving and maintaining a good credit score is important, and we can help.

These days, most people rely on credit for any number of financial needs. Whether you wish to borrow at favourable credit rates, get approval for a mortgage, buy a car, or get approved for a credit card, the status of your credit rating will impact your ability to do so. Without a credit card, for example, simple activities we often take for granted like online shopping or renting a car become impossible. Also, credit cards are often helpful for larger purchases like furniture, or for placing rental car or hotel reservations.

There is no quick fix for rebuilding credit; it’s a lot easier to damage your credit score than it is to repair it. Having the right tools and information helps, and 4 Pillars gives you access to the products and expertise you need. Credit scores range between 300 and 900. With a higher credit score, you are more likely to get approval for loans and favourable lending rates. The goal of any rebuilding program is to achieve a score of 650 or higher and qualify for a CMHC approved mortgage.

The sooner you take action to improve your credit rating, the sooner you can improve your credit history and get your finances back on track. Factors that affect your credit score are:

Payment history. This is the most important factor. Late and missed payments reduce your credit score and make creditors nervous.

How much is owed. Higher credit balances negatively affect your credit rating. It’s ideal to keep the balance owing below 30% of the available credit.

Length of credit history. A short and/or poor credit history reduces your score. Using credit responsibly over the long-term is your best bet.

New credit applications. Applying for multiple credit cards and loans in a short period of time is seen as a sign of potential financial difficulty, and makes creditors wary. These “hard inquiries” hurt your score, as opposed to “soft inquiries”, which are just checks on your file for updates.

Types of credit. Although the least significant factor, certain types such as deferred interest or payment plans can indicate financial instability.

4 Pillars Debt Solutions of Sudbury can help you repair a damaged credit rating, no matter how bad it seems. With over 10 years of proven credit rebuilding experience, our agents offer clients the support, education, and tools needed to  turn things around and start accumulating wealth. The 4 Pillars process involves:

Assessment. We will analyze your credit score and help you fix any errors that might be affecting it. We will also look into addressing any debts in collection, if necessary.

Create a Credit Rebuilding Plan. Using the best credit rebuilding products in the industry, we will create a customized plan aimed at increasing your credit score to 650+ within 24 months. The plan includes helping you get new credit and use it properly going forward. (Results assume the client successfully executes the program in its entirety.)

Protect Your Credit Rating. Once you’ve starting building a stronger credit score, it’s crucial to maintain good habits and avoid common credit mistakes. Your 4 Pillars agent will teach you about the potential risks and work with you to steer clear of them.

Each of these steps involves comprehensive planning. A 4 Pillars agent will guide you through the entire rebuilding process so you successfully meet your future credit needs. With patience and discipline you can rebuild, even after bankruptcy.

To get you started, here are a few basic tips to consider:

Check your credit report. This gives you an opportunity to understand where you went wrong and gain visibility to potential inconsistencies or errors in your credit report that may need correction. You are entitled to a free yearly copy of your report from the credit bureaus, Equifax and TransUnion. While it is stressful to review your credit history when it’s in bad shape, remember—you are taking the initiative to fix it for a better financial future.

Make minimum payments by the due date. Missed and late payments hurt you when trying to repair credit. Making payments may be tough depending on your current financial status but if at all possible, it will help you re-establish a reliable payment history. Be cautious when using automatic bill payments, unless you are confident there are sufficient funds in your account. NSF fees and overdrawing your account are red flags to creditors.

Create a budget. It requires financial discipline to rebuild your credit score. Awareness of your spending habits will help down the road as you get your finances in order, and also gives you a greater sense of control. Review day-to-day expenditures and prioritize spending on what’s most important.

Contact 4 Pillars. Rather than dealing directly with creditors or struggling on futilely, let us advocate for you. 4 Pillars consultants will represent you, helping you to restructure your debt, rebuild your credit and get you the best possible result.

Poor credit is stressful and financially restrictive, but it doesn’t have to remain that way. There is no better time to start building stronger credit. Contact 4 Pillars Debt Solutions of Sudbury and begin the process of putting bad credit behind you.

Using Your Credit Cards Like Cash


It is easy to fall deeper into debt if you aren’t regularly monitoring your finances and spending. Credit cards are one of the most readily available and dangerous tools for unsuspecting consumers. In Canada, nearly half of all credit card holders carry some credit card debt. Many cards offer high spending limits that go hand-in-hand with high interest rates, as well as optional cash withdrawals that come with even higher interest rates.

For many folks however, credit cards provide a useful way to establish a good credit rating so they can borrow at favorable rates or easily make larger purchases later on, such as a vehicle or home. They are also necessary for practical uses like rental cars or hotel reservations.

Instant Gratification

One of the reasons credit cards are so popular is that they allow you to immediately possess the items you desire, even if you are unable to actually pay for them. Cards allow you to easily overspend and then hit you with a high interest rate. In the event that you are unable to quickly pay off your balance, you may find yourself paying the monthly minimum and watching the outstanding balance grow. The longer you maintain a balance the harder it is to pay it down, especially when you keep relying on the card for unplanned purchases. While it’s easy to get carried away and spend more then you have, it is possible to use credit cards in a financially responsible manner.

Use Your Card for Smaller Purchases

One of the easiest ways to develop a strong credit bureau and stay out of debt is to use your credit card for smaller, more manageable purchases. Using your credit cards for small purchases, like bread and milk, ensures that the balance due on your card stays at a manageable level. This allows you to pay the balance off every month so your debt remains low and your credit score rises. In addition, when you continuously pay your balance off on time and in full, creditors see that you are a financially responsible and can be trusted to pay off your debts.

Monitor and Budget

Monitor and budget use of your credit card as closely as you do your other monthly expenses. If you don’t have a budget for your credit cards and want to create one, a great way to get a handle on how much money you spend each month is by simply reviewing your credit cards expenses. Access all of your credit card information online, or with paper statements if you prefer. Track your spending for a month then review and look at areas where you can cut back. Create a manageable budget based on the results.

Additionally, if you don’t have a monthly budget in place, consider creating one. The savings you find when you eliminate wasteful spending can be used to help pay any credit card debt down.

Pay with Cash

It is way too easy to use your credit card as if it is cash. Unfortunately, with delayed payments, debt creeps up on you and often can’t be paid off if you are caught off guard by end-of-month billing surprises. The best option, especially when trying to reduce your debt, is to pay with cash rather than credit. Overall, studies show that we tend to spend more on everything we buy when we pay for things with credit.

Rather than relying on your credit card as an open-ended line of credit, use it to make purchases that you can pay off in a timely manner. If you need to make a larger purchase, organize your finances ahead of time and have a plan in place to pay the amount down efficiently. And finally, start saving! These days, it’s too easy to just put purchases on a card. Stop relying on credit cards for everything and create a saving plan and long-term savings goals.

If you are dealing with an overwhelming amount of credit card debt and feel like you are fighting an uphill battle, give 4 Pillars of Muskoka/Parry Sound a call today. Our highly trained debt consultants provide solutions and help you get your finances back on track.

How to Set Up a Monthly Budget

How to Set Up a Monthly Budget

Creating a monthly budget is a great way to kick-start debt-free living and add to your savings. A budget is a great financial tool, whether you are looking to reduce your existing debt or simply gain a better understanding of your spending habits. It allows you to determine how much money you have available to spend, prioritize spending on what’s most important, and figure out how much money you have leftover each month.

How Much Money Do You Have?

Before you begin planning your monthly budget, it’s important to know how much money you make. If you have a regularly scheduled paycheque, it will be fairly simple to tally your monthly income. If you’re unsure of what your monthly funds amount to, a useful way to figure it out is to look back at your past earnings and establish an average monthly amount. Once you have an accurate idea of how much money you have on hand, you can begin to create a functional and realistic budget to put into action.

What Are Your Monthly Expenses?

Once you confirm your amount of income, the next step is to track your monthly expenses. Determining what you owe in relation to what you make allows you to plan your budget accordingly. Make a list of all your expenses and total the cost so you have a visual on the amount of money you need to cover all expenses. Record every purchase no matter how big or small. Keep in mind “fixed expenses” like rent or mortgage payments, car payments, loan payments and utilities. Also, make note of things like insurance and taxes so you don’t get caught unprepared.

Compare your expenses to your income and determine if they amount to less than your total income. If so, you can now put the difference aside for larger purchases, future savings and emergencies. Even a small amount helps. Continue to do so each month and watch your debt go down and/or your savings go up.

If your income is not enough to cover your current expenses, adjust your budget. See if there is any wasteful spending you can eliminate to free up additional cash. Do you tend to make impulse purchases, pay unnecessary fees or miss minimum payments? Review and see where you have room to make changes.

Determine a Set Timeline

Once you have a budget in place and are ready to kick-start it, decide on a timeline. Setting a date will give you a goal to work towards, and help you stick to the budget past the first month. Even if you plan to continue with the budget to maintain financial discipline long-term, setting a timeline helps to keep you on track. When you do reach your goal, it’s helpful to review where you are at and update the budget accordingly. If you have paid down debt, you may have now more disposable cash to put towards your savings plans.

Creating a realistic budget and sticking with it takes discipline but it’s well worth the effort. Monitoring and managing your finances will give you a greater sense of control, and make it easier to eliminate the debt that is holding you back.

If you’re feeling weighed down by debt and want help to get your finances on track, give 4 Pillars of Sudbury a call. You don’t need to struggle alone. Our highly trained debt consultants will offer solutions and help you on the road to debt-free living.

Emergency Funds—An Important Part of Financial Planning

Emergency Funds—An Important Part of Financial Planning

How long would your current savings last in an emergency? What if you suddenly lose your job or face unexpected expenses, such as urgent home or car repairs? Maybe you want to make a career change, possibly to self-employment, and will experience a less stable financial situation for a while.

Do you have ample savings put away to help you get by, or would you suddenly have to rely on credit cards and loans for everyday living expenses? Experts recommend having savings of three to six months available to cover living expenses. Few people have this much stashed away in an emergency fund, however.

Relying on credit in case of an emergency can cause you to quickly fall deeper into debt. Saving habits of Canadians have changed in recent years, with people saving less and taking on larger amounts of debt.

Tips to Set Up an Emergency Fund

Set a Realistic Savings Goal. Whether it’s a certain amount such as three months living expenses, or a date by which you want to save the amount by, it gives you a goal to work towards. Start with an amount you can manage so that you don’t get discouraged. Even a small amount helps in the long run, and you can always increase it as your finances improve.

Open a Savings Account. You want to save the money for your emergency fund in a low risk account that you can easily access in an emergency. Ideally it should have no/low transaction fees, no penalties to withdraw and earn you interest as you save. Talk to a financial expert for advice on what is best for you.

Continue to Pay Your Debts. Always make at least the minimum payments on credit cards, loans, and sources of debt. Make sure you have irregular expenses covered as well like insurance payments and property taxes. Set aside what you can for your emergency fund with these expenses in mind.

Make a Budget and Keep Track of Spending. Awareness of where your money goes is important to making smart financial decisions. It helps you to become aware of wasteful spending and eliminate it. Track your expenses, and use cash rather than credit to help cut back on impulse purchases you rely on credit for.

Made Extra Payments. If possible, deposit money over and above your allotted amount whenever you can. It may be from a tax refund, a gift, a work bonus, or something you sell. If you finish paying off a loan, direct that freed up money towards your savings going forward.

Eliminate Unnecessary Expenses. Look at your expenses and determine which are needs and which are wants. You need to pay your mortgage or car payment. You want a new pair of jeans or the latest Smartphone. Can you bring lunch to work or make coffee at home, rather than purchases them each day? Do you use savings coupons and pay attention to specials? Small lifestyle changes can add up to notable savings.

Benefits of An Emergency Fund

There are many benefits to having an emergency fund in place. It helps to be prepared for the unexpected.

  • You are better able to handle emergencies without getting into debt such as sudden health issues, an urgent trip to the veterinarian, job loss and unexpected repairs.
  • You can avoid high interest loans, increasing credit card debt and relying on payday loans and credit card cash advances.
  • You will have greater control over your finances and as a result, less stress at an already difficult time.
  • The thought of saving for an emergency fund can be intimidating when you have so many expenses and monthly payments to handle as it is.
  • Start small if you need to and think of it as a long-term goal. Every little bit you manage to put aside may help down the road.

Good and Bad Debt – What’s the Difference?

There is an abundance of coverage in the news these days about how Canadian household debt has climbed steadily in recent years and hit record levels, fueled by mortgages and low interest rates. While debt is generally perceived as bad, some debt is necessary and if well managed, can be an asset. When looking at your debt, it’s important to understand good and bad debt and make sure you are making sound choices for your financial future.


Traditionally, there is certain debt that is considered to be good. Generally, good debt helps you gain wealth or income. It’s an investment that gains value over time and improves your quality of life. Examples include:

Mortgages. A mortgage helps you build equity in real estate. It’s considered an appreciating asset that will make you wealthier in the future. Using debt to finance assets—like real estate and retirement savings—that grow over time might be a wise investment. However, it is crucial to get professional unbiased advice on these matters. Markets can turn into a downward spiral and money borrowed to invest will have compound interest charged on it. Borrowing to build wealth is not simple, and because of this, many people end up losing wealth, or simply pay more interest on the money borrowed when compared to the appreciation of the asset.

Student Loans. A loan towards pursuing education is an investment in your future. It can help you increase your earning power and future net worth. In saying that, much research and care needs to go into this decision as a student loan that yields a job in a low paying industry may take many years to pay off.

Business/Investment Loans. A business loan can give you the boost you need to launch and run your own business. Being your own boss can provide great job satisfaction and increase your income.


Bad debt is money spent on goods that are consumed over time and provide no return. It is debt taken on to buy something that depreciates in value or that you can’t repay on time and in full, incurring interest charges and more debt. Examples include:

Credit Cards. Credit card purchases are considered bad because they are often used to purchase items that are consumed right away or that start losing value as soon as they are purchased. A new TV, set of golf clubs, expensive concert tickets or a vacation you can’t really afford are all examples. Credit cards also tend to have high interest rates. Interest charged on outstanding balances means you end up paying more than the actual purchase price.

Payday Loans. Payday loans are never a good idea. Aside from credit card debt, they are about the worse type of debt you can carry. They are usually short term with extremely high interest rates and high fees. It’s crucial to repay payday loans as soon as possible because of additional fees accrued when you fail to pay. People often turn to these when desperate and out of a better alternative, becoming further stuck in a cycle of debt.

Auto Loans. Vehicles lose value the moment you drive them off the lot. Their depreciation rate combined with high interest rates makes an auto loan a type of bad debt. Since most people require a car and may not have cash to purchase it, you are better to buy a used car with low miles than an expensive new one.

Debt can be good or bad, and good debt can turn into bad debt. It’s important to figure out what is right for you, and to focus debt on long-term assets and immediate needs, rather than wants and impulse purchases. Review your spending habits and where your current debt falls to see where you can best eliminate debt, and what you can do to reduce bad debt going forward.

Tips on How To & The Importance of Rebuilding Credit

There are many reasons that achieving and maintaining a good credit score is important. If your credit score has dropped as a result of struggling with debt or filing a consumer proposal or a bankruptcy, you’ll quickly realize the limitations it places on you. While 4 Pillars Debt Solutions of Muskoka & Parry Sound assists clients with the immediate challenge of debt restructuring, our agents also help clients to rebuild credit with a look to future financial success.

In today’s world, most people rely on good credit for a wide variety of activities. Let’s face it, certain purchases can’t easily be handled with cash or your paycheque, and even then, often credit cards are required to hold a reservation. Whether you want to borrow at favourable credit rates, get approval for a mortgage, buy a car, or order a credit card, your good or bad credit rating will impact your ability to do so. Without a credit card, for example, simple pastimes like online shopping and car rentals that we often take for granted become impossible.

Credit scores range between 300 and 900. The higher your credit, score the more likely you are to be approved for loans and receive favourable rates. The goal of any rebuilding program is to achieve a score of 650 or higher and qualify for a CMHC approved mortgage. Credit rebuilding is not a quick process, however; it’s a lot easier to damage your credit score than it is to repair it, especially without the right tools and information. Since credit rebuilding is a lengthy process, the sooner you take action, the better off you’ll be. Factors that affect your credit score include:

Payment history. This is the most important factor. Late and missed payments reduce your credit score and make creditors nervous.

How much is owed. Higher credit balances negatively affect your credit rating. It’s ideal to keep the balance owing below 30% of available credit.

Length of credit history. A short and/or poor credit history reduces your score. Using credit responsibly over the long-term is your best bet.

New credit applications. Applying for multiple credit cards and loans in a short period of time is seen as a sign of potential financial difficulty and makes creditors wary. “Hard inquiries” hurt your score, as opposed to “soft inquiries”, which are just checks on your file for updates and won’t show up.

Types of credit. The least significant factor, certain types of credit such as deferred interest or payment plans can indicate financial instability.

4 Pillars Debt Solutions of Muskoka & Parry Sound can help you address these issues and succeed at building a stronger credit score. Our credit rebuilding program gives clients the tool and support needed to get back on track and into a position to begin accumulating wealth. The steps 4 Pillars agents will take include:

Assessment. We will analyze your credit score and fix any errors that might be affecting it. We will also look into addressing any debts in collection, if necessary.

Create a Credit Rebuilding Plan. We will create a customized plan to increase your credit score to 650+ within 24 months, using the best credit rebuilding products in the industry. The plan involves helping you get new credit and using it properly going forward. (Results assume the client successfully executes the program in its entirety.)

Protect Your Credit Rating. As your credit rating improves, it’s important to maintain good habits and avoid the common credit mistakes that can hurt your score. Your 4 Pillars agent will educate you about the potential pitfalls and work with you throughout the process to ensure you’re on track. All your hard work deserves positive results.

Each of these stages involves detailed planning. Your 4 Pillars agent will personalize the program to help you achieve your future credit needs. With patience and discipline you can rebuild, even after bankruptcy.

In the meantime, here are a few simple tips to help you get started right away:

Check your credit report. This gives you a clear overview of the issues and visibility to any inconsistencies or errors that need correction. While it may be depressing and downright stressful to see it in black and white, you are taking action to change it for the better. You are entitled to a free yearly copy of your report from each credit bureau, Equifax and TransUnion.

Make minimum payments by the due date. This may be difficult depending on your current financial status but if it’s possible, it will help you to establish a reliable payment history. Missed and late payments hurt when trying to re-establish credit. Be careful if using automatic bill payments, unless you are confident there are sufficient funds in your account. NSF fees and overdrawing your account are bad signs to creditors.

Create a budget. Financial discipline is required to rebuilding your credit score. Take a look at your day-to-day expenses and prioritize spending on what’s most important. Awareness of your spending and saving habits will give you insight and a greater sense of control.

Contact 4 Pillars. Rather than deal directly with creditors or struggle on as you are, let us advocate for you to restructure your debt and rebuild your credit. With over 10 years of proven credit rebuilding experience, 4 Pillars consultants will represent you and get you the best result.

There is no time like the present to get your credit rating back up and your stress level back down. Contact 4 Pillars Debt Solutions of Muskoka & Parry Sound and begin the process of putting bad credit behind you.

Debt Solutions are Available to You, Don’t Get Bogged Down By Debt

David was a 25-year-old honors student fresh out of University with an accounting degree, starting a brand-new job in Muskoka. David was successfully able to get a mortgage loan and begin living on his own on a beautiful lakefront property.

David loved his life. His amazing GPA helped him get his dream job and everything was going great for him. He had a plan to pay off his student loan debt and his mortgage loan, while living and working in Muskoka, but a year after moving into his new home some unexpected events took place.

One day during the winter when driving into town for work, he lost control of his car and was hit by another launching him off of the road. The accident totalled his car and sent him to the hospital for three months while he recovered from the wreck.

David’s recovery in the hospital meant that he was absent from work for three months and because of this his mortgage and student loans began to stack up at an alarming rate due to lack of payments. With no car to drive, David had no way of getting into town for work which meant he had no income to help him pay for anything which began his downward spiral. Eventually he began to receive notices in the mail and was forced to move out of his home.

David moved in with his parents because they lived in town closer to where he worked and he began trying to pay off his debts once he began working again. By that point his debts were racking up and were beginning to make him feel very overwhelmed. He began to wonder if he would ever be able to successfully pay off his debts and he began to question why he was even trying any more. The stress of having such a large amount of debt began to take effect on him and he began to give up on everything.

While talking to one of his co-workers one day at work, he opened up about his debt and how he was struggling to pay off everything since the accident. He told his co-worker that he didn’t know what to do and that he was on the edge of giving up on everything.  His co-worker suggested to him that he try getting in touch with 4 Pillars Consulting Group and told David that they could help him recover from his current financial situation and regain control of his life again.

David got in contact with his local 4 Pillars Muskoka branch the very next day and soon after that, they began helping him layout a plan to pay off his debts, they helped David realize that he was not alone in his current financial situation and with some hard work helped him get a better grasp on his debt and how he could become free of it.

4 Pillars Muskoka can help you with a variety of different services, including professional financial consultation, debt restructuring, budget evaluation for your family or individual needs, as well as asset protection and refinancing recommendations. Once you’re out of debt we continue to work with you in order to ensure that you maintain your financial situation and avoid falling back into debt again. If you or someone you know is suffering from debt and are interested in learning more on how to escape it, give 4 Pillars Muskoka a call and let us walk you through the process of rebuilding and reclaiming your debt.