Tag: Credit Karma

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FIGHT FOMO-RELATED DEBT: FOLLOW OUR STEPS TO FINANCIAL RECOVERY

fomoWe hope that you and your family are safe, healthy and secure during this COVID-19 pandemic. Ira Smith Trustee & Receiver Inc. is absolutely operational and Ira, in addition to Brandon Smith, is readily available for a telephone consultation or video meeting.

If you would prefer to listen to the audio version of this Brandon Blog, please scroll to the very bottom of the page and click play on the podcast.

Why is FOMO a thing?

Are you experiencing FOMO right now? In the modern-day, FOMO, or fear of missing out, is a significant stressor in people’s lives. You’re wondering how you are going to make it through life at such a fast pace. Social media posts constantly tell you what your friends are doing, what you should do with your life, and what to buy. People suffering from FOMO have lost track of what’s important in life, and you have lost track of what you want to accomplish. If you want to keep your mind (and your bank account) and financial situation healthy, there are steps you can take to make sure that you have proper spending habits.

Missing out on important events or social gatherings is the feeling of being excluded. The term FOMO was coined and popularized by Patrick J. McGinnis in The Harbus, the Harvard Business School’s magazine, in 2004.

It is often difficult to bring up the subject of money with friends, yet it is one of the most important. I discuss how FOMO can lead to runaway debt and how to avoid it, in this Brandon Blog.

FOMO and the rise of social media-induced debt

The internet has created a social media engagement platform for bragging; things, events, and even happiness itself can appear competitive on social media. You do not just feel as if there are better things that you could be doing at this moment, but you also feel as if you are missing out on something fundamentally important that others are experiencing right now.

It is difficult to identify the nuances of FOMO since social media users have different social priorities. FOMO users share one common characteristic: the feeling of social exclusion.

Self-concept and perception of oneself play a role in FOMO. Individuals’ perceptions of and experiences of the world – and what they feel they are excluded from – play a critical role in their fear of missing out. There is a very strong connection between self-perception on social media and FOMO.

FOMO has become an all-too-common affliction. FOMO can strike anyone at any time, but it is usually strongest in children, teenagers and young adults. FOMO can also have serious financial repercussions.fomo

FOMO debt on the rise: Nearly 50% of millennials overspend to keep up with friends

Credit Karma/Qualtrics surveyed 18-38-year-olds in both Canada and the United States prior to the pandemic. With November being financial literacy month in Canada, the topic of FOMO debt is timely, notwithstanding when the surveys were done. Findings were strikingly similar in each country. Millennials are overspending on food and drinks, music events and tattoos because of rising social pressures.

In the Credit Karma surveys, 48% of Americans and half of Canadian young adults reported spending money they did not have and going into debt to keep up with their peers. Over a third of respondents said it is hard to turn down friends who suggest activities they cannot afford.

Almost one-third of young Canadians who got into FOMO-related debt owed more than $500. Key survey findings show that among those who have borrowed to keep up with friends:

  • 49% said they did it to avoid being excluded from future events if they did not participate in spending time with friends.
  • A similar 49% said they didn’t want to miss something once-in-a-lifetime or novel in their social lives.
  • 45% of respondents said they didn’t want to be seen as an outsider.
  • 34% feel it is the way to keep friendships strong because they feared losing friends.
  • 29% feared being judged.

According to Credit Karma, the items and experiences that push Millennials into FOMO-related debt include:

  • social situations requiring the purchase of meals and alcohol (47%);
  • clothes (41%);
  • travel (38%).
  • Autos (15%);
  • body art (11%); and
  • residential (9%).

In other words, FOMO-related debt is a real problem among young adults.fomo

How to Avoid Overspending Due to FOMO

The temptation to think you won’t have it later or your friends won’t like you if you don’t buy it now can be quite strong. This may not always be true. Perhaps you would be better off finding new friends who don’t spend money so obsessively all the time.

Simply stopping spending is the first step toward overcoming FOMO unnecessary spending! Not forever, just until you figure things out. You might also consider limiting your use of credit cards or even debit cards and making most of your purchases with cash. If you feel FOMO creeping in, you will be less likely to impulse spend. It will also prevent you from incurring more FOMO-fueled debt.

You can avoid FOMO-fueled debt by working within your budget and becoming comfortable with saying no to overspending. Having a budget doesn’t mean you have to give up every nice dinner or outing, but you have to understand what is within it.

I have written on the need for household budgets many times on my Brandon Blog. You can prevent FOMO-fueled debt by creating a monthly budget or even a weekly budget.

Buying things out of impulsiveness might seem to make us feel better because we’re getting what we want right away, but there’s actually another side effect to consider. In the end, we pay more interest and fees when we buy items without considering future needs and end up falling behind in monthly payments.

Whether you’re trying to pay off debt, add to your savings, create an emergency fund for unanticipated events, plan for retirement, or save for a new home, be sure to keep your bigger goals in mind. There’s no reason to let your friends get in the way of your longer-term goals, such as paying off your debt, saving for retirement, or buying a house.fomo

FOMO summary

I hope you found this FOMO Brandon Blog post informative. Are you worried because you or your business are dealing with substantial debt challenges and you assume bankruptcy is your only option? If it is FOMO-fueled debt or too much debt for any other reason, call me. It is not your fault that you remain in this way. You have actually been only shown the old ways to try to deal with financial issues. These old ways do not work anymore.

The Ira Smith Team utilizes new modern-day ways to get you out of your debt difficulties while avoiding bankruptcy. We can get you the relief you need and so deserve.

The tension put upon you is big. We know your discomfort factors. We will check out your entire situation and design a new approach that is as unique as you and your problems; financial and emotional. We will take the weight off of your shoulders and blow away the dark cloud hanging over you. We will design a debt settlement strategy for you. We know that we can help you now.

We understand that people and businesses facing financial issues need a realistic lifeline. There is no “one solution fits all” method with the Ira Smith Team. Not everyone has to file bankruptcy in Canada. The majority of our clients never do. We help many people and companies stay clear of bankruptcy.

That is why we can establish a new restructuring procedure for paying down debt that will be built just for you. It will be as one-of-a-kind as the economic issues and discomfort you are encountering. If any one of these seems familiar to you and you are serious about getting the solution you need, contact the Ira Smith Trustee & Receiver Inc. group today.

Call us now for a no-cost consultation.

We will get you or your business back up driving to healthy and balanced trouble-free operations and get rid of the discomfort factors in your life, Starting Over, Starting Now.

We hope that you and your family are safe, healthy and secure during this COVID-19 pandemic. Ira Smith Trustee & Receiver Inc. is absolutely operational and Ira, in addition to Brandon Smith, is readily available for a telephone consultation or video meeting.

 

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Brandon Blog Post

BANKRUPTCY BLOG REVIEW: A LOOK AT MY TOP 2018 BANKRUPTCY BLOGS

Bankruptcy blog review: Introduction

I hope that you are all enjoying quality family time together over the holidays. As 2018 is nearly over, I thought that it would be interesting to do a bankruptcy blog review on my Brandon’s Blog. So here is a review of the 7 most viewed blogs over the past year.

Bankruptcy blog review: The 7 most viewed blogs in 2018

BANKRUPTCY AND INSOLVENCY ACT: COURT MAY NOT LISTEN TO BANKRUPTCY TRUSTEE

This blog was about a very interesting case decided in the Court of Appeal of British Columbia. The bankrupt’s creditors applied to have the transactions reviewed under section I00 of the Bankruptcy and Insolvency Act, R.S.C. 1985, c. B-3 (“BIA”). One of the areas of contention was that the judge in the lower court found he could not rely on the bankruptcy trustee’s opinion of value in the circumstances.

MORTGAGE LENDING CRITERIA SELF EMPLOYED: BIGGEST MYTH MAY BE RIGHT

In this Brandon’s Blog, I wrote about mortgage lending criteria self-employed, I discussed a Court decision that shows when it comes to a self-employed person’s mortgage, if there is a deemed trust claim by Canada Revenue Agency (CRA), you cannot solely rely upon the registry system.


STALKING HORSE CREDIT BID: WE NEED COURT APPROVAL BEFORE STARTING A COURT SUPERVISED SALES PROCESS

This bankruptcy blog review post came from our corporate case files. I discussed the decision making process the Court goes through when being asked to approve a stalking horse sales process and the stalking horse credit bid being recommended by the licensed insolvency trustee (formerly called a bankruptcy trustee).


CREDIT KARMA CANADA REVIEW: IS IT REALLY FREE AND LEGITIMATE?

Since 2007, Credit Karma USA has attempted to simplify credit and finance for more than 60 million Credit Karma members. They advertise very heavily on US television to attract new members. Becoming a member is free, and it allows any member to get access to their free credit score and credit report, with the option to update every single week. Credit Karma also provides financial education to put credit into context.

Credit Karma Canada arrived this past year from the United States. Its website is creditkarma.ca. The purpose of this blog was to describe what Credit Karma Canada is and to let you decide if it would be helpful or not for you or someone you know.


IS GOODWILL A NON PROFIT ORGANIZATION? ARE YOU SCARED BECAUSE YOUR COMPANY HAS TURNED INTO ONE?

 

The Goodwill Toronto bankruptcy confused and astonished many people. After all, how can Goodwill, a non-profit organization, go bankrupt? Isn’t the very nature of a non-profit or not-for-profit that it doesn’t have to make a profit? This Brandon’s Blog discussed the issues.


FILING FOR BANKRUPTCY IN CANADA: MENTAL HEALTH & DISCHARGED BANKRUPTCY

 

This bankruptcy blogspot dealt with filing for bankruptcy in Canada and the bankruptcy discharge process when mental health issues are involved.


POOR CREDIT PERSONAL LOANS GUARANTEED APPROVAL CANADA: REDUCE AND DON’T INCREASE DEBT TO IMPROVE YOUR CREDIT SCORE

 

This Brandon’s Blog was a discussion about and a warning against being seduced by ads from companies for poor credit personal loans guaranteed approval. We pointed out the pitfalls of the products being offered. We also showed how people with poor credit can go about settling their debts and improving their credit score.

 

Bankruptcy blog review: Conclusion

 

These are my 7 top viewed Brandon’s Blogs in 2018. Four are about personal debt issues or personal bankruptcy blog items and three are about corporate insolvency issues. Three are about a review of a then-recent court case.

I hope that the year 2019 will be a happy, healthy and prosperous New Year for you and your families.

Have you taken on too much debt in 2018 or the years before? Is the pain and stress of too much debt now negatively affecting your health?

If so, contact the Ira Smith Team today. We have decades and generations of helping people and companies in need of financial restructuring and counselling. As a licensed insolvency trustee (formerly known as a bankruptcy trustee), we are the only professionals licensed and supervised by the Federal government to provide debt settlement and financial restructuring services.

We offer a free consultation to help you solve your problems. We understand your pain that debt causes. We can also eliminate it right away from your life. This will allow you to begin a fresh start, Starting Over Starting Now. Call the Ira Smith Team today so that we can begin helping you and get you back into a healthy, stress-free life.bankruptcy blog review

 

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Brandon Blog Post

# VIDEO – CREDIT KARMA CANADA REVIEW: IS IT REALLY FREE AND LEGITIMATE? #

Credit Karma Canada review: Introduction

Credit Karma Canada has arrived recently from the United States. Its website is creditkarma.ca. Right now they run in most provinces but not yet in Quebec, Nunavut, the Yukon or the Northwest Territories; but they are working on it. The purpose of this blog is to provide our Credit Karma Canada review, tell you what it is and to let you decide if it will be helpful or not for you or someone you know.

Since 2007, Credit Karma USA (CKUSA) has attempted to simplify credit and finance for more than 60 million CKUSA members. They advertise very heavily on US television to attract new members. Becoming a member is free, and it allows any member to get access to their free credit score and credit report, with the option to update every single week. CKUSA also provides financial education to put credit into context.

It’s mission statement is:

“Everyone deserves to feel confident about their finances. Our job is to give you the tools, the education and the opportunities you need to make real, meaningful progress.”

Credit Karma Canada review: Is it really free? Is it legitimate?

So far so good. Like a lot of things advertised as being free, you may wonder to yourself is it really free? Is it legitimate?

The answer is yes; accessing your credit score, your credit report and the financial and educational aspects are free. However, it is a money-making operation. They make money in at least two ways:

  1. They have ads to make money. So if you don’t like ads, just ignore them; and
  1. They do promote various credit card, mortgage and loan programs which they hope members will purchase when needed. When someone takes an offer through CKUSA, it makes money from one of its partners (like the bank that issues a credit card or the lender who funds a loan). Presumably, Credit Karma Canada (CKC) will be following that model by establishing such partnerships.

Credit Karma Canada review: So how does it work?

So this is how it works. When you first open your account and set up your unique password, it’s going to ask you different questions to confirm your identity, including your date of birth and social insurance number. They are trying to become the best-known credit bureau of Canada.

It might include things like where did you get your last car, what kind of car do you have, what addresses have you lived at in the last five years, what address do you currently live at. All of the questions offer you multiple choices to choose from. Once you finish that process your account is open. This allows you to log in either from the app or from their website.

In order to ask you the setup questions, and to then be able to give you your free credit score and report, CKC obtains information from one of our two credit reporting agencies, TransUnion. In the United States, Credit Karma uses both Equifax and TransUnion.

CKC also searches certain public record databases to look for other information such as:

  1. Bankruptcy: A legal filing by people or businesses seeking certain types of relief from all or some their debt.
  2. Civil Judgment: A non-criminal ruling in a court of law, often requiring the person or business to pay damages.
  3. Registered Items: Other items included in public records, like a lien against your car or a mortgage or loan registered against your house.

Credit Karma Canada review: Does using it lower my credit score?

You can watch your score through CKC anytime you want. Unlike a potential or real lender performing a check on you, the more times you go into the CKC database it does not affect your score. The TransUnion and Equifax credit score algorithm reduces your score every time someone does a check on you.

The theory is that each credit check is either related to your having applied for new loan(s), or an existing lender feels the need to check up on you. The algorithm interprets this as your need for more borrowing. If the checks are too often or too close together, their algorithm assumes you are experiencing some financial problems requiring more loans. The CKC algorithm prevents this from happening, which is a good thing.

However, remember that the CKC algorithm is different from the one used by TransUnion and Equifax; this is an important distinction which I will explain shortly.

Credit Karma Canada review: Things I like about it

A feature that I do like is that the CKC report will help you understand what factors are impacting your score, thereby telling you what you need to work on to improve your score. This is especially for young people who are just learning about borrowing and personal finance for the very first time. CKC gives advice for how to help improve your score and things not to do.

So it is handy to find out about:

  1. payment history;
  2. credit use;
  3. derogatory remarks on your financial history;
  4. total account and inquiries;
  5. your full report; and
  6. credit advice.

CKC gives you an easy way to see how you’re doing financially, how much money you have tied up between charge cards and auto and other loans. It also gives you tips on how to improve your score, all for free.

It is an easy and efficient way of checking up on yourself that TransUnion, Equifax or any of our Canadian financial institutions have never done. So, in my view, CKC is providing a real service and benefit.

Credit Karma Canada review: Things I do not like about it

So are there any downsides? Since CKC is not yet advertising who its financial product partners are, I have to look at the US operation. So, my comments come from a review of only CKUSA.

I’m not convinced that I would personally recommend any of the financial partners. Here are the reasons why:

  1. The financial partners have to pay a fee to CKUSA, and that fee has to be reflected in the cost of the financial product itself, making it higher.
  2. It is safe to assume that CKUSA members are working on improving their scores. The financial partners may be pricing their products for those people who have not achieved enough of a score to go and negotiate the rate they will be paying with any Bank. Again, this means the cost of any specific financial product through CKUSA could be higher than otherwise available to people with a better score.
  3. So if you do have a good score, you can probably get a better deal by going to the Bank you normally deal with.
  4. Once CKC establishes its Canadian financial partners, we will have to see if it follows this higher priced US model.
  5. The most common complaint in the US is that the score through CKUSA is different from the score calculated by either Equifax or TransUnion.

Recall that I gave an example of how the CKUSA algorithm was different from the one used by the credit reporting agencies? Well, it is further differences in the algorithms that causes this disparity. I am not talking about a small disparity either. Complaints show that the difference could be as much as 100 points!

CKC states that it shows the same credit rating and report that TransUnion shows. Again, time will tell if the Canadian experience is the same or different from in the United States.

My final point is not a criticism, but merely a fact. CKC describes their system as being safe, they respect your privacy and do not share your information with any third-party.

However, when you give personal information on a website, and especially financial information including your social insurance number, this always provides an opportunity for hackers and phisher scam artists to attempt to either hack the system or use phishing emails and websites to attempt to steal your identity.

Credit Karma Canada review: Only you are in control of your credit and debts

I hope that you realize from this blog that understanding your credit score and credit report and obtaining more financial education are all positive things and are necessary to be able to have a good financial life. However, sometimes life gets in the way and good people experience debt problems.

Only you can be the one to deal with your debt to get on top of it and gain back your life. If you don’t know how to go about reducing your debt, start by contacting Ira Smith Trustee & Receiver Inc. There are many ways to deal with debt. As experts we can help you make the best choice and set you on a path to debt free living Starting Over, Starting Now. Make an appointment for a free, no obligation today.

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