Holiday Hangover Bill Blues
What’s a tenant to do?
By Barbara Warner
So by now the holidays are over, the out-oftown
guests are gone, the power is back on,
Valentine’s Day has come and gone and life’s
back to normal, right? Everything but your
finances, perhaps. Despite an aggressive
advertising campaign by debit card payment
provider Interac, most of us won’t have “0%
chance of getting a bill in January.” Credit
card use is high in December, thanks to gift
shopping, dining out, going to holiday events
and stocking the fridge. That’s especially
true this year for those of us who lost power
for days in December. Even if tenants used
only cash or debit throughout December, it’s
still likely they’ll have spent more this month
than any other. So, this is a perfect time to
talk about how tenants can save money—
whether through spending less in the first
place, putting some aside, or both.
First, have a sense of your financial fitness. Print or view all of your bills, bank account balances and savings. Figure out how much you have coming in, and when, what is owing and when, and how you’re going to either pay off your bills in full or pay in instalments if absolutely necessary. (There are interesting tools and apps available for this, but it can be as simple as using a pencil, paper, and calculator.)
Second, if your review reveals you’ve got debt, or are running your household on a very tight budget, I strongly suggest you find a licenced credit counsellor working at a non-profit, accredited agency. I am most familiar with Credit Canada Debt Solutions (I’m an unpaid volunteer on its Board of Directors), but there are many such places to choose from. The most important thing is to get educated about your financial obligations and to get advice about how to get those under control. The counsellor might be able to help you make a proposal to your creditors (places you owe money to) and may offer advice on whether to transfer your balances to other cards or financial products such as a line of credit so that you’re paying as little interest as possible while you’re paying off your debts.
Third, take a look at your spending. Write down every purchase you make. See if there are ways you can spend less—small things like packing a lunch and buying ingredients for meals at home instead of buying prepared foods, going to the library instead of buying a book, and big things like giving up a car, (gas, insurance, parking, and maintenance are often thousands of dollars more per year than taking the TTC). Another small but meaningful change is to switch banks and use a no-fee service like PC Financial or ING Direct. You’ll get all the benefits and conveniences of a regular account— checking, savings, ATM access, bank card with debit—without monthly user fees. I haven’t paid banking fees for regular banking in 15 years (on my personal accounts, that is—I’ll tell you more in an upcoming column about how to save on small business and corporate accounts).
Fourth, see if there’s some way you can negotiate a better deal on things you must buy. Obviously you can’t expect the TTC collector to haggle with you over the price of a token. But there are print and online coupons, online discounts, and importantly, always the option of asking for a good deal in person. Be sure to follow the three Rs: be respectful of the time and talents of the person you’re bargaining with, be reasonable in your offers, and be repetitive— regular customers often get bonuses or discounts to reward loyalty.
Fifth, consider whether you can use your free time more wisely. (Think you don’t have any free time? Think again—tv, movies, video games, and using the internet are all uses of your free time. Think about reducing or eliminating those for a week—you might have more time on your hands than you thought!) Maybe you are renting a basement apartment, and aren’t responsible for shovelling snow or removing ice. Ask your landlord if they’ll pay you (hourly or a flat amount) if you take up that task for them. (Depending on the property you might also want to get legal advice about the liabilities involved.) Maybe you live in a high-rise building and have seen the city’s ads about the huge amount of recyclable materials which go to landfill. Offer to set up a recycling committee to help tenants divert more items to the recycling, and ask your landlord to give you a discount on your rent in exchange for the time and effort it takes you to set it up and keep it going. Set up a babysitting co-op to save yourself, friends, and neighbours money and hassle in finding a sitter.
Sixth, whatever you do, get all agreements in writing, preferably on paper with signatures. If you are a low-income tenant, call your local legal aid clinic for help in reviewing agreements before they are signed. If you are working or have a pension which puts you above legal aid’s threshold, consider a legal services plan which gives you access to legal advice for a low flat fee per month. You could also try asking a local lawyers for a free consultation and for their best rates but generally, paying for individual contract reviews for odd jobs costs more money than the job will pay.
Seventh, and this is an odd one since it involves spending money up front, consider whether you can save money in the long term by buying a monthly TTC pass instead of tokens or weekly passes, or by purchasing tenants’ insurance for the contents of your property instead of running the risk of being on the hook for theft or damage if something goes wrong. Use a broker to get the best deal on insurance.
Finally, keep up your good work. Stay on top of your finances by continuing to track what’s coming in and when, what’s going out and why, and if you have anything left at month’s end. Figure out how much money you have left to spend after the rent, utilities, and transportation and other necessities are paid for. Write that number down and post it on your fridge. Every time you spend any money, deduct it from the number on the fridge. This will give you a running tally of how much money you have for spending before your next income (whether it’s a paycheque, pension money or welfare deposit). When the money comes in, readjust that number accordingly and start again.
Yes, it’s kind of like being on a hamster wheel, always spinning but never getting anywhere. But like the hamster, you will get healthier with the activity. It’s necessary for your financial fitness to know what you’ve got, where you’re spending it, and what—if anything—is left over.