Me and My Money

On-line shopping nerves...

Posted November 25, 2011
Originally Published March 12, 2009

Q: Do you think PayPal is a safe way to pay online if one does not have a credit card? CB

The minute you think it is safe to swim a shark appears. That is the way of financial security these days. Note Elmwood Spa in Toronto which recently was the victim of a bait and switch after which hundreds of credit card numbers were stolen and used for a spending spree. Fortunately the thieves were so thick they left a fluorescent paper trail leading right to their door.

I have used PayPal both as a Canadian and US resident with both debit and credit cards attached to my account. I had two incidents of incorrect billing which were fixed as soon as I brought them to the company’s attention.

However, if you are going to use any online service for banking or shopping, you must be vigilant about checking your statement for errors. I would also advise a separate bank account if you make frequent on-line purchases, transferring funds as you need them.

Q: I'm 29 years old and live in Montreal. I'm in desperate need of finding someone who can help me get out of my debt which I've allowed to go on too long and show me how to stick to a budget and manage my money, etc... any ideas? Alissa F.

A: You sound desperate but you have a number of options. Possibly a consumer proposal, every province has some variation of this, will work for you. With the help of a counselor, bankruptcy trustee or the court, you make a proposal to your creditors to pay them off so much per month. In Quebec this is known as the Voluntary Deposit scheme or the Lacombe Law. This does affect your credit rating but it is not as bad as bankruptcy and since you are young you have time to get yourself back in good credit graces. For help contact the Superintendent of Bankruptcy in Montreal (514) 283-6192.

You can also go to your local courthouse, speak to someone about Voluntary Deposit and request the names of debt counselors. Be careful about some so-called not-for-profit organizations which may charge significant fees so ask that question up front.

In other provinces there are credit counseling services which vary in terms of what they do beyond helping you with debt. In Ontario, Credit Canada (www.creditcanada.ca) is a great not-for-profit source.

As for a budget, you clearly need to make a deal with yourself to live within your means. Track everything you spend for a month then put together a budget. You can download a good budget template at www.wnetwork.com. Go to Shows, Dollars and Sense and Tools. Finally, start using two words regularly -- yes and no. Yes, I can manage my money. No, I do not need to buy that.

Q: My two teenagers would like cell phones for their birthdays. But I’m not sure how to handle the monthly cost. Debbie Z.

A: Cell phones can be a great introduction to financial discipline for kids. A part-time job is one way for them to pay the costs of chat, text and tweet. Another option is for them to work in the summer to pay the annual cost, roughly $650 for a moderate plan. Teens can earn between $1,500 and $2,200 with a summer job over eight weeks.

If they don’t have enough income you will have to share the cost of the phones or pay the whole shot. In that case make sure you have an agreement that they must stick to their minutes. Between you and me, they will stumble – mine sure did – but overall, if you have the discipline to cut them off when they don’t stick to the contract you will be doing them a big favour in the long run. And don’t forget to ensure they check their statements monthly. That’s a good learning tool.

<p>Q:  Do you think PayPal is a safe way to pay online if one does not have a credit card? CB<br><br>The minute you think it is safe to swim a shark appears.  That is the way of financial security these days.  Note Elmwood Spa in Toronto which recently was the victim of a bait and switch after which hundreds of credit card numbers were stolen and used for a spending spree.  Fortunately the thieves were so thick they left a fluorescent paper trail leading right to their door.  <br><br>I have used PayPal both as a Canadian and US resident with both debit and credit cards attached to my account.  I had two incidents of incorrect billing which were fixed as soon as I brought them to the company’s attention.  <br><br>However, if you are going to use any online service for banking or shopping, you must be vigilant about checking your statement for errors.  I would also advise a separate bank account if you make frequent on-line purchases, transferring funds as you need them.  <br><br>Q: I'm 29 years old and live in Montreal. I'm in desperate need of finding someone who can help me get out of my debt which I've allowed to go on too long and show me how to stick to a budget and manage my money, etc... any ideas? Alissa F.<br><br>A: You sound desperate but you have a number of options.  Possibly a consumer proposal, every province has some variation of this, will work for you. With the help of a counselor, bankruptcy trustee or the court, you make a proposal to your creditors to pay them off so much per month.  In Quebec this is known as the Voluntary Deposit scheme or the Lacombe Law. This does affect your credit rating but it is not as bad as bankruptcy and since you are young you have time to get yourself back in good credit graces.  For help contact the Superintendent of Bankruptcy in Montreal (514) 283-6192.<br><br>You can also go to your local courthouse, speak to someone about Voluntary Deposit and request the names of debt counselors.  Be careful about some so-called not-for-profit organizations which may charge significant fees so ask that question up front.  <br><br>In other provinces there are credit counseling services which vary in terms of what they do beyond helping you with debt.  In Ontario, Credit Canada (www.creditcanada.ca) is a great not-for-profit source.  <br><br>As for a budget, you clearly need to make a deal with yourself to live within your means.  Track everything you spend for a month then put together a budget.  You can download a good budget template at www.wnetwork.com.  Go to Shows, Dollars and Sense and Tools.   Finally, start using two words regularly -- yes and no.  Yes, I can manage my money.  No, I do not need to buy that. <br><br>Q:  My two teenagers would like cell phones for their birthdays.  But I’m not sure how to handle the monthly cost.  Debbie Z.<br><br>A:  Cell phones can be a great introduction to financial discipline for kids.  A part-time job is one way for them to pay the costs of chat, text and tweet.  Another option is for them to work in the summer to pay the annual cost, roughly $650 for a moderate plan. Teens can earn between $1,500 and $2,200 with a summer job over eight weeks.  <br><br>If they don’t have enough income you will have to share the cost of the phones or pay the whole shot.  In that case make sure you have an agreement that they must stick to their minutes.  Between you and me, they will stumble – mine sure did – but overall, if you have the discipline to cut them off when they don’t stick to the contract you will be doing them a big favour in the long run.  And don’t forget to ensure they check their statements monthly.  That’s a good learning tool.</p>

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