Save On Clothes

Second Hand September: The Cost Of Fashion

Second Hand September is a new challenge, started in 2021 by the humanitarian charity, Oxfam. You might recognise the Oxfam name for their charity shops, which is how they fund so many of their projects around the globe. However, Oxfam found that 11 million garments end up in a landfill every single week. The Second Hand September project is pledged to reduce the impact of unsustainable fashion and unnecessary purchasing by encouraging people around the globe to switch high-street shops for secondhand stores or just cut down on spending altogether.

Brits are buying more than ever before and are purchasing twice as much as 10 years ago. This increase in purchasing could be the allure of deals or the rise of ‘fast fashion. Oxfam is promoting upcycling and buying secondhand because it is better for the environment. Here at 12monthloans.ca, we have discussed the benefits of upcycling and reducing your household carbon footprint, but also the positive impact it can have on your pocket. This guide will have a closer look at how much is actually spent on clothing and the benefits of saying yes to Second Hand September.

The Financial Cost Of Fashion

According to Oxfam, 2 tonnes of new clothing items are bought every single minute in Canada. Reports also suggest that Brits spend, on average, $1042 on new items of clothing every year and that certain demographics were more likely to overspend on new clothing than others. For example, women are more likely to buy something new for an occasion than men.

This kind of purchasing could be extremely unsustainable, particularly, if purchases are being made for a ‘pick me up’ or for ‘retail therapy. This kind of shopping can create harmful spending habits that could push spenders into debt as buying a new item of clothing could become an unhealthy reaction to unhappiness. The relationship between debt, clothing, and mental health is relatively unexplored, but it does seem likely there could be a dangerous cycle in which individuals comfort themselves with clothes, feel bad about their financial status and then resort to their retail pick-me-up. There is data to support this, as two out of three 18 to 24-year olds say they don’t feel as good when they are not wearing brand new clothes, interestingly these make up a part of the demographic that spends quite a lot on luxury goods and also rely on short term loans or temporary credit to see them through to their next paycheque. This could be why there is an anticipated $10 billion worth of unworn clothes in wardrobes across Canada.

The Effect Of ‘Buy Now Pay Later’

Although it’s not a new strategy, ‘buy now pay later schemes have become more available at high-street clothing retailers across Canada. The likes of New Look, ASOS, and Topshop all offer Klarna pay. Klarna is a financer for retail outlets and makes it easier than ever before to purchase clothing we may not have the money for. Klarna’s checkout tag lines for these kinds of payment schemes promote the good feeling that comes when we treat ourselves to clothes, featuring phrases like “Payment can wait. Your new look can’t”.

The CBC News-Times reports “Companies like Afterpay [a ‘buy now pay later’ lender] operate off the premise that the younger generations are more open to them because they came into adulthood under the cloud of the recession.” This suggests that those millennials who find comfort in their purchases could be more likely to find themselves in debt or subject to late fees because of their clothes spending. This could lead to consumers finding themselves in a financial emergency and reaching for a short-term loan, as they cannot pay their other bills or cover unexpected or unplanned expenses when they crop up.

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SMART TIPS TO MANAGE FAMILY MONEY

Are you self-employed? Are you your boss? As a self-employed worker, your salary income will be irregular than if you have been a salaried employee. You will have to manage everything yourself. To avoid headaches and stress while managing your finances, here are some best financial tips:

Make a budget 

Budgeting is the best tool to plan your income and expenses. With a budget, it will be much easier to understand how much you are getting and where your money is going. Budgeting will give a reality check. 

Build an emergency fund

With an emergency fund, you can able to handle any unexpected financial emergency with ease. This will give you a cushion that you may face through a dry spell of three to six months. Apply for a bank line of credit if you don’t have liquidity. 

Consult a financial planner

Don’t hesitate to take advance from a financial planner who can help you manage your business and personal finances. They can even help in calculating the amount of taxes you owe, plan for retirement, investment plan, etc. 

Pay your tax in installments 

Whenever you receive payment from a client, it is considered a gross amount. It is not wise to forget to pay income tax on that amount. Talk to your accountant and calculate your provincial and federal taxes and make installment payments every three months. By doing that you can control spending money that is not yours. 

Keep funds for sales tax payments aside

Remember that a portion of your income that you earn includes sales tax that you need to repay to the government. You will have to deduct the amount owing from your payments and set the difference aside. This would allow you to pay it to the government when required. 

Save money 

Ups and downs are part and parcel of any working structure. Therefore, it becomes easy for you to forget about saving money. To always remember to save money, just set up an automatic savings mechanism that will force you to set aside some funds for emergency and retirement. 

Plan your retirement 

Retirement planning plays a very important role in the life of self-employed people as they cannot count on a pension plan from their employer. Take help from your financial planner and advisor to ensure that you save enough to secure your future. 

Maximize your RRSP and TFSA contributions 

You must contribute the maximum amounts allowable to your registered retirement savings plan and tax-free savings account as you won’t be able to access a company pension plan. This will help your tax situation and facilitate your retirement. 

Avoid claiming for unnecessary deductions 

It is likely possible that you would like to deduct as many expenses as possible to lower down your taxable income and pay as little income as possible. But it may further reduce your ability to convince financial institutions of your ability to repay loans. To avoid that, don’t overdo it when it comes to deducting your expenses. 

Separate your business finances from personal ones 

If you chose to register your business as a sole proprietorship, there is no difference between your personal and business finances. Therefore, it is best to keep them separated as it will simplify things to help you manage your finances. 

Take out an insurance plan 

If you were to suffer a critical illness or disability, this may result in serious financial trouble. Therefore you must take out disability and critical illness insurance. 

Get an accountant 

Don’t make it too long to get an accountant. An accountant helps you to keep close track of your expenses and do almost everything you are doing in your business and an accountant will be there to help you understand the nuances of taxes and finances. You need to understand that every single dollar in and out of your business needs to be tracked and categorized to be able to file for taxes properly. 

Track your expenses 

When you are self-employed it becomes even more important for you to track your expenses. There are several tools available that can help you do this. You can use spreadsheets or can download some apps to track all your expenses. Doesn’t matter how you do it, what matters is that you understand where your money is going and you must be able to account for it. 

Think in percentages 

The most challenging part of being self-employed is the variability of your income as some months you might be taking in a good amount of cash, and the next month all your clients are on vacation and you are not getting much. To keep an account of these ups and downs, it is important to think about your savings, salary, and investments in terms of percentage. When outing some money aside for savings, for vacation, for investment, for business proposal, and more, think in terms of percentage of income, and not in fixed amounts. 

Make goals and pay yourself 

You need to pay yourself and set goals. It is a good idea to have a timeline for when you aim to be profitable and start saving regularly. Just keep in mind to never start investing money until you have an emergency fund. Make sure your business has a bank account meant for business income only. Next, pay yourself out of that business into your personal savings account. 

Invest

You should be having short-term, mid-term, and long-term financial goals to achieve and you should be investing money in accomplishing those goals like expanding your business, having a kid, investing in a child’s higher education, and more. 

Educate yourself 

Many self-employed, especially those in creative work, forget they run a business and they have to think about their profit first rather than letting others take advantage of them. Thus, you need to educate yourself in all matters, so that you can keep growing your business and take it to a higher level. The more time you invest in your business and implement new things, the more you will make money. Upgrade your skills, keep learning and keep gaining knowledge. 

Budgeting for the self-employed 

A budget for a self-employed is a little different from a traditional budget. This is most likely because a self-employed won’t make the same amount each month. It is quite challenging to budget every month appropriately when your income fluctuates. For that, you first need to prioritize your bills like what you need to pay first. Secondly, you should make a bare-bones budget where you can have an idea of your non-discretionary expenses. This is what you will rely on during slow months. Thirdly, you should separate your expenses. This will make your life much easier, particularly at tax time. 

Use windfalls for stability 

Just remember to not spend all your extra cash on lavish items when you have amazing months business-wise. You can treat yourself a little bit, but not much as it is important to have some financial stability in slow months or unforeseen times. During better months, take out what you need for taxes, emergencies and put the rest in an account. 

Calculate your net worth 

Once you collect all the financial records, calculate your net worth. By calculating your net worth, you can easily figure out what you own and what you need. If your assets such as your house, investment, bank account, etc. surpass the liabilities like a mortgage, loan, credit card debts, etc. then your net worth is positive. On the other hand, if your liabilities are more than your assets then your net worth is negative. Calculating your net worth is the best way to analyze your financial status. 

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Budgeting For Your Domestic: How To Accomplish Multiple Incomes & Cut Expenditures

Starting a budget can be easier said than done. Especially If someone has multiple sources of income and many outgoings that can change each month. To many, controlling your finances with can also be especially time-consuming, being easily put off until another rainy day. However, there are simple ways to achieve this and create a domestic budget. That can not only be complete quickly but efficiently too. At 12monthloans.ca, we believe everyone should have a clear idea of their finances to be able to control them and make better decisions if they choose to borrow cash. Budgeting For Your Unwanted Domestic Expenditures

If someone needs a short-term loan in the event of a financial emergency. They’ll want to ensure they can afford the repayments. By starting and maintaining a budget, You’ll be able to put money aside and pay for an emergency without over-relying on taking out further credit. Here’s our short guide to managing it all.

Address Those Multiple Incomes

There are a few available, such as on the Citizens Advice website. That is easy to use. Having to hand in recent bank statements and payslips, means an accurate picture of what is going into an account will form for many people. In a household, considering a partner’s income into this also presents a clearer view of the household income. Especially if they contribute to bills and outgoings or receive any benefits.

The first step for many is to know really what income is being generated. Otherwise, there will be too much reliance on guesswork. Depending on the type of industry and those who are self-employed. Many may not be able to put an accurate figure on all of it, so it is a case of being as accurate as possible. One way people that successfully budget achieves. That is by utilizing online budget calculators to thoroughly look at all avenues.

Different Approaches To Managing Multiple Incomes

There are different approaches to managing multiple incomes, for example, if your household has an income for both you and your partner that covers all expenses. One method some people try is the ‘jam-jar approach. Where you divide your income into different pots for separate expenses. Budgeting For Your Unwanted Domestic Expenditures Now of course you can do this physically. But it is much safer to do this online than withdrawing all your money to put into jars or containers. Setting up separate bank accounts for each type of spending will help achieve this, for example, one for rent or mortgage. And another for utility bills or car expenses.

Then it’s the case of dividing the money between those accounts, and if any money is left over, this can be put into an emergency savings fund. By separating multiple incomes into areas of expense, rather than just one account. That everything pays into and expenses come out. It can help and mean you can control how much of your income streams are spent on certain things like groceries and so on. With a set amount put into a savings account each month.

View Multiple Income Sources

Also, Money Dashboard is another way to view multiple income sources and track spending without having to log in to various accounts. The more income sources you have, the more difficult it can be to track them. So using apps and budgeting methods that give you an overall view of your finances can make a huge difference. And take the effort out of doing so.

Working out a budget is extremely effective for people who can’t see a way to increase. Their savings or disposable income. If done successfully and with all pay accounted for. If you are fortunate to have more than one source, a few mini changes to outgoings can make a difference in the long term.

Will It Affect Your Credit Score?

Often, the first time victims are made aware of identity fraud is when their card declines or a late-payment letter is mail to their address. That can be extremely upsetting, particularly when you live on a tight budget. Anecdotal reports indicate that individuals have been unable to buy food and pay their rent because of identity fraud. This kind of emergency can also make some people reach for a short-term loan Budgeting For Your Unwanted Domestic Expenditures. They wait for official services to investigate the issue. That is an expensive way to borrow money but might be the only way out of a tight situation for some people.

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