Should You Co-sign a Car Loan for Your Children?

Co-signing is one way to help your grown child to purchase a used or new vehicle. Whether this is a good idea depends on many factors, including their age, financial literacy, exposure to credit, and others. Weigh in all factors because you are 100 percent liable for loan repayment.

Co-signing and Other Options

Before co-signing for your son or daughter, you may think of other options such as adding them to your credit card. In essence, this will make them authorized users and will allow them to build a strong credit score over time. This is one way to help your grown child to build a solid report and meet the requirements for a car loan. There is a great post on the subject here. You can do this if your FICO score is in the range of 740 – 750 or higher.  Another option is to offer money for a larger down payment so that your child gets approved. If you choose to cosign, however, this is one way to help your child get affordable car financing. Whether it is a good idea to consign depends on the amount required and the terms of the loan. Obviously, parents know their children best – their responsibility level, work history, lifestyle, and how they deal with financial hardship. While auto financing companies, car dealerships, banks, and credit unions allow parents to consign on a vehicle loan, this is a hard decision to make. The lender will have the same claim on you and your child in case of default. There are some benefits to cosigning, however, and one is that timely payments help your child establish credit history. Check this great post about credit history and repair here.

Reasons Not to Cosign

Many parents are happy to cosign for their children or will at least consider doing it, but there are some things to consider. There are tax consequences in case the loan balance is settled. For example, if you settle for $5,500 and owe $12,000, the remaining $6,500 will show on your tax returns as debt forgiveness income. Another reason not to cosign is that it will make it more difficult to get approved should you decide to apply for a new loan. This might mean too much credit on your name and if you need a loan in case of emergency, the lender may turn you down when you need urgent cash. Obviously, suing your child if you get sued is unlikely option, and it is worth weighing the pros and cons before jumping on the bandwagon. If your child needs a car badly to commute to work and has a stable job, for example, you may lend a helping hand.

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How to Finance Children’s Party Planner Business

Children’s party event planner services organize and host events such as baby blessing receptions, graduations, baptism receptions, birthdays, tea parties, bar mitzvahs, and many others. This is a popular business and a great way to earn a living and have fun at the same time.

Financing for Your Party Planner Business

Obviously, it is important to specialize in some niche, whether arranging dinners or children’s parties. Stick to it to master the details. The first step, however, is to find financing for licenses, supplies, and other expenses. You will need cash to purchase a computer, office supplies, a scanner or copier, an answering system a telephone, and so on. There are different ways to fund your endeavor, and the cheapest is to use cash in your savings or checking account. If you are short of cash, your credit card can be a handy option, especially if you use a low-interest card. kidsIf you plan to apply for a business loan, you will probably need a good business plan. А comprehensive business plan takes at least several weeks to complete but this is one way to improve your chances for approval. You can also use the services of a professional. When it comes to basics, include your net profits, gross margin, and sales. State your objectives as well, i.e. to become a leading children’s party planning specialist in Canada (or your province or territory). It is also a good idea to list your milestones or keys to success, for example, significant profits on each party organized, competitive prices, and consistent and quality services. Emphasize the fact that the funding is minimal for a service-based business and provide information about your start-up expenses and the amount required to cover them. You may stress on the fact that outside funding is a viable option. Your bank will offer one of two options or both – an unsecured or secured business loan. Secured loans require some type of business collateral, and banks offer larger sums compared to unsecured ones. A low-cost government loan is yet another option to explore.

What to Do Next

Once you have been approved for financing and opened a children’s party planner business, it is time to create a functional office space. There are two options – a rented office space or a home office. The next step is to advertise your services online and in local media (newspapers, business journals, and other outlets). Print advertisements are also an option. You can place advertisements in areas such as toy stores, malls, children’s boutiques, day care centers, and others. Place ads around libraries and other public buildings as well. Think of a logo that is eye-catching, easy to remember, and child- and family-friendly. Do some research on other event planners in your area to find out what they charge for their services. To this, it is important to find a supplier that offers competitive prices because supplier costs usually determine service pricings.

Resources:

https://www.lifeoncredit.ca/cashback-vs-rewards-credit-cards/
http://www.creditcardfaq.ca/credit-card-types/cashback-offers-to-attract-new-customers
https://www.lifeoncredit.ca/top-6-credit-cards-for-bad-credit-in-canada/

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Parenting in Canada: Are Children Money Pits?

Parenting is a challenging task in today’s busy and fast changing world and being a parent is very demanding. Many of us need support from friends, family members, and our communities. With busy work schedules, it is increasingly difficult to establish a stable and loving relationship so that children develop healthy self-esteem and confidence. Money is also a serious problem for many families, and they feel socially isolated.

Financial Challenges

Raising a child is a costly endeavor, and parenting involves complex decisions and arrangements for statutory and school holidays, summer vacations and school breaks, dental and medical care, medical insurance arrangements, and more. Many households are financially strained and lack money for cultural events, extra-curricular activities, school events and trips, and special needs such as speech therapy, physiotherapy, and counseling. More and more households are near the financial breaking point, especially families with two or more children. Facing financial stress, parents are more likely to be arbitrary and irresponsive in their interactions with children. Such fathering and mothering behaviors increase the risk for low motivation and reduced expectations, deviant behaviors, and emotional problems. Financial pressure is often the reason for conflict, especially over financial issues and people start looking for debt consolidation options as a way out of debt. Children and teenagers want entertainment, games, clothes, and vacations that parents are often unable to afford. With money pressures mounting, adolescents become anxious and repressed and are less in control of their everyday life. Financial stress is associated with less  guidance, and support and inconsistent parenting.kids

Low-Income Families in Canada

Statistics show that close to 14 percent of the population in Canada lives in low-income households. More than 16 percent of children under the age of 17 live in low-income families. Families with above median income live in 4 provinces, British Columbia, Alberta, Saskatchewan, and Ontario. Families in Alberta were reported to have the highest median income. At the same time, close to 5 million people have a low-income status and many are unable to afford basic necessities. Single-parents are often trapped in the vicious cycle of poverty and are heavily indebted and look for bad credit personal loans. Financial experts estimate that it costs over $240,000 to raise a child to the age of 18. This equals close to $13,000 a year. Children are a huge financial responsibility and many parents are forced to make big financial sacrifices. But there is hardly a parent who will trade having a child for anything in the world.

Families with Babies

Welcoming a new member of the family is one of the happiest moments in our lives. However, there are some numbers to consider. During maternity leave, women lose a significant portion of their income. For each year women take off to look after their children, they lose about 3 percent of their income. This also affects mothers’ medium and long-term employment. While it helps to have employment insurance, you only get up to $485 a week. At the same time, there are things you cannot go without (mandatory expenses) such as baby gates, high chair, stroller, crib, and so on. In addition to one-time expenses, there are ongoing expenses such as clothes, baby foods, diapers, and toys. There are overlooked expenschalkes to consider:

• Pet care
• Party gifts
• Movies
• School books
• Team parties
• Team fees
• Equipment
• Uniforms
• Art supplies
• Musical instruments
• Teacher gifts
• Field trips
• Yearbooks

Parents also pay admission and registration fees, software, computer supplies, college test preparation fees, room and board, etc. You also pay for passes, bus fare, car parking, and fuel. Raising a child can be a money pit, from shelter and child care to cosmetics, entertainment, education, and sports. Costs vary depending on many factors, for instance, whether your kid attends daycare or private or public school. Parents of children with disabilities and special needs face special challenges and are often financially strained. Such children often need exceptional level of attention and care, especially for kids with severe disabilities. Over 500,000 Canadian children live with disabilities and mobility limitations. Parents of children with special dietary requirements, chronic illnesses, and allergies also face financial challenges. In many cases, the whole family is affected, especially in case of loss of employment or income.

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