Although many Canadians, even most, might be in debt, the people we want to emulate are those who have no debt. What’s their secret? Well, odds are, they know a thing or two that we can learn and copy.

First, recognize there’s good debt and bad debt. If you’re a recent grad carrying $25,000 in student loans, you’ll be happy to hear that’s a good debt. It’s considered a good debt because the return on that whopper of an investment should far exceed the money you had to borrow to make it. On the other hand, if it’s a $10,000 debt on spring break trips to southern climes and lovely Margaritas, well, try and get your money’s worth for those wild weekends, and you’ll see what we’re talking about. That’s a bad debt.

Here’s another difference between good and bad debt. A good debt expands what you’re worth, by either making you personally more valuable (because you’ve got an education and know stuff, for example) or adding tangible goods to your portfolio that are valuable (like investments, a home, or business). You’ll know you’ve got it made with good debts when you go into the bank and are immediately ushered to the second floor where the suits hang out.

A big key is to balance your good debts and eliminate your bad ones. That means paying off your credit cards as much as possible, not buying what you cannot afford (like a 42-inch high definition, blu ray television), and being sure to keep up on payments on your good debt. So pay that mortgage every month, and don’t default on your student loans. But that doesn’t mean you have to keep paying those high interest rates on your student loan.

This is another way to manage your debt. For debts like student loans, which can sometimes have really high interest rates, see if you can negotiate it down or buy it out with a line of credit. That can save you significant dollars if you’re carrying a large debt.

Debt isn’t always a bad thing. Owning a home, or capitalizing on a good education, can have terrific returns. Just be sure you know the difference between a good debt and a bad one.

First, be careful how much you borrow. The two or three big-ticket items most people hope for include an education of some kind, a home, and a car. Generally, most of us are not going to buy those things without a loan of some kind. It certainly isn’t impossible to get an education by working full-time during the day and going to school part-time at night for 11 years, or buying only as much car as your bank account will allow-say, a 1984 Honda Civic. Most of us, though, aspire to faster degrees, and cars! But everyone has a limit. Know yours.

Tip one: Don’t start school until you know when you’re going. Too many people waste two years’ worth of loans before they know what they want to do-and that’s a lot more expensive than six months’ hitch hiking through Europe while you work out what your future career path.

Tip two: Don’t over buy on your first car. Do you really need an audio or BMW? Wouldn’t a pretty nice, nearly new Golf hatchback do?

Tip three: House buying is a complicated process, but the research still says that people buy on impulse. Before you start looking for a home, put together a checklist that includes a list of the features that might be important to you. For example, do you want to walk to your work place or downtown? Do you spend a lot of time in the backyard, and have a dog or kids that need a fence? Most important, go to the bank before you go house shopping, and see just how much home you can buy. Never reveal that number to an agent, if you’re using one. And don’t be afraid to look at houses being sold privately; it can save you thousands.

In every case, house buying, car purchases, and educational choices, have a budget on what you can realistically handle. Then you’ll never have a good debt go bad on you.

Start by making a list of all your debts. You need to know where you really stand. You need to know exactly how much you owe, and who you owe it to. Don’t hide anything, and don’t pretend you don’t owe something. Once it’s all out in front of you, it may feel a bit like taking a rock out of your shoe. A lot of the stress of debt comes from denying it exists-and you’ve just stared your debt right in the face.

Now prioritize your debts. You likely really want to pay your best friend back, and owing a friend may strain relationships, but it isn’t likely going to wreck your credit. So list all your debts in order of the most important ones first. That might include your mortgage and secured loans. That’s because you don’t want to lose your home, or whatever you’ve purchased-often it’s a car-using the purchase as security against the loan. Then list other debts like credit cards, lines of credit, utilities, taxes and other fines. Things like your electric bill or overdue taxes can often be sorted out more easily than mortgages, so they should be considered low priority.

Now work out exactly how much money you make every month. Set up a budget that includes your debts and also your living costs like groceries. Be careful about what you believe is a necessary cost, and what is not. Life does exist without television, and if you’re in a money jam, it’s these kinds of costs that will have to go. Eliminating television also impacts other costs. You can sell the television and, if you’re using the typical 42-inch big screen most people own these days, you’ll save on your electric bill as well. You may also have to make hard choices about pets, second vehicles, mobile phones, and other items your budget cannot afford right now.

Once you’ve figured out all your costs, and hopefully have found a way to begin to pay back your debts, contact your creditors, one at a time. Explain your situation, and tell them what you think you can manage each month. Contacting your creditors before they contact you can save your credit score. Sometimes, if you make a deal, they won’t report your credit, or at least won’t downgrade as much. Either way, you’ll feel much more in control if you call them and strike a deal than if you’re tracked down by a collections agency.

The Bank of Montreal says its securities department first noticed irregularities in several of their Western Canada mortgages back in 2006. This prompted the bank to hire a forensic accounting firm who spent the next year digging through the details to uncover what was really going on.

The forensic accounting firm realized a rather sophisticated scheme where scammers would chose the worst house in a preferred, established neighbourhood. They would then convince the bank the house was worth much more than it really was due to it’s location, and being as banks rely on software programs to determine house values, the banks would concur. The scammers would then purchase the house and pocket the difference.

To qualify for the mortgages, these scammers were paying unsuspecting people, generally new immigrants $2,000 to $8,000 for the use of their name on the mortgage. Lawyers would then step in and draw up fake documents of earnings, often showing inflated wages and high net incomes to ensure the immigrants would qualify for the mortgages. The legal documents filed by the bank shows the fraud scheme was operated by 14 inter-connected groups that generated approximately $140 million of which $70 million was in fake mortgages.

The Bank of Montreal’s documents also showed that millions of the fraudulent money was sent to countries such as India, United Arab Emirates, Lebanon Pakistan and Saudi Arabia. They also noted that in one instance alone, a home in Calgary that was bought for $900,000 was sold three years later for $2.3 million, netting the scammers a whopping $1.4 million.

A Calgary based management company had documents unravelled by the Bank of Montreal investigators showing 150 suspected counts of mortgage fraud within 16 different financial institutions. The investigators felt this was a clear sign of how inefficient the controls are in the banking system. If you have been the victim of fraud and have had your finances affected because of it, you might want to consider a private consolidation or car title loan to help get your mortgage back on track.

Eliminate credit and debit cards

Using plastic for purchases can give the illusion that you have more money than you really do. After all, plastic never wears out. Carrying real green makes the end of the money train a very real experience. When it’s gone, your spending is done. So, get rid of all your plastic, and start using cash to pay for all your purchases and bills.

Admit your debt load

One of the ways we fool ourselves into believing that our financial situation “isn’t all that bad” is by straight denial. We just don’t check-until the debt collector’s knocking at the door-and even then. So, pull out every bill you have stuffed away and ignored. Include your mortgage or rent, in-store credit lines, bank lines of credit, regular monthly bills like the utilities-you name it. Add those debts up to see just how much money you owe. Oh-and don’t forget mom and dad, friends, or other relations you owe money to.

Consider consolidating your debt

One of the biggest problems with debts is that there can be so many of them. That makes them hard to track, and can leave you overwhelmed. Which one do you pay? And that can lead to just giving up on paying anything. Consolidating your debts-even if the monthly payment seems big when you do-can help you get your debts under control. Knowing the amount you have to pay out each month to service that debt may also help you curb your spending urges, too.

Consider your assets

It may seem foolish to think about mortgaging an asset to pay off debts, but sometimes this is a good way to get back on track. Even if it costs you a bit more, in the long run, using assets to pay off debt can be a good choice. And, it’s an especially good choice if you’re up against the wall on your credit cards, have stopped paying your bills, or are thinking about bankruptcy.

Consider a vehicle title loan

If you have bad credit, own your vehicle, and it’s less than eight years old, you may be eligible for a car title loan. It’s an easy application you make online, and can be approved in less than 24 hours. You could qualify for as much as 40% of the wholesale value of your vehicle. And that cash can go a long way to bailing you out of financial trouble. Apply today, and your loan could be direct deposited into your account by tomorrow. You can withdraw that cash and pay off a lot of debts by tomorrow night. And get your life back on the straight and narrow.

Several Canadian financial institutions are offering programs to help guide people through the tough times when it comes to debt overload. They say that consumers should monitor their credit profiles to avoid becoming financially overextended and that there are steps that Canadians can take before resorting to bankruptcy.

To keep financial matters in check, it is advised that consumers should keep their housing costs around 28% of their income and overall debt payments around 35%. If consumers are utilizing 30% of their credit limit, it may be a warning sign. If consumers are using 50% of their limit, that is a red flag.

Filing for personal bankruptcy may provide financial relief to consumes who have taken on too much debt, but a bankruptcy will remain on your credit file for many years and can severely impair your ability to borrow in the future. Canadian financial institutions have seen over 30,000 people come to seek financial and debt-paying advice through their programs. Many people are not even aware that most banks offer such programs.

It’s hopeful that Canadians will see better times in the next year as consumer confidence has risen since November. Financial planners recommend consumers have a six-month supply of money saved for emergencies. Only a few years ago these same planners were recommending three-months worth of emergency funds were saved. Savvy planners are able to prepare for unforeseen life events. An insurance policy for $50 a month can easily save you $100,000 in unforeseen medical emergency debt.

If you find yourself on the brink of bankruptcy, reconsider filing. Instead you may want to try altering your budget, using your savings to pay down loans, calling creditors to rework payments, selling a few assets to put towards your debt or consolidating debt to make the monthly payments easier. If you already have bad credit and do not feel traditional banks are an option for consolidating your debt, there are many private financial institutions that specialize in bad credit loans that may be able to help with debt consolidate  to help you get your bad credit under control.

Living outside ones means seems common practice for many people. With so much rotating credit available, many of us simply are not saving for the golden years. The recent recession had people reciting ‘Freedom 85′, which unfortunately, probably has a ring of truth to it. While many of us know retirement is inevitable, falling somewhere between death and taxes, the mental concept to just work longer seems to be common one. With people living longer and generally being healthier, it can make sense to consider this an option.

However, we have to admit how unpredictable life can be. An unforeseen health issue or accident can instantly eliminate any of those longer working intentions. Suddenly even Freedom 85 is unobtainable. An unexpected health issue forces many people into early retirement. Even if you’re lucky enough to have a generous pension, the payout will be reduced because of early retirement, which will most likely end up being less than your previously earned salary.

According to Statistics Canada, more and more Canadians continue to grow their debt loads. The Bank of Canada says the average person has accumulated $36,000 in bills. They blame this on credit card addicted young people, but older Canadians are still piling up debt as well. The Credit Counselling Society noted 14% of their clients are over 56, saying this category of clients has almost doubled in the past ten years. If you’re about to start saving for retirement, here are a few tips:

The first thing you need to do is reduce risk.  Real estate and stocks don’t necessarily provide the benefits they once did due to surging markets. People need to realize conditions change and markets around the world have been falling. Scaling back is also a key to retirement success. If you’re not the type to live outside your means, then living on 50% to 70% of your pre-retirement income won’t be a problem.

There are things you can do now to help yourself later. If you own debt and traditional banks are no longer an option, consider applying for a secured private loan. This may help put your finances in order so saving for retirement won’t be such a red-hot issue.

Debt consolidation is a good idea for pretty much everyone. It means a couple of things. First, you try to eliminate as many credit cards as possible, and put all your debt into one pot. Sort of like when you empty out the garage and put all your stuff into one big pile. It can be a bit scary, at first, because now your debt is all out in the open, and you can see just how high that pile has become. But, let’s do it.

So, how much do you owe?

Say you carry three cards-a gas card, a general credit card, and a specialty card, for your favorite big box store. All these credit cards are near their max, and you don’t make payments each month. It’s tough because they all come due at different times, in different amounts, and it seems that they absolutely never come at the same time you get paid, and might have some money in your pocket. But not paying those debts gives you bad credit-in fact, just keeping those credit cards near their max can lower your credit score.

How can you fix credit card debt?

Take out a car title loan. Sound like more debt? Nope. You’re going to use that car title loan to get rid of those credit cards, improve your bad credit debt, and get your payments in line with your pay cheque so that you make one payment you can easily keep track of, at the same time, in the same amount, every month. Sound easy? It is.

How to get a car title loan

If you own your car (or other vehicle) and it is less than eight years old, you may qualify for up to 40% of the wholesale value of that vehicle. You apply online, fast, easy, and private. About 99% of people qualify, so odds are, you will too. And you’ll know about your car title loan in 24 hours or maybe less-it’s that fast. And they can even direct deposit it to your bank account, if you want.

When you get that car title loan, pay off those credit cards, and start making one payment that’s easy to track and easy to remember, at the same time, every month. You’ll be on the fast track to credit repair, and feel a whole lot better about your life and your future.

First things first. Take out your credit cards. Do it with your partner or spouse, if they’ve got cards too. Even get the kids in on it. Make it a family challenge. Then, cut every card up. Yup. Gulp. Take a deep breath, and just do it. Including, by the way, your debit or cash card. From here on in, you’re paying with real green and green alone (that’s the colour of cash, by the way, if you’ve forgotten) for every purchase you make.

Next step. Go through every credit card bill, and every bank statement, and add up only these fees for the past 30 days:

1.    How much have you been charged just for exceeding your credit card limit-not the interest you’re also being charged-on every card you carry (you know you’re over on every one of them)

2.    How much have you been charged for exceeding your chequing account limit-that is, drawing on the overdraft (or is your credit so bad, your cheques are just flat-out bouncing-then add up those charges)

3.    How much has the bank charged you for exceeding your allotted number of debit card withdrawals this month (’cause you know you use that baby like there’s no tomorrow).

What’s the scary total? Don’t pass out; congratulate yourself. Because you’ve moved to cash-only purchases, you’ve just subtracted that amount from monthly mounting debt. See how much free cash you’ve suddenly discovered?

Now. Make a list of every debt you have, credit cards, in-store accounts, rent-to-own agreements, you name it. List every one of them. List the highest interest debts first. Those are the ones you’re going to pay off first, using the money you’re no longer spending on overdrafts and exceeding your credit card limit. See how that works?

Still not enough?

Consider your assets. If your debt is that bad, you need fast action. Think about using your car, or truck, or whatever you drive, to get a car title loan. It can help you get a jump on those bad credit cards, and help you get your debt repayment under control. Instead of paying high interest rates on three, or four, or more credit cards, you can pay one easy monthly installment.
Right now maybe your credit is so bad you think you couldn’t even qualify for a car title loan. But that’s the best part. A car title loan is especially developed for people like you with bad credit, low credit scores, or even bankruptcy. It works because you use your car-if it’s less than eight years old and you own it-as collateral against the money you borrow.

And, because you’ve qualified for a loan, and make regular payments, it can help you improve your credit score, and get you back on the very merry-go-round of good credit. And back to sleep at night.

How do you know if you are a bad credit risk?

If you can’t say, within a very few dollars, how much you owe and to whom, chances are that you are a bad credit risk. If you can’t count your credit cards on way less than the fingers of one hand (and thumb, ring finger and pinky don’t count) you may be a bad credit risk.

How to improve your credit score

Managing credit isn’t all that tough, but it’s something a lot of us let spin right out of sight. But a few simple steps can help you stop that tailspin and level out your credit again.

First, when your bills arrive, don’t stuff them under the couch. Have a drawer or a basket within easy reach of the door where you can put them as soon as they come. Use that drawer only for your bills. Promise yourself that every month, you’ll open that drawer, pull those babies out, and pay them on time.

Then, make paying bills a feel-good time. Tell yourself that this is the responsible thing to do, that it shows creditors they can trust you to repay what you owe, that you’re good for it. Have one place where you sit down with your bills to pay them. Make yourself a coffee and settle in. Write down on every bill what you paid and when you paid it. Subtract that amount from your debt. Keep track of that debt and watch it drop every month. Store your paid bills separately, in envelopes, and mark the new amount you owe on the outside so you can see how much you’ve paid down. You’ll be amazed at how good you’ll feel and how well you’ll sleep (and how nice it is when creditors stop calling you).

Keep your credit cards at home so you can’t make impulse buys. When you feel the need to buy something, picture those bills in that drawer. Do you really want to add a new bill to the picture? Think how good it would feel to have an empty drawer.

Consider fast-tracking your debt

That means using credit wisely to help pay off what you owe. One way you can do that is through a car title loan. If you own your car, and it’s less than eight years old, you can apply for a loan using your car as collateral. Sometimes you can get as much as 40% of the wholesale value of your car. It may sound crazy to use a debt to get rid of a debt, but sometimes you need that jumpstart to get you moving on paying debt down. Also, a car title loan enables you to pay off multiple bills and turn many monthly payments into one easier to make payment. A car title loan is easier to get, too, and has the advantage that it’s a loan-and that makes you look good to other lenders in the future.

So, which credit type are you going to choose to be? It’s all up to you.