What a headline, like this blog had really been active before and died. I have paid very little attention to this blog as other things in my life took my attention away. I’m using this spring, the spring of 2010, as a time of rebirth for this blog.

Cash Challenged is going to be focused on helping Canadians understand how to deal with their debt, how to rebuild their credit, how to live more frugally and to build savings for their future.

I’m a debt & insolvency counsellor registered with the Superintendent’s Office. I’ve been meeting and working with debtors in financial distress for several years and will be bringing that knowledge to this forum to help my visitors learn to take control back in their lives.

In the coming days I’ll be installing a contact form for you to be able to reach me privately and to ask your questions. I’ll do the best I can to let you know what your options are and point you in the direction of finding the help you need.

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A recent study by the Bank of Montreal claims that Canadians tend to be tightfisted when it comes to tipping. The study seems to indicate that the problem is more a lack of understanding of who to tip and how much than truly being tightfisted with their money.

I generally tip in restaurants and when I get my hair cut but never would think of tipping in other situations. The site, The Original Tipping Page, carries a list of situations and common guidelines on how to determine tips.

While most people realize that people in service industries look for tips, usually because of low wages paid to them by employers who rationalize that the service person can make a real wage by all the tips they get. That should be an incentive for service people to give good service, all too often, it isn’t. Keep in mind that good service earns a tip, extraordinary service earns larger tips. Likewise, incredibly bad service earns either less than the standard or zero.

Generally, tipping in Canada follows the same guidelines as the United States. In most restaurants and hair salons the rate would be 15-20% of the pre-tax bill. I generally shoot in the area of 15% of the total bill which would put me more or less midrange. If the quality of service is less than competent the tip will fall off accordingly.

In a buffet service restaurant it is acceptable to tip in the 5-10% range considering how much service the wait staff have actually done.  This is an area I’ve always been confused on until now. I’ve often thought it was more logical to tip lower in a buffet restaurant but haven’t wanted to be chintzy and have been generally tipping the same as a sit down restaurant.

With a bit of knowledge, you can tip with confidence to those who understand that good service is what they are receiving a tip for.

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This story in last weekends Toronto Star is a prime example why Canadians need to be wary of giving out personal identification, especially your SIN (Social Insurance Number). Private corporations get away with asking you for your SIN but the fact is that rarely is there a legal requirement for you to give it to them.

The SIN is the Canadian equivalent of the American Social Security Number. This article refers only to the SIN, I don’t know what the law is on the Social Security numbers. Your SIN is not and never was meant to be used as a piece of universal identification. The program was started in 1964 as a client account number for Canada Pension and various employment insurance.

Generally speaking unless the transaction you are trying to accomplish involves you earning money, you are not required to provide your SIN to any private firm. If you are opening a bank account that is not going to earn interest, you don’t provide your SIN. If you are taking out an RRSP, opening an investment account or an interest bearing deposit account you do provide your SIN.

If you are applying for credit, the potential lender can not refuse you because you decline to disclose your SIN. You have the right to challenge any requests for it. The institution asking for it must show that there is an appropriate need for them to have it. Telling you that you must provide it because that is how they do it is not good enough.

So, why is it so important to safeguard your SIN?

• The SIN may be a key piece of information to open the door to your personal information.
• Computer technology makes it possible to use the SIN to find and match your information from one database to another; without your knowledge, a detailed profile could be drawn about you. This amounts to “data surveillance” or monitoring of your daily life, which can pose a serious threat to our privacy and autonomy.
• Your SIN can be used to steal your identity. Along with other personal information, someone may be able to use your SIN to apply for a credit card or open a bank account, rent vehicles, equipment, or accommodation in your name, leaving you responsible for the bills, charges, bad checks, and taxes.

Remember, they can ask but you don’t have to provide your Social Insurance Number until they demonstrate why it is required. For more information visit the Privacy Commissioner’s site.

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T0day, credit has become a necessity of life. Generally speaking, it takes credit to get credit. So, how do you break into the circle?

There are several ways you can obtain your first credit. Many young people will look to their parents or other established adult to co-sign their first credit. DON’T do it! Don’t ask for someone to co-sign for you and if you can co-sign — DON’T do it! I really do say this from experience.

If something happens that you can’t manage the credit you are forced to make a decision between stiffing the person who trusted you, the debt transfers to them if you can’t pay, or remaining buried when what has happened may have been out of your control. I’m not advocating getting more credit than you can handle but the fact is, and I see it every day, events happen in people’s lives that they can’t see coming and their debt becomes overwhelming.

Your parents or already credit worthy friends are not being bad people if they decline to co-sign. They are being prudent and you are learning a life lesson. There are other ways.

Learning to save at an early age is more important than most realize. Using savings to invest in bonds, especially government savings bonds can provide you with collateral to use to start establishing credit. In my early years, I once got caught short in dire need of a set of tires. I considered cashing in some of my savings bonds but then took them in hand and went to talk to my banker. The bank used the bonds as collateral for a loan for the tires.

I was able to pay the loan back quickly which reduced the amount of interest I paid, retained the interest the bond earned and most importantly, established a clean credit report. Before I had the loan paid off, I had applied for and obtained my first credit card based on the payment history on the loan.

Make your first application for a credit card to where you bank.

If you get turned down, you can ask the bank or other institution about allowing you to apply for a secure credit card. A secure card allows you to put down a deposit of say $500 and receive a card with a matching limit. By using the card wisely and always paying on time, you will be establishing a credit history and will eventually be able to convert the card to a regular card.

Treat your credit card as an emergency fund and always keep in mind that it has to be paid, so don’t over use it.

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AH the power of a credit card! For a lot of people getting their hands on their first credit card can be as much of a power rush as their first car. Like driving a car, you need to take having a credit card very very seriously.

You may enjoy the freedom of having a credit card to use for those times you are caught without money in pocket. Be aware that thieves and fraud artists love the rush of having YOUR credit card to use as they wish.

Credit card fraud is a crime that you wont catch right away, you wont notice it until you check your credit card statment. Number one rule, check that statement as soon as it arrives!

There are ways you can protect yourself from becoming the victim of credit card fraud. Be vigilant at all times. Treat your ATM card (also known as an Interac card) in the same manner you do your credit card.

Here are some tips to help you stay safe:

1. Always know where your card is both when you are out in public and when you are home. Placing your cards, all your cards and personal information in a secure place at home guards against losing them to burglary.

2. Never email credit card details and NEVER respond to emails requesting credit card or banking information. I don’t care how real that email requesting the information is, DON’T! If you are really determined that it might be legit, look up your financial institutions phone number (don’t use what they list in the email) and call them.

3. Always activate and sign new credit cards immediately. You want your signature attached to your name, not the lucky stiff who got his hands on your card and signed it.

4. When using your credit card, don’t let the clerk wander off with it. Keep your eyes on the clerk and your card. Don’t be afraid to question any action with your card, it is your card and an honest clerk will gladly answer your question.

5. Take the receipt from the transaction into your hand, and check immediately if the receipt printed your credit card number on it. If it did, get a dark pen and immediately mark out both sides of the receipt to obscure the number. It only takes some trial and error for a determined fraudster to figure out expiry date and even security code once your credit card number is in hand.

6. Check your credit card statement as soon as it arrives. Account for every transaction. If you find any wrong transactions, phone the company or the issuing bank immediately and report it.There is usually a time frame for transactions to be reversible and the sooner you jump on the problem the better.

7. Be wary of authorizing anyone to do repeated transactions on your credit card. I allowed an internet provider to debit my credit card every month for my dial up connection. I notified them last August to cancel my account, informed the bank in October that they were continuing to charge my card. In January the bank reversed several months of their charges after they had been unable to get a response from them. They once again debited my account at the end of January and now the bank is wanting to cancel my card and issue another. What a huge nuisance!

8. If, inspite of your careful vigilance, you can’t find your credit card for any reason, report it lost immediately. They can block the usage of it just in case it has been lifted on you. If you become a creature of habit in where you store your card, you will know with greater confidence if it has been stolen.

9 Many credit cards double as an ATM card with a PIN (Personal Identification Number) for you to use when using a banking machine for cash withdrawals. NEVER tell anyone your PIN, always choose some obscure number that you can remember.

One way to create a backup for your PIN number is to choose a word that you’ll remember fairly easily and calculate it’s numerical equivalent. For example, let’s use CAT. Figure out the number inthe alphabet for each letter… for CAT it would be 3.. 1.. 20. There you go, you could use 3120 for your pin. If you forget your number but remember the word you used you can retrieve your PIN from your memory without writing the PIN down for a thief to find.

For more security you could use a 4 letter word and add the digits of double digit numbers to render them into single digit numbers. If I’d used CATS instead of CAT.. it would be 3, 1, 20, 19 and then adding the double digit numbers to get one I’d have 3, 1, 2, 1 (19 adds to 10 which added together gives me 1) so the pin would be 3121.

10 You should always use separate PIN numbers for each card. That can become confusing remembering which is which. Figure out a system that works for you but DON’T use personally indentifying reminders like your birth date, your address or your drivers license.

The moment you use information like that you then have another piece of information which needs to be carefully guarded. Use something that means something to you but would be innocuous to someone else and keep it to yourself. It might a word from the title of a book you enjoyed, someone else’s birthdate, or a long dead pet .. you get the picture… obscure but meaningful for you.

11. Don’t use an ATM that you are at all suspicious about. Report your suspicion to the bank that owns it immediately.

12. When using your card at an ATM or your bank card at a retail store, ALWAYS shield the entry of your PIN number. If someone is standing closer than you are comfortable with, ask them to step back and be even more careful that your finger movements on the keypad are shielded. A sharp thief can pick up finger movements enough without seeing the numbers to make a pretty good guess.

13. Never give out credit card info over the phone unless you initiated the call and are very confident who you are talking to.

14. Online use of credit cards can make you very vulnerable. You want to be sure of the site you are making the transaction on that the purchase page is secure. The page address should start with https://. Unless I’m really familiar with the site, I usually avoid giving my credit card to any site. Sites which accept online payment through an online payment processor has a lot more confidence from me. When I can run the payment through a site like Paypal, I can avoid giving out my credit card number all over the place.

Always narrow the risk of using your card to protect your card and your credit.

Got a tip to add? Leave a comment.

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If your financial plan lurches from one credit card limit to the next, you may want to consider that your money is managing you. For your own peace of mind, you have to turn the tables and take control.

That control is as much about having credit and the ability to have credit as it is about saving and investing. All things in moderation.

This blog will become a resource about credit, savings and investing. It will show the good, the bad and the ugly so come on along for the ride.

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