Tag Archives: consolidate

Saving Strategies for Canadian Homeowners

Save Smart: How to Manage Money and a Mortgage

According to a recent Canadian Payroll Association survey, nearly 60% of Canadians don’t have enough money in the bank to cover even one month’s worth of necessary expenses. Too many homeowners are living on the edge of financial disaster, spending money that they should be saving. If you’re finding it difficult to save, now’s the perfect time to reassess your financial strategy, curb your spending, and improve your investment portfolio. Keep more of your money with these saving tips from the mortgage brokers at FamilyLending.ca.  

Saving Strategies for Canadian Homeowners

Saving is easier than you think. All it takes is a little financial knowledge and foresight.

  • Saving Tip #1 – Pay Yourself Saving is simple when you don’t have to think about it. The mortgage brokers at FamilyLending.ca recommend setting up a savings or investment plan that automatically transfers money from your paycheque into your savings account. Not sure how much you should be saving? Start with 10% of your gross income. Whatever amount you choose, make sure you don’t spread yourself too thin.
  • Saving Tip #2 – Get Rid Of Debt Carrying consumer debt can really hurt your ability to improve your savings. Let’s pretend that you’re carrying a credit card charge of $1,000 plus 18% simple annual interest. Every year, you’re paying an additional $180 in interest charges. Pay off that debt and you’ve saved $180. That’s the same as investing $1,000 in something that earns an 18% return after tax. The more debt you carry, the more money you waste paying off high interest charges. Eliminate debt and you’ll automatically save more money.

Save Money on Your Mortgage

Are you paying more than you have to on your mortgage? Refinancing your mortgage could save you thousands of dollars. The mortgage brokers at FamilyLending.ca recommend refinancing your mortgage if:

  • Your mortgage rate is more than 2% higher than current rates, and you have less than 2 years until maturity. Remember to always check with your mortgage holder to determine if there’s a penalty for getting out of your current arrangement.
  • You’ve built up enough equity in your home. The more equity you have, the more likely you’ll be able to refinance and tolerate a floating or variable rate mortgage. This type of mortgage is known for offering lower interest rates, but unpredictable monthly payment requirements. Speak with your FamilyLending.ca mortgage broker to determine if this is an option for you.

Expect Ups and Downs When Investing

It’s no secret that too much risk can hurt your investment portfolio’s growth rate, but so can sticking to ultra-safe investments that pay one percent or less. When reassessing your investments, make sure that:

  • You’re in it for the long haul. Don’t chase every market fad in hopes of making a quick buck. Studies have shown that it’s long-term discipline that provides the highest average returns.
  • You diversify with a healthy mix of stocks and bonds. A good rule of thumb to stick to: the fixed-income holdings in your portfolio should equal your age. This is because as you get older you’ll want to be more conservative in your approach.
  • Know when to sell. The financial experts at FamilyLendingFinancial.ca recommend that no holding should make up more than 5-6% of your portfolio.

Need more help making senses of your money? Then contact the mortgage brokers at FamilyLending.ca. Or our financial gurus at Family Lending Financial are here to help you save.

 

Chantielle Kennedy writer for FamilyLending.ca

Consolidate Your Debt and Save!

 

Looking for a simple way to pay off credit card debt quicker? The key to getting rid of debt is to commit to fixed, not declining, monthly payments and finding a better interest rate.

Here is an example.

Lets say your credit card has an interest rate of 19.75%. If you were to attempt to pay off a debt of $30,000 with fixed payments of $600 per month, that debt would be paid off in just under 9 years. Your total interest cost would be approximately $34,356.

Take out a loan with an interest rate of say 6% and that same debt would be paid off in just under 5 years, almost 4 years sooner than the same debt you’ve accumulated with the credit card. Best of all your interest cost will be reduced from $34,365 to $4,634, that’s almost a $30,000 savings.

In the real world, of course, your debt may not reside on one, but multiple credit cards. The practice of transferring all of your debt to a single loan is called debt consolidation.

 

Here’s how it works:

1. Add up all your credit card debt.

2. Take out a single loan for the total amount.

3. Use the proceeds of the loan to pay off all your credit cards in full.

4. Pay off the loan in single monthly payments, the interest rate will be considerably less than what you would pay on a typical credit card.

The key here is to pay off debts, if you just get new cards or rack up the balances again this can very quickly spiral and eat up the equity you have built in your home, so discipline is the key to success.
Contact FamilyLending.ca for more information.