Time to make your New Year's Resolutions
It’s that time of year again when we begin a new year and think about what we would like to accomplish as we get a fresh start. Making resolutions that stick requires real motivation and dedication to change. While change can be scary, it is an important aspect of life that keeps things exciting and keeps us developing. Have you made your new year’s resolutions yet? How about some financial resolutions? Here are some tips to get you started.
Resolution 1: Make a Budget
The best way to get your financial house in order is to make a budget. Canadians now carry more household debt than ever before, so it’s time we took a good long look at our spending habits. One of the easiest ways to begin budgeting is to start keeping track of how you spend money. Do you buy lunch every day? Do you go out for coffee every day? Are you eating only packaged food when you could be cooking? Not only do our spending habits affect our financial outcomes, they also affect our health. Imagine how it would feel to get rid of that credit card debt? To lower your monthly credit payments or to be debt free would be amazing right? It is not an impossible dream. How you spend your money is something to take very seriously in 2013, and finding ways to lower your debt load is a key.
To budget, there are many online tools that make it easy to keep track of your spending, set limits and start to develop better spending habits. Mint.com is one of the best, with over 10 million users. This is an easy, secure program to use that allows you to track your spending easily, define your budget limits, use online financial planning tools and so much more. I’ve met so many people in the last month who have found that this program has changed the way they spend money without it feeling like a punishment, leaving them with more money in the bank each month to pay down their debts and to start getting ahead.
Think carefully about your spending, sign up with Mint.com and start finding ways to make your money work for you.
Resolution 2: Review Your Investments
This time of year, we also get our year-end statements for tax purposes, our T4 slips that show our investments and how they performed over the year. Did you make an RRSP contribution this year? Did you get good advice about how much to put down on your debt and how much to pay into your RRSP? Setting up a monthly contribution from your bank account is an easy way to build up your RRSP without causing too much stress. A recent survey by BMO found that 60% of respondents were stressed about making RRSP contributions (see “RRSP deadline causes stress, BMO survey says”). By setting up monthly withdrawals, you can take advantage of the tax benefits of RRSP’s without feeling it. Even a small contribution of $50/month can make a difference. With retirement looking less and less likely for many Canadians because of their debt, setting up an RRSP is your first step to making that retirement possible.
It is a good time of year to meet with a financial advisor to see how your investments are performing. If you have only debt and no investments, it is time to start paying down your debt and get into the habit of saving money. Make that money work for you by investing in things like GICs and mutual funds so that you start to see more positive returns.
Resolution 3: Review your Mortgage
Many economists expect the North American economy to start to recover by the end of 2013, and that could mean that interest rates will go up. With new mortgage rules in place as of July 2012, it is harder to qualify for a mortgage in Canada. If you have a mortgage, it is a good time to look at the maturity date and see if it is worth it to convert it to a different type of mortgage.
The best way to do this is to contact a mortgage broker and get advice about how you have your mortgage set up. A mortgage broker can help you find new ways to save money on your mortgage and assist you by finding you the best rates, the best mortgage type and will be there to answer your questions.
Resolution 4: Consolidate your Debt
If you are carrying lots of debt, why not use 2013 to start on the path to more financial freedom? There are many ways to get started, and with a little help you can have more money in your pocket each month and pay down your debt faster. Reducing your debt reduces your stress, improves your credit rating and allows you to start working for yourself again – rather than working for the bank!
With the cost of living going up, tax increases, the cost of gas and food rising, saving money is harder and harder. Start by looking at your credit cards. How many credit cards do you use? If you have more than 2, it’s time to cancel the rest. If you are carrying debt on multiple credit cards, you are on a path to a financial crash that is avoidable. One of the easiest ways to control your spending is to start using cash instead of credit. Once the cash is gone, the spending will have to stop. It will enable you to physically see how much you spend, and removes the “pay later” option.
Use a home equity line of credit to consolidate your debt and lower your monthly payments. We recently helped a client who was buried in debt caused by sudden illness. Between car payments, mortgage payments and credit line payments, as well as credit card debt, they risked losing their home and everything. The Mortgage Brokers at One Stop Mortgage were able to reduce their monthly payments by over 60% and helped them to find a way out of the scary debt scenario they were living.
With a new year comes a chance for new beginnings. Take a serious look at your finances and see how you can reduce your stress in 2013 by making a budget, reviewing your investments, setting up a new mortgage that works for you and consolidating your debt. With a little effort you can come back from the edge of financial problems into a positive return space where you have more money in your pocket every month and with that more freedom and less stress.
We can help!
Contact the One Stop Mortgage Corp team today and see how our decades of experience and insight into mortgages, home equity lines of credit and debt consolidation can help you get back your life.
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If the bank turned down your mortgage application, give the One Stop Mortgage Corp team of Mortgage Brokers a try. By finding you the best terms and rates, giving you solid financial advice and helping you unlock the money you need for your life, while reducing monthly payments, they will help you take back your life and provide the credit help you need.
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