I can remember a time when I had put my family in real jeopardy. With two credit cards and me being an impluse shopper, it wan't long before I maxed out both cards. It wasn't so bad afterall we were both working and we could handle the payments. Then it happened. I decided to go back to school, my husband's company went down to a three day work work, and our mortgage was renewing with mortgage interest rates nearing the 20% mark. You guessed it, yes it was back in the 80's. We had a car loan, and couldn't make our mortgage payments let alone pay off credit card debt. We were really struggling and were sinking every day. It was the closest we had ever come to losing our house and everything we ever worked for. Times were tough everywhere. How did we make it? Instead of locking into a fixed mortgage rate we stayed with a variable rate that changed regularly. It went as high as 22%. We were frantic. My husband finally found a part time job to add to his reduced three day a week job. I found a job on weekends so I could continue to go to school as I only had six months left to graduate. We cut up all our credit cards. We did without. We visited our parents more often where they were happy to cook for us saving us on our grocery bill. Yes, it was tough times. Slowly, but ever so slowly the mortgage rates began to decline. In just around the one year mark they had dropped down to just under 7% where we locked in at a fixed rate. I had graduated and found a great job. My husband's company recalled all employees back to full time. It took us almost four years to climb out of that credit card debt. We could finally breathe again. We resigned ourselves to only one credit card and only used it as a last resort. Back then there was no such thing as a debit card so we paid cash for everything and we stayed on a strict budget. It worked. Getting out of that credit card debt was like a breath of fresh air and really gave us a new start again. If you have credit cards, and find yourself tempted to buy anything, ask yourself this question - Do I really NEED this? What will happen if I don't have it? You already know the answer to those questions. And life just gets better.
WHEN IT COMES TO YOUR MORTGAGE . .
Buying a home can be a challenge with a lot of numbers, so much paperwork, and a long range of questions. The biggest challenge of all is to purchase within your means to keep your payments affordable. If you can afford it, simple strategies like increasing the amount of your mortgage payments, or making bi-weekly payments will automatically reduce how much you owe, helping to pay off your mortgage sooner. For the most part rates can and do increase. When buying your home, it’s important to see if you can afford your mortgage payments should this occur when it’s time to renew. Shifts happen and they can create a real hardship for you and your family. Make sure you don’t overextend yourself. Be aware that if you have an illness or accident preventing you from working for a few weeks, that the impact of no pay check isn’t going to put you in real financial jeopardy. It’s important to read the fine print when shopping for a mortgage. Sometimes, there’s more to an amazing rate than meets the eye. A mortgage specialist can help make the process smoother. They can answer any questions and ensure your home purchase and mortgage fit with your future financial plans.
WHEN IT COMES TO INVESTMENTS . . .
Use a process that will fit your needs. Consider your financial goals and decide on a path to get you there. A TFSA (Tax Free Savings Account) can be set up to save for short-term goals like a vacation. It’s great for long-terms goals too, such as retirement. Now you’re serious about your future! While it would be great to invest a lump-sum contribution, it not only makes sense to make automated regularly scheduled investments, its just plain easier that way. Even a small amount deducted from your pay check and automatically deposited into a savings vehcile can make much easier for you. If you’re used to the type of investments such as RRSP’s it’s no biggie then because, TFSA-eligible investments also qualify for the same type of investments such as mutual funds, GICs, traded securities and bonds. Talk with one of our Professionals in our Financial Health Collaboration, they can help you determine your investment profile and recommend a portfolio that matches your comfort level and risk tolerance, so you can reach your goals and decrease your stress. So go ahead and LIVE WELL TODAY!
WHEN IT COMES TO RETIREMENT . . .
Forty percent of respondents in a 2011 survey by the Canadian Payroll Association, said they’ll likely retire later than they originally planned. The main reason being they haven’t saved enough. Visualize how you want your retirement to look like. Develop a plan for what you’ll need once you get there. Research the various income options so you have an income from the first day you retire. RRSP’s are tax-free compounding investments (until you start to withdraw them) that allow your savings to grow faster. Other options at retirement include annuities and unsheltered savings, in addition to a TFSA. Your retirement financial plan should ensure a steady, predictable cash flow that will cover all your expenses. Staying focused on the plan you put in place will help avoid costly money mistakes. Try not to jump around as the various experts tout new products and their take on which stocks will do well. No one has a crystal ball or we would all be rich, rich, rich. But, you can have a steady retirement income if and only if you make your plan and work your plan. Why not talk to one of our professionals in our collaboration under Financial Health and let them show you how they can help you build a customized plan that can turn your retirement dreams into a reality.