Tips to painlessly have your best financial year ever

Welcome to 2016! We have all had a few weeks to settle in now and get back to reality and as always getting our finances in order is at the top of mind for many of us. This week we are going to look at a few tricks to help you navigate this as easily as possible.

1. Do you feel bogged down by the little payments? Consider refinancing your home to include all the little payments such as credit cards and smaller loans. Your overall monthly payment obligations can drop dramatically which in turn frees up your cash for your TFSA or other savings vessels.

2. Consider changing your payment frequency on your mortgage. Going from a biweekly payment to a biweekly accelerated will save you 2.4 years off your mortgage and thousands of dollars in interest. Failing that, consider the power of adding even $25 extra to each mortgage payment. In a year that is $300 if applied monthly which is $1,500 over five years which cuts your mortgage down by three months way down the road. Small changes really add up.

3. Saving money is a discipline which is not contingent upon your level of income. If only the very wealthy could afford to save then you would never hear of NBA players going bankrupt. I have seen clients making minimum wage with investment portfolios which greatly exceed those earning six figures a year. So all that being said, find yourself a professional financial planner and set a monthly automatic withdrawal. It’s way easier to save when it does not feel like a horrible and painful choice.

4. Call your credit card companies and get the best card you can. The annual fees on some cards can be quite high so you need to ensure you actually need the ‘perks’ the card gives you. If you carry a balance then you should make sure to ask for the lowest rate available. The difference between 19.99% and 12.99% adds up really quickly. While you have them on the phone and are negotiating like a boss for the best card possible, opt out of paper statements. Most companies charge you $2/month and it’s a nice little step you can take for the environment.

5. Get realistic with your spending. There is a terrific app brought to you by the makers of Quick Tax called MINT.com. You enter your banking and credit card information into this very secure and very free site and every time you make a purchase this app tracks it and allocates it to the proper category such as food etc. You can set a budget for every part of your life and receive notifications when you are nearing the limit you have set. It can be very eye-opening to come face to face with your spending reality.

6. It’s a great idea annually to make sure your will is up to date. Life changes quickly and the last thing you want to deal with during this time is an incorrect will.

7. Another item for annual review is your insurance. Do you have enough or too much coverage? Are the beneficiaries reflected correctly? Are your homeowners and auto policies up to date and giving you the coverage you want? One hour a year should be enough to give you piece of mind.

8. And finally, where could you save even more? Is your bank offering a better all-inclusive plan to cut down on monthly fees? If not then maybe it’s time to look at your options. Twenty-five dollars a month per account really adds up. Is your cable cost efficient? Your cell phone provider remaining competitive? Are you opting for paperless statements to avoid unnecessary fees? If you saved even $50 between all of the above that my friends adds up to $600 a year which you could put right against your mortgage in fact!

And there you have it, some pain free ways to keep your money. I mean it is your money after all. Have a great week!

Pam Pikkert is a mortgage broker with Dominion Lending Centres – Regional Mortgage Group in Red Deer.

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