For all the woeful consumers out there who avow to make 2014 the year of wiser investments, a few general guidelines and pointers may serve useful.
Take advantage of lower interest rates and strategies to pay off your mortgage faster.
Seeking advice from a mortgage broker, keeping abreast of local, provincial and national real estate forecasts and staying in touch with your bank and/or financial advisor are all good starting points.
Ask about accelerated bi-weekly mortgage payments; open versus closed rate mortgages; how much the long-term cost savings are when you put additional funds against your principle loan balance.
Keep in mind that while many live on a tight budget and the thought of dumping a lump sum annually to chunk down the principle on your mortgage may not seem feasible, mortgage specialists say that even rounding payments up a few dollars to (for example $433 to $440) can make a surprising dent in overall cost savings.
Start some kind of savings plan and seek financial advice from a professional with respect to the best option for you and your family.
Starting a portfolio with some low-risk investments and easing into some higher risk (higher return) investments over time isn’t something that requires much start-up capital.
Some registered savings plans to consider:
A Tax Free Savings Account (TSFA) — where the government allowed up to $5,000 a year in tax-free contributions, now $5,500 per annum.
A Registered Retirement Savings Plan (RRSP) — deductible RRSP contributions can be used to reduce tax bills and income earned is normally not taxed, as long as the funds remain in the plan.
For those with children, a Registered Education Savings Plan (RESP) might be the way to go; there are family and specified plans and a variety of companies or organizations out there competing for new clients.
According to Statistics Canada, one third of retirees carry debt into retirement.
According to a 2013 report from credit reporting agency TransUnion, there was a 2.19 per cent overall increase in Canadian consumer debt between the final quarters in 2012 and 2013; learn more at transunion.ca.
