Happy spring! The sun is out, the birds are singing, and here in Canada, we probably only have one or two more surprise snowfalls before summer.
This is the time of year when we emerge from our dark rooms, stretching and blinking into the sun. We peel off our woolly layers and start thinking about what bikini we will flaunt this summer (yikes). And then we start going for long walks again and haul out the bicycles. Yes, spring is a time to open the windows, clean out the closets, flip the mattresses and sweep away the cobwebs.
While you are busy freshening up your home and garden, you might want to consider pulling out your wallet, blowing off the dust and giving it a good seasonal purge as well. Your finances are like anything else in life: after a while, you start to forget your good habits, and things tend to get sloppy, neglected and disorganized. So seize the spring, darling. Carpe ver!
Here are ten tips to organize your finances and clean up your budget:
1. Clean out the wallet! Lord knows what is lurking in there. Stuffed full of receipts and bank slips, expired discount cards, phone numbers with no names attached, business cards from your last three jobs. As our feng shui sisters might say, you must make space in the wallet for the money to flow to you.
2. Be an A-Lister. Dedicate space for lists in your BlackBerry or a notepad that you carry at all times. Lists are critical for clearing trivia out of your head and keeping you focused when it's time to spend. Mark down items you need as you think of them; that way, when you get to the grocery or department store, you won't get that overwhelmed, "why am I here?" feeling and end up with a cart full of cocoa puffs and tea lights.
3. Reality check. Fitness memberships are an essential expense to many of us. However, if your gym is $90 a month and you only show up three times a month, that's $30 a visit. Be honest with yourself and your schedule. You might be better off paying as you go, or finding a gym where you can buy 10 sessions at a time.
4. Subscribe to this. What is with that messy stack of unread newspapers and magazines on your coffee table? Don't you have enough to dust? Subscriptions are no bargain if you're not reading the products. Consider weekend-only newspaper delivery and buy magazines at the newsstands when you have time to read them.
5. Stay on season. Now that it's spring, we can look forward to fresh fruit and vegetables from local farmers. Check labels and choose food products from close to home — not only will they be fresher, but they won't be packed with big fuel and shipping costs.
6. Be a contrarian. On the other hand, when it comes to big-ticket items, it helps to be delightfully off-season. The end of February is the time to nab a Prada ski jacket in the clearance sales, saving you money to buy Swarovski Christmas tree ornaments in July and Pottery Barn patio furniture in September.
7. Friend and follow. Before you shop, check the website of your favourite store or mall for online-only specials and coupons. Sign up for the Facebook or Twitter accounts of your favourite retailers, restaurants or hotels, which often use their online profiles for giveaways, contests and special deals to their friends and followers.
8. Spring THAW. Remember that trip to Costco where you got 40 chicken breasts for four dollars? Take an inventory of your deep freeze and start planning meals around what you already have on hand. Or throw a dinner party and use up everything you bought more than three months ago. Buying on sale is a waste if you end up throwing out freezer-burnt food.
9. Get your Groupon. Clipping coupons gets stylish with deal-of-the-day sites such as Groupon. The site offers limited-time discounts on everything from $25 off at The Gap (NYSE:GPS) to half price scuba diving lessons. Going on vacation? Check the site for deals at your destination. When you're going out a lot, who wouldn't want to score a free plate of appetizers or two-for-one tickets to a show?
10. Cheap and cheerful. Fun doesn't need to cost nearly as much as you think. A morning with the whole family at the playground is just as rewarding as a day at a theme park and much cheaper than driving, parking and paying for family passes. A night in with the girls and a bottle of wine is every bit as fun and boisterous as going out to the newest hotspot. Bonus: by making it OK to have fun on the down-low, everyone feels better about hosting or getting together more often.
Paying your mortgage off the traditional way takes 25 to 40 years and costs about TWICE the purchase price of your home. Here are some effective ways to pay off your mortgage sooner, build equity faster and save thousands in interest.
• Change your payments. Simply increasing your payment frequency to bi-weekly or weekly costs nothing and can save thousands of dollars over the life of your mortgage. If you can afford to pay a little extra, consider accelerated bi-weekly or weekly payments—these are equivalent to making one extra monthly payment per year which results in substantial savings. Or you can make a lump sum payment which can realize savings several times as great over the life of your mortgage.
• All-in-one mortgage. Instead of making extra payments, consider switching to a mortgage that pays off the principal faster without costing you anything more. All-in-one mortgages combine a line-of-credit mortgage with a chequing account to reduce interest costs and pay off your mortgage in as little as half the time, without changing your spending habits. You deposit your pay into the all-in-one account and pay bills as you normally would. While you’re not using your money, it’s used to reduce your daily loan balance. Over the life of the loan, this can save hundreds of thousands of dollars in interest!
• Merged account mortgage. If you’d rather not refinance your existing mortgage to switch to an all-in-one mortgage, consider a merged account mortgage. This system uses your existing mortgage (any type of first mortgage will work), an advanced line-of-credit (ALOC), and specialized software that makes a connection between your bank account, ALOC and mortgage. Each time you deposit income into your account, the software automatically generates an interest cancellation on your mortgage. The result is that a 30-year mortgage can be paid off in about 8 to 11 years, with no change to your lifestyle or refinancing of your existing mortgage.
To help decide which of these options is the best way for you to become mortgage-free sooner, call us today for a free analysis at 1-877-904-9222 or apply online at http://www.mrfinancial.ca