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Don’t take financial advice from friends, neighbours, co-workers and family members. More often than not, peers who offer financial advice are themselves financially challenged. Your friends and loved ones might mean well, but taking their advice could put your money in jeopardy. If someone has not achieved financial success himself, you must not subject your financial security to his advice. |
Hire a tax accountant in order to take advantage of all available tax credits, and deferral and minimization techniques. A tax accountant can free up 5-10% of your gross income as surplus money. Your tax savings will more than justify the cost of engaging a professional.
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Seek out a Financial Planner/Advisor to be your emotional anchor for money matters. Enlist a professional to help you outwit inherent impulses that let greed and fear affect the way you handle your money. The benefits far outweigh the costs.
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Don’t buy a house with a loan repayment plan that exceeds 25% of your family income, even if you are given an approval limit of 40%. A home is a shelter, not a way to display success or artificial affluence. Avoiding stretching your finances to the limit will allow room for rises in interest rates and monthly payments. And remember to weigh your options. It might make more economical sense to rent a home once you factor in the costs of mortgage payments, property taxes, repairs and maintenance. |
Avoid the fixed rate mortgage; instead opt for a flexible rate home equity line of credit. Your interest charges will be reduced by as much as 50% over the same repayment period. This advice might go against popular beliefs, but historically fixed rate mortgages end up costing more than variable rate mortgages.
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Don’t buy a brand new car. When you buy a car, go for a pre-owned vehicle that’s only a few years old and has low mileage. A new car’s value depreciates significantly the moment you drive it out of the dealership. Be practical. Your car is a means of transportation, nothing more.Once you have a car, keep it for as long as possible. Compare the cost of repairs to the monthly instalment for another vehicle and keep your car as long as repair costs are lower.
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Consolidate and pay off debt as soon as possible. If you carry any debt, focus on consolidating it for a lower interest rate and paying it off as soon as possible. Money spent on interest is money thrown away! Why spend your hard-earned cash making financial institutions rich?
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Pay your bills on time to avoid late fees. Automate anything you can by setting up pre-authorized payments. These days, most utilities and recurring bills can be set up to charge a credit card or deduct from a checking account. Additionally, many banks offer free bill payment programs. With so many tools available, there really is no excuse for forgetting to pay a bill on time and forking out late fees.
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A penny saved is worth more than a penny earned, because it has already been taxed; you don't have to work for it again. And saving doesn’t have to be difficult. If you save the cost of a cup of Starbucks coffee for $2.50 and lunch for $7.50, totalling $10.00, a day, you can save $3000 in a year (300 days) or $90,000 over 30 yrs! And that’s without adding the compounded gain on your $10 a day investment!
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Avoid impulse purchases. Many of the things you want to buy no longer seem necessary if you delay the purchase for a day or two. Waiting also gives you the opportunity to compare brands and check prices, allowing you to make an informed decision. To help prevent impulse purchases don’t carry credit cards in your wallet and, whenever possible, pay cash. Studies have shown that it’s harder for us to part with cash than to make a payment with a debit or credit card. Cash is more tangible and makes buyers more aware of how much money they’re giving away and how much they have left. We’re willing to pay much more for an item when we don’t pay with cash. |
