Firstly, you will want to set out a savings plan. Find out how much you need to spend each month, and how much you are able to save. This way, you will be able to put together a budget, which can be a far more effective way to ensure you are able to save at a steady rate.

You will also want to think about what you do with the savings you make. If you simply let them sit in your bank account, you may find it tempting to spend the money which you are hoping to save. If you still want to be able to have access to your savings, without keeping them in your chequing account, then you might want to think about transferring the funds to a high-interest online savings account, but at today’s ultra-low interest rates, these 1-2% cash accounts won’t keep pace with our estimated 2.9% inflation rate.

Alternatively, you may wish to think about investing your savings in the hope of making a return on your money – without exposing yourself to the volatile markets of equities and bonds. Often under-looked at, commodities such as precious metals give you both a great hedge against inflation as well as risk. Market participants often tell you “No portfolio is complete without gold”, but it is often thought as out of reach for ordinary investors.

Sites such as Bullionvault allow investors to buy and sell gold online, making it a convenient option for many of those who are looking to invest their savings. If you choose to keep your savings in a bank account, then it can certainly be worth shopping around to find out where will offer the best rates of interest.

Don’t forget, if you are looking to make useful savings, then the first thing you will want to do is to clear any outstanding debts. Don’t be disheartened if you find that this means you are only able to save a small amount each month – this can soon add up. What is important is to make sure you stick to your savings plan, and keep a careful eye on your finances whilst saving.

There is a high price to be paid for our “conveniences” and I don’t think I’m the only one that is starting to notice. Eating on the run has turned North America into the land of the obese, and other countries are not far behind. Social networking is eliminating the need for face to face communication, the Internet has replaced my library card and video games have moved road hockey from the street to the family room. Have a chat with a teenager and you’ll soon discover that vowels have all but disappeared from our grammar and the entire English language has become a series of three letter abbreviations. How convenient eh?

Have you noticed what convenience is doing to your finances? Spending money is about the easiest thing to do on the planet now, and my cheque account functions eerily similar to an intravenous line from my wallet to the retail world. I can spend money in a million different ways and each one costs me money, but such an insignificant amount that I hardly even notice the leaks day to day. Genius, isn’t it? It is if you’re a bank!

How much of your money goes to services charges, late fees, administrative fees, taxes, and interest every month? Do you even know? We pay fees to take money out of the bank, and fees to put money into the bank. There are fees for paying bills on line, fees to send money to a friend via email and fees to receive that money on the other end. It’s no wonder so many Canadians find they have a lot of month left at the end of the money, right? If this were final Jeopardy, the answer would be, “only 1 in 10 Canadians own a home free and clear and Canadians hold over a trillion dollars in consumer debt,” and the question would be “What is the price of convenience?”

My parents tell me they would hate to try and raise a family in today’s world, littered with choices, temptation, and convenience. Everything can be done faster and built stronger but not everything needs to be faster and stronger. There was a time when if you didn’t have the money, you didn’t buy anything. People paid off their mortgages, and lived debt free because debt wasn’t something you bragged about at parties. Today, it’s become fashionable to be in debt, and instead of paying those debts off in a reasonable period of time, people become resigned to staying there for a lifetime, or go bankrupt and start over. Life has become a board game with a reset button.

So as life becomes easier, faster and less arduous, we are getting fatter, lazier, and more controllable. Whatever you are doing in your life that is giving you the results you are getting financially or other, it’s all justifiable. You can keep telling the world there’s not enough money, complain about the extra charges on your credit card, and continue making excuses or you can live inconveniently, get out of debt, and have peace of mind and a nice life. Just ask someone over the age of 50 what it was like to be them growing up. I feel confident predicting that their answer will be anything but “convenient”…and they probably don’t have a mortgage either.

-Chris

Ask us about a free mortgage plan that could get you out of your mortgage in half the time! We’re more than happy to help!

Current ticket holders can register for either event here. If you don’t have tickets yet drop as an email at events@thegivenetwork.ca or call us now on 1 (866) 431-1474

Hope to see you there!

-The InterestSUCKS.ca Team

Stop.

The uncertainty in personal finances is one of the greatest cause for stress in this country but it doesn’t need to exist in the first place. More and more of our mortgage clients are turning to the Educational Workshops we offer, to take the guess work out of reaching their financial dreams. Incidentally, we had a public event last night in north Toronto and the feedback from it was great: Everyone there now knows something that they didn’t know, they didn’t know!

You see, at the workshops we teach a banking methodology which you keep for life and will allow you to take control of your financial destiny, rather than having it dictated to you by a bank or other lender. If you’re interested in attending, speak to us, or speak to your Realtor… they may be hosting one of our workshops soon.

For more information, check out the events page and remember: it’s never too late to reserve a spot. For those twitter users out there, you may have noticed our two-for-one offer? If you haven’t yet seen it, it’s not too late – simply create a twitter account and tweet: “@interestsucks I want 2-for-1″ and we’ll get back to you with the details.

Hope to see you there!

-The InterestSUCKS.ca Team

The truth is, they don’t know. At least that’s how it looks from my desk. The only thing we know for sure about any market is where it is right now. It’s that simple and the rest is purely speculation, be it educated or otherwise. These days, the financial markets are as unpredictable as the cards dealt to you in poker. What’s the point in trying to predict what we cannot control? What if we’ve got this money management thing all wrong? What if our money is controlling us and has been all along? If you’re like me, you’ve got your income, your expenses, and then a decision to make every month about what to do with what’s left over. Not much to control.

Growing up, I learnt how to bank by picking up bits and pieces from people whom I thought knew what they were talking about. I learnt how to balance a cheque book, put a piece of every pay cheque away for a rainy day, and that when you grow up, you get a mortgage. Sound familiar? No one ever told me that mortgage would take the rest of my life to pay off and that along the way I’d pay for it twice, plus inflation! No one told me that my savings account just holds my money in reserve for the bank to use at will, while paying very little interest to me for the privilege. My biggest gripe however is that no one ever told me that the people giving me financial advice, whom I had thought were successful, didn’t really know much at all! That’s what hurts the most.

So now what? Well, if I was going to start playing a new sport, I’d learn the rules, make a plan, and practice. Personal finance is a game, and it has rules. In fact, the most absolute rules in the world are contained in the numbers game. If you want predictability, certainty, and peace of mind from your money, you must be prepared to invest the time necessary to learn the rules, make a plan, and practice. It’s simple math, not rocket science. You’ll be amazed at how much money you are throwing away just because the bank is better at the game than you, always one step ahead. How irritating, no?

Keep it simple, and worry only about what you control. If it can work for me, it can definitely work for you because at the end of the day we’re all playing the same game. I’ve put most of what I’ve learnt online at www.interestsucks.ca to help you start somewhere. Good luck!

It has been theorized that if you took all the money in the world, divided it equally amongst each person on the planet, within 3 years all the people who have the money today would have it back and those that are struggling today would once again find themselves wondering why there seems to always be more month left at the end of their money. The message is clear. We have a money management problem, not an income shortage.

How much do you actually know about how the banking system really works? Do you understand interest? Would you feel confident explaining compounding interest to your teenage son or daughter? How much of your mortgage payment every month goes to principle and how much to interest? Do you know how to change this? Have you ever read the fine print of your credit card agreement? Do you know how to make all of your accounts work for you instead of against you? How honest have you been with yourself about these questions?

It has been proven that a person with an average income can pay an average mortgage off in less than 12 years, saving half the total interest paid to the debt without having to earn more money or make extra payments. In fact, consumers in some countries pay their mortgages back 10 years faster than Canadians on average! How do they do it? Are they just smarter than us? The answer is no. Their knowledge of the banking system is just a whole lot more in depth because they understand the value of their dollar. It’s easier to reduce interest on your debts than it is to find more money to throw at them, trust me!

The problem is that the way westerners have been taught to think about managing our money is grossly flawed. We have been taught how to bank by the very institutions that await our next interest dollar. Would you ever negotiate a business deal with me, and ask me what I think you should do?! Never! The worst part is, that our banks have done a magnificent job of befriending us while they drain us of our hard earned money. It’s like getting a cut, and instead of finding a way to stop the bleeding, we head to the hospital for a blood transfusion in one arm while we bleed out the other!

Perhaps the blessing in these tough times is that enough discomfort has been created to open consumer’s minds to the possibility that we have been doing it all wrong and need to change the way we think about money. The cost of not getting in the know is enormous and it won’t get better until we start applying pressure to the wound. The alternative is to keep doing what you’re doing and bleed out financially, what will you do?

Want the answers? email us at info@interestsucks.ca to find out about our upcoming workshops!

As little as a week ago, it would have been very prudent to set yourself up with a 5 year fixed mortgage at a little over 3%, relegating the variable mortgage to a distant second choice, but things change quickly in the arena of mortgage negotiation and fixed rates today are hovering around 4.5% and higher. At a full 2% lower, it makes sense to look at the variable mortgages a lot closer today.

Most refinances over the past few months have typically been with someone in the middle of their term, at an interest rate of around 5.5%, looking to see if it makes sense to pay the penalty and move. In most cases, it made a lot of sense when fixed rates were in the 3′s, especially since the rates and the future savings are guaranteed, certain and unchanging.

Right now, the prime +0.25% variable would save that same client an additional half of one percent from last week’s fixed rates which everyone was loving. Here’s the best part: the Bank of Canada has publicly stated that it will not raise prime for another year. They’ll keep their promise if inflation doesn’t return (unlikely) and the interest saved in your first year will cover your penalty in most cases. In the back 4 years of the deal, the longer prime stays below 4.75% (a 2.5% increase) the more gravy you save in interest….tax free.

For new borrowers, the decision to go variable at 2.5% or fixed at 4.5% is simple. On a $250k mortgage, you’ll save almost $5000 in interest each year and your monthly payments will be $263 less.

Variable mortgages have historically outperformed fixed rates, and with lenders dropping their margins above prime, now is the time to get back into them.

If you’re curious, enquire at givemortgages.ca about the 2.5% variable mortgage they have. Start saving today!

In order to refinance, unless you are in a fully open mortgage, you will have to pay a penalty to your current lender for the right to pay them out early. Lenders are in the business of making money and an early payout means less interest paid to their bottom lines, hence the penalty. So how do you know if it makes sense?

The good news is, it’s not as difficult to determine as you may think. The numbers always tell a story, you just need to know how to read them. Here’s what you need to know to be a great numbers reader!

1. Find out from your current lender what your penalty actually is. This may sound pretty basic but it’s easy to get bad information from a customer service rep at your bank. Make sure you speak to someone who doesn’t just tell you a number, but also tells you how they arrived at that number. Not all banks calculate the penalty the same way so be careful! if you need help here, let us know.
2. Compare apples to apples. If you have 3 years left on your current mortgage, you will want to determine how much you will save every month with a new, lower interest rate and lower payment over the next 3 years even if your new term is 5 years. An apples to apples comparison in this case would be over the next 3 years.
3. Do the savings outweigh the penalty? If they do, it’s worth it to refinance, and if not, then stay put!

It doesn’t matter if the savings are $1000.00 or $10,000.00, savings are savings right? Don’t make the mistake of staying put because the savings don’t feel “significant enough”. if I offered you a choice between taking $20.00 for nothing, or not taking the money, you would take it every time. There is no amount of free money or “savings” that is insignificant.

The g.i.v.e Network has helped many Canadians take advantage of the opportunity to pay less interest on their mortgages and we can help point you in the right direction too. All you have to do is let us know you need our help, and we’ll g.i.v.e. our time and expertise to you with our compliments. Good luck!

This month’s Money Sense magazine (May 2009) features an article entitled “Escape the Debt Trap”, written by Maggie Gilmour. In her article, Maggie accurately identifies the growing consumer debt problem Canadians are facing, “the typical Canadian family owes $20,300 in credit card debt, lines of credit and other consumer loans…” In an interesting adjunct in the article, Gilmour makes note that in 2008 123,000 Canadians filed for bankruptcy, up 13% from 2007. That was all in the first 2 paragraphs. It went south from there…

“No matter how bad your debt problem is, you have at least four strategies to consider”. Oh, how we complicate things un-necessarily. There’s really only one strategy to consider if you are mired in debt: Make the decision to change your spending patterns and your income, and then exercise discipline and patience to gradually turn your circumstances around. It all starts here and until you are spending less than you bring in every month, God himself can’t help you!

My answer to avoiding the trap is to be a very smart rabbit! Credit counselling, consumer proposals and bankruptcy are all very last ditch solutions and create a future problem from a past problem. Here’s how to leave your debt problems in the past forever with no sugar coating.

1. Know where you are and where you want to be. Be honest with yourself and do the work to assess where you are at. The greatest map in the world is useless until you know where you are and where you want to go. In this case, debt free is where you want to go…so where are you at now? How bad is it really? Yes, all of it!
2. Get educated. Managing your personal finances is not rocket science, it’s basic math. So they didn’t teach us in school…is that really a good reason to screw our lives up? The information is available at interestsucks.ca so now you have no excuse and should immediately learn how to Bank-Like-The-Bank. Last time we checked they had all the money. They must know a thing or two about managing it right?
3. Get your questions answered. If there was a way you could save half the interest you pay on your mortgage, be mortgage free in half the time and save $50-100k by doing so, would it be worth the few hours it would take to understand how? Well, there is such a way, so don’t hold back from asking us questions. Ask away!
4. Put what you learn to use. Once you know what is possible, the only thing that stands between you and success is actually doing it! Having said that, this is where most people fail!
5. Find good people to help you facilitate and execute your plan. If your plan requires you to find a new house, refinance your mortgage, purchase insurance, or get legal advice, then do the work to find good people that will educate and serve your needs.

If you have had enough of the debt trap and need help to get headed in the right direction, drop us a line and let us know how we can help. You do not have to pay for our advice. We are happy to help those who truly wish to help themselves.