Get Control Of your Debts In 2011!

In January the Government announced changes to Mortgage ending because they fear we are going to be great financial distress as a nation when interest rates finally begin to increase.  The current economic recovery in Canada is still fragile, so rates won’t increase greatly or quickly but it they will eventually.  So here are some ways to get control of your debts in 2011.

Address your current debt. This is the toughest one of all so I’m going to start here!

Put all your monthly bills on the table at once and have a good look at exactly how much you owe.  I said this was going to be scary!  Most Canadians can pay their mortgage or rent, but it’s these monthly credit card bills that make us shake in our boots.

Create A Household Budget. It’s a list of your total income from all sources and the total amount that you need to pay all the bills.  If you have more bills than money at the end of the month you must try to eliminate some of the unnecessary spending, such as eating out, impulse buying and any other non–essential spending. You Can Do It!!

Make a Repayment Plan. Two things can happen here. You can pay off the smallest debts first, so the payments can then be used towards the bigger debt, or you may want to consider a consolidation loan. One way or another, you’ll want to reduce the number of bills and the amount that is draining you monthly.

Pay With Cash.  Use real money not debit cards. It’s hard to spend if you don’t have it with you when you go to the store.  Make a list of the things you’re shopping for and buy only those items.  Sure this is hard, but it’s will keep your debt from increasing.

Reduce Limits On Credit Cards. Credit cards should not be a substitute for household income. Most of us have far too much credit available and most of it at exorbitant rates.

Start Saving. If you have consolidated your debts, you might take as little as $25.00 a week and commit it to an RRSP, you’ll have an asset and a tax break all in one!

Save Thousands On Your Mortgage Saving on your mortgage can be done by shopping for the best rate and terms, choosing a bi-weekly payment, asking for a lower Amortization when you arrange a mortgage.  Apply your tax refund to the principal, especially in the first 5 yrs of your mortgage.  If you aren’t good at saving, try to increase your biweekly mortgage payment by $25 to $50 and watch the balance diminish. Each of these tips will help you save!   Visit  www.youtube.com/mylowrates for Elfie’s videos!