With the holiday season quickly approaching, it’s tempting to fall into the trap of overspending on gifts for family and friends. A gift is a great way to show thanks and appreciation to the people in your life that you hold dear, however it’s quite easy to overspend on gifts during the holidays. If you’re worried about how this extra spending could negatively impact your bank balance and debt levels, now is a good time to start planning on how to better manage your spending during this festive season. Here are five tips that can turn your holiday spending into a spending holiday:
Give Yourself a Budget
We find that one of the most important things is to create a holiday budget and stick to it. That way you can forecast the amount of spending you’re planning to do, while still staying within your financial means. To ensure that you’re checking off everyone on your list while still keeping things affordable, create a mini-budget for the season that includes the people you’re buying for, and the amount you’re willing to spend on them. With this budget in place, you’ll find that it’s much easier to avoid overspending this season.
Make a List, Check it Twice
It’s time to take Santa’s advice and make a list (maybe check it twice). It’s tempting to buy gifts for everyone in your life, but sadly for most people it’s not a feasible option. If your shopping list includes an excessive amount of family and friends, your list may need a little pruning. Make a list of everyone you’d like to buy gifts for, and begin eliminating people until you have a nice small group of gift recipients to be. If you’re feeling some serious holiday remorse for those you’ve decided to exclude from your list, a D.I.Y gift is an inexpensive and thoughtful alternative. Sometimes it’s the thought that counts.
Giving someone a homemade gift can sometimes carry more weight than any store-bought gift could. If you’re really concerned about spending this holiday season, a D.I.Y gift is a thoughtful and less costly alternative. A small thoughtful gift made by you is a lot more unique and thoughtful than an item that can be picked out from a store.
Do Online Research
In a day and age where internet and social media is so ubiquitous, it’s extremely easy to do extensive research on any particular item that you’re planning on purchasing. Online shopping and shipping is a lot cheaper and faster compared to buying a gift from a retailer. There’s often better selection and availability, and it gives you the opportunity to compare value vs quality of an item.
Cash vs Credit
Again, it’s extremely easy to fall into a trap of overspending, and purchasing all your gifts using your credit card is a surefire way to overspend. Putting everything on credit may be tempting, but using cash is a much safer alternative. Not only do you realize the expense immediately, but you can choose to withdraw a specific amount of money and keep that as your spending cap.
Gifts are a great way to show that you care, but ultimately it’s the thought that counts during the Holiday Season. As a certain Christmas character once said “Maybe Christmas doesn’t come from a store. Maybe Christmas, perhaps, means a little bit more”.
Before you go jump the gun and re-sign with your current mortgage lender, it’s always important to consider shopping around to see if you can get a better deal. The biggest monthly expense for most people is their mortgage payment, yet a shocking amount of households just automatically renew their mortgages when the term is up. Shopping around is always a good idea, because you may be able to negotiate a better deal. Here are three tips to help you lower your mortgage payments come renewal time:
1. Get a head start
What you definitely don’t want to do it wait until the last minute (i.e., when your mortgage is actually up for renewal) to start shopping around for new terms. Give yourself a little time and start shopping around for a better rate a couple months before your mortgage is up for renewal. This way, you’ll have plenty of time to search for and compare different renewal options.
2. It’s not all about interest rates
Please don’t just fixate on interest rates – there are plenty of other factors that determine a good mortgage rate. Remember to factor in the amortization period, rate types (fixed rate or variable rate) and the flexibility of the payment schedule. These are all crucial factors in lowering the cost of your mortgage payments.
3. Shop around
Before trying to negotiate a lower rate from your bank, find out what other banks and lenders are offering. There are quite a few websites that post current mortgage rates from banks, which can vary widely.
It might be uncomfortable to think of the day when your sun sets, but uncomfortable or not, it’s greatly encouraged to be prepared for that moment as much as possible. We all have a say in when, where and how our hard-earned assets are distributed. With that in mind, take a look at these four steps to comfortable estate planning.
1. Pay All Your Bills Including Debts and Taxes
The beneficiaries of your estate will not see a dime until all your bills have been paid, this can’t be stressed enough. Take care of all your accounts so you take care of your loved ones. If you are deep in debt, chances are there will be little left of your estate for the people you intended to benefit once you pass.
2. Write a Will
While it’s obvious, it’s amazing how many people omit writing a will all together. Your estate and how it is distributed is and should be your call. Sadly many estates are left in the hands of lawyers and judges. A good written will guides how your estate is distributed and to whom specifically. To put it bluntly, you get to determine how your estate is used even in death.
3. Establish an Executor You Can Really Trust
Take careful consideration when deciding who is best for the task of executor. The trusted person should have the time, knowledge, skill and responsible attitude to carry out your wishes honestly. It’s often assumed the eldest child should handle this task, but it’s certainly not a concrete condition.
4. Properly File Important Documents
Keep all your valuable papers together. Insurance policies, wills, bonds, investment records, birth certificates, marriage certificates and social insurance numbers – make sure your family knows where they are.
Little decisions in the day-to-day can go a long way. We choose things by impulse, emotion and sometimes by ignorance. But some of these choices can be very costly. To help keep an honest perspective, here are four decisions that can lead to stronger financial independence.
1. Marry the Right Person
You could lose half of your assets in just a few hours. That’s the worse-case scenario in a tenuous marriage. People often don’t think of financial compatibility when considering marriage, but the truth is it’s just as important as any other factor. Money mind-set can be a big predictor of relationship success. Many marriages have torn apart as a result of conflicting financial beliefs and habits.
2. Watch Your Costs
Fixed costs are very easy to lose track of. From a gym membership, to a cell phone plan, to a subscription of your favourite magazine – it all adds up. The key is to stay ahead of all these and find those unnecessary expenses. When is the last time you have been to the gym? Do you really use four gigs of data? And, who really reads magazines these days? The point is there are always areas to trim and all it takes is a little attention and awareness.
3. Tune Out the Noise
Given the volatility in the market there is a reason every day to pull out. But more often than not, these knee-jerk reactions usually prove to be very costly. Try to turn out the noise and think long-term. Also think about low-cost index funds as the investment of choice.
4. Don’t Rush for Government Benefits
The longer you can put off collecting government benefits the better. We as Canadians are living longer than ever.
Research has shown that more than half of Canadians aged 50 and older have collided with unexpected events that have impacted their finances and/or retirement plans. Whether you’re planning on selling your home or staying, here are four ways to tap into your home for added security during retirement.
1. Sell and Rent
An easy way to get money out of your home is to sell it and put the cash into an investment that will boost your yearly income. But before you do so, factor in expenses (real estate agent fees, lawyer fees, moving costs, etc.). It’s also important to decide on the volume of risk you’re willing to take in investing.
2. Sell and Downsize
Another effective way to boost your retirement security is to sell and downsize — it’s easy logic. However keep in mind that your needs might change as you age. For example, you might decide it’s absolutely necessary to avoid homes with a steep set of stairs. It’s imperative that you think strategically about your next destination.
3. Become a Landlord
Ever thought of converting a portion of your home into an apartment? Well, doing so can increase your monthly income substantially. However you need to decide you’re cut out to be a landlord – that means being available all hours of the day and being able to find the right tenant.
4. Get a Reverse Mortgage
This is a mortgage that is given to people who own property at 55 years or older. The borrower doesn’t pay back the loan until he or she sells the home.The loan is tax free and any interest you pay is deductible. But there are some drawbacks to this approach – you have to pay interest on the loan and the penalties can be heavy if you decide to cancel.