As January has seemed to fly by, I thought I would pass along a few ideas on saving money and paying less interest.

Awareness is the key. You would be shocked how many people I speak with who don’t know what is owing on their mortgage and more importantly what is owing on their other debts. Credit cards and Lines of Credit (secured and unsecured), being the biggest headaches/threats to our financial independence. It is likely that we feel better not knowing how much we owe, where in fact knowing is the first step towards getting out of debt.

Your 2016 End of Year Mortgage Statement will be coming to you soon- check your current balance and be aware of how much you paid in principle and interest last year. Force yourself to make one extra payment a year, and it will save thousands in interest over the term of the mortgage.
If you are currently paying your mortgage MONTHLY, change to an accelerated bi-weekly basis, this alone forces the extra payment each year without you really feeling it.

On the topic of interest cost, if you are carrying a balance on CREDIT CARDS, look at a monthly statement on them as well. The banks now must disclose the length of time in years to pay the card balance to zero, with making minimum monthly payments.
It can show a depressing length of time! So if you’re carrying card balances, work on those and forget about paying any extra against the mortgage. Try and automate the monthly credit card payment with a set larger amount. You will get used to it, and in no time, start to see the balance start to drop. The high interest rate of credit cards, should make them the priority over paying extra principle on a mortgage.

Regarding savings, start with looking at who you do your banking with and what your monthly account and cheque fees are. Monthly bank account fees can easily be from $10 to $50 dollars. A set of cheques alone can be $30.00.
For the last 15 years or more I have dealt with Presidents Choice Financial for my banking. There are NO BANK ACCOUNT FEES, and they give you your cheques for FREE. You can access your money either online(an easy to use on line platform) or from an ATM at any CIBC bank branch, Loblaws or SuperStore. If you don’t want P.C. Financial, then take a look at Tangerine. It is owned by Scotia Bank and runs on the same concept as P.C does- NO-FEE BANKING. They also offer high interest savings accounts.

I believe the most reliable and easiest way to save money is to automate the process. Pick a monthly amount, anything is better than nothing, but make it a reasonable amount. Then schedule for that amount to be automatically transferred out of your everyday chequing account into a savings account that you don’t have easy access to. With the transfer of money into savings done for you, you won’t even miss the money. Start today, and save for that well-deserved holiday or RRSP contribution.

If nothing else, take that change out of your pocket or purse each day and throw it in a bottle. You will be amazed how quickly it adds up. Remember that a dollar here and there is always better in your pocket than someone else’s, especially the big bad banks!

So that’s my two “sense” on paying less interest and saving money!