Where to Park Your Money

Maybe you’re saving up for something you’ve wanted to buy or do for a long time, or maybe you just want to have some money set aside for a rainy day. Whatever your needs, it’s important to get an idea of some of the best places to park your money.

Here are just a few tried and tested places to park your money,

A Savings Account

A savings account allows you to earn a bit of money while retaining quick access to your funds. If any kind of emergency or accident occurs this money will be there ready for you to use.

A special kind of savings account, a tax-free savings account (TFSA), gives you this benefit without being taxed on your account’s earnings. Like RRSPs (discussed below), TFSAs give you the option to buy other investments including stocks and bonds, the returns on which will also be tax free in most circumstances.

A Guaranteed Investment Certificate (GIC)

A GIC gives you the option to park your money at a higher rate of interest and comes in several varieties. The most important distinction is between redeemable and non-redeemable GICs.

Like a savings account, a redeemable GIC lets you withdraw your money at any time but provides you with a lower rate of interest.

On the other hand, non-redeemable GICs generally require you to agree not to access your funds until the end of the agreement, which can be anywhere from from 1 month to 10 years depending on your preferences and the rate you secure.

A Home Down Payment

Saving for a home down payment is a life milestone for many, but you have options as to where you park your money while you are saving.

A home ownership goal of three years or less is a short-term investment and keeping your money safe and accessible is important. Place the money in a high-yielding savings account, or if you can afford to risk, invest it as well.

If you plan to own a home within three to five years, you have more time and more room to take a few risks. Park your money in short-term but high-quality investments.

A plan that is more than five years gives you more flexibility in where to park your cash. You can risk on investing in stocks or other forms of bonds and funds that provide you with broad market diversification.

A Retirement Account (RRSP)

It never hurts to set aside some money for retirement. In some cases your employer may even be willing to match your contributions so that your savings grow even faster.

The general rule of thumb is that you deduct your age from 100. If you are 30, keep your portfolio in stocks. If you are 70, stay at 30% in stocks. If you live longer, you will need the growth that stocks bring to enable you to live comfortably.

Here we’ve outlined just a few of the options available to help you make the most of your money. But remember, always consult with a financial planner before making an investment decision. Financial planners are specially trained to help you make the right decision for your specific circumstances.

Saving Towards Retirement

Some people believe that saving for their retirement is easier when they are at the cusp of their golden years. They believe that it will be a long time until they get old. However, what most people do not realize is that saving now may mean the difference between comfortably enjoying their senior years and working past 65.

Building your retirement plan starts sooner than most people think; for some it starts as they reach 30 years old or as soon as they join the workforce. Whatever your plan is, it is best to start early.

Lifestyle Changes

Lifestyle changes such as focusing on the essentials will enable you to build a comfortable retirement fund after you retire.

Staying healthy will prevent you from getting sick or hospitalized. Avoiding fatty and sugary food will shield you from potentially life-threatening diseases such as heart problems, cancer and diabetes. You do not have to remove food that contains fat and sugar from your diet; you just have to limit the portions once you reach a certain age.

A clean bill of health each year makes you a low risk prospect, if you plan to get life insurance.

Saving for your retirement fund does not have to be torture; have fun by going out a few times, eating at a nice restaurant or going on trips. However, you must always keep an eye on your budget to increase your nest egg while you are still young.

Saving Vs. Paying Off Debt

It is tempting to pay off debt such as car loans, credit card bills and the mortgage instead of setting money aside for your retirement fund. You have to carefully review the costs associated with your debt as well as the potential returns generated from investing your savings.  Work with a financial planner to make sure your always maximising your dollar.

Set money aside for your retirement fund, if you are ahead of schedule in paying your mortgage. Choose to save money for your retirement, if you can afford to pay the minimum on your outstanding debts.

Investments

Having a savings account is only one source of funds for your retirement plan. A diverse portfolio will increase your fund faster, growing into a comfortable nest egg once you are ready to retire. Take advantage of government support, bonds, stocks or other forms of investments to build your retirement fund.

A comfortable retirement will rely on your ability to start saving early. Thinking that it is a long time from now will make it difficult to grow your retirement fund to a comfortable amount.

How to stop yourself from falling deeper into debt

Billionaire Warren Buffett once said: “The most important thing to do if you find yourself in a hole is to stop digging.” This is best advice you can receive if you are starting to feel like you are spiraling down in an endless cycle of debt. Find ways to cut back on spending and decrease your debt. Here are some suggestions to get you started:

Analyze your current situation

List down exactly how much you owe, how much you need to pay each month to settle these debts and the current status of the loans you have (for instance if you are making payments or are late in settling them)

Understand how much you can afford to pay

While it is ideal to pay back all the debt you owe, this is not always the way things work out. Take a moment to assure yourself that you will get to that point one day and you will be debt-free again. For now, list down your source of income and how much goes to your daily living expenses and what amount you can realistically use to pay off your loans.

Talk to your creditors

There is nothing worse than letting the debt pile up and not finding a way to settle them. If you need more time to pay off your debt, give your creditors a call so they fully understand the situation.

Create a budget

Most tips on getting out of debt will include this, because it’s very important. Budgets help you understand where you spend your money and find out how you can cut back on spending so you can reallocate what you earn toward repayment of debt. Creating a budget does not just entail writing down how much you make versus how much you spend on a piece of paper, this may mean a lot of sacrifices on your end for you to make the payments to get you out of debt.

Prioritize your mortgage payment

In most cases, the biggest bulk of your debt payment goes to your mortgage. Losing your house because of unpaid debt should be the very last thing that happens to you. If you think that you still cannot make payments for your mortgage after curving your spending, there are short-term loan options you can think about. The answer to help you make ends meet might be payday loans. Richmond has several short-term loan companies that offer this service. Payday loan Kingston companies like GoDay offer fast cash when you need it most.

Getting out of debt or even just stopping yourself from falling deeper into it is not always easy, but it is not impossible.

Getting Married? Are You Financially Compatible?

Imagine those lovely candle-lit dinners after a tiring day at work or those adventures in Barcelona during a two-week vacation. All these are fond memories of your relationship. However, once you become more serious with your partner, you have to review you and your partner’s financial situation.

Marriage can be till debt do us part or till death do us part; the latter is a romantic fulfillment of your lives together, the former is a nightmare you want to forget. Before you tie the knot with your significant other, you have to deal with the tough question, “are we financially compatible?” Here are some questions you need to answer as a couple before you take those marriage vows:

Who earns more?

Times have changed. While in the past, being the man of the house may mean carrying the entire financial burden in the relationship, today that may no longer be the case. Women in the workplace can earn as much or more than men. Before getting married, you both need to be 100% comfortable about discussing your earnings with your partner and whether one earns more than the other should not be an issue.

How much debt are you carrying into the relationship?

Knowing how much assets you bring into the relationship is just one part of the financial equation. Liabilities are equally important. Once you get married, more likely than not, you will start sharing the responsibility of settling your financial affairs together, even for debt that you accrued before the marriage and you need to continue paying off well into it. You need to discuss all kinds of financial liabilities with your partner, whether this be a student loan, mortgage payments, alimony for previous marriages or even something as small as a payday loan you took out and have yet to pay for. Knowing these things will help you budget as a couple.

How many kids do you want to have?

Now comes aligning on the financial goals. One spouse may want a big family with four kids, the other might be happy with one child. You both have to be on the same page with the number of children you want to have, as your decision will impact your financial future.

You have to prepare for schooling, food, housing and other additional expenses of having a child or two.

How big will the house be?

Buying a home is a dream for most married couples; will your home be large enough for a big family or just at the right size for a small one? If you do not plan to have children, will you want to have a pool, a large living room or an entertainment area? You must think about these questions when you get married.

Take a good look at your finances and determine if you can afford your dream house. You have to consider the mortgage you have to get when you purchase a home. Will you settle for a fixed or variable term loan?

Post-graduate Degree

Do you or your loved one plan to get a master’s or doctorate degree? This decision affects your financial flexibility in the future, as one spouse might have to stop or work part-time. One spouse might need to take on extra work to pay for the mortgage, tuition, food and other expenses at home while the other spouse finishes their post-graduate studies.

Retirement Fund

The nest egg is important to the future of a married couple as they might not have children to help them financially when they can no longer work. Will both contribute to the retirement fund? Or will they create separate nest eggs because both spouses have jobs?

Marriage is not all about love, a couple must also consider if they are financially compatible before tying the knot.

Funding Your Dream Vacation

Imagine sitting on a hammock with your favourite book on hand while the coconut trees sway behind you and the bone-white sand tickling your feet. The cerulean waters are calling out to you, but then you awaken from your daydream while at work.

This dream does not have to be far-fetched; you can make it a reality by changing your saving habits and other easy to apply lifestyle choices.

Set a Budget

The initials step is always the most difficult when it comes to planning a trip, because many travelers do not determine their budget.

Before you leave examine your finances and how much you will need before your trip begins. Set a number to make saving easier, a target number helps you deliberately set money aside for your adventure.

Are you a luxurious traveler? Are you a backpacker or a person who is someone in between? The answer to these questions helps you make adjustments when budgeting your trip.

Find Other Sources to Get Money From

If you really want to go on vacation right now (due to some time constraints at work or in your personal schedule), then it may be necessary for you to find other options for getting money to fund that vacation. Saving up for it may mean months of waiting before you can get to that target figure.

You can actually use your credit card to purchase tickets and even earn miles or points if your card is affiliated with certain airlines or hotels. You are not just funding your vacation, but you are also saving a lot through these reward systems.

Another option is to take out a payday loan. Kingston has a lot of companies offering these cash advance options for whatever purpose it may serve. If you are after a particular date for travel and you don’t have enough funds, this can be a good option to take. Payday loan Kingston company design this service for short-term financing only, which means the loan should be paid off as early as your next pay period.

Earn Extra Income

An extra source of income boosts your savings and enables you to get to the number you need faster. Invest in mutual funds, insurance, savings bonds or stocks to earn extra. Sell unused items or valuables to increase your savings.

Good Value Trip

You do not need to spend luxuriously to enjoy your vacation. Good value does not have a definite cash amount or star of hotel or restaurant. Get lost in a new city to discover local eats or hangout places. Those back alleys and obscure bars will give you a better feel of a place compared to booking a tour.

These tips will enable you to fund your dream vacation. That trip does not have to be expensive; certain ways are just as fun without the need to splurge.

Funding Your Child's Education

It is a parent’s responsibility to take care of their children until they are capable of living independently. However, with the rising costs of tuition, is it still financially feasible to borrow money for a child’s college education? Before you answer that question, you must consider a few things.

Co-Signing Loans

Creditors normally do not take loans from students because they do not have a steady stream of income. In such cases, lenders will want a co-signor when they provide a loan to a student, and the co-signor is most likely a parent.

Most parents want to make sure their children will pay the loan and not them. They do not want to shoulder the burden of the debt because their kids can work to pay it off after getting their degree. When a parent co-signs a loan, it will affect their debt-to-income ratio, even if it is always paid on time.

Cost of Student Loans to Parents

What parents do not realize is that co-signing a loan has long-term implications. If they take a loan for their children, they usually get higher interest rates and fees. These extra costs may affect their financial flexibility in the future.

It may take a long time before they pay the loan because of rising interest rates. It may derail a parents plan for retirement, as they might withdraw from their nest egg.

Borrowing Responsibly

Parents must set an example to their children by borrowing responsibly. The way a parent manages their debt and finances will help their kids in the future. If a parent saves early and makes responsible money choices, their children are likely to follow their example.

Save for Your Child’s College Education

The best time to start saving for your child’s college education is while they are still young. The head start will give you the financial flexibility you need to give them the best possible education. If you save enough money early, you might not need to get a big loan to pay for your child’s tuition.

Getting a little extra help

If you have not been able to save up for your child’s education and a student loan is out of the question, there are short-term loans that can help you when you only need a little extra money for this year’s tuition fee. The answer may be payday loans. Oakville offers plenty of opportunities to get a cash advance for immediate financial needs. Payday loan Oakville companies such as GoDay can get you quick cash in as little as an hour.

Helping your child pay for college comes with its pros and cons. Consider all your loan options before doing so. It is better to start saving early to reduce your costs when your child reaches college.

Controlling your spending while on holiday

Have you been imagining skiing in the Swiss alps or getting a tan in Tahiti? These dreams do not have to stay in your head. You can actually have a great holiday without breaking the bank and spiraling down into a cycle of debt. Here are some money-saving tips you can follow for when you do decide to take that vacation:

Know how much you can spend

Before you even plan that trip, identifying how you will finance your vacation will give you flexibility in planning the trip. You will be able to know if you will choose a 5-star hotel or try out backpacker hostels. Will you be saving up for that trip? If so, how long will it take you to reach your target amount? This will affect your trip schedule, the leave that you need to take from work and a lot of other logistic considerations. If you have a set date in mind, you might want to take out a payday loan. Ajax has several options offering this short-term cash advance for whatever purpose you need it. As long as you are able to pay within the set time frame (usually within the next pay period), a payday loan Ajax company like GoDay Ajax may Ajax help you make that Ajax dream vacation a reality.

Research Your Destination

Each place has an area or region that is not often frequented by tourists, keeping the prices low and the experience authentic. Tourist areas charge exorbitant prices for accommodation and restaurants, most of which are overrated.

Study how to use a place’s public transport system to avoid accumulating expenses on renting a car or paying for taxis. These may seem like minor expenses, but they add up and hurt your finances after your trip.

Stay in a hotel or guesthouse near all the attractions you want to see or are accessible to public transport. Doing this will save you money on transportation and will take you right into the heart of a city.

Researching ahead of your trip will enable you to create a budget that will approximate your expenses once your trip starts. You will know where the good value places to eat are, the exchange rate and the best place to buy local items.

Follow a Budget

A budget will rein your expenses in during your trip; a set course of action will enable you to monitor how much you are spending.

Set a budget for food, accommodation, night outs and day trips during your holiday. Doing so will keep you from debt during your vacation. You do not have to spend a lot to have fun; there are free things to do in the country or city you will visit. Cheap local eats will not only fill your belly, but also give you a glimpse of the local culture. You will also get to meet locals and learn more about them compared to someone on an expensive tour.

Take Advantage of Miles or Points

The miles and points you accumulated will save you a lot of money on flights and hotel bookings. Take advantage of those points for your next holiday so that you have extra money to spend on going out, shopping, dining or visiting more attractions.

These budget saving tips will enable you to save during your holiday so you can fully enjoy it knowing that you did not overspend.

Tracking Your Money

Monitoring where your money comes from and goes to is always the first step in better understanding your finances. Poor financial management keeps you in debt and prevents you from reaching your goals. Certain ways enable you to keep track of your money and improve your financial management acumen.

Make a List of Expenses
A list of your expenses helps you better understand exactly where your money is going. Keep track of the essentials like rent, mortgage, food, water, utilities and other similar items so you have an idea of how much you spend, daily, weekly and monthly. Make sure these items are prioritized and must be settled first before spending money on less important items like clothing, dining, or travel.
Once you know what your detailed expenses are it’s easier to make a budget and reduce to build your savings or pay off debt.

Budgeting is the Way to Go
A budget that you follow for weekly and monthly expenses enables you to monitor your expenditures closely. You can resist the urge to go shopping or splurging on a fancy restaurant when you know you need money to pay off debt or handle a major expense from unexpected home repairs, a future operation, or a post-graduate degree.

Your budget will also enable you to determine your spending habits. Your habits will either help you achieve your financial goals like retiring early, buying a house, or sending kids to school, or lead you into a life of unpaid debt a few years before retirement.

Investment Portfolio
Discuss your investment portfolio or other sources of income with a financial consultant. Focus the discussion on increasing your nest egg and diversifying your portfolio. Additional sources of income like stocks, bonds or mutual funds provide you with residual income that you can use along with your savings.

Looking at your portfolio also helps you see which investments are worth keeping and which ones are worth selling or stopping altogether. You might end up losing money by keeping a poorly managed stock or one that is performing badly.

Financial Management
Financial long term planning and management keeps you debt-free or at least keeps debt at a level you can control. This also enables you to find ways to attain other sources of income other than employment. Multiple source of income provides you with more financial flexibility to pursue your dreams.

Consulting a financial expert enables you to make the right decision regarding paying and applying for loans for a house, car or, business endeavour. They also assist you in finding a better option than keeping your money stagnant in a savings account.

Saving for a Big Purchase Versus Taking Out a Loan

Are you considering taking out a loan versus saving for a big purchase? Before you make a decision, weigh the pros and cons of both sides to reveal the ideal option. Both have advantages and disadvantages over time, and the decision you make will have a significant impact on your long term financial situation.

Saving for a Major Purchase

A big purchase like a car or house takes careful consideration, as both may saddle you with debt for the next five or more years. However, these purchases are the two most common made by individuals or families once they begin to gain financial security.

A mortgage is usually necessary when you purchase a house. This may tie you up long-term, as it normally takes more than a decade to pay off the debt, and that time frame means you are taking a chunk of your income to pay for it.

You have an option for a fixed or variable term loan when you apply for a loan. Fixed term is ideal for prospective homeowners who plan to live in the house they buy for years. The interest rates and monthly dues remain relatively the same when you choose this option.

The variable term has a changing interest or monthly dues and is ideal for prospective buyers who are unsure of living in the area within the next few years.

Purchasing a car is not as difficult as buying a home, but it is one of the most common big purchases that people make. In most cases, you need a loan to buy a vehicle, unless you can pay with cash with your savings.

Using a majority of your savings for a big purchase is not a good idea, unless you have sources of income that enable you to recuperate the money in a short amount of time.

Taking Out a Loan

A loan requires monthly payments that carry varying interest rates, depending on what you purchase. However, loans are ideal for making big purchases such as the above-mentioned items.

You will need a steady source of income, a good credit score and a hefty savings account to get a mortgage or car loan. These show a creditor that you know how to manage your finances.

Saving for a big purchase and taking out a loan are interconnected in certain ways, especially if you plan to purchase a house or commercial property. Some big purchases like travel or buying furniture to fill your home may take a chunk of your budget if you rely on just your savings. There are other options available to you such as short-term or payday loans.

The key to making that big decision is to study your finances and determine, if you can afford to make the big purchase within your timeframe using just your savings, or if you need a loan to get it sooner.

Save Money by Making Your Home Energy Efficient

Are you looking for ways to reduce your expenses and increase your savings? Start at home by making a few improvements that make it more energy efficient and eco-friendly.

Natural Light

You don’t need several lights at home when you can take advantage of natural light. Install bigger windows and carefully place them in areas that shed light into a room that you use the most. Place them overhead for maximum efficiency, especially in kitchens and living rooms.

Natural light also gives your home a fresh and natural look. Highlight different parts of your house or pieces of furniture to spruce up your home’s interior. Using natural light reduces your monthly energy expenses.

Home Insulation

Proper insulation reduces your energy bill, as it keeps cold or warm air circulating when it is to cold or to hot. You won’t have to use the air conditioning or furnace too much when the weather changes every season.

Seal holes or potential drafts from windows or walls as these alloaw cold air to enter your home. Most leaks are in windows, doors, basements or attics. Make sure to seal the ducts as they carry cold or hot air to different parts of your house.

Choose Energy Efficient Appliances

Some appliances have energy efficient features that enable you to reduce your energy expenses. Certain kettles, irons, entertainment systems and other items consume less energy and automatically shut down when not in use.

Programmable Thermostat

A programmable thermostat may seem like a pricey addition to your home, but this device saves you more money over time. You get to set the temperature you want in certain rooms or your entire house whether it is summer or winter. Connect the thermostat with the heating and cooling system to set the temperature at a level you want to consume less energy.

Renewable Energy

Installing solar panels can help reduce your reliance on fossil fuels, and in many cases can power your entire home. The cost of purchasing or installing solar panels may be expensive at first, but it will reduce your overall energy costs over time.

Get an Audit

An energy audit executed by a professional enables you to find areas that need proper insulation or the reason your home consumes too much energy.

These improvements make your home energy efficient; these changes also enable you to reduce energy expenses and focus on other things that increase your savings.

Regaining Control of Your Finances

Living from pay cheque to pay cheque is not an ideal way to enter your prime years. It’s easy to get yourself into this kind of situation. Simple activities such using credit to shop, eat at expensive restaurants or travel, can get you into debt. However, it may also happen when you accumulate debt and only pay the minimum. Regardless of the reason, you still have a way out of financial troubles to get back on your feet.

Income Evaluation

The first place to start your path on to financial freedom is by evaluating your source of income. Other than your fixed pay cheque, do you have other jobs or sources of income such as alimony, child support, or investments? If your answer is yes, add these all up and subtract your monthly expenses. Landing in the negative after doing the math means that you are spending more than you are earning.

Start reducing your expenses until you surpass zero to build your savings account and use the disposable income on investments that give you value.

Make a Budget

A budget will rein your expenses and keep you focused on your goal to overcome your debts and start a debt-free life. Keep track of where your money is going and make a list; some people make monthly lists while others prefer making daily ones.

The budget will help you identify what you spend money on the most, the essentials and the items you can remove to enable you to grow your savings and pay off debt faster.

Pay Off Debt

For people who have accumulated debt over the years, it is wiser to pay off huge chunks of it before spending on anything else. It will be more difficult to pay off debt if you wait because of mounting interest rates and additional fees for late payments.

Tighten the Buckle

Part of regaining control of your finances is to reduce the amount of money you spend on luxuries. Reduce the number of times you eat out and cook more often, redesign your home to be more energy efficient, and focus on saving money and paying off debt.

Don’t Be Too Hard on Yourself

Even if you are in debt, you can still spend money on the things you want to do. Doing so keeps you focused and refreshed on getting out of debt and staying debt-free with several investments.

These steps enable you to regain control of your finances, stay debt-free and have disposable income for investments.