As the year draws to a close, it’s an opportune time for homeowners in Brampton, Toronto, and the GTA to assess their financial situation and prepare for success in the coming year. By completing some financial tasks, you can start the new year with confidence that you’ll be on track to achieve your financial goals. From reviewing your spending to watching your credit score, here are ten important tasks to ensure a financially healthy year-end.
1- Review Spending & Cut Out Non-Essentials: The first step to achieving financial stability is understanding where your money is going. Take a close look at your spending habits by going through all of your bills line by line to identify areas where you can cut out non-essential expenses. You may have signed up for services you never really use or perhaps don’t remember requesting. Look for small, unexplained charges, fees, and add-ons, and the services that you can now live without.
2 – Create or Update Your Budget: A well-crafted budget is the cornerstone of financial stability. A budget serves as a roadmap that helps you allocate your income wisely and track your expenses. It might not be the most thrilling task, but it’s one that will give you a clearer picture of where you stand, how much you can truly spend, and how much you can allocate to savings. This knowledge empowers you to make informed decisions and take control of your financial future.
Check out this online budget planner that will help you put your budget together. It provides tips and suggestions, creates useful charts, and allows you to compare your budget to other Canadians.
3 – Pay Down Existing Debt and Avoid New Debt: Debt can be a significant obstacle to a strong financial future. By taking control of your debt situation, you’ll free up resources for more meaningful financial endeavors. Your priority is to keep paying at least the minimum amount owed on all debts. However, any extra money that you can spare should be focused on the debt with the highest interest rate. By tackling high-interest debt first, you can save on interest charges over time. Once you have paid off one debt, you can then allocate the extra funds towards the next debt in line.
4 – Set Your Financial Goals: Setting clear and achievable financial goals is necessary for long-term success. Whether it’s saving for a home renovation, education, or retirement, define your objectives and create a roadmap to reach them. Having tangible goals provides direction and motivation, guiding your financial decisions and helping you stay focused on what truly matters.
5 – Get your Credit Report: Your credit report is a mirror reflecting your financial health and your credit score is your passport to financial opportunities. It’s worthwhile to get a copy of your report and review it carefully to identify any discrepancies or areas for improvement. A healthy credit score opens doors to favorable interest rates and financial opportunities. Addressing any issues promptly will contribute to a positive credit profile, strengthening your financial foundation. You can get your credit report from either Equifax or TransUnion.
6 – Review Credit Card Benefits & Rewards: It’s always a good idea to check in on your credit card reward programs. The programs can change over time and new programs become available all the time. We often don’t fully understand the perks associated with each card and fail to optimize their usage for maximum benefit. Whatever your goal is i.e., to get cashback incentives or travel rewards, these benefits can provide a valuable boost to your overall financial picture so take the time to realize what you have and what may be out there that is better for your situation
7 – Review Insurance Needs: Protecting your home and assets is paramount. Evaluate your insurance coverage to ensure it aligns with your current needs. This includes home insurance, life insurance, and any other relevant policies. Adjusting as necessary will provide peace of mind, knowing you are adequately protected against unforeseen events. Doing some research may also uncover a better deal that could save you money each month.
8 – Make Sure You Have Emergency Savings: Life is unpredictable, and having an emergency savings fund is necessary for weathering unexpected financial storms. Aim to have at least three to six months’ worth of living expenses set aside in a dedicated savings account. This safety net will provide financial security in the face of unforeseen circumstances. If you have a focus on debt payment, it’s still advisable to maintain small contributions to your emergency savings while paying down debt.
9 – Explore Debt Consolidation Options: If managing multiple debts is becoming overwhelming, consider exploring debt consolidation options. Consolidating your debts into a single, manageable payment can simplify your financial situation, boost your cash flow, reduce overall interest rates, and help you improve your credit score.
There are several debt consolidation options. You can refinance your mortgage to access the equity you have accumulated in your home. You need more than 20% home equity to complete a refinance. Refinancing involves replacing your current mortgage with a new bigger mortgage that allows you to pay off your non-mortgage debt. You will need to pay a penalty for leaving your mortgage early and will have to qualify for your new mortgage.
If you don’t want to break your current mortgage to lose your rate and incur fees, you can access your equity through a Home Equity Line of Credit (HELOC) or a second mortgage. The best way to determine which option is best for you is through a comprehensive analysis available through your trusted Brampton Mortgage Broker Rakhi Madan.
10 – Help Others: As a homeowner in Brampton or the Greater Toronto Area, you’ve likely noticed how inflation is impacting those less fortunate. Contributing to your community fosters a sense of connection and goodwill. Whether through volunteering, supporting local initiatives, shopping local, tipping restaurant workers and others generously, or helping neighbors in need, finding ways to give back can be personally fulfilling and positively impact your community. Focusing on compassion not only benefits others but also enriches your own life and is a positive example for others.
Seek the Advice of Top Brampton Mortgage Broker, Rakhi Madan
Tackling these ten important financial tasks as the year concludes positions homeowners in Brampton, Toronto, and the Greater Toronto Area for a more financially sound future. Proactively reviewing, planning, and optimizing your financial situation doesn’t just close the chapter on 2023—it sets the stage for a new year filled with strengthened financial well-being.
Always remember that Rakhi Madan, your trusted Brampton Mortgage Broker, is available to answer your questions and assist with your mortgage and cash flow needs. Rakhi’s tireless dedication to her clients is why they return for their next mortgage need and refer family and friends. We’re in an uncertain economic environment which is precisely when you need expert and trusted advice!
