The latest news has been focused on rising interest rates, surging inflation, and economic uncertainty with suggestions that the Canadian economy could be tripped into recession.
With all this information circulating, now is a good time to discuss ways to adapt your finances and protect your future. Fortunately, there are a few key things you can do to get started today!
Adapting Your Finances
- Review your income and expenses and identify areas for reduction – such as getting a cheaper cell phone plan, reducing streaming service subscriptions, reviewing
- Make a list of your current high-interest loans (such as credit card balances). If your mortgage is up for renewal, you may be able to benefit by consolidating debt into your mortgage to save on interest and free up cash flow with one payment. Refinancing your mortgage before the renewal is also an option, but a review of the penalty cost versus your debt consolidation goal should be considered. As your mortgage professional, I can assist you with this analysis.
- Allot a percentage of your income towards savings such as an emergency fund. Your goal should be to have the equivalent of 3 to 6 months of earnings in this fund to provide breathing room should you lose your job or face any unexpected expenses. Another form of emergency funds could also be a line-of-credit. Once set-up, these generally have no cost to you unless you use it in the event of an emergency.
- Review your income and expenses and identify areas for reduction – such as getting a cheaper cell phone plan, reducing streaming service subscriptions, reviewing
- Many people have found innovative ways to increase their income by asking the following three questions:
- Are you a fit for a potential promotion?
- Do you have a review coming up?
- Do you have transferable skills that you can apply to consulting or additional contract work?
One final reminder – don’t panic. I know the word “recession” can be stressful but understanding what is happening and making appropriate adjustments will help you stay financially secure.
Interested In Learning More?
If you have any additional questions, I would be happy to chat with you anytime! Please don’t hesitate to reach out if you want to discuss the impact on your mortgage, or how to make changes.
Tim Ward, Collingwood Mortgage Broker.
