Many people spent their New Year’s Eve thinking about their resolutions and what they were going to change in 2012. But, if you’re one who hasn’t quite decided what you want to focus on, here are five financial resolutions that will help you this year, and for many more to come.
Pay off your principal faster
Everyone knows that paying off your mortgage faster by paying a little more principal every month will help you pay off your mortgage faster. But do you really know how much? Let’s say that you’re currently paying $830 on your mortgage every month. Increase that by just $170 to $1000 and you’ll not only pay off your mortgage about 8 years faster but you’ll also save yourself a whopping $48,000 in interest over the entire amortization period of your loan.
Use a secured line of credit for energy-efficient improvements
Tax credits offered by the Canadian government for energy efficient appliances and home improvements began in 2009 and continued right through 2011. While new credits haven’t been announced (yet) for 2012, you can still take advantage of everything that’s been offered up until this point. Using a secured line of credit can help you install an energy-efficient furnace, hot water heater, or even purchase a hybrid car, saving you hundreds of dollars on gas every month!
Use your home equity as an emergency fund
Canadians certainly fared much better during the recession of 2008 than our neighbours to the South. But many of us are also still living paycheque to paycheque and just trying to make ends meet – never mind having that 6-month emergency fund socked away like we know we’re supposed to. An emergency fund is important, but it doesn’t mean that you have to forego groceries in order to have it. Take out a HELOC and leave it be for those times when you really need it for an emergency. You won’t be charged anything unless you withdraw from it, and then it will only be the interest that you need to pay back.
These are just three mortgage resolutions that you can make to help get your financial life back on track and make 2012 one of the most prosperous years ever! It’s a new dawn and a new day. And now more than ever Canadians have great opportunities to get their finances under control and working for us rather than against us!”
