The secret to financial success in 2013? Baby steps
Baby steps. They don’t sound like much but they can be key to your financial success.
A new year has arrived, and so has the parade of resolutions many make to outline what they want the next year to look like. Many of the more common resolutions centre around diet or exercise, but a number of Canadians are making financial resolutions as well. From contributing more to a Retirement Savings Plan or a Tax Free Savings Account (TFSA,) to paying off a mortgage faster, most financial resolutions can be met in a similar fashion: baby steps.
Not many Canadians have the ability to contribute $5,500 to their TFSA all at once, which is one of the reasons contributions can be spread over the course of the entire year. The same principle can be applied to a mortgage. Recent reports show that the majority of Canadians will be focusing on paying down debt in 2013. In an era of historically low mortgage rates, a larger portion of most home owners' mortgage payments are going towards the principal rather than paying down interest. This gives borrowers an advantage when looking to aggressively reduce their debt. Making small changes, like changing mortgage payments from monthly to bi-weekly, or saving small amounts over the course of the year to apply as a lump sum payment later, can significantly reduce the amount of interest paid over the course of a mortgage. Use an online mortgage calculator or talk to an Ottawa Mortgage Broker to examine different payment options.