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Whether you're a first-time homebuyer or someone already paying down a mortgage, staying on top of your finances is crucial.
With tax season and RRSP deadlines approaching, now is the perfect time to assess your financial health and make any necessary improvements.
Reviewing your finances can lead to a number of positive changes, whether it’s a small adjustment to boost your credit score or a larger step like refinancing your mortgage to eliminate high-interest debt once and for all. Given the financial strain many people face, improving your financial health has never been more important.
Mortgage Professionals Canada’s latest consumer survey shows rising anxiety about household finances, with 63% of respondents expressing concern—up from 53% at the end of 2023. This growing stress, linked to high interest rates and the elevated cost of living, is especially pronounced among non-owners, with 71% of them worried about their financial situation.
Tips to improve your financial health
If you're looking to improve your financial situation, here are a few practical tips to help you get started:
1. Build an emergency fund: Emergencies happen when you least expect them—whether it's an unexpected medical bill or a home or car repair. Having an emergency fund set aside ensures that you won't need to rely on debt to cover these costs. Start small, and over time, these savings will grow, providing you with peace of mind when life throws you a curveball.
2. Automate your savings: Paying off debt is important, but saving for the future is equally crucial. One easy way to do this is by automating your savings. Set up a regular withdrawal from your account that aligns with your pay schedule, sending a fixed amount to your RRSP or Tax-Free Savings Account (TFSA). Even small contributions can add up over time, helping you build long-term wealth.
3. Know your credit score: Your credit score plays a huge role in your financial health. The better your credit score, the more likely you are to secure lower interest rates on loans and credit cards. It's important to monitor your credit score regularly to understand what may be holding it back. Services from TransUnion and Equifax Canada can alert you to any changes in your score and help you identify factors that need attention.
4. Tackle high-interest debt: High-interest debt—like credit card balances with rates up to 29%—can seriously hinder your financial progress. Prioritizing these debts is essential to your overall financial health. If you’re feeling overwhelmed by high-interest debt, consolidating it into a lower-interest loan or refinancing your mortgage may help reduce your payments. It's worth speaking to a professional to explore all options.
5. Consult a mortgage broker or financial professional: Improving your financial health can feel like a daunting task, but you don’t have to go it alone. A mortgage broker can help guide you through the refinancing process and also connect you with a financial advisor if you need additional support. A mortgage broker’s expertise can be a great starting point for understanding your options, whether you're tackling debt or considering mortgage refinancing.
Improving your financial health is a journey, and the first step is always the hardest. But with the right strategies and professional guidance, you can build a stronger financial future. If you're unsure where to start or need assistance with refinancing or debt management, feel free to reach out to a professional for support. |