Personalfinance tips

If you are still renting a place in Toronto, that’s fine. But, if you are planning to buy a new house or a condo. Better be prepared with a good credit score. A good credit score will not only help you in getting better mortgage rates but also in better shape once you move into the new home and buying new stuff. If you have already bought a home and paying your bi-weekly or monthly mortgage, I’ll suggest you always try to pay more towards your mortgage, if you have the luxury and income to do so. Keep in mind, the first preference goes to clearing off your debt, making sure it’s $0. Then comes the emergency fund. Provided you have both these in place, try to finish off the mortgage payments by paying the extra money you have. Also, another thing to talk about here is, if you can probably make some additional income from your home, like renting it out on Airbnb or renting out the basement or renting out a single room in your home which you probably might not need. Now, this might be a small amount, but over several months can be a real source of your income. Give it a thought. If you are still renting, try to minimize your expenses by just buying the stuff you need. After all, you are in a rented place. Say tomorrow you do buy a home, the money you have saved up comes in handy and you’ll end having a beautiful home, well furnished. Save today! Think about tomorrow 🙂

After credit card debt, the next I am going to stress about is having an emergency fund? So why do you need an emergency fund? What if you happen to lose a job for no fault of yours, what if you get fired in simple terms? Do you have the financial back up to take care of your family? Do you at least have a couple of month’s budget saved up? How good are you in terms of your financial status? Also, emergency funds are not only for job loss, say for example you are getting married in the next 6-8 months, but you also need to buy a new house or whatever the financial situation that may arise, an emergency fund is going to be your pillar and help you remain strong in difficult turbulence. So how much should you have in an emergency fund? There’s no straight answer to this question. However, if you have saved up 3-6 months of your monthly expenses in your emergency fund, that should be good and enough. Also, never touch your emergency fund unless it’s really an emergency and you have no other funds access.

Almost every personal finance blogger in Canada or elsewhere will usually have this on his/her list. This is the most important and the #1 thing to take care of if you ever want your finances to improve. Your Credit card debt can hit your credit scores and carrying balances for a longer period will Destroy your credit even further. Especially in a country like Canada. If you do not have a decent credit score of at least a bare minimum of 650+, you can forget about getting a mortgage, car loan, lease and even rent a decent property. That’s because almost at every place, your credit report is asked for or a soft/hard credit inquiry is performed. Imagine you go to get a new phone from Rogers, forget the new phone a new cell phone connection or a switch, your credit report is pulled up. Let’s say. Your car’s lease is nearing its end term, you can’t get a new car loan if your credit score is bad. Always keep your credit card limit utilization to less than 30%. Say you have two credit cards with limits of 10k combined, try to keep it below 3k max every single month. Also don’t carry the balance month after month, pay it off in full every month. If you don’t have the money to pay the balance in full at least make honest efforts of paying more and more money until you have paid it off.