The holidays have come and gone once again, and families across Canada are left dealing with how much they spent on the season. December is a very expensive month and January is the month to pay it all off – chasing one payment with another as they say. Maintaining the family savings account is a difficult task in the post-holiday blitz, but there are ways to limit the damage and even add to the savings account.
Credit cards are excellent ways to build credit for later in life, but at the same time it’s very easy to use them for products that aren’t necessities – a double edged sword if ever there was one.
Financial experts advise families to use credit cards sporadically, not for everyday items. In the grocery store keep the credit cards in the wallet, even lock them away before going out if necessary – but use them only for a one time type of purchase. Developing a reliance on credit cards prevents money from being saved, which threatens financial stability.
Higher savings provide an insurance to fall back on – the old phrase ‘saving for a rainy day’ is more important than some families recognize. When applying for a bank loan, a car lease, or even a mortgage creditors consider how much money is within savings accounts. A well funded savings account boosts credit value in the eyes of the creditor, which provides leverage for the applicant to negotiate an affordable plan.
Negotiations for a mortgage are particularly important because lower mortgage rates and lower interest rates provide a more affordable living. Paying for a mortgage is expensive enough for most families, so having the means to negotiate a lower mortgage rate is very important to maintain a good standard of living. Successfully negotiating a lower rate than expected is money saved, which can be regularly placed within the savings account – savings lead to more savings.
Many families make resolutions on New Year’s Eve, and many of those resolutions involve being more cautious with money. A well-funded savings account works like a safety net in that it cushions the fall if ever needed. Start 2013 with some ideas to save, and you can make life a little more affordable.