Apply Now

It’s Not How Much You Make – It’s How Much You Save

January 29, 2013

The basic principle of personal financial wisdom is to either make more or to spend less. Instead of just working harder to make more money, why not make the money you have work harder for you.

Here are some very basic tips to make your money work for you

Pay down your mortgage

Use your savings to make lump sum payments on your mortgage. Not only will you save thousands of dollars in interest, you’ll build up equity faster which can be used to make other investments. Paying down your mortgage is a low-risk investment and guarantees you a shorter amortization period for your mortgage.

Pay another monthly bill–to yourself

With all the bills you have to pay each month, it’s tough to start a savings program. That’s why you need to think of saving as another monthly bill. Choose an amount you can afford–even if it’s only $20–and get your bank to deduct that amount from your checking account into a savings or TFSA account automatically every month.

There is a psychological advantage to having that money stored away before you can see it. The idea being you will learn to make do without those funds and you allow your savings to grow larger and larger in the background each month. Put yourself first; pay yourself first.

Multiply your savings

Make sure your savings go into some kind of high interest account, money market account or mutual fund. By benefiting from the power of compound interest, you can double or triple what you contributed over time. If you aren’t sure where to put your savings there are a number of options depending on your tolerance for risk that can help grow your money. Do your research before putting your hard earned savings into any sort of financial product.

Save for a down payment on a revenue property

Depending on your goals, risk tolerance and cash-flow, an investment property could be the type of revenue generating asset that works for you. Once your savings or equity have grown enough, you can invest in a revenue property that will pay returns in both monthly rent and capital appreciation. Remember that owning an asset like a revenue property requires certain personal and financial commitments, but can be a financially rewarding endeavour.

To learn more about how to pay down your mortgage faster or if some of these strategies are right for you, call MonsterMortgage.ca today.