Growing Your Money Tree
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1. In the spirit of the tree, think of this tip as the trunk. Pay yourself first, its crucial and simple. One of the ways to do this is to either get an automatic deduction (approximately 5-10%) from your payroll cheque and put into a mutual fund account or have the bank automatically withdraw an the same amount out of your account on payday.
2. A major branch of the tree is to spend less money than you make. Sounds like common sense yet a major amount of you break that rule every day.
3. There is a tax shelter out there for everyone, it’s your RRSP. I know it sounds boring and you’ve heard about it so much…my answer to that is for you to give your head a shake and start contributing.
4. When contributing to your Retirement Savings Plan, do it at the beginning of the year rather than at the end of the year. The reason for this is so you can take advantage of earning compound interest on this money for another whole year.
5.  Do up your net worth statement up once a year, every year. By doing this you give yourself a great idea how your financial health has improved every year…hopefully.
6. Know the difference between Bad Debt and Good Debt. Bad debt is debt that declines in value and good debt is debt that appreciates in value, such as a house, mutual funds, education.
7. Pay off your credit cards as quickly as possible. Quick tip…if you owe on several credit cards, list all your cards and the amounts that you owe on them. Make payments on all of them but instead making payments on your biggest credit card debts…pay off those small balances and get them out of the way so you can begin making some really substantial payments on your bigger debts and it doesn’t seem so overwhelming.
8. If you don’t have your own business, you shouldn’t lease a car. By leasing a car you are paying premium cost to drive that car because you are financing the whole cost of the car.
9. Save money in banks such as ING or at a PC bank…no service charges and you usually get a better interest rate on your money. I don’t know about you but that sounds great to me.
10. By raising the deductible on your car and home insurance, you can save a sizeable amount on your premiums.
11. Pay your mortgage weekly or bi-weekly. You will knock years off your mortgage. Also, if you pay an extra $200.00 a month more than you’re usual payments, you can save approximately $40,000.00 on interest payments and knock off 5 years off your mortgage.
12. Order a credit report from both Equifax and Trans Union and see where you’re credit stands. Many times there is misinformation on your credit report that will stand in the way between you and the things that you want and unless you pull your reports on a regular basis then you will never be able to repair any problems on your report.
13. Never buy extended warranties, especially on inexpensive items. They are a complete waste of money and almost always favour the retailer.
14. When applying for mortgage or getting insurance, always use a broker so they can you the best deal for you.
15. Don’t purchase insurance if you don’t need it. If you’re single, you don’t need insurance because chances are no one will be put into a financial tailspin over your death. Also, buying insurance for children is also unnecessary. If children die, it is heartbreaking but do you really need to benefit financially from it?
16. Contact the HRDC once a year and find out where your Canada Pension stands.
17. Discuss your Will and Powers of Attorney with the people that it effects. It is very important that your loved ones are aware of your choices before anything drastic happens.
18. If you have children, start an RESP for your children immediately. Not only does the money that you invest gain compound interest but the government also contributes every year towards your child’s education.
19. Decline the offer to purchase whole life or universal life insurance. Buy renewable term-life insurance. Its less expensive, it usually covers you from 10-20 years and is guaranteed renewable
20. Educate yourself financially, know what is happening with your money at all times and don’t be afraid to ask questions and shop around.