Minute Amount of Milk

I was having coffee with a friend yesterday and as she was about to throw out the milk container she says...."there is only a minute amount of milk I'm going to toss it" to which I responded "minute to you is worth 2 cups of coffee to me". Maybe not the greatest analogy in the world to the one man's garbage is another's treasure but you get my point.

It's that time of year when people are spring cleaning and yes having garage sales. I challenge all of you this weekend to go to some garage sales and pick up and item that is on your normal shopping list that you need but could buy second hand. Coffee makers, tables, and such.

Not only will you save some $$ but you will also save that item from being tossed into the garbage.

Spring Cleaning Money

It is that time of year - time for spring cleaning!

Although most of you may dread spring cleaning, it may actually make you money. As they say one man's garbage is another's treasure.

Go through the house and take out everything that has not been touched or used in 2 years. Place gently used items on craigslist or take to a consignment store or have a garage sale - you'd be surprised how much money you can make.

Not only will you make money but you will have a cleaner and less cluttered house.

Email us and we can help put you on a budget.

$96,000 in debt

If you find that crazy then you are like me.

There was a recent study conducted in Canada that places household debt at $96,000. That is up 145% from just a few years ago.

And to top it all off there has been a 40% increase in those that are late on their credit card payments.

We have become a nation and world where we thrive on having the latest and having it now. Gone are the days of saving for a vacation or such - We Want It Now! So now we have to pay for it.

But don't fret there are lots of options out there for us all. Non-profit organizations such as Credit Counseling Canada or private firms that will help build you a household budget and help you manage your debt.

Of course we are here to help. Email us or visit us centssavvy.com

Lending Money to Friends & Family

If we lived our lives by the words of Shakespeare "Neither a lender or a borrower be" the world would not go 'round.

Now, from time to time we have all been asked by friends and family to lend them money or we have had to ask our families to borrow money. There is no hard or fast rule about lending money but to keep these relationships healthy long-term here are a few things to consider:

1. Write up a contract

It can be on a napkin, preferably email it and ensure that the recipient has read is and is fully aware of the terms. The contract should state the amount of the loan, the interest, how & when it should be paid back . This ensures that all parties are in agreement prior to the money exchanging hands. Once money has exchanged hands without a contract then it is very hard to put terms against it. If this is the only thing that you do then you are way ahead of the game.

2. Ensure you can afford to loan the money

If you cannot live without this money for 1 year then don't lend it - PERIOD.

3. Don't lend if you don't have

Simply put if you don't have it - don't lend it. Don't take out a loan for anyone outside of your spouse - you will be held liable if that loan is ever defaulted.

And lastly, if you feel uncomfortable about lending then just express to anyone who asks, given the recent climate of the economy you are not in a position to lend anyone money....most people will understand.

As always, we are here to help. Email us or visit us as centssavvy.com

Weekend Challenge #4 - Make a List and Check it Twice

As we are all preparing for the weekend and our weekly grocery shopping trip our challenge this weekend is to make a shopping list for your groceries and put a budget towards it.

It has been noted that when you make a list and are prepared when you go grocery shopping, you don't overspend. Also, when you make a list you can read your weekly flyers and see where to shop to get what you need at the best price.

And always remember, it's better to buy less groceries and shop twice a week then shopping once and over buying. Studies have shown that families throw out an excess of $1,500 worth of spoiled groceries in a year!

As always we are here to help. Contact us centssavvy.com

Weekend Challenge: Save your Pennies

This weekend's challenge is very simple. Start a coin jar.

Simply put, piggy banks were created for a reason to place your money for keeping until you required it. Much like the banks of today, piggy banks known as "still banks" have been in use for thousands of years.

Use the same ideology from year's past and start yourself a piggy bank. Keep it somewhere handy to drop in your loose change at the end of every day. Before you know it you will have of dollars to use toward a goal and for your rainy day fund.

As always we are here to help centssavvy.com or contact us

Time to Renegotiate Your Mortgage

Interest rates are at an all time low and if you are locked into a fixed mortgage then now is the time to renegotiate.

Two options to choose from:

Option One

Keep your mortgage at your current amount and pay less

Option Two

Take out equity and pay the same or slightly higher.

Here are how the two options look like:

Option One - Keep Mortgage at Current Amount

A $320,000 mortgage at a fixed rate of 5% would equate to $1,707 (rough estimate) per month. If you renegotiate to prime 2.25% then your rate would equate to $1,223. That is $500 monthly in savings and your interest payments and length of the mortgage will go down.

The caveat with this option is that you will need to pay a penalty but even with a $10-15,000 penalty you will still see a savings and your interest payments and amortization will go down.

And of course you will ask, how about if the rates go up. Rates will not go up as quickly as people think, for the interim (roughly the next 6 months or so) rates will not change much as we are not out of our recession yet and any changes to the prime will stunt growth. And you can always lock in within 1 week.

Option Two - Take out Equity

If your home has gone up in value, you can keep your current monthly payment and take out equity. For one client it looked like this $318,000 original mortgage, house went up in value to $525,000, they took out $75,000 in equity and the mortgage climb to $393,000. The good news because the interest rate went down they ended up paying the same monthly figure and had $75,000 in their pocket!

Again, because you are paying a lower interest rate your long term interest payments will go down and so will the life of your mortgage.

There are of course costs to this option as well, however if you do an increase and blend, there are no cancellation fees only lawyers and bank fees which usually amount to $800-$1,000 (approx.) and get taken off the $75,000.

Whatever your option, go to your bank or ask your mortgage broker. In the long run you will end up saving money.

Do not take out more than you can pay on a monthly basis today and long term! Your bank or broker will help you decide your comfort level and what you can pay monthly.

As always we are here to help centssavvy.com