5 Biggest Wastes of Money - Why Get a Mortgage Instead
March 9, 2020 | Posted by: Ron Chan
It’s March. Data shows that by now over 80 percent of households have abandoned their prior New Year resolutions. Among those goals was to stop spending money on unnecessary things and instead invest in the future. But unfortunately longstanding consumer habits win which is why we need a constant reminder to be better with our finances. The latter is often accomplished with an investment in real estate, especially in Winnipeg which is one of the most stable markets in Canada. Today we’re going to help you free up cash for a downpayment and/or monthly mortgage payments by drawing attention to the biggest household wastes of money. Let’s review.
5 Worst Ways to Spend Money That Could Be Better Put Towards a Mortgage
1. Driving Your Car
This may seem like an essential expenditure, but is it? Vehicles drain money fast. We’re talking gas, maintenance, insurance, parking, and monthly payments if you don’t yet outright own the vehicle. All of this for a quickly depreciated asset! Take stock and see if you can limit or completely obliterate the use of your automobile. Can you walk, bike, or ride-share/hail to work and play instead? If not, perhaps it’s time to move so into a mixed residential/commercial community that offers more convenience.
2. Taking Frequent Vacations
We would never dissuade a household from taking a vacation - it’s critical to emotional wellness and offers valuable family time. However, you may consider cutting down the big trips from two or three times per year (i.e. winter break, spring break, and summer break) to just one. This can save you thousands of dollars, money that could be put towards a downpayment on a home - or even a vacation property should you already own a house.
3. Going Out to Eat / Drink / Party
There’s nothing wrong with going out to eat every once in awhile. It’s part of enjoying life. But when you dine at a restaurant once a week or more, you could be throwing away hundreds of dollars that could serve as a significant portion of a monthly mortgage payment. Those weekly meals, drinks, and desserts at Earl’s Kitchen + Bar, The Keg, and even Boston Pizza (unless it’s Pasta Tuesday) along with twice-daily stops at Starbucks add up fast without you noticing until you check your bank statement at the end of the month. Stop feeding food chains and instead invest in your own kitchen - in a home you own.
4. Credit Interest
Even if you boast a great credit standing you’re probably still throwing money away on credit card (etc.) payments. In fact, those persistent payments may be what led to a solid credit score in the first place. Stop carrying credit debt today. Wipe it out with a lower interest line of credit from your bank, or get a no-interest loan from a well-to-do family member to pay it off and just pay them back with consistent installments on the sole principal. You may also check with your credit card company to see if there is an option to opt out of AirMiles programs and the like so that you may instead qualify for a lower interest card.
This is the one you were expecting. Yet despite its obvious nature it remains to be the worst waste of money that so many Canadians continue to allow. Stop paying someone’s mortgage starting today and instead put yourself in their position. As a homeowner your monthly expenditure will go towards building your own equity and personal wealth, and you can use that leverage to piggyback into another property and become the one who earns revenue on the short or long term rental market. It all starts with taking the first step - contacting a mortgage broker.
If you’re tired of throwing money away and would rather put it towards Winnipeg real estate, get in touch with Ron Chan today. Call 204.290.9950 for a friendly conversation.