Four Ways to Take Control and Thrive in a Challenging Market
March 9, 2023 | Posted by: Barbara Chong
If you're struggling financially as a result of increased living expenses and interest rates, you are not alone. A lot of Canadians are feeling a little helpless these days, with talk of rising interest rates and inflation dominating news headlines. The good news is that there are still ways to save money and increase your monthly cash flow even in an atmosphere with higher interest rates than we've been used to over the last few years. Here are a few proactive things you can do take control of your financial situation:
Anytime is a good time for a mortgage review
An analysis of your current mortgage terms may reveal opportunities to improve your situation. For example, you might be able to refinance your mortgage and consolidate any other high-interest debt to cut your overall monthly payments or you may want to consider increasing your amortization or possibly changing your payment frequency to lower your mortgage payment.
Don't sleepwalk through your mortgage renewal
If your mortgage is renewing this year, you may be receiving (or have already received) an automatic renewal notice from your lender. Don't accept their renewal offer without talking to a mortgage professional first! In most cases, we can shop around and negotiate a better rate than what you're being offered
Plug the money leaks
Take a very hard look at your spending and challenge yourself to find ways to save. Every little bit helps – cancel one (or more) streaming services, cut any impulse spending, dine out less, consider carpooling, take advantage of price matching at your local grocery store ...the list goes on and on.
Supplement your income
Tap into your talent or skills and consider turning that into a money-making side gig. Or if it's feasible, consider building a rental unit in your home and let renters help you pay your mortgage. Any extra income can be put toward paying off debt, paying down your mortgage or just providing the much-needed breathing room every month.
Even in a higher-interest rate situation like the one we're in right now, there are still options available to reduce monthly spending and increase cash flow. You may make a more financially secure future for yourself and your family by examining the conditions of your mortgage, making cost reductions, and increasing your income. And although some of these choices may not be the most comfortable in the short term, the long-term payoff is well worth it.
Whether it's managing your current situation, or looking to your future situation in regards to your home, building a plan is the best way to help you take charge of your financial destiny.
Home ownership is still a terrific investment and a cornerstone of financial success. According to betterdwelling.ca, while home prices may have decreased by 17.8% since the peak reached in March 2022, they are still almost 31% higher than in 2020. The demand for housing will continue to be high due to Canada's aggressive immigration goals for the following three years, which will put pressure on property prices.