Camille Jones, CLU

By Camille Jones

“I’m really curious about finances for newly-graduated students”

Graduation is both a joyous time and a very stressful time. It is great because on one hand, no more homework or late night study groups, but on the other hand, graduations marks the beginning of your career and of course, the repayment of student loans, mortgages and many other future debts.

This can be overwhelming for a new grad, especially when they have their parents and others saying that they should start saving. All the grad is thinking of is, “how can I save money when I am just starting out, and/or paying off my student loan”? This is true, but even as a newly graduated student, you need to start building life long habits of saving and paying yourself first. Remember, where we are today, is not where will be tomorrow, so start off small.

The rule of thumb is to save 10% of what you are earn a month, and then use what is remaining for expenses and hobbies. If 10% is too high to start with, 5% is ok, but nothing less. For example, if you make $500 per month, you should be setting aside $50 a month. As your income increases, you increase the amount you pay yourself. The key is to re-adjust your life to 10% less in your pay a month. If you think about it, most of us SPEND 10% of our earnings eating out on a monthly basis.

Please do not save your money under the mattress, as you loose the purchasing power of that money. The best solution for a grad is the tax-free savings account, (please view my previous articles for information on the TFSA). Now I am not neglecting your expenses and recommend that you set aside 25-30% of your pay to service them.

Create systems as soon as you start making an income. Building proper savings habits as soon as you start working will pay off BIG in the long term. When it comes to your student loan, it is not always beneficial to pay it off right away, as the interest on the loan is tax deductable, (please contact your account to see if this solution is good for you).

Lastly, the master key to your question is, get a financial planner working for you asap! We are trained to create a plan tailored to your needs, and look for opportunities that you can benefit from. When you have a cavity, you go to a dentist, an expert. Please do the same with servicing your financial needs. We are the experts here to assist.

Contact Camille Jones, C.L.U at 647  856-8048 or by email at [email protected].

Dick Loek/Toronto Star file photo

By Tony Wong

Buying a vacation property is one of the most rewarding things you can do. But it can also be a complex and stressful experience with pitfalls that are different from those you encounter when you buy a house.

Here are 10 things you need to know:

1. Why do I want it?

Buying a vacation home isn’t always about just about a place to retire or relax. It can also be an investment which generates income when you don’t want to be there. So that’s your first question. Are you using this second home mainly for fun or do you want to rent it out and make some money?

If it is mainly for personal use, then the most important consideration might be the size of kitchen. Is it big enough for family gatherings? Or you might want a big yard for the kids to play, or a massive deck overlooking the lake to barbecue and watch the sun go down. If you are an investor those sorts of detail may be unimportant. What you might be looking for a smaller property because it is easier to manage and rent.

Figuring out where you are on the spectrum and what is most important to you will help you find the characteristics of the property that will benefit you the most.

2. Keep your emotions in check

Just because you have the cash for a down payment doesn’t mean you should buy the property.

Buying a vacation home is fraught with risk because it appeals to the emotions. Before you start on your journey make sure that you do a thorough check on your finances. Is your primary home paid off? Can you carry the operating costs? How much can you afford?

Finding a mortgage in different parts of the globe may be more difficult, so be prepared to pay a higher percentage in cash if that’s what it takes.

Some people take out the equity on their primary home to make a down payment on the vacation home. All’s well and good if the housing market remains in positive territory. But if the market falls, so does your equity. How can you enjoy your vacation property when all you can think about is the debt you’re racking up?

3. Where do I buy?

Your dream vacation home might be your backyard or Florida, Arizona or New Mexico. In Ontario, Muskoka and the Kawarthas have been a traditional rite of summer vacation, within reasonable driving distance of major cities like Toronto, Ottawa and London.

But a strong dollar, means Canucks are looking south of the border. Canadians were the number one foreign purchasers of American property in 2010.

Latin America and the Caribbean have long had a strong attraction for Canadians. And there is increasing interest in buying second homes in far-flung destinations especially since currencies like Euro have devalued relative to our dollar.

The important thing to think about is the time and the hassle it takes to get there and how often you can actually use it. You’re more likely to head north to cottage country for the weekend then fly to Phoenix for two or three days.

4. Consider pooling resources

One way to ease the burden or to get a nicer property is through joint ownership. Your brothers or sisters might want to go in with you so you. Friends may want to do the same. The key is to make sure everyone understands the rules of the road, including a fair way to split up prime time use, what happens when one party wants to sell and who inherits the property.

5. Beware of tax implications

Buying a home outside Canada also has tax implications. Canadians must report U.S. rental income on their Canadian tax return. Canadians who own U.S. property may also face an estate tax when they die. Rates start at 18 per cent and may hit 45 per cent for properties over $1.5 million, although there is some relief in the form of a U.S. Canada tax treaty that could lessen the impact. When Canadians sell a U.S. property up to 10 per cent of the proceeds may be withheld. That money can be used to offset the US income tax payable on any capital gains. The difference will be refunded if the money withheld exceeds the tax owing.

6. Location is key

Buy a condo a block away from the beach and your potential rental income could drop by half. Vacationers are willing to pay extra for that week or two they spend in paradise. Views and beachfront are traditionally two of the main features people look for. Consider the trade offs. You may go for a lesser property closer to the beach than a larger property further away.

7. Condo vs house

Do you have a big family and like to be surrounded by friends? Or are your vacations a chance to get away from it all? Thinking about this will help you decide whether you need a small condo, or fully detached home with lots of space.

Make a list of your important features. Things that were important in your family home may not be as important in a vacation property. Do you really need tons of closet space for your two suitcases? Will a galley kitchen do since you plan to be eating out a lot?

On the other hand, maybe you always wanted a pool, or an outdoor shower. Then revisit the amount of time you plan to spend at the vacation property to see whether it’s cost effective.

8. Check out the neighbourhood

Once you’ve decided what to buy and where, stay for a few days and look around. You’d be surprised how many people buy from blueprints only to have a rude awakening later.

You may have vacationed in the area before but not really gotten to know anyone. Talk to neighbors and locals. What do they think of the area and what is it like in the off season? Can you walk to cafes and shops? Is this a good fit for your family?

9. Look for hidden costs

Take a look taxes, management and condominium fees. Florida’s Homestead Act means out-of-state residents pay higher municipal taxes than those who live there.

Other things to consider:

•Does the condo association allow rentals? If so under what conditions. Must they be long-term periods of several months or can it be weekly?

•Does the condo association have an adequate reserve fund to pay for future repairs. If not, you could be hit with a special levy once you move in.

•If you are buying in a foreign currency and have a mortgage, you can hedge your risk to avoid currency fluctuations. The most straightforward way is to buy for example, U.S. dollars if you are going to make a purchase down south. This is because you think the Canadian dollar is currently high and may fall in the future. You can park those dollars in the bank until you are ready to make a purchase. But there are also a variety of financial products that allow you to secure today’s rates for a future purchase.

10. Cheap doesn’t always mean bargain

Buying on impulse is probably the worst thing you can do. Just because you’re enjoying your March Break in the sun, step back and consider all the factors. Don’t be blinded by a fire sale price. Do your due diligence.

Originally published on www.moneyville.ca

Camille Jones, CLU

By Camille Jones

Have you wondered where all your money goes at the end of the month? Is it the bills swallowing up all of your income? Or is it eating out, going to the mall, and entertainment habits? The only solution is one we all hate to hear. You know, the B word. A budget.

A budget is an essential element of financial planning. It’s a great tool for not only monitoring finances, but for building better habits and getting your goals under control. The financial rewards of budgeting are great: growing your wealth, building financial confidence and gaining peace of mind.
Here are some basic steps for you to start your monthly budget.

1.    Calculate your TOTAL monthly income
-    List all income sources including salary, commissions, bonuses, business royalties
-    Use after tax amounts

2.    List Expenses
-    Consult your banking statements and list ALL your expenses. Monthly and annual
-    Separate your ‘fixed’ and ‘variable’ expenses
-    Expenses vary so take an average over three to four months
-    Also include your monthly contributions to your RSP or savings

3.    Total and Subtract
-    Total your income and expenses separately to see how much comes in each month and how much goes out
-    Subtract your expenses from your income to determine the amount left to save and invest

**This is an important number because it shows you how successful you are in managing your money. If the figure is small or a minus, you have to work on what ‘variable’ expenses you can reduce.

Use your budget to find ways to increase your savings and investments. How? Consider the following:

4.    Reduce Expenses
-    Identify expenses that can be cut and assist in setting new spending objectives
-    Decide how much you can realistically cut, but don’t go overboard; try cutting back a little at a time. If your goals are overly strict, you’ll never stick to them

5.    Review your Debt
-    How much can you pay down faster?
-    Is there a way to reduce overall interest costs, such as consolidating existing debts or payment plans?

You should consider working an expert financial planner to develop a short-term investment plan. Once your cost-cutting plan is in place, you should review your progress every few months. You may find further opportunities for shaving expenses, and you will most certainly see that you have more money left over to invest for your future!

Call Camille Jones, CLU to get started on your budget today.  647-856-8048

By Camille Jones

With interest rates so low, you may be thinking of taking the big step into home ownership, ‘moving up’ or even refinancing your existing home. If so, knowing what’s what with mortgages can save you money now and in the future. Here’s a mortgage primer to get you going.

Get pre-approved.

Many people want the security of knowing they have a pre-approved mortgage before they go house shopping. Having a preapproved mortgage helps you focus on looking at houses you can afford and provides the security of knowing you meet the financing requirements of the home you are trying to buy.

The down payment decision.

Conventional mortgages do not exceed 80 per cent of the purchase price of a house—you supply the other 20 per cent as a down payment. If you don’t have that kind of cash on hand, you can apply for a high ratio mortgage, but it must be insured through Canada Mortgage and Housing Corporation (CMHC) or GE Mortgage Insurance Canada (GE). In this case, it’s important to keep in mind that you need to pay an insurance premium typically in the range of 1% to 3% of your mortgage amount. This fee may be added to the mortgage amount.

Amortization period.

Amortization is the number of fixed payments or years it takes to repay the entire amount of a mortgage. The traditional amortization period is 25 years, but by making higher monthly payments over a shorter amortization period, you’ll pay off the loan that much faster and save substantially on borrowing
costs.

Accelerated mortgage payment
By making accelerated payments you’ll pay off your mortgage faster. The same is true of lump-sum payments. When you have excess cash, you can use it to reduce the principal amount of your mortgage loan. Most lenders allow a yearly lump-sum prepayment of up to 10 per cent of the original principal amount, and some allow more.

Term
A mortgage term is the period of time for which the money is loaned under the same rate. When the term expires, you have the choice of repaying the balance of the principal still owing or renegotiating your mortgage for a further term at the then current interest rate.

Open or closed—determines how much re-payment flexibility you want.

An open mortgage allows payment of the principal in part or in full at any time without penalty and tends to be for a short term – usually six months
to one year. Since open mortgages offer greater flexibility than closed mortgages, they typically have a higher interest rate. A closed mortgage allows limited prepayment privileges and a penalty usually applies if you repay the loan in full prior to the end of the term. Closed mortgages typically offer a
lower interest rate as compared to open mortgages of similar terms.

Fixed versus variable rate.

With a fixed rate mortgage, you can be certain the interest rate will remain the same for the mortgage term, making it easier to budget. A variable rate
mortgage may deliver a lower initial interest rate, but this will fluctuate from month to month with changes in prevailing market interest rates. The more rates change, the larger the impact on your monthly budget. Don’t jump into a mortgage—take the time to find the right product for your unique situation. We can help you make sound decisions for your life as it is now and as you wish it to be in the future.

To discover the best mortgage solution that best fits your needs, contact Camille Jones, C.L.U at 647  856-8048 or by email at [email protected].

To avoid diving into deeper debt, financial expert Tessa-Marie Shillingford says there are simple steps we can take to reduce financial distress. “Once you have found yourself in debt after the holidays, vacations or other special occasions, you should make a spending plan that lists your income and expenses, including a savings and debt repayment plan,” she says. “It is important that you stick to both plans. I recommend that my clients begin a savings account to take care of the holidays, vacations, and special occasions so that they will not find themselves in the same position again.”

While that solution may work for some, many Canadians choose plastic over paper, only to suffer the consequences later. According to Shillingford, it may be difficult to bounce back after your credit has been compromised, but it’s not impossible. It’s all about changing spending habits to prove to credit grantors that you made a mistake and have changed your ways.

For example, having a savings account and a registered retirement account will allow them to see that you are serious. The best part is you can get either, despite your credit standing. “Then they will take a small chance on you and let you have a small credit card,” Shillingford explains. “It now becomes your responsibility to pay this bill on time, and preferably the balance in full each month.”

The best way to see where you stand credit-wise is through Canada’s two credit report agencies, Equifax Canada and Trans Union Canada. All that’s needed are photocopies of two pieces of I.D., one of which needs to be signed on the back. Once you have mailed in your information and paid the fee, the credit report will be sent to you. Included in it will be your credit score, which can be as high as 900 or as low as 300.

Shillingford advises cardholders to keep it simple when establishing credit. She says the biggest myth about credit is that we need several cards from various companies to build credit. “One credit card is sufficient to let a credit grantor know that you are a good credit risk. The more cards you have, the more of your money you are giving away.”

Shillingford, however, recognizes that this generation is less likely to be as frugal as its parents. “This generation is more educated, but we do not have the village raising the child anymore,” she says. “Instead, we’re bombarded by radio, television and social media sites with very little information on how to save or hold onto our money.”

Despite these challenges, this expert believes that with a little planning and patience, we can all spring forward into financial freedom.

By Mike Holman

The government doesn’t give you much for free, so when they give away money for your child’s post secondary education you should take it.

That’s the number one reason to open a Registered Education Savings Plan (RESP), though not the only one. But having said that, even though the government matches 20 per cent of your annual contribution up to a limit of $500 per child per year, it doesn’t mean that everyone should open an RESP. If your household finances are in poor shape, you don’t have enough retirement savings of your own or you think your child will get more out of it by paying the freight, keep the money in your pocket.

Here are the pros and cons of this great government-sponsored program. The pros first:

1. Free money: Children are eligible for the CESGs (Canadian Education Savings Grant) up until the end of the year in which they turn 17. This grant gives you the $500 per child for a maximum $2,500 a year contribution on your part. That’s a pretty good cash incentive, but the other important part is that by setting the cash aside, you are increasing the odds he or she will participate in post-secondary education by reducing the financial barriers and building a nest egg. An RESP makes it easier on your budget when she is in school.

2. Tax-free compounding: All interest payments, dividends and capital gains earned inside an RESP account are not taxable. This means you get to keep all of the money earned, increasing the amount of money available for your child’s education. If you start the RESP account when your child is young, there will be many years for that investment to grow tax-free.

3. Dedicated savings account: It is a good idea to have a separate savings account for a major financial goal like post-secondary education. If this money were mixed in with other types of savings, it would be easier to spend it on items other than education.

4. Pre-fund a big expense: Some parents find themselves in the situation where their child is attending college or university, and they end up having to funnel a large amount of their budget to pay for the schooling. With a fully funded RESP, there should be little or no financial demands on the parents once the child starts post-secondary education.

5. Save your child from student debt: One alternative to parents paying for a large amount of the education is for the child to apply for student loans. While this strategy isn’t the worst thing in the world, it would be ideal for the student to avoid any debt while in school.

6. Keep your child’s focus on school: I’m a big fan of students working during the summer, but I don’t think they should have to work during the school year. Students should be free to work hard in their studies while also participating in sports or social activities.

The top reason for not starting an RESP is poor finances. If you start an RESP and you have excessive debts or spend more than you make, you might end up cashing in the RESP to pay your bills, defeating the purpose of setting it up. It is important to get control of your finances and fix the here-and-now before worrying about the future.

Here are more reasons for not starting an RESP:

1. Inadequate retirement savings: If you are working full time and don’t have any retirement savings, you are not saving enough. The older you are and the less you’ve saved, the more you should worry about saving for your retirement rather than saving for your child’s education. Your child can borrow to pay for her education, but you can’t borrow for your retirement.

2. No spare saving room: If your finances are in good order but you don’t have any extra money, you obviously can’t make RESP contributions. In this case, you might want to consider trimming your budget in order to free up some money for RESP contributions. Another idea is to look at ways to make extra income so that you can save for your child’s education.

3. Pay-as-they-go funding strategy: One common strategy for parents is to pay down all their debts before the child starts school. Once the child starts post-secondary education, there should be lots of extra cash in the budget to pay for education bills. The drawback of this plan is that you don’t get any of the juicy RESP grant money.

4. You want your child to pay: It is reasonable to ask your child to pay for part of her education. The drawback of this plan is that she might end up not going to school or dropping out if the financial burden is too onerous. If the student works part-time during the school year, her grades could be affected. Alternatively, she might graduate with large student debts.

5. Ineligibility for RESP grants: The last year your child can receive a grant in her RESP is the year she turns 17. However, children who are 16 and 17 are only eligible for grants if they meet certain eligibility requirements. Creating an RESP for a child who is ineligible for the RESP grants has very limited benefits and is likely not worthwhile.

Conclusion

RESPs are an excellent way to fund your child’s education. Make sure your own finances are in good order and then start contributing.

Originally published on moneyville.ca March 31st, 2011

Camille Jones, CLU

By Camille Jones

When creating a financial/investment portfolio, you need to ensure that there are multiple investment buckets available. This is because each bucket has its advantage and disadvantages. The key is to ensure you are increasing each bucket’s advantages and not allowing their disadvantages to erode your capital.

So what are these buckets? They are: Pension/Registered Retirement Savings Plan (RRSP)/non-Registered/Tax Free Savings Account (TFSA).

Not everyone gets the opportunity to have a pension, but if you are one of the lucky ones, take advantage of pensions and join them.  Why not have your employer help you save further income for retirement?

For everyone, else, and including pension recipients, ensure you are maximizing your RRSP contribution room. This not only helps reduce your earned income, but can also provide a tax reduction and in many cases a tax refund that you can use to fund your child’s Registered Education Savings Plan (RESP) or your TFSA.

Did you know that both a pension and a RRSP are 100% taxable when funds are withdrawn, and that is why you need to ensure you have non-registered and TFSA money saved. This is because both these investment buckets are tax “preferred” upon withdrawal.

With non-registered income (from investments that do not solely pay interest income), you are only taxed 50% of your capital growth and zero on the principal portion of any withdrawal, and with the TFSA, the income earned is completely tax-free.

By having all these investment buckets, when you need to withdraw money, you will typically go to your non-registered first, then your TFSA and leave your registered funds to accumulate tax-deferred as long as possible.. When your pension and RRSP mature and you have to start withdrawing income, by having non-registered and TFSA income, you only have to withdraw the minimum required, and thus will not be heavily taxed during your retirement years.

To discover the approach that best fits your needs, contact Camille Jones, C.L.U at 647  856-8048 or by email at [email protected].

Camille Jones, CLU

By Camille Jones

February is Black History month, a month we celebrate our past accomplishments and our future successes in all areas of life. When planning our financial futures, we also need to plan on building generational wealth today and build financial legacies so that the opportunities for our culture to continue to grow remain everlasting.

Generational wealth is defined as passing and building a financial legacy that your future generations can reap the rewards. We all work hard to become financially free in our lifetime, but what about our future generations? Do we want them to have to battle with their finances the way we have or are we also planning on leaving financial legacies that will give them greater opportunities than you had?

To really build wealth, we have to build generational financial success. Generational wealth begins with erasing the “poverty” thinking mindset and replacing it with financial wealth education. We need to start attaching goals and values to the money we earn. To avoid multi-generational poverty, we need to start planning and investing in our future today.

Don’t wait until you are heading into retirement, saving for a home or saving for your child’s education to take advantage of the opportunities to change your financial future. There are a variety of options to invest in that can shape our future generations. Investing should start as soon as you are earning more than $3,500 a year. When you are 18yrs old, you have the opportunity to invest in a Tax-free savings account. One can use this account to build tax-free income for their retirement, a down payment on a home, leaving a legacy, the options are endless, and best part is, the income earned in this account is tax-free. How about investing in your community programs or businesses? We all can make a difference in our financial futures, but it starts with what we do today!

Protecting Generational Wealth

To ensure that the money you are investing remains invested and is not interrupted by any unforeseen deaths or illnesses, you need to invest in a private insurance protection plan. Don’t just rely on your employer’s benefits to protect you and your family, take action into your own hands. Remember, in order to take advantage of your employer’s benefits, you need to ensure that you have a sudden death or illness while employed with them!

There are now options for children to have life and critical illness insurance that not only protects their health, but also has a cash return and investment component at a lower cost.

Do not let an unforeseen illness or death take your legacy away. Protect and invest today.

Camille will be presenting investment options at 156 Duncan Mill rd, Toronto from 2pm-4pm on Sunday February 20^th, as well as, on February 21 and 23 at the Gallery Studio Café, 2877 Lakeshore blvd W 5pm-9pm. Please RSVP at 647-856-8048

Camille Jones, CLU

By Camille Jones

The introduction of the Tax-FreeSavings Account (TFSA) represents the most important change to the way Canadians save money since RRSPs were launched in the late ‘50s. But the big question on many people’s minds is whether they should contribute to a TFSA, the tried-and tested RRSP or possibly even both?

Before shedding some light on their question, let’s first get a firm grasp on some of the innate differences and similarities. First and foremost, both RRSPs and TFSAs provide investors with the opportunity of tax-sheltered compound growth for investments held inside each plan. But unlike an RRSP, contributions to a TFSA are not tax deductible, amounts can be withdrawn tax free at any time and withdrawn amounts are added back into your TFSA contribution room the following year.

Now that we’ve established their unique characteristics, let’s get back to our original question:

Which is best?
On a very basic level, looking at your pre-retirement and expected postretirement marginal tax rates can provide you with an idea how to best allocate your investments. If you expect to be in a lower tax bracket during retirement, contribute to an RRSP is generally more beneficial. However if in retirement you anticipate being in a tax bracket that is equal or higher than your pre-retirement tax rate, the TFSA may be more tax-efficient.

Hold on; not so fast.
Although it’s tempting to settle on a simple rule-of-thumb, the decision on whether you should use a TFSA or RRSP is not that simple – your advisor
needs to work with you to consider the entire spectrum of financial strategies at your disposal that could ultimately impact your approach.  Even if you anticipate having a lower marginal tax rate in retirement, maximizing your RRSP contributions may not always be the most tax-efficient long-term strategy.

Since RRSP withdrawals (directly or through your Registered Retirement Income Fund (RRIF) or an annuity) increase your taxable income, those withdrawals may affect certain government income-tested benefits and credits such as the Old Age Security benefit and the Age Credit.

On the other hand, if your expected marginal tax rate in retirement is equal or higher than during your accumulation years, contributing to your TFSA may not be the best approach either. For example, RRSPs that are converted to a RRIF or an annuity after age 65 can produce income that is eligible for the pension income tax credit, and thus qualifies for pension income splitting with your spouse.

Other income splitting strategies such as the use of spousal RRSPs could effectively distribute a portion of your taxable income to a spouse with a lower marginal tax rate in retirement, further reducing your tax bill and reducing the claw-back effect on your income tested benefits and credits.

So where does this leave us?

Generally speaking, a TFSA may be better suited for shorter-term goals, such as an emergency fund or saving for a major purchase, since there is no tax on withdrawals and these plan withdrawals are added back into your TFSA contribution room the following year. However, for long-term
objectives, RRSPs are generally the vehicle of choice since there are strong incentives to keep your money invested, in the form of taxes and lost
contribution room on the withdrawals from an RRSP.

The TFSA can also be a powerful retirement savings tool. However due to the ease with which TFSA savings can be accessed (no taxes on withdrawals or loss of contribution room) only a disciplined investor who can resist the temptation to dip into their savings prior to retirement will fully benefit from its potential as a source of retirement income.

Remember, there is no one-size-fits all solution. In fact, there are a multitude of variables that must be taken into consideration. In many cases,
the TFSA should be used as a complementary product, along with your RRSPs, as they both have their own advantages. Your personal savings
strategy needs to take into account your unique circumstances as well as your short and long-term objectives.

To discover which approach is best for you, contact Camille Jones, C.L.U at 647  856-8048 or by email at [email protected].

Camille Jones, CLU

By Camille Jones

There’s no doubt about it, making ends meet is tough. And getting ahead? – well, for many Canadians, that’s a desperate dream for tomorrow when every day brings the reality of mortgage payments, car loans, lease payments, large credit card balances, and other demands on your hard won earnings.  Sure, you’d like to start an investment program or add to the small investments you’ve already made, but there just never seems to be anything left over once you’ve taken care of the essentials.

And in a world that runs on credit, it’s too easy to carry too much debt in too many places. If you’re staying awake at nights trying to map a way out of the dreaded debt spiral, to say nothing of stretching your income to cover an investment program that could help you realize your dreams for the future, debt consolidation may be just the ticket.

Debt consolidation can increase your ability to invest
Debt consolidation simply means paying off a number of higher interest rate loans or other high-cost debt by taking out a single loan for a consolidated overall lower monthly payment.  You can choose to consolidate such unsecured debts as medical bills, car payments, education loans, credit card payments or lines of credit – and the benefit is a single, more affordable monthly payment, that is usually much lower than the many monthly payments you were making previously.

It’s an effective way to regain control of your finances, ease your cash management, generate savings and reduce stress – as well as establishing a repayment plan that will move you beyond simply servicing your balances to actually eliminating them.

If you own a home, you can consider consolidating your debt using a home equity loan. Your loan is secured by your home and there’s no doubt you’ll be paying a much lower interest rate than you do on your credit cards which can range from 19 percent to over 28 percent for a retail card. By keeping your amortization period the same, but with a lower interest rate, you’ve created additional cash flow that can be used towards other financial goals.

An easy investment strategy that works
Once you’ve got your debt under control, it’s time to bring discipline and consistency to your investment life.  An easy way to do that – and enjoy long-term investment growth – is through dollar cost averaging. This simply means making regularly scheduled investments for a set amount of dollars. It’s a trouble-free investment plan that delivers some powerful benefits:

1. Your investments are automatic – you choose an amount that is debited from your bank account and invested on your behalf on a regular basis, such as each month.
2. You are free from scrambling to buy lump sum investments at irregular intervals in an attempt to ‘buy low and sell high’, your automated
   investments take place on a regular basis.
3. You are able to acquire a greater number of mutual fund units – when the price is lower and a lesser number when the price is higher.
4. Over the longer term, your average cost per unit may be lower.  Dollar cost averaging is a great way to ramp up your RRSP nest egg – and,
   along with debt consolidation, is one of the many personal financial solutions that can make your dreams for tomorrow realistically achievable through the actions you’re taking today. We can help you gain control of your financial life and improve your prospects for the future.

Camille Jones, CLU specializes in wealth and risk management.  She can be contacted at 647  856-8048 or by email at [email protected].