FINancial Literacy And Beyond

Comments are made all the time that all you have to do is pay down debt and make additional principal payments on your mortgage and you will have a major component of retirement achieved.  Well.. we all know it is probably good advice. We have to ask ourselves why advice alone doesn’t work and we need to understand human behaviour.

Giving people the advice that all you have to do is make additional principal payments is like telling the over 60% of the North American population that are overweight all you have to do is eat less and exercise more.

Anyone that’s been struggling with weight their whole life understands that concept but still struggles with weight. The people that succeed use a structured and organized system to loss the weight. That’s why companies like Jenny Craig made close to a billion in sales last year. They understand that that systems work and it’s more than just advice it’s about planning, having the tools and a tracking system.

Imagine if you will two people going on a week long boating trip from point A to B. The only difference is one person has a GSP navigation system and the other is using memory. The one using memory may not reach their destination at all and if they do it would have cost them more in fuel and time much than the person using the GSP system.

WE HELP YOU WITH A PLAN AND IMPLEMENTATION!!

THE PLAN – In order to succeed we need a plan of attack, the tools and a system to track our progress. Without this it’s wishful thinking that we’ll reach our goals. Statistics show that 97% of people with mortgages know that if you make extra principal payments you can pay off your mortgage faster yet only 3% work on systematically pay off their mortgage faster. We help you understand if it is a good idea and how to do this.  WE LOOK AT ALL DEBT because before paying extra on your mortgage, you need to see if it is a better strategy to pay off OTHER DEBT first. 

THE ACTION:  

Here’s some of the questions we ask in order to determine the best strategies moving forward to best serve you.

1. Do you have a savings fund that can be used for emergencies and how much?

a) If the savings is more than $1000.00 then we can skip the emergency fund part one and go right to paying off the consumer debt.

b) If the savings fund is 3 to 6 months of operating costs then you have the option of borrowing from yourself interest free or using a LOC debt swapping technique to power down your mortgage.

c) If the savings is less than $1000.00 then we would suggest building the savings account up to at least $1000.00 short term. We would advance to emergency fund part one procedure next.

d) If you have no consumer debt and no emergency fund then we would suggest building up the emergency fund before going after the mortgage right away. We would advance to the Score Card.

e)  If you have no consumer debt and have an emergency fund of 3 to 6 months then the next step would be to go after paying off the mortgage in record time.

 

The goal is to have money serve you instead of you serving money!!

 

Other questions  -- Are you finding you keep paying off debt (by adding debt to your mortgage) and then end up in the same place again?  We may want to look at other ideas on how to help you make a difference in finding why money isn't serving your life and your true wealth.  A Certified Financial Coach has many tools to help you.