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How to Get Your Finances Back On Track by New Years

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We all know that the Christmas and holiday season can be financially stressful… especially for those trying to save for a downpayment while simultaneously shopping for friends, family and loved ones.

But attaining and maintaining a credit score of 620 and higher can ease the blow and have you sailing into 2016 with financial stability and confidence. If you’re thinking of applying for a mortgage pre-approval this coming spring, here are 12 steps you can follow to secure the best interest rates and loan terms.

On the first day of Christmas my broker gave to me…

… one tip about placing a credit freeze on my reports.

TransUnion and Equifax offer consumers a security option that prevents the release of your credit report without your consent. This helps protect you against fraud and leaks of your personal and financial information. The only thing to note is that it may delay your approval for a mortgage application- so buyers who are benefiting from the service need to think ahead when it comes to their deadlines and delays.

On the second day of Christmas, my broker gave to me…

two links to check my credit score for free.
1 and 2. Request the reports by post rather than email and they won’t cost you a cent.

Checking your credit score on a regular basis is a crucial step to financial success. Read more about this point here.

On the third day of Christmas my broker gave to me…

… three credit card payments made early.

Early payments help improve your credit score because they break down the amount of interest on your debt. Making early payments also helps you stay within your means when it comes to your christmas shopping.

On the fourth day of Christmas my broker gave to me…

… four hours of counselling with a credit advisor. 

If you’ve really messed up your credit score in the past, booking an appointment with a credit councilor can work wonders towards getting you back on track and helping you understand what went wrong. Here are some local services you can call: Services Crédit Conseil (English site | French site) has been helping consumers consolidate their debt payments through their non-profit debt management program for over 20 years. The Canadian Association of Credit Counsilling is another certified  resource you can learn from.

On the fifth day of Christmas my broker gave to me…

… five factors that determine my credit score. 

Understanding the five factors that determine a credit score and the way it is measured will doubtlessly help you manage your own finances.

These factors are: payment history (35%), debt and credit utilization (30%), length of credit history (15%), new accounts and inquiries (10%), and diversification (10%).

On the sixth day of Christmas my broker gave to me…

… a tip about having six-months worth of savings

Any first time buyer should keep themselves an emergency fund of 6 months for security against unexpected happenings. Unemployment, increased cost of living, medical emergencies, and home or auto damage can cause huge credit issues if you’ve just taken out a mortgage and you have nothing in the reserve fund.

On the seventh day of Christmas my broker gave to me…

… A 7 day budget planner to help me keep track of my weekly household finances.

Request our printable template by sending us a message on the contact form below. Or, create your own template on excel or pages and stick to it! When doing your weekly book-keeping, remember the Gross Debt Service (GDS) Ratio. No more than 30% to 32% of your gross annual income should go to “mortgage expenses”-principal, interest, property taxes and heating costs (plus fees for condominium maintenance). Knowing your weekly expenditures thoroughly will help you decide whether you have a spare 30% to allot to a mortgage.

On the eighth day of Christmas my broker gave to me…

… a list of eight free apps to track my spending and budgeting.

Keep forgetting to pay your bills on time? There’s an app for that. Or eight.

Try Mint, YNAB, WallyDollarbird, BillguardWalletGoogle Wallet, or Monefy.

On the ninth day of Christmas my broker gave to me…

… nine thousand dollars saved by letting go of your car. 

$9,122 is how much it costs on average to drive a typical sedan in Canada. Ridesharing, taking public transportation, or sharing a car as a couple is one of the best ways to fatten up your savings account if you plan on buying a home in 2016.

On the 10th day of Christmas my broker gave to me…

… Top 10 free things to do in Montreal this winter. 

Instead of spending your hard earned money on bar nights, cinema tickets and concerts this winter, look out for the scores of free cultural and community events that Montreal has to offer. Here are 10 of them: Visit the free Christmas Markets (St Henri Christmas market or the Nutcracker Market), go ice skating in Old Montreal, Catch the fireworks on Jacque Cartier bridge or the light shows in Old Montreal, visit the free permanent and discover collections at the Museum of Fine Arts, learn about New France holiday traditions at the free Chateau Ramezey Christmas celebrations, watch an open air cinema screening at Montreal en Fetes, browse through the eco-friendly and sustainable Christmas fair at the Botanical Gardens, warm your heart by volunteering at a local charity, attend the Mt Royal Christmas parade, and go to the free talks and concerts and the Segal centre for performing arts.

On the 11h day of Christmas my broker gave to me…

… a link to 11 great calculators to use to get out of debt.

Knowing how long it’ll take to clear your debt will help you face your financial obligations in a disciplined and manageable way. It’s a great way of adjusting your budget to best meet your financial goals.

On the 12th day of Christmas my broker gave to me…

… a year’s subscription to a credit reporting service that guards against identity theft.

Stolen identity can lead to massive problems when it comes to debt and homeownership. Protect yourself by finding out about Equifax Canada’s identity theft insurance.

And lastly, when your finances are whipped back into shape, lock in a low interest rate while you start looking for your dream home!

Happy holidays!

 

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