Smart tips

As the title of the blog suggests, I like to find good tips or things of interest to help you save money. Here are some things that have worked for me (practice what you preach!).

• Never pay the minimum payment. If I paid the minimum payment on my student loans, I'd still be paying them off when my kids started university. Ditto credit cards - if you have a $5000 balance (and don't spend any more on it) at 10% interest and are paying the minimum payment of $54/month, it will take about 15 years to pay off and end up costing over $9,600!
• Negotiate your interest rate for your credit card. And not just for balance transfers (those 1.9% promotions that you need to pay off within 6 months or the interest jumps to over 20%). I'm talking about a permanent rate reduction. This only works if you're not drowning in debt, don't have a rewards card and have a good credit record.
  

1. Pay off your credit card in full.
2. Call the credit card company and ask to speak to a supervisor. Why? It's about possibly canceling your card.
3. Tell supervisor you've got a better rate on your other card or you've been offered a better rate with a competitor. Be honest - know your stuff.
4. Ask for a matching rate or for your interest rate to be slashed.

• Pay off your mortgage faster (or loan or credit card). Increase the frequency of your payments: A $200,000 mortgage at 5% over 25 years can be reduced to just over 21 years by paying bi-weekly and increasing the min. payment. Use your tax refund to put lump sum payments on your mortgage to accelerate the payoff.
• Keep your money in your pocket, instead of the government's. Being self-employed I currently have the option of keeping all my hard-earned cash all year and paying it the following April. Do I like writing a cheque to the Receiver General for thousands of dollars? Of course not. Do I like the fact that I have thousands of dollars throughout the year to earn me money? Yes. How can you do the same?

1. Ask your employer to adjust the amount of tax being deducted. You need a reason for this: school, RRSP contributions, etc.
2. Contribute to a Group RRSP (and encourage your employer to get one if you don't). By using pre-tax income to put in your RRSP you see less of a difference on your paycheque. In other words, instead of you taking $100 from your pay and putting it into an RRSP, your employer deducts $85 from your paycheque (this amount varies depending on your marginal tax rate, but you get the point). If your employer does RRSP matching that equals free money. And since it doesn't grow on trees, take the free money!