Now that we’re already half way through the month of January, it’s a good time to ask yourself how those New Year’s resolutions are coming along. It’s funny how quickly we can forget a commitment we made only a few weeks ago.

If you were one of many that decided to get your personal finances in order this year, here are a few tips to help get you started.

Manage your mortgage

A mortgage will likely be the largest debt you take on during your life time. It should not be entered into lightly and it is not a loan that you should have a passive relationship with. By actively managing your mortgage, you can save money and become debt free faster.

Current mortgage rates are near all time lows. If you’re locked into a fixed rate, find out what the penalty would be for you to get out of it. If you don’t have much time left on your fixed rate, it might make sense for you to pay the penalty so you can secure a lower rate. For more advice on this, it’s best to speak to a licensed mortgage specialist.

If you’re up for renewal, don’t just sign on again with your existing lender. Compare the market to find the best mortgage rates for your personal situation. It may not be convenient to change lenders, but ask yourself if the extra paper work is worth the cost savings over the life of your loan. Typically, only a few basis points on a rate will make a big difference.

Mortgage rates are sure to increase when interest rates start going up in the middle of 2010, so make sure you’re taking advantage of the cost savings that are available now.

Don’t get complacent about your car insurance

Just because you’ve had a car insurance policy with the same insurer for years, doesn’t mean that you’re getting the best rate. It’s not very often that companies reward loyal customers with lower rates; in fact, it tends to be the other way around. If you’re too comfortable, chances are you’re paying too much.

When it comes to renewing this year, make sure you compare car insurance quotes. Thanks to the internet and comparison websites it’s easy to find the best policy for you at the lowest rate.

Take another look at your bank account

What service fees are you paying each month for access to your own money? Even $10 a month can quickly add up to a lot of cash over a few years. Ask your bank manager about online banking options which tend to have lower service charges.

Or maybe it’s time to make the move to a ‘Free’ bank like PC Financial? If you’re willing to give up the perks of having loads of bank branches around and face to face interaction with bank tellers, then this type of service might be for you.

Also, if you often get stuck with overdraft fees, maybe it’s time to negotiate a line of credit that has an acceptable interest rate. Just remember that a line of credit is similar to a credit card – it’s NOT free money.

Make your credit card work for you

A recent survey conducted on RateSupermarket.ca asked visitors ‘how many times have you switched credit cards in the past 5 years?’. It’s not surprising that over 40% of respondents answered never.

The credit card that you signed up for when you were a university student, or fresh out of school, probably isn’t the card that you want to keep in your wallet in case of an emergency. Typically these cards charge incredibly high interest rates and offer little in terms of benefits such as points or AirMiles.

If you’ve had the same credit card for a while maybe it’s time to take a look at the other options available and find a card that suits your lifestyle and gives you the rewards you deserve.

Also, if you often forget to pay your credit card balance each month and get stuck with painful interest charges, take a look at how online banking can help save you some stress. You can easily set up an automatic payment from your bank account to your credit card each month, so you don’t get stuck with those interest fees.

Get the right peace of mind

It’s shocking the number of home owners who opt for mortgage insurance over life insurance, when their lender tells them they need to secure their mortgage.

Few people understand the differences between mortgage insurance and life insurance, so they think the natural choice for securing a mortgage is mortgage insurance – seems obvious, right?

Wrong. Mortgage insurance could cost you more money and provide you with fewer benefits than a life insurance product would.

Firstly, customers forget to shop around for mortgage insurance. Lenders simply offer you whatever insurance product their institution offers, without regard to price.

Secondly, Mortgage insurance is known as decreasing term insurance. As you pay off your mortgage the coverage you would receive from your mortgage insurance also decreases – but your premiums stay the same!

And finally, mortgage insurance normally lasts as long as the ‘term’ of the mortgage, not the length of the amortization period of the mortgage. So if you’re on a 5 year fixed rate, after 5 years you will need to renegotiate your mortgage insurance again. At that time, your personal situation may have changed and you might no longer qualify for mortgage insurance.

Instead of opting for your lenders mortgage insurance, compare life insurance quotes and speak to a licensed life insurance broker about term life insurance. A broker can easily shop the market to find you the lowest rate. Plus, with a life insurance product the coverage remains constant, even as you pay down your mortgage debt, and your premiums stay the same.

Be smart in 2010

If you’re anything like the majority of most Canadians, I’m sure you’ve found that life can get really busy at times. It may not be convenient to regularly review how you spend every penny, but if 2010 is going to be the year that you get your personal finances in order then you need to start somewhere. Compare the market to make sure you’re getting the best rates on your mortgage, car insurance, utilities, mobile phone, etc, and switch lenders if you’re not. Switching can be a pain, but it can also save you money.

Let’s make 2010 the year that you stop giving away your hard earned money to big companies that aren’t offering you the best product or service.

Kelly
PR@RateSupermarket.ca

Related posts:

1. 2010 Will Be the Year of Well Informed Consumers
2. Mortgage Brokers in Canada: Their Role To Compare and Get You the Best Mortgage Rates
3. Mortgage Rates Canada – Compare Mortgage Rates in Toronto, Calgary, Vancouver and Montreal at The Rate Supermarket
4. RateSupermarket.ca’s Expert Mortgage Panel Divided but Consensus Expects Rates to Remain Low in Early 2010
5. Are Mortgage Rates Heading Lower in February 2010?