Back in prehistoric times (i.e. before the advent of online banking), it made sense to do all your banking with one financial institution. After all, if everyone from the friendly teller to the branch manager knew you on a first-name basis, odds are you’d be entitled to a few perks. But in today’s world does it make sense to have all your financial eggs in one basket? Or should you multi-bank?
After the CMHC announcement hit headlines last week, a few lenders changed their guidelines for promotional rates offered. The lenders revealed that the promo rates are no longer offered for conventional mortgages anymore and they are only looking at high-ratio deals. CMHC claimed that their cap wouldn’t affect qualified home buyers nor would it affect the cost of buying a house. Ahemm… the last time I checked, putting LESS money down on a home to qualify for a lower promotional rate, increases the interest payments made over the life of your mortgage, thereby directly affecting the cost of buying a house!
Experts will tell you your debt-to-income ratio is one of the best ways to gauge your financial position. The media often quotes the Bank of Canada saying Canadians are at dangerously high levels of debt at 153 per cent. But what does that mean? I’ve spent dinner parties arguing how to properly calculate debt to income ratios and how much is too much. There are many schools of thought on how to asses your financial health. Here are a few.
The greatest gift you can give your child isn’t an iPad or a new bike – it’s a savings account. That gift could set them up for life… just don’t expect your child to be too thrilled about the idea! Opening that first account is an important milestone for children and should be treated as such.
Financial planning is something many adults struggle with. How is a kid who’s still in kindergarten supposed to understand where money comes from and where it all goes? Well, if you start early enough, you can teach your kids how to manage their money properly, long before they get themselves into real financial trouble as adults.
If only I knew in my twenties, what I now know in my thirties…