September 24th, 2014 → 2:39 pm @ MacDev Financial Group| Stephen Devlin // No Comments
The authors of the recent Finance Canada Study reported a troubling statistic about Canadian households: Most of them are in debt. In fact, a large portion of middle-income families are spending more than they earn. What if you could get out from under debt and use the money you’ve been spending on interest to fund it?
That is exactly what we did years ago. We were $500,000 in debt due to a house purchase, car purchase, and credit cards, and foolishly tried to use cash to get out of debt. But we were paying interest to everyone but ourselves! Then we found Pamela Yellen’s book, Bank On Yourself, and our financial situation quickly changed.
Here are a few ideas on how to reduce your spending, get out of debt, and enjoy doing it.
Don’t shred your credit cards – wrap them. Bank On Yourself maven, Pamela Yellen, wraps her credit cards in paper on which she’s written her goals. Every time she takes out a credit card, she decides whether the purchase is more important than her goal.
Find what really makes you happy (and it’s probably not more stuff). Often, we buy things to fill an emotional need, not an actual need. If emotional spending is your downfall, then find something that works even better, like spending more time with your friends and loved ones.
Practice gratitude. A recent study published in Psychological Science shows that people who reflect on gratitude are better able to save money and reduce impulse spending by 12 percent. If you want to be more financially disciplined, it may be as easy as counting your blessings.
Concentrate on getting out of debt first. Break down your debts based on principle amount and interest rate to determine which to pay off first, then pay off one at a time. As you knock each one off, use the money you’d normally funnel towards paying off interest and put it into an investment that will grow tax-free over time, like…
Dividend-paying whole life insurance. You’ll never have to get into debt again when you put your money into dividend-paying whole life insurance. When you need to make an expensive purchase, you’ll be able to borrow from yourself and pay yourself back with interest – growing your tax-free savings the entire time.
You don’t need a lot of money to open a dividend-paying whole life insurance policy. Some plans are funded with just $250 per month, and you’re probably hemorrhaging more money than that to cover your debts right now. Ask us how, with just a few alterations to your finances, you can get out of debt and make sure you never find yourself in debt again. Buy a car, fund your child’s university education, even buy a house, and with every purchase, your money won’t drain away into someone else’s pocket – it will grow. That is the magic of the Bank On Yourself concept, and we would love to share it with you.
Tags: CPA, Financial Advice, retirement advice, retirement information, Tax Advice, Tax Information, Tax Tips
