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Mortgage payments or rent up?

A check list to find savings elsewhere

If your mortgage has renewed at a higher rate and you're looking to save money in other areas of your finances, there are several places you can consider:

Making money is not easy, and keeping it is even harder. The world is designed to make you part with it. It takes care and attention to avoid death by a thousand cuts when it comes to budgeting. Here is a list of some areas that need regular attention.

  1. Budget Review: Examine your monthly budget to identify areas where you can cut back on expenses. This might include reducing discretionary spending, eliminating non-essential subscriptions, or finding more cost-effective alternatives for services you use regularly. If your children are old enough, involve them in parts of the process, enlisting them in the family team to be good money managers. Help them achieve agency and avoid being fad or fashion victims.
  2. Reduce Utility Bills: Look for ways to lower your utility bills. This could involve improving energy efficiency in your home (e.g., upgrading insulation, sealing drafts, using energy-efficient appliances, switching to a heat pump) or simply being more mindful of water and electricity usage. There may be lights in laundry rooms and closets that could benefit from having a timer. Bonus, you are reducing energy demand which is good for the environment.
  3. Shop for Insurance: Review your insurance policies (auto, home, health, etc.) and shop around for better rates. You may find that switching insurance providers, adjusting coverage levels or raising deductibles can lead to significant savings. (See #11, emergency fund, to make sure those deductibles don't create a new problem in the event of a claim.)
  4. Consolidate Debt: If you have high-interest debt (e.g., credit card debt), consider consolidating it into a lower-interest loan, such as a personal loan or a home equity line of credit (HELOC). This can help reduce your overall interest payments and cash outlays. 
  5. Cut Transportation Costs: If you have multiple vehicles, consider downsizing to save on maintenance, insurance, and fuel costs. Alternatively, explore public transportation, carpooling, or biking if it's feasible. Even reducing driving a little will add up, as per kilometre operating costs and depreciation are more than you might think. Oakville Transit is now free for students and seniors.
  6. Review Subscription Services: Take a close look at your subscription services, including streaming, cable TV, gym memberships, and subscriptions. Cancel those you no longer use, or consider sharing some services with family or friends to split the costs. Don't cut back on Oakville News, though...we can't survive without YOUR subscription!
  7. Meal Planning: Eating out less and planning meals at home can lead to significant savings on food expenses. Create a grocery list, shop strategically, and minimize food waste. This one has another benefit for the environment, as food waste is a significant contributor to emissions. Try to buy food only with a plan for its consumption, not just to make sure the cupboards and fridge are full.
  8. Little traps: Our consumer society is designed to separate you from your money. Businesses work really hard at convincing you of needs you managed fine without for years. A little work on your part can keep more of that money for you. For just one example, double-edged razors still exist and work fine (they are better than they used to be, and there is even an excellent Canadian one). They cost a little more to buy, but the per shave cost is much lower than a five-blade razor with a Teflon strip. A significant part of the grocery and drugstore spending we all do is not food, and those items really need a second look: lots of cleaning supplies can be replaced with vinegar and water. Here's just one link to DIY cleaning supplies that save money. The same applies to personal care products, which add up. An internet search for how to replace regular expense items like paper towels can produce surprising results. All of these things are multiplied by the number of people in the house, and many of them have environmental side benefits too.
  9. Negotiate Bills: Contact your service providers (cable, internet, cell phone) and negotiate for better rates or explore cheaper plans that meet your needs. 
  10. Audit: Your credit card bill and bank statements frequently for recurring charges: you may find a service contract or extended warranty on an appliance you don't have any more or a charge that was inadvertently applied twice.
  11. Emergency Fund: Building an emergency fund can prevent you from going into debt when unexpected expenses arise. Having savings readily available can save you money in the long run. Take a little off the paycheque and stash it in a separate account every month as if it had never existed.
  12. Retirement Contributions: While it's essential to continue saving for retirement, review your contributions to make sure they align with your current financial situation. You might temporarily reduce contributions to free up more cash for immediate needs, with a plan to top them back up if other costs come under control or income increases later.
  13. Tax Planning: Consult a tax professional to ensure you're taking advantage of all available tax deductions and credits, which can reduce your overall tax liability.

Remember that every financial situation is unique, and the strategies you choose should align with your specific goals and circumstances. Creating a comprehensive financial plan and working with a financial advisor can also be valuable in finding ways to save money and improve your financial outlook. We don't know what will happen to interest rates next, or when, so prudent spending and careful money management are key to keeping financial stress from affecting your happiness and relationships.