End of the mortage - The day I felt a whole new freedom

End of the mortage - The day I felt a whole new freedom (2 min 13 s)

Added on May 12, 2015

Description

The day we make our last mortgage payment is one of the most important in our financial life. We no longer have to budget for it. It may be tempting to just spend this extra money on things we donít need. So how do we use it wisely?

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End of the mortage - The day I felt a whole new freedom (2 min 13 s)

Added on May 12, 2015

Hello!

There's one day in our lives that we greet with both a sigh of relief and a huge sense of accomplishment, it's the day we make our last mortgage payment! I can tell you agree, I can feel it!

After 15, 20 and even 25 years, you've suddenly paid it all off; you no longer have to budget for it - it almost feels like you've won the lottery. And to some extent you have!

But what will you do with that money? How will you deal with that new-found freedom?

You may be tempted not to do anything at all, and just take advantage of the extra cash. But you can bet you'll spend it on things you don't need. That's what often happens when you don't set money aside to save for something. Unfortunately, unnecessary spending stops us from carrying out future projects.

Have you ever heard of forced savings? I know, it sounds painful, but it really doesn't hurt at all. You actually can't feel a thing! It's simply a matter of taking an expense and forcing it into a savings plan.

It actually gives you an even greater sense of freedom.

Let me give you an example. A friend of mine was telling me that once their mortgage was paid off, she and her husband immediately asked to meet with their advisor. They knew that if they didn't put away the money in some form of forced savings, they'd spend it. With the help of their advisor, they developed a plan that took into account their new financial situation. So they've been able to maximize the impact in the medium and long term while also treating themselves to a little extra cash.

Say your mortgage payment was $1,000 a month. If you invest that amount in your RRSP, you'll save $12,000 in one year. You'll also be getting a tax break and maybe even a tax refund! That means extra savings AND, maybe, a little extra cash for a special treat. It makes sense, right?

And if you've already maximized your RRSP contributions, or if you have other short-term projects, put the money in a TFSA - it's a smart way to grow your investments tax-free!

If your mortgage payments are finally drawing to an end, free yourself up to save for today and plan for tomorrow. Call your advisor! It's the perfect time to update your financial plan. Give yourself the means to fulfill your ambitions.

On that note, if you have questions, please email me at the address you see on your screen.

See you soon!