Giving my opinion that the were basically being “ripped off” (both have an excellent insurance plan through work) they canceled this overpriced insurance after shaking their heads at the money they had spent on it in the last few years. Both are now making an effort to pay off their cards and keep them paid off.

One of the same guys sent me a text message the other morning excited that he had called one of his credit card companies and got his rate reduced from 18.99% to 11.99%. On a $10,000 balance this is a savings of over $700 a year.

After this first phone call he proceeded to call his other credit card company to see if he could get this rate lowered as well. He did not have the same luck getting his rate lowered from 11.99% but they did offer him a balance transfer at a rate of 3.99% for six months.

After this second phone call he proceeded transfer his $10,000 balance to the second card. This will save him $750 dollars in interest over the next six months. In addition to the savings, he realized his entire credit card balance was now showing up on his online banking statement. This became a psychological factor as he now wants to get this card paid off having the statement as a constant reminder!

Twenty minutes on the phone saved him $750! I call that free money!

Most people are aware that if you contribute to an RRSP you should see a tax refund in the spring.   The bad news is the C.C.R.A. has held onto your money for the whole year and then given it back to you without interest. The math does not work out in your favour. The good news is it doesn’t have to be that way.

You can go to your Human Resources department and ask to fill out form T1213 Request to Reduce Tax Deductions at Source. For example let’s say that you are contributing $600 per month to an RRSP and every spring you get a tax refund of $2,400 as a direct result of your monthly RRSP contributions. That refund is great, but the C.C.R.A. has owed you a little bit of that money every month. Once you fill out the form you will now see an extra $200 monthly on your pay cheque . Unfortunately you will not get a refund in the spring.  The C.C.R.A. will take your monthly RRSP contribution into account and tax you less.  You have your money now!  What good does this do you?  Well, now instead of a $2,400 lump sum mortgage payment in the spring you can increase your monthly payments by $200.  It makes a big difference.

A $250,000 mortgage at 6% with monthly payments of $1,487 has an original amortization period of 30 years. Add the $2,400 prepayment every spring and you save $81,634 in interest costs and your house is paid for in 22.5 years. Not a bad deal at all.

If you don’t make a $2,400 prepayment every spring and instead increase your monthly payment by $200 you will save $84,620 in interest and have your house paid for in 22.33 years. For about an hour of your time you have saved just under $3,000.

I believe that the little things make the difference and this little rearrangement of your finances will help you pay off your mortgage faster, save you money, and help you be debt free faster!