Stopping the Big Leaks in your Spending Plan

In an upcoming post I will explain about the turnover to the left. Let me just say it's apple!


There are lots of spots in our spending plans that are hemorrhaging. Places that could easily be closed up. I thought I'd share some. First of all, PMI or Private Mortgage Insurance. I'm not sure if that's the right name for it in Canada, but it's the insurance your bank charges you to insure your mortgage is paid out in the event of you or your spouses death. The trouble with this insurance is that it is much more expensive than straight term, and it doesn't decrease as your mortgage balance goes down. For example: $50,000 costs about $22/month or $264/year. That same $50,000 covering both husband and wife, in straight term costs about $100! Immediately that saves you $164/year!

To read in detail about this here's a link http://www.fin.gc.ca/news08/data/08-051_1e.html . These definitions have been taken directly from this government site.

What is Mortgage Insurance?
Mortgage insurance (which is sometimes called mortgage default insurance) is a credit risk management tool that protects mortgage lenders from losses on mortgage loans. If a borrower defaults on a mortgage, and the proceeds from the foreclosure of the property are insufficient to cover the resulting loss, the lender will submit a claim to the mortgage insurer to recover its losses.
Role of Mortgage Insurance
The law requires federally regulated lenders to obtain mortgage insurance on loans where home buyers make down payments of less than 20 per cent of the purchase price of the home (i.e., high loan-to-value ratio loans). Lenders generally require high-ratio borrowers to pay for the premium for the mortgage insurance, which can be added to the mortgage balance.



Check your mortgage and see if you could save yourself hundreds of dollars every year!



Life Insurance: This again is another area where you can save. I didn't realize how varied the rates were until I took a Good Sense Budgeting course. They suggested I shop around and when I did I immediately saved almost $200/year! While searching the net for a comparison I came upon this website. http://www.lifeinsurancequote.com/ I do not know what they are like, but I do see a Better Business accreditation.

Term Insurance is the best kind to have and experts say you should have enough to cover 10 times your wage. At minimum it is important to cover all your outstanding debts. Every 5 years, as you get older, it gets more expensive. The goal is to pay off debts and eventually not need it.

It's a good idea to keep track of the next increase year and then shop around again. At present we are with Manulife.



Car insurance and House insurance are often cheaper when they are all with the same company. Again it's a good idea to shop around. If your vehicle is older and not worth terribly much maybe you can look at not having collision. Raising you deductible can save you lots, just remember to use your savings to have the deductible saved so that you have it when you need it.

For years we have only insured one vehicle and that has saved us not only in the insurance department, but also in maintenance and repairs. We found ways to make it work, and it meant huge yearly savings.



Bank Accounts: It may not seem like much, but if you are paying bank charges of $15-20/month that's $180-$240 that's slipping out of your pocket! There are lots of free bank accounts out there! http://www.redflagdeals.com/ has some links to banks offering free accounts. https://www.citizensbank.ca/Personal/Products/BankAccounts/GlobalChequing/

At President's Choice they have free chequing and savings plus if you deposit money before Nov 30/08 you get 3.75% interest. Here's the link http://www.banking.pcfinancial.ca/a/rates/rateOffer.page?WT.mc_id=rateoffer2008

Royal Bank has a savings account deal right now. Put $500 into a savings account by Nov 30th and get $25! www.rbcroyalbank.com/savemore

To see a list rating the banks and their charges go to the link below, it's an awesome many page document doing an in depth comparison of all the banks out there. http://www.redflagdeals.com/deals/main.php/articles/savings1/



Gas: Vehicle fuel is falling at present and that sure helps the pocket book! Did you know you can find prices for your city or any city your going to visit, Canada or USA? Just go to http://www.gasbuddy.com/ . They have a fuel logbook(free) that you can use to track your purchases for the year. This can really help you to determine how much to allot to your monthly gas spending. If you want a permanent record remember to print it before the end of the year as it resets. It also will tell you your vehicles gas mileage and has tips to reducing your fuel consumption. We use it whenever we are going out of town and find the price variances quite large! In Edmonton I used it a lot because there were more price differences from area to area.



Internet: For years we used Netzero for our Internet. It was a free limited dial up service provider. At present we use Shaw as we have to have a high speed connection for our home learning. I recently learned that you can get your rates lowered when the competition has a special deal. Not long ago Telus offered a discounted rate for 6 months(plus one month free) I called Shaw and they matched it! If you are interested in free Canadian Internet(or less expensive anyway) here's the link. http://freeinternetaccess.home.att.net/canada-free-isp.html?gclid=CInKj9jP8pYCFQQCagoduHZlXw



Cable: This is one expense that is sometimes a touchy subject. Cable isn't a necessity( sorry I know that it feels like it is) and if you are really struggling financially consider cancelling it or even going down a package size. On average cable costs $50/month. That's $600/year! We have lived without cable for many many years and I don't think we are suffering. Look closely at the different packages and bundles to see how you could lower this.



Phone: Having a land line is pricey, but there are ways around it. We switched to Internet phone shortly after we moved to B.C. and it has been a good move! We pay $33.60/month and get all the calling features, call answer(which can also be retrieved online as well as from the phone), call waiting call display, call forward, etc.. Unlimited long distance in Canada, the USA and lots of other countries. Now of course to have Internet phone you have to have a high speed connection. The regular price is $39.95/month but we pay once a year, thus the extra savings. Our land line before was $42.00 with only 3 features and no long distance. If you want to try it they offer a free month. Email me to get your free trial, I'll send you the referral link.



Cell: There are lots of companies out there offering all sorts of different options. First, figure out why you need a cell. If you don't actually need one don't bother. If you do figure out which features you need, how many minutes a month, free incoming or not, long distance or not. Then shop around. I recently changed companies and saved myself a bundle! I searched online and found the company that seemed to have what I needed, then I visited some of their stores when I was in the area. I ended up finding the best deal at Costco, they have a kiosk in the store. Be cautious about signing for a long period of time if you think your needs might change.

Please be aware that I am a fellow consumer like you, not an expert. Be sure to check into your insurances and such carefully before changing anything.

I'd love to learn all the things you do to save in these or any other areas! Happy Saving!!! Sue