A famous proverb said: “Money saved is as good as money gained.” Unfortunately, the average Canadian socks away less and less savings every year, with many of us spending beyond our means.
It is estimated that the average person only saves about 2 to 3 percent of their take-home pay each year (which is a paltry amount compared to the interest we pay on our debts!). Those pesky credit cards can cost you upwards of 20 percent (or more, depending on the type of card you own) in interest paid. Over time that REALLY adds up.
So before you can start saving for your retirement, you need to do two things.
First, you need to balance your monthly budget and second, you need to reduce the amount of interest you’re paying (so that the interest saved can go towards saving). If you’re in a position where you have not been able to reduce your debts because interest rates are too high, then you need to look at what options are available to you.
My recommendation is: Think about your retirement and then take the first major step to eliminate your debts and become debt free.
But how does someone become debt free?
If you’re struggling to pay down the debts in your life and want a structured, protective solution that will keep you out of bankruptcy and protect your assets at the same time, consider a Consumer Proposal with A.Farber and Partners. This government-sanctioned settlement offer, administered by a Licensed Insolvency Trustee, will provide you with one low monthly payment over a specific period of time.
The result? A dissolution of your debts. No more interest. No more collection agencies. No more worries.
Once you are truly debt-free (and I am speaking here primarily of credit cards, lines of credit and other unsecured types of debts – not your mortgage or car loan), you can begin to implement a true savings program. Start with a simple TFSA (tax free savings) account, and then add a RRSP retirement savings program.
All of that money you’d been throwing away on debt repayment will now be directed towards income growth. And a happier, healthier future.