According to a survey released last week by ComFree, 40 per cent of Canadians are very hesitant to talk about their personal financial situation because it isn’t ‘polite,’ especially when it comes to home ownership.
The majority stated that they’d prefer to maintain their current outward perception of net worth. Sadly, keeping up with the Joneses is one of the major reasons Canadians wind up house poor.
Home poverty is when after paying a mortgage and household bills, there’s little money left over for other things like groceries, RRSP contributions, home maintenance, car repairs and vacations.
To get out of it, home owners must increase their cash flow by cutting back spending.
If you’re running a negative bank balance for more than three months because of your home, you’re in financial trouble and must make major cash-flow adjustments.
March over to the bank immediately and consolidate your loans and credit cards to take advantage of low interest rates and more affordable monthly repayment options.
Cancel unnecessary monthly expenses like club or gym memberships, dinners out, souped-up cellphone and cable packages, iTune downloads and nail/hair appointments.
If you’re guilty of splurging on your kids, stop and explain to them that you need to save money. Get a roommate and lease out your parking stall. If you’ve got two vehicles, sell one and share the other with your partner, or get rid of your car permanently.
If you can’t get out of the red, you may need to sell your home, buy a smaller more affordable one, or rent for a while.
The top three ways to save major money when selling a home are to price it correctly, negotiate to maximize the home’s value and consider selling through a commission-free listing service like ComFree.
And the top three ways to save major money when buying a home are to recognize a good deal, buy within your means, and use a mortgage broker to get a rock-bottom interest rate.
Politeness and maintaining a perception of wealth have no place in healthy personal finances.
By talking about our finances and getting advice from qualified professionals, Canadians can be more realistic about building their net worth, which includes affordable home ownership.
