1. Identify Your Key Goals.

Before making a reliable financial plan, you must figure out your goals – including personal goals and financial goals. Common financial goals are preparing for retirement, paying tuition fee, buying a house, leaving a legacy for a beneficiary, or setting up emergency account for unexpected expenses.

• Grab a piece of paper and write down your goals. Don’t afraid to be a little bit creative!

2. Your goals should be precise.

Make sure your goals are in line with SMART principles, that is, specific, measurable, attainable, realistic, and timely.

•  For example, you may not have a deposit at the moment, and you set up a goal to save more money. Saving money is an excellent goal. But simply “saving money’ is too broad and vague. If, instead, you change your goal to deposit 5% of your monthly income, then your goal is not only specific but also measurable (you can easily know whether your goal is achieved or not). It is achievable within a reasonable time frame.
• Grab another piece of paper and rewrite your goals now. You do so to ensure that you keep your goals in mind and this will urge you to take responsibility of your goals. It’s a good idea to specify the goals you have just written down to short -term goals, medium-term goals, and long-term goals to establish a good management system of your own.

3. Determine the amount you need to achieve your main goal.

To ensure that your financial plan is effective, quantifying your goals is very important. Which is to say, set a specific target and convert it into numbers.

• For example, a common financial goal is to retire at 60 or 65. A lot of people think that it is enough the make retirement income reach 70% to 80% of the current income they have. Some suggest that a safer estimation should be 50% to 60% of the couple’s combined income and 60% to 70% if you are single.
•  At this point, you may be overwhelmed by all sorts of information with different sayings. It’s fine. Financial goals vary from person to person. Carefully analyze your needs and set up the goals is the only way to customize successful financial planning for yourself.

• Go for a walk in Assiniboine Park and enjoy Valentine specials at the Park Cafe with live music performance.
• Book a staycation. Spend the evening at a hotel with phones turned off.
• Enjoy horse-drawn sleigh rides along Fort Whyte and enjoy for a three-course dinner in the scenic setting.
• Sit back and watch classic love movies on Netflix with drinks and popcorn.
• Feast on a five-course dinner under the salt-water aquarium at Club Regent Casino.
• Prepare flowers and dinner at home. Chocolate fondue is the perfect surprise for desert lover.
• Spend the day relaxing at Thermea Spa. Try the Nordic baths and Finnish sauna and get rid of all the stress.
• Buy your loved one a piece of jewelry or one electronics.
• Love going out? Consider tickets to a concert, show or simply impress with a restaurant they love.
• Love to be pampered? You can’t go wrong with day spa packages, couples retreats or a surprise shopping spree!
• Love to escape? Why not hit the road or grab a cheap flight and discover somewhere new together?
• Chocolate is a typical gift but we don’t want to strike it off the list completely. Get creative and go for something a little different to suit your personalities, like a chocolate bouquet, a chocolate tasting tour
• Last but not least, impress your special one with luxury designer shoes, handbags, watches on this special day!

Here are some more ideas to celebrate Valentine’s Day in Winnipeg with your special someone. See them at: https://www.todocanada.ca/valentines-day-winnipeg/ .

Or plan your romantic getaways during winter in Manitoba following these instructions: https://www.todocanada.ca/10-romantic-getaways-manitoba/ .

Revolving credit: The most common revolving credit is a credit card. A borrower is given a certain credit line for consumption and is not expected to exceed the credit line. Unlike ordinary loans, the borrower can continue to hold and use the previously obtained credit line after repayment. For example, Jack is approved for a credit card with a limit of $1,000. Unless the amount is increased/decreased by his bank, Jack has a limit of $1,000 available as long as he repays in time after consumption.

Charged card: Charged card is like a credit card, but you must pay off your bills every month. You cannot carry the arrears to the next month, like using a credit card. Another big difference from credit cards is that charged cards generally do not have pre-set limits. However, it does not mean an unlimited limit. The card issuer sets a floating limit regarding the user’s consumption situation/asset status/credit history. Usually, the user does not know the floating limit, while the credit card limit is relatively fixed and visible.

Service credit: Hydro bills, phone bills, and gym memberships are examples of service credit. These merchants usually sign contracts with clients and offer a service period. Clients have access to the merchant’s services/products during the service period and pay the fees as agreed. Service credits rarely appear on credit reports, but service credit defaults can affect credit records negatively.

Installment payments: House loans and car loans are two typical types of installment payments. The borrower obtains a loan at the site and agrees to repay the loan in installments within a pre-determined period at a certain number of times and intervals (e.g., 36 months). Installments usually require an additional amount of interest, depending on the loan interest rate of the loan company. Also, according to the types of contracts, the borrower may choose to pay in advance to avoid paying interest.

If you are interested in learning more about how a credit bureau prepares your credit report, please follow the links below:

https://www.transunion.com/how-to-read-a-credit-report

https://www.transunion.com/how-to-read-a-credit-reporthttps://www.transunion.com/resources/transunion/doc/insights/reference-guides/TU-How-to-Read-Credit-Report-Quick-Reference-Guide.pdf

While you are focusing on long-term goals like the ones mentioned above, you are missing the ‘small’ goals and decisions that decisively impact your finances in the long run. Small goals are more manageable and more related to our daily life. However, they are often neglected by us.

To improve finances, we can start from 5 small things you can do today:

1 Switch Banks

If your bank is charging you a lot for monthly/annual fees but not offering competitive interest rates, you need to pull yourself out from this! Do research online, ask your friend and family what banks they are with, talk to a financial advisor. You will always find a better alternative.

2 Open a Saving Account

If you have a saving account, you are half way there! If you don’t, why not? It doesn’t take long to find one with a great interest rate and set up an account.

3 Fund It with Direct Deposit

After setting up your saving account, it’s time to ask your employer directly deposit $20 or more to it every paycheck. If you can’t do that, set up an automatic transfer from checking to saving. Again, it won’t take more half an hour. But you will see great things you’ve been missing before.

4 Lower Monthly Bill

Call your internet and mobile provider ask for a better deal. New offers pop up all year round, so your current plan may have a more cost-effective alternative. Don’t forget to bring up a better deal you saw on the flyers provided by your providers’ competitors in the conversations. Your providers may match it. If they don’t, switch to the competitors.

5 Find the Biggest Money Drain

Ever said, “I don’t know where my money goes?”

Last but not least, sit down with your bills and statements and figure out the biggest hole in your pocket.

Do you have a costly habit? Do you enjoy $10 Starbuck for a morning call? Do you dine out a lot? Entertain too much? Shop for stress? Host a pot luck dinner instead paying food catering. Find a free hobby to take place of wandering in the mall.

Not every financial improvement has to take up years and decades. There’s plenty that you can change in one day or even within an hour. The trick is to stop thinking small things won’t make a difference and make a change today.

Tip 1: Turn your multiple bills into one

• We all have bills, lots of them. Whether they are for credit cards, cell phone bills, rent, mortgage, utilities, car payments, internet and TV bills, they can all add up fast and it is easy to let these payments slip. From this point it is easy to get behind and for interest to add up on these multiple bills – where you end up spending more than you even intended to. A debt consolidation loan can help you get back on track and pay off what you owe, helping you save money in the end and save on interest – all in one single, affordable payment. Learn more about a debt consolidation loan from AAR.

Tip 2: Combine your payment dates

• Chances are all your payment dates may be scattered, and not all on the same day. This can make things very confusing for you and make it easy to miss a payment. If you contact your representatives at the different companies you work with, you can adjust your due date for your payments so that they are all in sequence and it is easier for you to remember the dates the payments are to be made. If you provide notice, the company can change the day your payment comes out to soon after your pay cheque comes in, this will ensure there is money in the account and your payment will be taken on time without any extra fees.

Tip 3: Stay On Track and Organized!

• Life can get busy at times, and dealing with multiple bills on top of that can become overwhelming and its easy for a bill to be misplaced and forgotten. In order to stay organized, dedicate a place or drawer for bills to be placed so that you are always aware as to where your bills have been placed for your own reference. A big tip that will help you is if you organize your bills in the order they need to be paid, and if you check in on them regularly so make sure that you are on top of things!

Tip 4: Set up a dedicated “bills” account

• Many people already have separate accounts for their spending and savings, but a trick we have learnt is that adding a third account just for your bills. This account can be used for you to deposit your money for bills and you can pay your bills from, and transfer the rest of the money to your savings account for home expenses and other expenses you may have. This way you won’t miss a payment and won’t incur any extra charges as those payments will be taken out from their own dedicated account.

Tip 5: Utilize Apps

• Whether you are using an iPhone or a Samsung phone, there are many apps out there today that help in keeping you on track with your monthly bills and expenditures. With these handy apps, you are able to take advantage of many different features such as:
  • Checking your account balance
  • Transferring money
  • Paying bills
  • Budgeting tools
  • Seeing your recent transactions
  • As well as mobile cheque deposit.
• We will discover the best apps for different phone users and compile a list of our favorite in our next blog post!

These changes will become habits if you stick with them, but we assure you that with a regular money management routine will help you in saving on interest as well as staying organized with your bill management and relieve some stress you may have! Who needs extra stress on top of everything else life has to offer?

Given that the lender with the first mortgage has first rights to take any action on the property and they have a better loan to value equity position, the interest rate on the second mortgage/loan will normally be higher as the risk to the lender is greater.

This is not to say that it is a bad idea for the client to take out a second mortgage as long as it is affordable and it will help the client with their financial position.

Private lenders generally have more options than the main street institutions and therefore can provide terms and conditions that meet the client’s needs. Remember interest rates are not the only thing to consider when seeking out a private lender for the second mortgage. Meet with them, ask the right questions and in the end be comfortable with your decisions.

As a person who has been in the financial industry for the past 40 some odd years, I have dealt with a lot of varied clients.

One of the first things I review with clients is the amount, and the type of debt they have accumulated over the years. I have found that too many of us have too many credit card and other assorted debt, and it is not uncommon for clients to have three or more credit cards, and often more if husband and wife.

This is especially the case with people who own homes and have steady jobs, and start out with good credit. These couples begin with one card, and then add an additional and so on because the companies approve these clients as they appear to be handling the debt loan. Unfortunately in a lot of cases, this does not last as we get over extended and comfortable with the loan we are offered. Rather than being able to pay off the cards each month, we end up just paying the minimal amounts each month. It is then that these clients come and see us at AAR Mortgage for assistance.

If the couple home owners, they might be able to consolidate these debts into a single loan that is more affordable for them as well as saving themselves a great deal of interest, given the high rates on the majority of these cards. This is what we call debt consolidation!

All of this will depend on several factors. This includes the stage as to where the couple’s credit rating is at, the incomes they have, and of course the amount of equity they have in their home. Most lenders like banks and credit unions have very specific guidelines for these loans and if you do not fit in the box, then the clients will not be approved.

The other alternative available to clients are the private lenders. They have more flexibility when financing a consolidation loan like this, and it offers the clients a good chance to get themselves into a more comfortable financial position. Do realize however, given that the clients will be considered as higher risks, that most of these lenders will be charging higher rates and fees than the mainstream institutions.

Therefore if you are in this position as a lot of people are, ask the right questions, be comfortable with the lending company and their associates, and they will help you so you don’t end up in the same position again!

Ray Evaniuk

Business Manager

The terms first, second and third mortgage can be very confusing for new and current homeowners so we at AAR Mortgage have decided to clear it up for you here!

The number before the mortgage, whether it be first, second or third etc. denotes the seniority in chain of title of the mortgage.

A first mortgage is a first lien on the property that secures the mortgage. A first mortgage has priority over all other liens or claims on a property in the event of a default. They are considered low-risk investments, although the quality of real estate that is used as collateral is extremely important in determining the riskiness of the mortgage.

A second mortgage is a mortgage that has a secondary or junior position behind a first mortgage. It is simply a mortgage that is taken out on a property that is already mortgaged. This kind of mortgage allows homeowners to borrow money from the equity that is remaining in their home, without having to refinance their current mortgage. Many Canadians use a second mortgage to help them achieve their financial goals especially with today’s marketplace and the low mortgage rates we are seeing.

A third mortgage is a lien on a property that is junior to the first and second mortgages already existing on the property. Technically, you can have a third, fourth fifth etc. mortgage and any of those mortgages could be a “home equity” loan meaning that they would be loans secured by the remaining equity in the property. In the event of a default on the mortgages, the third mortgage will be paid only after the first and second mortgages are paid. Monthly payments will have to be made and paid on all three mortgages simultaneously.

Contact us for more information on the different kinds of mortgages you can get as well as your loan options.