Surviving the Flucuating Price of Oil
So due to international forces well beyond our control it appears that the price of oil is falling. Al Albertans we are well aware of the financial ramifications this can have to us personally…
So due to international forces well beyond our control, it appears that the price of oil is falling. As Albertans, we are well aware of the financial ramifications this can have to us personally. A decreased profit margin may lead to cut backs by the oil companies in the form of decreased hours and possibly even layoffs. So what can you do to make it easier? Read on good friends, as I share a few ideas with you.
Refinance Your Home
The last few years have seen an increase to property values. When you put this together with the fact that you have been paying your mortgage down, you could be in a great position to do refinance. Consider this scenario:
- House value is $400,000
- Mortgage at $280,000 at 3.75% = $1435/month
- Credit cards $7500 = $200/month
- Line of Credit $20,000 = $600/month
If you refinance your home to $320,000 at today’s much lower rates, your payment drops to $1,514/month, which allows you to payout all of the above and have a savings account of about $10,000 just in case. You will also save $721, which you then start putting away into your savings account every month.
Keep in mind that you will incur a penalty to break your current mortgage, so call your lender to see exactly how much this will be. No lender will pay this for you, but some of them will pay your legal fees and appraisal costs, which can save you up to $1,000.
Get a Line of Credit
Perhaps you do not have the home equity necessary to do a refinance. Consider getting yourself a line of credit in case of emergency. The payments on this type of a loan are often interest only, and the funds are easily accessed if you need them.
Start a Savings Plan
We all say we would like to save more. Perhaps the potential downturn will remind you to actually act upon this. Consider setting yourself up on an automatic savings plan. Most people find an automatic monthly withdrawal from their account to be relatively painless when compared to actually having to transfer funds. Make sure you have an account like a TFSA where you have cash that is easily accessible without any penalties, as seen with a savings account like an RSP.
Take a Close Look at the Little Expenses
The devil is in the details they say, and this is true of your finances as well. Take a look at your expenses.
- Did you know that some banks offer fee free banking? Maybe its time to consider a move. This could save you $20/month
- Are you being charged an annual fee on your credit card or maybe a higher rate? Take a look around and see who is offering a better deal. Even calling your current credit card provider to negotiate a better rate This is another potential $20/month
And really, this list could go on and on. Just these 2 ideas could save you nearly $500/month. There are coupons and discounts all around us, websites written by the thrifty to help steer you to great deals, and of course, well written articles in the Red Deer Express. Until next time my friends.