Mark Huber, CFP

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Cornerstone to a solid financial planwise
debt management

• Mark Huber, CFP
• SetForLife Financial Services
• Tel [phone]
• mhuber_at_HowToBeSetForLife.com http//www.HowToBeSet
  ForLife.com

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Meet David

• High expenses
• Mounting credit card debt

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Meet Terri and Sam

• Ready to arrange a mortgage
• Floating interest rate
• Fixed rate

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Meet Sarah

• 10,000 in savings
• Needs access for emergencies

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Sound familiar?

• 70 concerned about rising interest rates
• 75 havent reduced debt or increased savings in
  the past year

Source Maritz Research for Manulife Bank of
Canada
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Not all debt is bad

• Expensive debt
• Credit cards
• Regular debt
• Mortgages, lines of credit, car loans
• Tax-deductible debt
• Investment loans

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Remember David?

• Credit card debt
• Pay with bank loan or line of credit
• Reduce interest payments
• Out of debt sooner

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Davids saving solution

• Credit Card Interest
• 10,000 X 20
• 2,000 per year

• Loan Interest
• 10,000 X 4.25
• 425 per year

Savings 1,575
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Advice for David

• Only spend what you can afford
• Pay off your balance in full each month

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Banking on your own interests
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Terri and Sams mortgage dilemma

• Fixed vs. floating rate mortgage
• Study 5 year intervals (1950-2000)
• Better off with floating rate
• Renew annually

Source Prof. Moshe Milevsky, Professor of
Economics, York Univ.
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Advice for Terri and Sam

• Consider floating rate
• Lock in only to establish comfort level before
  moving to variable rate

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Sarahs savings

• Wants access to her 10,000
• Minimal debt
• Concerned about retirement savings

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Putting Sarahs money to work

• Non-registered investment
• Security for line of credit
• Access to cash in emergencies
• Low rate of interest

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Three problems, one solution

• Convert expensive debt to regular debt
• Reduce interest with a variable rate mortgage
• Put savings to work

• Flexible mortgage account

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Save yourself a whole lot of money

• Flexible Mortgage Account
• Combine floating rate approach with savings of
  debt consolidation
• Debts, savings and income in one account
• Save thousands in interest
• Access to money when needed

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Tips for your fiscal fitness

• Pay off credit card debt immediately
• Pay new charges in full each month
• Avoid retailer financing
• Avoid overpaying with interest traps
• Use windfalls to reduce debt
• Switch to variable rate mortgage
• Use credit card to pay monthly expenses and pay
  balance when due

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What you owe and what you own

• Save interest today
• Invest for tomorrow
• Get on track with debt counseling
• Speak to your financial advisor

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