5 tips from Mario Dumont to improve your personal financial situation (I love banks!)

All Canadian banks have submitted their results in recent days. Rest assured, they are not a pity. However, their profits have fallen sharply. There is no risk of bank failure at home as we have seen in the United States.

What is remarkable when looking at the data provided by the banks is the extent of the bad debt provisions. Canadian banks, giants, are global models of stability. If they increase their allowance for losses on their loans, it is because they have some pointers that the average taxpayer should include in managing their personal finances.

useful lessons

Taking note of this hedging from our major financial institutions, I draw some conclusions.

Banks anticipate that an increasing number of businesses and individuals will find themselves unable to pay.

Banks expect interest rates to remain high for some time yet.

Banks expect higher interest rates to eventually hurt families and the economy as a whole.

Friendly advice, if the better organizations to watch the economy prepare themselves this way, it wouldn’t be so crazy to imitate them.

what should be done?

What do you do with your personal money to repeat the caution of banks? Here are some humble tips from Uncle Mario, a part-time economist and wise old man.

1. Pay attention to the level of debt in your home.

Boring and classic advice, but it’s true: Canadians are deeply in debt. We soon find ourselves in trouble with rising interest rates. (And I dare not mention credit card rates).

2. Speeding up your mortgage payment is becoming wiser.

At one point, many financial advisors made it clear that you had to be crazy to pay back money quickly. Without returns of 5 to 10% or more on investments to pay off a 2% mortgage? It was an absurd loss! Today, with mortgage rates at 6 or 7% and investments tending to stagnate, the situation has changed.

3. Above all, don’t make any borrowing decisions based on the phrase “interest rates will go down anyway”.

If there is one thing we do know, it is that we do not know the future. Inflation is more complicated than expected for its decline. The Bank of Canada said it hopes to stop raising interest rates…unless…

4. Always carry a pillow with you.

Try to build a little cushion so you don’t live from paycheck to paycheck. And try to keep a small pillow on each paycheck. The sum of your mandatory and automatic payments shouldn’t push you up the wall each month.

5. If you are unable to make your mortgage payments, consider a second income.

Despite the economic turmoil, many employers are looking for people. Working six or seven days is hard. But handing over the keys, losing your property, your principal, your down payment, it’s just awful.