The Faltering Economy and Personal Debt Smash Goals for 2019

The past few months we have seen nearly all economic indicators point to certainly a hold but possibly more of a potential drop in Bank of Canada’s Prime rate vs continual increases media was screaming at us “that we could expect”. If I had a loonie for every time I heard the “guarantee of 6 rate hikes in 2019” I’d be able to purchase a detached in Vancouver. It’s just not going to happen based on the current numbers which have really slowed. We’ve now seen major banks shrink their discount on Variable to as low as Prime – 0.20% which signals to me it’s more likely we will see Bank of Canada DROP rates if this continues. As mortgage holders, we want this, as business people – we don’t. Slowing/faltering/stagnant economies are not fun for anyone. If you are still receiving calls from your lender to “lock in or else” please refer them to me, I’d be happy to have a little powwow about their reasoning – and you should ask too! If it’s a comfort thing to lock in rates, that’s cool, I get that. But no need for so much haste as I experienced in the summer. We still have some excellent Variable rates as low as 2.95%.

The main story heading in to the NY is according to BDO Canada 1 in 4 Canadians are feeling crushed by their debt. There has been a whole decade of people who have experienced low interest rates so even a 1% move upward that we’ve seen has had an impact in borrowing and debt pay down. It seems to also be a cultural norm to not carry a “just in case” fund in savings set aside or be carrying debt on a line of credit or credit card. We need to change this mentality else face some hard times should we experience a slow down, job loss, or emergency. Sparo Mortgage/I am very happy to help with a solution should anyone need to refinance for a reset but then also would ideally make an introduction to an amazing Financial Advisor to keep on the right track moving forward. Let’s make 2019 the year of savings! (including the reversal of debt)

A great tool I’ve used for goal setting in the past is something used internally by Lululemon staff for keeping simple/visualizing goals for the year. They do 1/5/10 year which I find to be a bit far out given how much can change in just a few years so I stick to 1/3 & 5 year goals.
A link can be found here – https://www.pinterest.ca/pin/1900024821129489/

Have a very healthy and wealthy 2019. Speak to you soon.

David