19. Pay off your mortgage quickly
Putting more down on your mortgage could save you thousands in interest charges. Consider simple strategies like opting for accelerated biweekly payments (so you make 26 payments per year instead of 24). Also, consider applying any bonuses from work or other windfalls to your mortgage up to your annual prepayment limit. Even a small amount can go a long way. For instance, an annual lump sum payment of just $1,000 on a $500,000 mortgage at 5% over 25 years will decrease your mortgage amortization by about one year and eight months.
20. Live closer to work, or work from home or with a hybrid arrangement
People often underestimate the true cost of commuting, both in terms of stress and dollars. In 2014, MoneySense pointed to a calculation by the Canadian Automobile Association: A couple can spend more than $200,000 over five years making the one-hour commute from Barrie, Ont., to Toronto in separate Civic LXs. When adjusted for inflation, that number becomes $254,297.19.
If you work in a major Canadian city, those costs justify paying a little more for a condo or townhouse in the city and taking public transit or walking to work.
21. Go for experiences, not stuff
Many of us have basements or garages full of stuff we don’t need. Instead, build memories. Simple things like a family trip to the zoo, a cooking class with a sibling or even a saved-up-and-already-paid-for family vacation with kids or grandkids can build good memories that will last forever. Or consider giving your loved ones memberships to wine clubs, arts centres or aquariums. These cultural institutions rely on membership fees, so your support is invested back into your community.
21. Negotiate, negotiate, negotiate
Simply asking a polite question like “Can you come down a bit on the price?” is often enough to get yourself a deal. If you get a “no,” ask for free add-ons instead, like free delivery or a three-year warranty on an appliance. These things don’t cost the store a lot, but they could add up to big savings for you.
22. Delay retirement if you can
The longer you keep working, the better off you’ll be financially. Employer-sponsored defined benefit pensions pay out more the longer you stay. The Canada Pension Plan pays more if you start taking CPP at the latest possible age of 70, rather than the earliest possible age of 60.
Same goes for delaying the start of Old Age Security past the earliest possible age of 65. It can also be deferred to age 70 for a higher pension. If you’re counting on your investment portfolio, the longer you work, the more a portfolio has time to grow—and every extra year worked means one year less the portfolio has to last. If you enjoy work, think twice about early retirement. If not, you may need a career change instead.
23. Keep using TFSAs, no matter how old you are
The TFSA was introduced by the late federal finance minister Jim Flaherty, and it may well turn out to be the biggest favour Ottawa ever did for retirees. There’s nothing like tax-free income flowing to you in retirement, and that’s exactly what the TFSA was designed to provide. Unlike with RRSPs, you can keep contributing to TFSAs for your whole life.