PIGGY BANK

PIGGY BANKS
 
By definition a piggy bank is a container that you put money in to save, and is generally shaped like a pig. I have listed below a few reasons of owning a piggy bank.

•  It helps organize loose change. Rather than losing all of those nickels and dimes under the couch cushion or in your car, hold onto them and place them inside a piggy bank. Not only will this help cleaning up the house and car, it will also further reinforce good money savings habits.
• The money adds up. When it comes to finances, it’s always important to set goals… Using a piggy bank is an easy way to help you reach those goals. Whether you’re looking to save for a new car or for a warm winter vacation, adding to a piggy bank will visually show how close (or far away) you are from making that purchase.
• Sets a great example. Piggy banks are an easy and effective way to teach youngsters in the family about the importance of saving. They may not be saving up for a big purchase, but they certainly want to save up for something, whether it’s a new toy, a new phone, or a new video game. Teaching them the benefits of using a piggy bank will go a long way in the future.
• Reinforces “Always Be Saving”. Saving should always be top of mind. As Benjamin Franklin famously said, “A penny saved is a penny earned”. Whether you’re depositing a portion of your paycheck into a savings account or stuffing change into a piggy bank, every little bit helps. With a piggy bank, you’re literally able to watch your money grow every time you save. This is a great habit to keep with you throughout your adult life.

My question now for you is, “Has your house become your piggy bank”. You might wonder what is she talking about. Over the years I have had the opportunity to buy investment real estate as well as
own my own home. Whenever I have needed money I would look at my assets and decide where I should pull the money from. In my opinion it all boiled down to what I needed the money for. If it was to buy a new TV, car or even more clothes that I didn’t need. (but wanted) I would just work harder and save until I could pay cash for it or do without. If I wanted to fix my roof, renovate my home, buy another rental property or even consolidate some debt, I would then use my line of credit to finance this. This is what I call a good use of my home equity. Your home really should not become your ATM, machine. Use your “Piggy Bank” not your home. A lot of people end up in a situation where they may, get a divorce, get sick, lose a job, have unexpected expenses and then will have no where to go. They have used up all of the equity in their home and are forced to then sell their home and end up not being able to get back in the housing market. I understand life happens and sometimes you have no option but when you have the option make sure that you take your money from your piggy bank not your house. Its really valuable to speak with your realtor when you are buying or selling your home about your basic finances and develop a plan that makes financial sense. I had a client the other day call and they still owed money all over the place and wanted to buy a home. I had them get in touch with their mortgage broker and work out a plan that made sense for them. They are now on a budget and saving for a healthy downpayment. It may take them a bit longer but it will actually put them in a much better position if they just save a bit more. A lot of people when buying their first home aren’t aware of all of the costs of a purchase, and also tend to use all of their money for a downpayment and when they have their first house issue they cant afford to do the repair. The same can be said about selling. Are you aware when you sell your house you have to pay off your line of credit as well. I am always surprised by the number of people that don’t know this. If you are selling do you have a good financial plan around the money you will have from the sale of your house. Will you spend it all carelessly, or do you have an idea of the best use of all of this money. Again, lots to consider. If you would like to chat with us buying or selling your home then feel free to give us a call.