Guest written by: Sean Cooper
A little over a year ago I achieved the ultimate dream of financial freedom when I paid off my 30-year mortgage in just 3 years – and I did this by the ripe old age of 30. I celebrated by burning my mortgage papers on national TV. My story went viral, making headlines around the world. I received dozens of emails both congratulating me and wanting to follow in my footsteps. This inspired to me write my new book, Burn Your Mortgage: The Simple, Powerful Path to Financial Freedom for Canadians.
With home prices skyrocketing in cities like Toronto and Vancouver, many feel like the dream of homeownership is out of reach. I’m here to tell you that it’s not. I may have paid off my mortgage in 3 years, but that doesn’t mean you have to. There are simple yet effective lifestyle changes that anyone—from new buyers to experienced homeowners—can make to get their foot in the door of the real estate market and pay down their mortgage sooner.
Controlling the Urge to Swipe Your Credit Card
Before you can think about buying a home, you need to have your financial affairs in order. It’s hard to qualify for a mortgage, let alone afford monthly mortgage payments, when you have a ton of credit card debt weighing you down. Here’s an excerpt from my book on credit card spending.
It’s easier than ever to pay for goods and services with your credit card. Simply tap or swipe it and spend $50 in the blink of an eye. Although credit cards offer a convenient way to spend, that convenience comes at a cost. Not only can credit cards cost you a bundle in interest, but we tend to spend more when we make purchases with a credit card instead of cash. Studies have shown 12% to 18% more.
The pain you feel upon seeing the steep price of a Rolex watch is caused by stimulation in a part of your brain known as the insula. But when you use your credit card, the pain is dulled (since you’re not handing over actual money). Even if you’re careful, credit cards can turn you into a big spender. If you’re buying a pair of Nike sneakers, what’s more painful, swiping your credit card or handing over $20 bills? I’m willing to bet it’s the latter.
So, how do you control your credit card spending? Here are four simple ways:
1 Leave your credit card at home. Carry your credit card only when you plan to make purchases. If your credit card is sitting at home in your dresser drawer, you’ll be forced to pay with cash or debit and might think twice about frivolous purchases like a new blazer (especially when your closet is already jam-packed with a dozen of them).
2 Take a cooling-off period. Before you swipe your credit card for a major purchase, give yourself a cooling-off period. Unless the sale is ending that day or there’s only one left in your size, you can always go back another day. Take the time to think in the comfort of your home.
3 Avoid spending triggers. Do you ever head to the mall just to window shop, only to come out with a shopping bag full of stuff? Try not to go to the mall unless you actually need something. Go for a walk to the gym, the park or the library instead.
4 Switch to cash only. If you’ve tried all of the above but still can’t keep your spending under control, it might be time for something more drastic. Deal in cash only until you can get your spending under control.
Do you want more great credit and mortgage-burning tips? Be sure to check out my new book, now available at major bookstores and online.
Exclusive Offer: Sean’s book is available 50% off online at Indigo March 6th to March 12th. Hurry and take advantage while this deal lasts! Also be sure to enter for your chance to win a free signed copy of the book.
Sean Cooper is the author of the new book, Burn Your Mortgage, which offers frugal living tips to help anyone—from new buyers to experienced homeowners—pay down their mortgage sooner and live well while doing it. It’s available now at Chapters, Indigo and other major book retailers and online at Amazon.