Spring cleaning time! Help your clients tidy their household finances

When spring arrives, the urge to tidy up winter’s clutter can be inescapable. Why not help your clients clean up their household finances while they’re in the spring cleaning state of mind?

It’s no secret that Canadians need to better manage their debt. By incorporating better borrowing strategies into their financial plans, you can help them organize their debt and achieve their overall financial goals.

Here are a few financial spring-cleaning tips you can share with clients:

Restructure: Look for ways to shift high-interest debt to a lower-interest vehicle. A recent study by Dr. Moshe Milevsky of the IFID Centre* used financial simulation techniques to estimate that a typical Canadian family**, with a residential mortgage, loses an average of $1,000 per year by not effectively managing their debts and short-term assets.

When it comes to restructuring home finances, one of the best debt consolidation tools on the market today is Manulife Bank’s flexible mortgage account – Manulife One.

Prepayments: Spring is a time when our governments return millions to taxpayers. Where does all the money go? We do know an estimated two-thirds of Canadian mortgage holders don’t apply extra cash towards their mortgage principal.

A better mortgage prepayment approach is a flexible mortgage account enabling clients to automatically pay down their mortgage with whatever money is left over at the end of the month, and take that money back out when needed.

Short-term savings: If your clients keep “rainy day” savings accounts, encourage them to apply that idle cash towards their debts. In the end, they could “save” more in interest than they’ll likely ever “earn” on that money.

By transferring debt to a line of credit or flexible mortgage account, their short-term savings can work at lowering interest costs without sacrificing access to that money.

Income: The typical banking experience is to have salaries deposited into chequing accounts earning virtually no interest, and then quickly evaporating through day-to-day living expenses. With a flexible mortgage account, clients can have their income applied directly towards their debt to lower the principal and save interest (in after-tax dollars).

Simplify: Instead of splitting banking needs across multiple accounts with a number of financial institutions, the Manulife One account is a simple, convenient and efficient means of managing all household finances in a single account.

This spring, let Manulife Bank help you explain the benefits of wise debt management to your clients. Use the following helpful resources, visit manulife.ca/yourbank or call your local Banking Consultant today.

Canadians’ Debt Diversification: Why These Eggs Belong in One Basket* Professor Milevsky explains (2 1/2 minute video) Summary of report Full research report

Manulife One quick calculator Manulife One the movie The wheel of Missed fortune

*Manulife Bank commissioned a study by Moshe Milevsky, Associate Professor of Finance at the Schulich School of Business and Executive Director, Individual Finance and Insurance Decisions (IFID) Centre. **The study assumes a typical family to be one with approximately $95,000 in a diversified portfolio of liabilities and idle cash of approximately $2,700.

Manulife One is offered through Manulife Bank of Canada. Manulife, Manulife One, the One logo and the block design are registered trademarks of The Manufacturers Life Insurance Company and are used by it and its affiliates including Manulife Bank of Canada.