Debt is unavoidable. All of us have debts. For some people, the debts are simple obligations like utility bills. For many, it would be a credit card bill. From mortgage to paying back the student loan, people have myriad types of debts. It is almost impossible to avoid debts. Even the billionaires of the world have humongous business loans to repay. They continue to persist with those debts because they are necessary and they haven’t turned into bad debts.

There is good debt and there is bad debt. You cannot and should not avoid good debt. Let us explore the simple differences between bad debt and good debt.


There are grey areas when it comes to good debt and bad debt. A car loan is neither good nor bad. Since cars are depreciating assets, you are better off purchasing one with a down payment or in cash. But if you don’t have enough cash or don’t want to use it up, then you need a loan.

It is not necessary to make debts complicated. Necessary debt with reasonable interests and when it is manageable is good debt. Any debt that is needless, demands high interests and becomes a burden is bad debt.

Most of us are so accustomed with poor money habits that we don’t even pause for a while to review if we can make a substantial change. And let’s face it – old habits tend to live on, they become hard to break.

Let us explore some of these unwise money habits and how we can shun them to get on a good financial path.


These simple changes to your money habits will not just help your immediate financial health but also pave the way for a handsome saving in a few years.

Making a household budget is quintessential to financial planning. It is rather simple to come up with a budget. You have your income, you can make a list of expenses you cannot avoid and then decide how much you wish to save every month. Accordingly, you need to cut corners somewhere, invest your money or save, try to increase your income and you should always look for smarter ways to save on unavoidable expenses. The real challenge is to adhere to a household budget. Here is how you can approach the whole daunting challenge of financial planning.

Every working adult should know the financial basics. Very few people are proactively conscious of their financial wellbeing. Financial health is not just about your present income, your monthly expense and if you are living from one pay cheque to another or if you are managing to put aside a few bucks. You need to have a plan to have your financial affairs in order and in control for a predictably prosperous future. While it is difficult to perfect financial planning overnight, you have to get started somewhere. Get started with the financial basics.

As always, we recommend speaking to your YFG specialist for expert guidance and assistance.

Dividends are a part of the profits that a company make in a financial year and decide to share with all its shareholders. Every share or stock has a certain dividend value which is announced at the annual general meeting or the meeting with shareholders. Usually, it is an executive decision with the entire board of directors having a vote. Companies can be generous and announce handsome dividends after a great year. They can announce no dividends for years if there isn’t enough profit or if they are incurring losses. Let us explore the dynamic concept of dividends.

The purpose of loan applications is solely to establish your eligibility and to assure the lender that you would pay back, with interest and on time. Hence, only two things matter in loan applications: your financial health and personal profile.


Lenders look for clarity, accurate details, truthful declarations and honest conversations.

There are some expenses that require a loan. Borrowing money does not have to be a bad thing, but you do need to be responsible. There are instances when borrowing money is a necessity. If you are looking to make a major purchase like a home or car, it is often unavoidable. Before you borrow money for any type of purchase, it is important that you know how to be a smart borrower. Here are the best tips for borrowing smarter:


Check Your Credit

It is important that you prepare before you borrow. This means that you need to check to make sure that you have a good credit score before you think about borrowing money. Having a better credit score will give you access to a lower interest rate on the money that you borrow. This means that you can borrow money for much less if you have a good credit score/ You might want to put off borrowing money until you get a higher credit rating.


Borrowing Can be Good

Many people assume that borrowing money is always a bad thing, but this is not the case at all. It is possible to borrow money in a way that actually benefits you. For example, if you choose to borrow money to buy a home and the value of the home increases with time, you made a wise investment and had the ability to leverage the debt to increase your own net worth. This is something that makes the most sense and is the best way to build your net worth. This means that borrowing money can sometimes be a good thing if you make the best decisions.



It is also important for you to budget when you are borrowing money. This is something that you need to be sure to do. It is important that you have the ability to make the monthly payments that are required for the money that you borrowed. It is even a good idea to have extra money saved so you can pay off the loan at a faster rate. You will need to create a budget so that you know how much you need to save and how much you have available to spend. This is one of the best ways to make sure that the money your borrowed does not impact your credit rating in a negative way at all.

Mortgage is the biggest financial commitment for most people around the world. Unless you are an investor or run a midsize to large business, you are unlikely to make any investment that is dearer than your mortgage.

While it is not considered to be a risky investment, there are risks associated with it. You would be making a down payment, which could be all your savings or a major chunk of it. You would be committing to repaying the mortgage, every month for fifteen, twenty, twenty-five or perhaps thirty years. That could be seen as a lifelong commitment. You can always walk out of the mortgage and that would mean you would be moving out of your home. That is why you should try to mitigate mortgage risk as much as you can.


Speak to your YFG lending specialist to guide you along in calculating the best mortgage repayment amount for you based on your specific income and expenses.



Refinancing a mortgage can be very rewarding or it can be a loss incurring exercise. Every financial decision or a financial product/service has potential pros and cons. You need to weigh the pros and cons in the right context and then make an informed decision.

While the entire spectrum of refinancing cannot be discussed in just one article, this beginner’s guide should shed some light on the essential aspects.

What is Refinancing?

Simply put, refinancing is opting for a new loan to replace your existing loan. You could do this with the same lender or with a different lender. Refinancing has some potential benefits. For instance, you can opt for a lower rate of interest than the one you are paying now, you could reduce your monthly instalments as a result or you can keep paying the same instalment and end up paying the entire loan sooner than with the existing loan. Also, you can save some money upfront by getting a cash payment because of the lower rate of interest while you stick to the same remaining repayment term and instalment. The objective is to save money using the lower rate of interest or a more favourable lender.

Overcoming the Issues with Refinancing!

Any financial product or service must be studied well to make informed decisions. There will be lenders, their representatives and brokers who would want to sell you the concept of refinancing. That is one way how they acquire new clients and earn commissions. You need to study the pros and cons.

There could be some upfront costs on your part, in the form of fees and commissions or processing charges. These shouldn’t deter you if you are actually making some savings every month and then eventually end up with substantial returns.

You need to factor in the short term and the long term goal. If there is a lower rate of interest, then you obviously have a bad mortgage and you should get the better rate or switch to another lender. But, if the rates have very little difference and don’t really affect the bottom line and if you are paying substantial amounts to make the switch, you have to do the math to make sense of refinancing in the short and long term.

Above all, you should always put refinancing in the right context. Would you be staying at the same home for five years or more, which is when you would realize the substantial benefits of refinancing? Do you need a better mortgage so you can sell your property immediately? These are certain contextual questions that beg consideration.

We always recommend that you consult with your YFG lending specialist to be able to make an informed decision.


Stress is defined as a state of mental or emotional strain or tension resulting from adverse or demanding circumstances.

Mortgage stress is defined as a state of mental or emotional strain or tension resulting from the onus of paying a mortgage, or instalments, that are higher than 30% of the total family income.

You can do the math and see if your mortgage consumes more than or let’s say one-third of your total family income. However, there are exemptions. High net worth individuals who aren’t really under any financial stress and whose two-third incomes would be a fortune don’t really fall into this classification. For others, the average families with ordinary homes, mortgage stress is a reality.

How do you know that you are experiencing mortgage stress?

The math alone would not be sufficient. It is very possible that despite paying more than 30% of your income towards your mortgage, you would be doing fine. It is also possible that paying 25% of your income towards your mortgage can get you severely stressed. What it boils down to eventually are the symptoms. What stresses you may not stress someone else.

Let us consider some realities.

Are you consistently thinking of the mortgage you pay? Are you perennially under duress that you have to pay the instalment? Are you compromising on a whole lot of things, perhaps including some humble purchases to continue paying your mortgage? If any of these realities are a part of your life, then you are experiencing mortgage stress.

The reason why 20% to 30% of income is considered the threshold while approving mortgages is the belief of experts over the decades that such an amount can be conveniently put aside and paid by an individual or family. What is not accounted for in such calculations are fluctuations, personal obligations or liabilities that emerge after evaluation the mortgage application when there may not be any debts or astounding financial dependence and many such possible circumstances that can squeeze every cent of the remaining income of an individual or family.

From medical problems to a growing family, professional troubles to untoward developments at home, there can be numerous factors contributing to mortgage stress. Homeowners should consider strategizing their finances to avert mortgage stress. Homebuyers should do the math properly before signing up for a mortgage which can lead to unnecessary and undesirable stress.

The mortgage industry is unlikely to work in favour of individual homebuyers or families that own homes. It is eventually upon every individual to make the right choices.


As always, we recommend speaking with your YFG lending specialist when determining the right amount for you to be spending on your mortgage – They are the experts after all!