The traditional approach to banking means that each month millions of Canadians jump through financial hoops to meet their expenses, pay their bills, cover borrowing costs and (try to) put something away into savings and investments.
Most Canadians manage their finances by doing two things:
- Depositing their income and other short-term assets into chequing and savings accounts.
- Borrowing when they need to, through mortgages, lines of credit, personal loans, and credit cards.
Sounds simple enough. Unfortunately, they usually receive low or no interest on the money they deposit, while they pay high interest on the money they borrow.
Wouldn’t it make more sense if the deposits and borrowings were combined? Why not have every dollar you earn paying down your debts until you need to spend that money?