The Ultimate Guide Of How To Get Out Of Bad Debt
An average Canadian consumer owes over $22,081 in consumer debt.
In a report released Wednesday, Equifax says the debt figure increased by 3.6 per cent in the third quarter of 2016 compared to the same period a year ago. All in all, consumer debt now stands at more than $1.7 trillion! (1)
That’s an awful lot of money to be carrying a balance on and paying higher interest rates. If you want to eliminate your debt, and improve your financial health, here is a step by step guide:
- Take stock of your obligations: list how much you owe and how much interest you are paying. Seeing it all in black and white can be strangely motivating.
- Prioritize your debts: mortgage and vehicle payments are typically at the top of the list.
- Track where you are currently spending your money. Before you can make any changes, you need to identify what you can change.
- Create a budget. Without a personal budget (spending plan), it is impossible to live within your means.
- Create a realistic debt reduction plan and consider the following.
- Where you can trim expenses every week.
- Apply the time value of money principle – how much will buying something now cost me in the future.
- Come up with ideas on generating additional income.
- If regular investment contributions can be suspended while you’re paying down debt.
- Consolidate your debt at a lower interest rate, without incurring more debt i.e. applying for a consumer proposal
- If you need assistance to consider your options and develop a plan that will work.
Over the long term, debt will drag you down. The interest and fees you pay will cripple your wealth. The more you spend to service your debt, the less money you have available for what’s important to you. Eliminating your unsecured debt is easier than you think. We are here for you. Get a free assessment with us today by calling us at 416-900-2324.