One of the top concerns of the Bank of Canada is the high level of Canadian household debt. Notwithstanding those concerns, the level of household debt continues to rise, hitting 171.1 per cent of disposable income in the third quarter of 2017. If your debt is starting to feel overwhelming, minimum payments might keep the calls from coming but, you realize that you’re treading water. Is it time to panic or deal with your debt head on?
There are some tips that can help you take control of your debt and build towards a sound financial future to avoid having your debts get out of control.
- Prepare a budget so that you know where you are spending your money. A budget will help you identify areas where potential savings can be made. For anyone who is tech savvy, you can download a number of free apps which might make tracking expenses more fun. The results of will show you how much is left over for debt servicing and where your money is being spent.
- Curb your spending habits. One of the most common ways to get into debt is overspending. Everyone needs to know where they are spending their money. It’s the little things that nickel and dime you to death that are the problem.
- Figure out the best way to reduce debt. Two well known methods are called the Snowball Plan. This starts with trying to pay off the smallest debt and leads up to the largest. This occurs while you are still paying only the minimum payment on all your other debts. The other method is called the Avalanche Plan. The Avalanche Plan method starts by throwing as much money as you can at the debt with the highest interest rate. Again all while still paying only the minimum on all your other debts. Once that highest interest debt is paid off you go onto the next highest interest debt and so on and so forth.
- Lastly get some professional help. Some of you will get a better sense of where you are financially and be able to get out of it on your own. But for most, it won’t be that simple. The amount of money left over at the end of the day will show that you only have enough left over to make minimum payments, which will only leave you treading water. And if something happens where you income is suddenly reduced, you might not even be able to make the minimum payments and you will soon fall behind on the payments. Then the calls will come.
So, the best way to meet that debt head on is to take control. Licensed Insolvency Trustees are the go to professionals of choice when dealing with debt. We are mandated to explain all of your options to you.
The experienced professionals at Boale, Wood & Company Ltd. understand the stress that financial difficulty can cause.
We know that realizing that you are experiencing financial problems is a hard thing to do for most people and sometimes you feel helpless. But instead of feeling helpless, let us help you gain control of your debts and understand your options.
Start by scheduling a meeting with us to discuss the solution best suited to your situation. This meeting is free and there is no pressure or obligation for you to make a decision right away.
We have the expertise to find the solution best suited to you.
Call us, it’s not too late. (604) 605-3335.