As we all know, debt can be a major burden on our lives. It can affect us physically and mentally, as well as financially. Debt is especially burdensome for those who carry it from one generation to another. In this article, we will discuss why generational debt is such an issue and how you can eliminate it from your life.
The Bigger Picture
Debt is bad—no, let’s be more specific: debt is not good. Debt is a burden on the future, and it places an even greater burden on the next generation.
A recent study found that millennials are delaying starting families because they’re afraid of taking on debt. The same study also revealed that nearly two-thirds of millennials are saving less than they’d like to because they’re worried about their debt levels. It’s no secret that when people struggle with paying off their student loans and credit cards, their lives become consumed by money issues. And this isn’t just damaging for millennials themselves—it’s also damaging for society at large.
The Real Costs of Debt
Before you can begin to eliminate debt, it’s important to identify what kind of debt you have and where it comes from. There are many different kinds of debt, including student loans, mortgages and credit card debt.
Each type of debt has its own characteristics that make it unique from the others. For example:
- Student loans typically don’t come with interest rates (although there are some exceptions) but require monthly payments until the balance is paid off in full—and usually for a long time after graduation (upwards of 20 years).
- Mortgages typically have low initial interest rates but often include balloon payments toward the end that increase interest costs significantly over time (sometimes as much as 50%!).
- Credit card balances should never exceed 30% or so of your annual income because if they do, then paying them off will likely take years—if not decades!
Why Don’t People Eliminate Debt?
Debt is a major issue among Canadians. In fact, the average household carries nearly $20,000 in credit card debt alone. Because of this, it’s important to understand the reasons why people get into debt and why they stay there.
First, debt is easy to get into. You can see it if you look at your monthly bank statement or go through your checkbook; however, most people don’t look at these things regularly because they don’t want to face their financial reality. Instead of seeing their money going out as quickly as it comes in (which should be alarming), most people act as though they have more money than they actually do—even though they really don’t! This leads us into our second point:
Second, staying out of debt isn’t always easy because society tells us that we need more than we have; thus, it becomes easier for us to spend than save our money for an uncertain future. Of course there are some benefits associated with having more stuff around us—we feel better about ourselves when we own nice things like a car or house—but these things aren’t necessary for happiness! What matters most is being fiscally responsible with one’s finances so that one can maintain peace of mind throughout life rather than worry about what tomorrow might bring due to lack thereof planning today…and then tomorrow arrives but nothing changes because it never does unless someone makes changes first!
How to Get Started
Getting started with your personal debt elimination plan can be as simple as recognizing why you’re in debt and what you want to achieve. If your goal is to get out of debt, then make sure that’s clear from the beginning.
Once you have a good idea about where you’re headed, it’s time to make a plan. You should have an end goal in mind—and ideally that goal will be “Pay off all my debts!” But how do you get there? Begin by looking at the big picture: What do your finances look like right now? How much money are you spending each month on bills and other expenses? Are there any recurring payments that could be reduced or eliminated altogether (like cable or car insurance)? What are your monthly income sources and how much do they add up per month after taxes are taken out (and assuming no additional income).
Next comes the fun part! Think of ways that money can flow into each category: Where do my savings come from right now? What about my credit card balance—how much does it cost me every month in interest payments alone? Can I put any extra funds toward paying off this balance faster than usual without sacrificing essential financial needs such as food and housing costs.
The first step to eliminating debt is to start small. When you’re just starting, focus on paying off the smallest debt you have. This can be a credit card with a $500 balance, or it could be your student loans or mortgage—whatever is easiest for you to pay off. The more money that’s owed on an account, the better it will feel when it’s finally cleared out. Paying off your biggest debt will also give you significant savings in interest and time by putting all of those payments toward one debt instead of bouncing back and forth among several different ones. The more money saved from interest payments and applied toward each individual loan payment means more money available for investment once all debts are paid off!
How to Stay Motivated
The biggest challenge facing any debt-elimination effort is motivation. When you’re deeply in debt, it’s easy to get down on yourself and feel hopeless about the situation. But if you’re motivated enough, there are ways to stay on track.
Here are some strategies for staying motivated:
- Focus on the positive—the fact that you have a plan and are taking action toward your goal can be very motivating in itself!
- Make a plan, then stick to it—you’ll have more motivation if you know exactly what needs to be done next.
- Don’t let yourself get distracted by other things—if something comes up that will take away from your time spent working toward eliminating debt, put it off until later (or delegate). For example: if someone asks me out for dinner or drinks while I’m trying not too spend money on food or booze (because then I’d need even more money), I’ll usually say no because this would make my goal harder for myself
Start with a Plan and a Purpose
To begin your debt repayment journey, start by creating a plan.
- Create a budget and stick to it. Make sure you have an emergency fund in place so that if something unexpected comes up, you’ll have the funds to cover it.
- Create an actual list of priorities—not just for yourself but for your family as well. Some things on that list might include paying off student loans or mortgages, owning a home free and clear, having good insurance coverage in place, saving up enough money for retirement at age 65 (or whatever age is relevant to your situation), or being able to afford future educational expenses for your children or grandchildren.
- Once you’ve created these lists and goals, start working toward them! Write down how much money needs to come in each month and make sure the amount matches what needs are coming out each month—including any debts that need paying down. If there’s not enough coming in to cover everything needed each month with just income from one person’s paycheck then look at cutting expenses as we’ll touch more on later here; however this could also mean getting a second job temporarily until things get back on track financially again which isn’t always easy! But most important here though is not becoming discouraged when things aren’t going according exactly as planned because if anything happens along life’s journey then there will always be bumps along the road ahead but don’t lose hope because God has big plans ahead for those who believe through faith alone without works themselves first proving their faithfulness like Abraham did before us all today too!
Paying off debt is one of the best things you can do for your future, your family’s future, and your community’s future.
Eliminating debt is one of the best things you can do for your future, your family’s future, and your community’s future.
Debt can be a drag on your finances. If you carry a credit card balance or student loan debt then it will be difficult to save money – even if you make more than enough money to pay off what you owe each month. It doesn’t matter if someone else gave you the money (like an employer) or if it was earned through hard work (like from selling products); either way an individual must repay their debts without fail. This means that every dollar spent paying interest on loans will not be available for other expenses like food or clothing—let alone contributing towards retirement savings or starting an investment account!
If left untreated over time this problem can get worse too as interest rates continue to compound: The more time passes between when payments are made versus when they were first borrowed; then compounded again each month thereafter; compounded again with every new payment cycle until finally becoming unmanageable over time due to exponential growth due…
The bottom line is that debt isn’t just about you. It’s about the future of your family, your community and your generation. If we all take action to eliminate debt, we can build a better world for ourselves—and our children. It’s time to start paying off those bills!
Managing debt is not the same as managing your credit. Debt negotiation, debt consolidation, bankruptcy and refinancing a loan all involve some form of change to your credit score. However, these changes don’t always have negative effects on your credit report. In this article, we will look at how each of these methods can affect your credit in different ways.
Debt Negotiation Can Hurt Your Credit
Debt negotiation is a way to settle debts with creditors without filing for bankruptcy. It can be a good option if you are having trouble paying your bills, and it can be a bad option if you want to keep your credit score intact.
Debt negotiations are conducted by third-party companies that work on behalf of consumers looking to reduce their debt burden. The company negotiates with the creditor and makes them an offer they cannot refuse: an amount less than what is owed, but still more than they would receive in court if they went through official proceedings (which often results in garnishment). If accepted by both sides, then everyone goes home happy.
Debt Consolidation Can Hurt Your Credit
Consolidating debt can be a great way to pay off your debt and get a fresh start, but it’s not the only option. Before you consider debt consolidation, make sure that you’ve exhausted all other options. If you have good credit, it might be better for you to use a personal loan or line of credit instead of consolidating your debts into one loan with higher interest rates.
When considering consolidation, make sure that you understand what will happen if you don’t repay the money in full on time. You should also know what kinds of fees might come along with this type of loan before committing yourself to an agreement like this.
Bankruptcy Can Hurt Your Credit
Bankruptcy is a legal action that can be taken against you in the event of financial hardship. It’s rare for debt relief to hurt your credit, but bankruptcy certainly can—and it can stay on your credit report for up to 10 years after being filed!
Bankruptcy can make it harder to get a loan or an apartment and can make it harder to get a job. The impact of bankruptcy is lessened if you have been diligent about paying off other debts during the period between filing for bankruptcy and having it discharged, but even so many landlords will still check a prospective tenant’s credit history before deciding whether or not they want them as a tenant (and some landlords may not rent at all).
Refinancing a Loan May Hurt Your Credit
If you are in the market for a new loan and are considering refinancing your debt, there are several things to consider. Do not assume that every lender will report their loans to the credit bureaus or that they will report them in an accurate manner. While some lenders do report their loans according to guidelines, many do not. Some lenders may report for only a short period of time, while others may never report at all!
These factors can be important when it comes down to getting approved for another loan or financing option because most financial institutions take into account your overall credit score when determining whether or not they want someone as their customer. If you have gaps in your history where no one knows what has happened over those years, this could cause problems with obtaining additional financing options later on down the road since having no information about how well managed your finances were during those periods gives lenders little assurance about how good of a risk you actually may be worth taking on board as one of their clients.”
Managing debt is not the same as managing your credit.
- Credit is a record of your financial history. It shows how you’ve managed credit cards, loans and other debt over time. Your credit score is a number that represents your creditworthiness as determined by the information in your credit report.
- A good credit score can save you money on interest rates when you borrow money (for example, to buy a car or house). A low or bad credit score may make it difficult for you to get loans or credit cards at reasonable rates without paying higher interest rates than someone with better-than-average scores.
Debt relief is important when you’re struggling to manage high debt. However, it can also affect your credit score. This is why it’s important to consider all of the options available before deciding on a debt relief option that will help get your finances back on track.
You can use the BBB to learn more about a company’s reputation. The Better Business Bureau is a non-profit organization that has been around for over 100 years and provides reviews of businesses in your area. The mission of the BBB is to promote trust between consumers and businesses, so it’s an ideal source for information on debt help companies.
When you’re looking for reviews, you want to make sure that they’re actually from real people. There are some companies out there who pay for positive reviews, so if someone has a review that says “This company was awesome! They helped me get rid of my debts and now I have more money in my pocket than ever before!” it might be suspect.
If a company isn’t getting many reviews (or any at all), this may indicate that their services are either not well-known or not sought after. This is something worth considering before choosing a debt help service provider as they may not provide anything above and beyond what is already provided by your existing creditors.
- Make sure that the debt help company you are dealing with is licensed with the corporations branch.
- Check to see if your company has a Better Business Bureau rating, and if it does, make sure it’s an A+ or better.
Licensed with corporations branch
You can also verify whether a debt help company is legitimate by checking that they are registered with the Corporations Branch, an agency of the Government of British Columbia. The official website of this organization is https://www.ic.gc.ca/eic/site/cd-dgc.nsf/eng/home.
The Corporations Branch is a good indicator that your debt help company will treat you fairly and make sure you get what you’re owed, so always make sure that your chosen provider has been registered here before signing up for any kind of debt management program.
It’s important to have one because it gives you more control over how your personal information is used by a company – as well as protection in case anything goes wrong.
In the end, it’s important to remember that there are many companies out there claiming to help with debt problems. It is up to you as an individual to ensure that they are legitimate and won’t take your hard earned money without return. If you’re unsure about any company then please do research before making any decisions!
#1: Choose someone who is knowledgeable and experienced. If you have debt, you’re probably already familiar with the industry. You may have heard of companies that offer debt relief services, but you don’t know which ones to trust. Look for a company that has been in business for several years, has a good reputation, and can provide references from satisfied customers. You want to be confident that the person who is helping you will know what he or she is doing when it comes to your personal situation.
#2: Choose someone who is trustworthy. It’s important to find an organization that encourages good communication between clients, including regular updates on progress toward achieving financial freedom through consumer proposals or other solutions offered by the agency..
#3: Choose someone who is affordable. You want to find a debt relief organization that offers reasonable rates and fees, as well as flexibility in payment plans. Keep in mind that most reputable companies also offer free consultations so you can learn more about their services and whether they are right for your needs before entering into a business relationship with them.
#4: Choose someone who is responsive. You need to be confident that your debt help organization will respond quickly and thoroughly to any requests from you or other clients. If they don’t, then it might not be worth using their services at all.
#5: Choose someone who is available. Find out when the company’s employees usually work during regular business hours so that if something comes up that needs immediate attention, you can call them without having to wait for a response.
#6: Choose someone who is professional. Look for a company with a good reputation among previous clients and in the industry as well. You should be confident that your debt help organization will act professionally and ethically when dealing with creditors, banks or other financial institutions on your behalf.
#7: Choose someone who is friendly. Find an agency that provides excellent customer service from start to finish.
The debt snowball method is a simple way to pay off your debts. Instead of tackling them all at once, you focus on paying off the smallest debt first. Then, when that’s paid off, you move to the next-smallest debt and so on until all your debts are gone. It’s an easy way to revitalize your finances because it gives you a sense of accomplishment right away—you’ll see progress right away rather than staring at a $10,000 balance on your credit card statement feeling hopeless and overwhelmed.
The Debt Snowball method is a proven way to eliminate debt. The principle behind this approach is simple: the faster you pay off your debts, the less you will owe overall. By focusing on paying off your smallest debt first and then moving onto the next one, you can quickly start seeing results.
The Debt Snowball method also works because it allows you to build momentum as you progress through your goals. Once you’ve paid off your first (or second) loan, it becomes easier to imagine that other loans will be eliminated in due time as well—and this makes it easier for us humans to maintain our motivation and keep going!
The debt snowball is the most popular and effective way of paying off your debt. It involves paying down debts in order of smallest to largest, focusing on one at a time.
The method works because it saves you from wasting time on the highest interest rate loan, allowing you to pay more towards it every month and get out from under its burden sooner. The logic behind this method is pretty simple: if your goal is to pay off all of your debts in order of smallest balances first, then sit back and enjoy life as a debt-free individual!
The first step to getting out of debt is to list all your debts in order of size. If you have a credit card balance, a student loan balance and a car loan, start by making minimum payments on all three accounts except for the smallest one. Once this account is paid off (or almost paid off), put all the money that was going toward that account toward your next smallest debt, until you’ve eliminated all but your final one.
At this point, it’s time to focus on one remaining debt at a time while making bigger payments than just the minimums. Your goal should be to pay each debt down as quickly as possible—and then start over again!
Pay off Debt
Once you have your debt snowball ready, it’s time to start paying off your debt.
There are a few different ways to pay off debt (like the debt avalanche and debt snowball), but we recommend using the debt snowball method. It’s also called the “snowball effect” because it starts with small debts that are easier to pay off and builds momentum by adding larger debts into the mix. With this approach, you’ll eliminate all of your debts sooner than if you just paid off one at a time in any order or didn’t use any strategies at all!
Here are some tips on how to pay off your debts faster:
- Set up a debt payment plan.
- Set up a budget, including all of your expenses and income.
- Make a plan to increase your income, if possible – for example, by getting a second job or starting a side hustle (or both).
- Make a plan to decrease your expenses, if possible – for example, by canceling subscriptions that aren’t providing enough value in exchange for the cost or shopping around for lower-priced options (like cable television).
- Make a plan to increase savings by setting aside some money every month in an emergency fund or retirement account so you don’t have to take out additional debt later on when there might not be any other options available (for example: when you have no more credit left).
The debt snowball method will help you eliminate your debt faster.
The debt snowball method is a debt elimination method. It’s a debt reduction plan and a debt management strategy, too.
If you use the snowball approach to eliminating the debts on your list, you’ll get to see progress much faster than if you were trying to pay off all of them at once. You’ll be able to check something off your list with each payment made towards one of your debts, which will help keep motivation high and lead to more success in paying off all of your outstanding bills.
If you’re planning to pay off debt, the Debt Snowball method could very well be your best option. The debt snowball method is a tried and true way to get out of debt quickly. We’ve learned throughout this article that there are many different ways in which people approach their finances, but one thing that’s always going to remain constant is that everyone has money problems at some point in time or another. Using Dave Ramsey’s Debt Snowball Method will help you eliminate your debts faster than ever before because this strategy focuses on paying off what seems like smaller amounts at first but eventually becomes larger payments towards your debt balance as time goes on
Getting out of debt can feel like an impossible task. But it’s not. With the right information, guidance, and support, you can get out of debt faster than you think. The trick is knowing where to start. You might be surprised to learn that debt isn’t always bad—in fact, it can be helpful when used correctly. You just need to make sure that your debts are manageable and affordable so they don’t keep piling up on top of each other like a house of cards ready to collapse at any moment (which happens more often than you’d think). In this guide we’ll walk through what getting into debt looks like and how you can use these tips to get back on track with your finances!
When you’re in debt, it can feel like you’re never going to get out.
When you’re in debt, it can feel like you’re never going to get out. You might have the same thought I did: “I’ll never be able to pay off all this debt. I will always have debt.” The stress of living like this is intense, and as a result, so is the sense of being trapped—a feeling that’s only exacerbated by financial challenges such as low or unstable income and unemployment.
If your debt is causing stress and negatively affecting your life in other ways (for example, by limiting what you can do), then something has to change. Here are some ways to help:
- Get back on track with budgeting
- Start saving for the future
Your debt-to-income ratio will tell you how much of your income goes toward paying off your debts.
Your debt-to-income ratio is a way to measure your financial health. It’s the percentage of your income that goes toward paying off all of your debts. The debt-to-income ratio is calculated by dividing a list of outstanding debts by total household income. For example, if you have $20,000 in credit card debt—and annual household income is $50,000—your debt-to-income ratio would be 40 percent (20 / 50).
The higher the number on this scale, the more at risk you are for experiencing financial trouble down the road. If your ratio is too high (e.g., above 40 percent), it may mean that you can’t afford to take on any new loans or repay existing ones without getting deeper into trouble with debt collectors and creditors who want their money back immediately!
Understand the way that debt works and how it fits into your life.
The first step toward getting yourself out of debt is to understand how debt works in your life. Debt isn’t a bad thing, and it doesn’t always have to be bad for you. It can actually be a great tool for optimizing your finances and helping you achieve the things that are important to you. For example, if buying a house is something you want in the next few years, taking on some mortgage debt could be an excellent way to get there faster—assuming that the value of what’s being purchased outweighs the cost of borrowing money at interest rates higher than those available through other investments.
However, there are times when taking on too much debt isn’t wise at all; this usually happens when people don’t understand or respect their own limitations with regard to paying off loans over time (e.g., credit card balances). If this sounds like something that describes your own situation right now then please keep reading!
Know what happens if you don’t pay your bills on time.
You may think that if you skip a payment or two, it won’t matter. But if you don’t pay your bills on time, there are consequences. You could lose your credit score and find it hard to get loans in the future. Your creditor can also sue you for payment and send the case to collections if they decide not to pursue legal action themselves. These actions can make it difficult for you to get approved for new credit cards or loans in the future because they’ll lower your credit score even further.
There are many options for paying off debt and saving money, but not all of them work for everyone.
There are many options for paying off debt and saving money, but not all of them work for everyone. You can pay off debt in a variety of ways, including:
- paying off your credit card with another credit card
- using a cash back rewards credit card to save money on everyday purchases like groceries
- taking out a personal loan or line of credit to pay down your debt faster (but this can be risky if you’re carrying too much debt)
If you need help deciding how you want to pay your debts, consider getting advice from an expert at CCDR.
If you’re struggling with debt, try these tips.
If you’re in trouble with your debt load, try these tips:
- Pay off the debt with the lowest balance first and roll that payment toward the next largest the following month.
- Make a budget and stick to it. If you don’t know where your money is going, you might be surprised by how much of it is going toward unnecessary spending—like those daily coffee runs or weekly happy hour outings that seem harmless but really add up over time.
With enough knowledge and support, getting out of debt can be less scary than it seems at first.
If you’re feeling overwhelmed by the idea of getting out of debt, don’t worry. With enough knowledge and support, getting out of debt can be less scary than it seems at first.
- You can do it yourself: If you have a basic understanding of how to manage money and create a budget, then self-management might be an option for your situation.
- You can get help from a professional at CCDR: A professional can help set up an action plan and provide guidance along the way as well as assist with difficult decisions or unexpected challenges along the way. While this type of assistance is often more expensive than self-help options, having someone else involved who understands what needs to happen may feel more reassuring during times when things seem overwhelming (and they will!).
Getting out of debt is a tough process, but it’s also a rewarding one. If you’ve managed to get this far and read this article about the best ways to save money and pay off debt, then you’re already taking steps toward your financial goals. The next step is simple: follow our advice! Keep in mind that there are many different approaches to spending less and saving more—whether it’s cutting down on eating out or finding creative ways around paying bills late. No matter what method works best for you personally, keep working towards those goals until they become habits instead of just resolutions by using our tips above as guidance along the way!
Let’s face it, debt is a huge problem. If you’re in debt, you know that feeling of dread when the bills come in and the balance isn’t what you wanted it to be. The worst part about being in debt is not having any money left over for fun things after paying off your bills each month. What do people do? They go into even more debt because they want to buy something nice or take a vacation but don’t have enough money saved up (or cannot get financing). This leads us to wonder: how badly do you want out of debt?
I don’t want to be rich. I just want my debts paid off… and then some.
You’re not trying to be rich, you just want your debts paid off.
You want the freedom to do what you want, when you want.
Like retire at 60 and travel with your spouse? Do it!
Or maybe start a business that requires lots of work and long hours? Go for it!
Do you know what your debt payments are every month? If you carry over a balance on your credit card, have you looked at the minimum payment lately? Even if you have a payment of $50 on a credit card, that could take decades to pay off if you only pay the minimum.
To calculate how long it will take for your debt to be paid off, use this formula:
Total Debt / (Monthly Interest Rate x 12) = Time to Pay Off Debt in Years
Say you owe $25,000 in student loans with an interest rate of 6%, and you make monthly payments of $250. You would divide 25000 by (6% x 12) and get 210 months or 20 years.
How many credit cards do you have? Why do you have them? Do you really need so many accounts?
Credit cards are not free money. They’re not even a good way to build credit. You should never obtain a new credit card just because you want the rewards, and it’s best to stay away from co-branded cards that offer points for your favorite store or airline.
If you do have a lot of credit cards, consider how many accounts you really need. Do all these accounts come with annual fees? If so, can you cancel them? Are there any promotional deals available for signing up for a new card which would help offset the cost of switching over?
What is something that costs more than it’s worth to you? Is it a meal at a restaurant that doesn’t feed your family enough or make them feel satisfied? Is it a pair of shoes that don’t fit quite right or aren’t quite what you wanted? Is it an item from a store that doesn’t accept returns (or doesn’t offer refunds or exchanges)? You’re probably being wasteful somewhere in your life.
- Don’t spend money on things that don’t give you value.
- Don’t spend money on things that don’t fit your needs or budget.
- Don’t spend money on things that don’t fit your lifestyle.
Are there things you want to do but aren’t doing because of money? Go on vacation. Start an education. Buy a car. Pay off debt so you can eventually retire and travel. For most people, these are things they’d like to do eventually. But for those holding out for someday, this list never seems to get fulfilled.
- Go on vacation.
- Start an education.
- Buy a car.
- Pay off debt so you can eventually retire and travel.
For most people, these are things they’d like to do eventually. But for those holding out for someday, this list never seems to get fulfilled—and it’s not just because of money but also because of time and other commitments (work, family). Unfortunately, the longer you wait until you start saving and paying down your debt, the more difficult it becomes when it comes time to invest in yourself or plan for something worthwhile later in life (like retirement).
If you want to cut out the waste in your life, it’s important that you start with what matters most. You can’t be wasteful with all of your money if you’re trying to pay off debt and save for retirement. So instead of feeling guilty about spending $5 on coffee each day, focus on where those dollars are going towards something important like retirement or paying down student loans.
Staying out of debt in Canada can be difficult. The credit card companies and other lenders have made it all too easy to get into the red. You may think that it is impossible to get ahead while avoiding debt traps, but there are ways to do so.
Get a copy of your credit report and make sure it is accurate.
- Get a copy of your credit report. Click Here
- Check for errors and make sure the information is correct. If it’s not, contact the credit reporting agency to get it fixed.
Keep track of your spending.
- Keep track of your spending.
- Know what you’re spending and where you are spending it.
- Use a spreadsheet or budgeting software to keep track of all your expenses, especially those that are recurring (such as rent).
- Place receipts in a folder for easy reference later on if the need arises, such as an audit or tax season.
Set up a budget and stick to it
The first step to staying out of debt is to set up a budget. A budget is a plan for your money, which will help you keep track of where it’s going and get an idea of how much money you have left over at the end of the month. You can use online tools like Mint.com or Quicken.com to create your own personal budgets, or download them from the Internet for free in Excel format.
Once you’ve created a budget and added all your expenses into it, stick to it! Instead of buying things on impulse, put aside some cash each week so that when payday comes around again (after all bills are paid), there’ll be enough left over for some fun stuff without having to borrow or charge more than planned for until next pay cheque rolls around again.”
Pay down your debts. It will build your credit rating and relieve stress.
The most important thing to do when you’re in debt is to get out of it as quickly as possible. You can do this by paying off the smallest debt first and then working on the next one. If you have multiple debts, try to pay more than the minimum payment each month so that your debts are paid off faster and you have less interest charged on them.
If your credit score is an issue for getting a mortgage or home equity line of credit, it might be worth paying off some of your smaller debts before making any large purchases like a car or house. This will not only improve your credit rating but also save money in interest charges over time. However, don’t use credit cards to pay off other credit cards because this will just lead to more debt!
Consolidate all your debt into one loan with a lower interest rate, if possible.
Consolidate all your debt into one loan with a lower interest rate, if possible.
This is the best way to get out of debt quickly and easily. Consolidating your debts means taking all of your different debts, like credit card bills and car loans, and combining them into one new loan. You’ll have one monthly payment instead of several smaller ones that are spread out over time, making it easier to budget each month. If you can consolidate all the debts into a lower-interest rate loan (usually from three percent to six percent), then this is what you should do first before doing anything else.
To find out whether or not consolidating will save you money on interest payments, go online and run some numbers for yourself using an online calculator like this one: Loan Calculator
If you have bad credit, consider a secured credit card to help rebuild your credit rating.
A secured credit card can help you rebuild your credit rating if you have bad or no credit history. You will apply for a secured card and make a deposit, which becomes your credit limit. The amount you deposit determines your interest rate and whether or not you will be approved for the card. If approved, payments are deposited directly into an account that is held by the bank until it’s paid off in full, so there are no surprises with interest or fees at renewal time.
Pros: A secure card can help establish a track record of paying bills on time and show lenders that they should consider offering regular unsecured loans in future when they see how capable YOU are at managing money responsibly.
Cons: Secured cards have higher than average interest rates compared to unsecured ones due to their riskier nature; however this may be justified if using them allows consumers access to more affordable loans down the road (especially those with low incomes). Get a Secured Credit Card
Applying for new credit cards may lower your rating, so stick with what you have.
Applying for new credit cards can lower your credit rating, so it’s best not to apply for one if you already have a lot of debt. If you do decide to apply, make sure that you are able to pay off whatever balance is on the card before the interest kicks in.
You should also keep in mind that while they can be useful tools, they can also be dangerous if misused. If you have no reason at all (like paying off medical bills or tuition), then it would probably be best not to get one right now. The same thing goes with borrowing money through a payday loan company : if there’s no need for such an expense then don’t take out a loan!
Get help from an accredited debt help agency like Canadian Customer Debt Relief. Their counsellors are trained to help you find the best solution for you, no matter where you live in Canada.
CCDR can help:
- Understand your current financial situation
- Figure out how much money is coming in and going out each month
- Understand which debts are causing problems for you (credit cards? student loans? car payments?)
- Create a plan that lets you pay off all or some of your debts over time
Debt can be a burden that holds you back from the life you want. It can also lead to stress and anxiety. The good news is that there are steps you can take to get out of debt and start saving money for the things you really want.
When you get a credit card, you will be given the option of paying the minimum payment or a higher amount. You may not realize that if you pay just 2 percent of the balance owed each month, it could cost you hundreds or thousands of dollars more in interest than if you paid more than just the minimum amount. In this article, we’ll explain why paying more than just your minimum payment is better for your wallet and how to do it effectively so that you can save money!
Your minimum payment does not always have to be 2% of your balance.
The minimum payment is the amount you must pay on your credit card if you want to be considered in good standing with the company. It is not always the best way to pay off your debt, and it does not reduce your principle balance.
If you want to pay off your debt faster and save money in interest charges, consider paying more than this amount. For example, if you have a $2000 balance on a credit card with an 18% interest rate and you make only the minimum payment each month ($100), it would take over 2 years to get out of debt! If instead you paid $1000 per month (equivalent to 24% of the balance), then it would only take about 2 months.
You pay more interest if you just pay the minimum each month.
You pay more interest if you just pay the minimum each month.
When it comes to paying off your credit card balance, it’s tempting to just pay the minimum amount due each month, but that’s not a good idea. Why? Because minimum payments are calculated based on your interest rate—the higher your rate is, the higher your minimum payment will be. And since most credit cards have variable rates (meaning they’re tied to an index or a prime rate), those rates tend to go up when inflation rises and fall when deflation takes hold of an economy. Plus, if you don’t make any regular payments against this debt over time—which is like running up new charges on top of old ones—you’ll end up paying even more in interest than originally planned because the longer this debt remains outstanding, the more money it costs you in total cost of ownership expenses like finance charges and other fees charged by financial institutions like banks and credit unions (like transaction fees).
Minimum payments do not reduce your principle balance.
We know that it can be tempting to just pay the minimum payment on your credit card each month, but doing so will not reduce your principle balance. The minimum payment is the minimum amount you have to pay each month as a percentage of your balance. This means it will never go down because most companies calculate their minimum payments as a percentage of interest owed, not principal balance.
Minimum payments extend the term of your debt.
The problem with minimum payments is that they only cover the interest, not the principal. This means you’re only paying interest on your credit card balance and not actually reducing it. In other words, you won’t be freeing yourself from debt any time soon. You’ll just be paying more in total than if you had paid more when monthly payments were due (which is why we recommend always paying at least double your minimum).
Balance transfers are not a good option for long term debt management.
When you consider a balance transfer, think about the following:
- Balance transfers don’t reduce your principle balance. They do, however, lower your interest rate and monthly payments.
- Balance transfers are not a good option for long term debt management. The debt will still be there after the introductory period has passed, and many consumers find that they have just created another problem to solve when their introductory period ends.
- Debt consolidation is one of the most popular reasons people choose to use balance transfers on their credit cards in Canada
You can save hundreds to thousands of dollars by paying more than the minimum on your credit cards
If you’re a credit card user, there’s a chance that you have taken advantage of this interest-free period and are paying only the minimum monthly payment. But if you’re like most Canadians, there’s also a good chance that your credit card balance has remained constant since signing on for the card or getting approved for a line of credit.
If you’re currently doing nothing about your debt, consider these statistics:
- The average 2 person household has $41,500 in debt on their credit cards and lines of credit.
- The average Canadian household carries an average debt load equal to 1/3rd of their annual income (not including mortgages).
- The average Canadian owes $300,000+ on their mortgage alone!
The bottom line is that you should always try to pay more than the minimum amount on your credit cards. You will save money and reduce the length of time that it takes to pay off your debts. If you can’t afford to pay more than 2% of your balance, then don’t do it! Instead consider using another strategy for paying off debts such as contacting a counselor at CCDR and get a free consultation.
Payday loans are a source of quick cash that many Canadians use to get through the month. They can be convenient when you need money, but they also come with high interest rates and fees which make it hard to pay off your debt if you take one out. If you’re considering getting involved in a payday loan, here are some things you should know before making that decision:
Make Payment Arrangements With Your Creditors
When you’re faced with a problem, the first thing to do is look at your options. If you don’t have cash to pay your bills, consider working out a payment plan with your creditors.
Get on their good side by paying any interest that is due (but not yet late), and any fees, late fees or collection fees that are due but not yet charged. This could help them see you as reliable enough to extend more lenient terms when it comes time for another loan in the future (or who knows—maybe they’ll forget about this one altogether).
If you still can’t afford a loan payment after all of that, it may be time to contact a payday lender as an absolute last resort.
Use Your Tax Return To Pay Down Your Debt
- Use your tax return to pay down your debt
The first thing you should do is use your tax return to pay down your debt. As a general rule, we recommend that you do this on the highest interest rate loan first (i.e., the one with the most expensive interest rate). This way, you’re able to save money in interest charges and payments and are able to get out of debt faster!
- Get a loan from a friend or family member
If using your tax return doesn’t work for some reason, consider getting a loan from friends or family members at an interest rate that isn’t as high as payday loans but still gives them some income for helping you out. We recommend checking with them first before going anywhere else because they may be willing to lend money without charging any fees at all! You can also try asking around through social media if anyone has any extra cash lying around instead of taking out an expensive loan just yet.
- Use A Credit Card To Pay Down Your Debt
If you can’t get a loan from friends or family members, try using your credit card to pay down your debt. This may be the only option left for some people who don’t want to take out an expensive loan just yet because they don’t have any other way of paying it back before their next payday comes around.
There are a lot of things you can do to keep from getting involved in a payday loan.
If you’re thinking about getting a payday loan, then there are some things you should know about them. First of all, if your friend asks for money and tells you that they will pay it back next week with their paycheck, don’t lend them any cash. This is what most people do by mistake when using payday loans because they think they’ll be able to pay it back after receiving their next paycheck. The problem is that these loans usually have very high interest rates attached to them which means that the amount due will keep growing every month until it becomes unbearable and/or impossible to pay off without taking out another loan or selling something valuable (like your car).
Instead of borrowing money from friends or family members who may not be able to afford giving out cash right now (and who would rather see other people succeed), ask for help from a professional financial advisor at www.ccdr.ca who specializes in helping people with debt problems like yours!