How Badly do you want out of debt

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).

Conclusion

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.

If you’re in debt, the stakes are high. You need to take action and get out of debt as soon as possible. But if you are considering buying a lottery ticket or waiting for a windfall from your favorite store’s loyalty program, stop. In this article, we will look at how these quick and easy solutions to financial problems can backfire on Canadians who are trying to get out of debt.

Build a budget

The first step is to create a budget, which can be as simple or as complicated as you want. A basic outline of the steps:

  • Track your spending for a month or so and see where your money goes
  • Make a list of all the things you want to buy in the next year, and prioritize them by how they fit into your life goals—this will help you decide what kind of lifestyle adjustments are necessary
  • If possible, sell unused items on Craigslist/Kijiji/eBay/VarageSale and then use that money towards debt payoff or savings accounts until you’re ready for another splurge purchase (or until an exciting opportunity presents itself).

Check your spending

>*If you’re serious about getting out of debt and building wealth, it’s time to take a hard look at your spending. You can do this by using any one of these tools:

  • A budgeting app or spreadsheet. These are great for tracking all the various things you spend money on—and can help you set goals for reducing spending in particular areas, too.
  • A pen and paper (or even just a few lines on your spreadsheet). If a full-blown budget isn’t really your thing, try keeping track of just your “fixed” expenses like rent/mortgage, utilities and groceries with nothing more than an old-fashioned list. This will help keep things simple without taking away from their effectiveness as an accountability tool!

>When it comes down to it though there’s no right answer here; what matters most is finding something that works for YOU!

Pay down debt

Paying off debt is an important step towards financial freedom. If you’re like most people in Canada, the amount of debt you have is likely significant compared to your income. However, it’s important to remember that there are two types of debt: interest and principle. Interest is the money paid each month on top of what you owe; principle is the original amount borrowed—the part that should be paid off first if possible.

The first step in getting out of debt is understanding how much you’re paying in interest versus paying down your principle balance each month (if at all). For example, let’s say John Smith has $15,000 worth of credit card debt at 25% annual interest rates and makes monthly payments of $200 per month towards his credit cards (which covers both interest and principle). In this case, his monthly payment would only go towards paying down 1% ($200/15000) or 0.6% ($200/$1500) annually.

Don’t rack up new debt

  • Don’t buy anything you can’t afford
  • Don’t borrow money to pay off your debt
  • Don’t use credit cards
  • Don’t use a payday loan
  • Don’t use a cheque cashing service (also called check-cashing or check-cashing outlets)
  • Don’t use a home equity line of credit

The chances are very low that money from the lottery will help you get out of debt. It is more likely to damage your finances.

It’s probably not a good idea to plan on winning the lottery to get out of debt. The chances are very low that money from the lottery will help you get out of debt. It is more likely to damage your finances.

There are many reasons why this is so. First, there’s the fact that lotteries are a tax on people who don’t understand math. Second, they’re a tax on people who think they can beat odds that defy logic. Thirdly, they’re a tax on those who have given up hope and feel like playing the lottery – something psychologists call “desperation.” Lastly, casinos rely heavily upon suckers for their profits – and what better sucker than someone desperate enough to buy lottery tickets?

Conclusion

Keep in mind that winning the lottery is not a surefire way to get out of debt. There are many cases of lottery winners who end up right back where they started when it comes to planning for their future. As we’ve discussed here, there are some ways you can improve your chances of winning big and keeping your finances stable after doing so — but none of them involve getting into more debt!