How to Beat that Debt

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Jenna Weekes Mortgage Agent Level 1 C P (613) 242-1503 Email jennaweekes@jjmortgages.ca

How to Beat that Debt

Have you lost control of your finances? How can you beat that debt? Here are ten things you can do to help you situation.

Plan your spending according to your income

1. Keep track of spending and make a budget.

One of the smartest things you can do to get control of your finances is to start keeping track of what you spend so that you can see exactly where your money is going each month. This is the first step in creating a budget that shows your income and expenses.
Having a budget and learning to stick to it will help you free up money to reduce your debt.

2. Put needs before wants.

Buy what you need first. Eliminate unnecessary expenses and look for things you can live without.

Don’t get into more debt

3. Keep your credit card in your wallet.

To avoid getting into more debt, use cash or your debit card instead of your credit card. That way, you’ll be spending money you have and are not borrowing.

4. Avoid ‘Buy Now, Pay Late’ offers.

When you’re having problems making ends meet, the administrative fees tied to such offers and high interest rates if you don’t pay on time will only add to your existing debt load.

5. Reduce small, recurring expenses.

Saving a little a day can go a long way. Good examples of ways you can save on costs include taking public transit instead of your car, bringing your lunch to work and reducing your coffee consumption. Make coffee at home and take it with you. Eliminating that extra $1.50 coffee each workday can mean over $400 a year in savings.

6. Reduce your banking fees.

Use automated banking machines (ABMs) from your own financial institution. Review your banking package every now and then to make sure that it is still the best one for you.

Manage your existing debt

7. Pay down your high interest debts first.

If you carry a balance on your credit card, then this is likely the debt with the highest interest rate. Use cash or a debt card while you pay off this debt to avoid accumulating more. While you pay of the credit card debt, don’t forget to make the minimum payments on your other debts to maintain your credit rating. If you set aside the main part of your income towards bringing the balance down on your most expensive loan, you’ll be surprised at how much you save.

8. Contact your creditors.

As soon as you realize that you are having trouble making ends meet, call your creditors and explain the situation. In most cases, they will work out a modified payment plan that will make it easier for you to pay off your debt.

9. Get a consolidation loan with your financial institution.

This means getting one single loan to pay off all of your existing debts so that you have just one payment to make. For this new loan to save you money, it must have lower interest rate and a lower monthly payment than all other loans put together. It is also important to stop using any credit cards with balances that you consolidated into the new loan.

10. Talk to a trusted financial professional.

These may include your mortgage broker, bank representative or your financial planner. With their help, you will be able to evaluate your current debt situation, determine your present and future needs, make a budget and find ways to pay off the debt.

For a detailed budget form please contact me.

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