Talking about debt is never a fun conversation to have. It’s something many of us don’t enjoy facing. But, the more you ignore your debt, the bigger the problem will get. Debt doesn’t need to be a normal way of life, but for many Canadians, it is. According to Equifax Canada, the average Canadian debt per person is $73,532, up 2.2% compared to 2019. Here’s the thing though, you don’t have to settle for a life full of debt.
If you’re ready to become debt-free, these are the 5 steps you need to take to get started.
Before you read the brief summary of the steps below, it is important to note; you may not like the idea of taking some of them, but it is not really about what you like and don’t like here. It is about getting free of the debt which shackles you down.
1. Your current debt
Sit down and compile all your current debts. Everything from credit cards, vehicle financing, mortgage, and even student loans if they are still lingering. Make a list of everything you owe money on and how much you owe on each of those debts and loans, and how much interest you’re paying for each one. Thinking about the money you owe can be overwhelming, but if you have a proper system to organize your outstanding debt, it can make it a little less stressful to look at and review.
2. Prioritize your debt
Now that you’ve compiled all your debts into a list, it’s time to start prioritizing them from most important to least important to pay off (not to say that some types of debt are not important, just that certain debts are better to pay off right away). To decide which debts are more important to start working on, first, look at the interest rates. In most cases, you want the debt with the highest interest rates closer to the top of your priority list.
3. Review your current spending habits
Are you buying a $5 morning coffee daily from your favorite coffee shop? Do you find yourself spending money on things you want rather than need? If you’re currently sitting on a lot of debt, it’s time to make a few lifestyle changes to help pay that debt off. That daily $5 dollar coffee, for example, is costing you roughly $150 dollars a month alone, which would be otherwise money well spent paying off your debt. So, as you have just prioritized your debt, you need to prioritize your spending habits as well and create a budget for yourself. Stick only to necessities and dedicate more of your money to paying off your debt.
4. Find another source of income
Another great way to start paying off your debt is to find another source of income. Easier said than done of course but think of extra ways you can earn some cash. Maybe by getting a part-time job or starting a small business. Also, think about things you could sell. Whether it be an older car you’ve been meaning to get rid of or holding a garage sale to earn some extra cash, every little bit counts.
5. Ask for help
The biggest step of them all is asking for help with your debt. As we’ve discussed in this earlier blog, talking to someone and opening up about your debt can seem like a really difficult step to take, but you’d be surprised by how much help you can get if you just ask for it. Regardless of whether you have someone to ask for help, you always have us at GetMeDebtFree to get you started in the right direction. With our industry knowledge and experience, we have searched out who we believe to be the best companies in Canada to help our fellow citizens get out of debt. If the company does not pass our Gold Standard Test, then we will not recommend their services. If you are looking for the best advice on how to consolidate your debt, fill out our contact form, and we will be sure to refer you to a company that we approve of. Let it be clear, we do not mine your data nor sell your information to numerous companies. We are simply looking to connect people who are serious about dealing with their debt to a professional who is best suited to help make that happen. You have nothing to lose and a lot to gain, so start your debt-free future today.
