Helpful Advice for Achieving Debt-Life BalanceJul 06, 2016
What is debt-life balance? It’s a simple concept that involves creating and maintaining a balance between managing the debt you carry with other priorities, like saving for your retirement, building an emergency savings plan and even having fun. With average household debt sitting at record high levels and almost a quarter of indebted Canadians reporting that they feel like they will be never be debt free, finding this balance is not always that simple. This doesn’t have to be the case, however. The following advice will help you not only get your debt under control, but also achieve your own debt-life balance.
Be clear about your debt and your financial goals
When working towards debt-life balance it’s important to have a clear understanding of the debt you carry, as well as your short- and long-term financial goals. Start by making a list of your debts. What are the terms of your loans? What interest rates are you paying on your credit card balances?
Now it’s time to clearly define your financial goals. A financial plan is an excellent way to accomplish this task, as it not only encompasses an outline of your financial goals, but also includes details about the steps you’ll need to take in order to achieve them. The Financial Consumer Agency of Canada (FCAC) provides a helpful online financial planning tool that guides you through the process of creating your own financial plan.
Plan your spending and saving
Planning your spending and saving is another way to mitigate debt problems and find financial balance. If you don’t currently have a budget in place, now is the time to start. Be realistic and capture all your anticipated expenses. Review your spending habits and cut back where you can. Include room in your budget for your other financial priorities if you can. There are many online tools and budget calculators that will help you with this process.
Strategically deal with debt
When you are carrying a large amount of debt, your need to keep up with debt payments can affect your ability to contribute to other financial goals. Utilizing specific debt control strategies can help you repay your debts more quickly or more efficiently. For example, a debt consolidation loan can potentially decrease the amount of interest you pay, leaving you with room in your budget for other priorities. Depending on your level of debt, a do-it-yourself debt plan may be the answer. Here are some strategies that you can help you tackle debt on your own.
Seek help with your debt if necessary
If you aren’t sure what would work well for you, or you’re unable to keep up with your debt payments, your next step is to seek advice and help from a debt relief professional. A Licensed Insolvency Trustee will review your situation and work with you to find a debt relief plan. It’s all about finding a better balance. When your debt payments are manageable or your debt is paid off, you are able enjoy a better quality of life, contribute to short- and long-term savings goals, and achieve economic security.
Do your finances feel unbalanced due to your debt? Share your thoughts and challenges with others using the hashtag #BDODebtRelief.