How to Survive Debt: Re-Focus Your Debt Plans for 2017Nov 29, 2016
Did you begin the year with high hopes and solid debt plans?
Household debt in Canada has risen to $1.68 for every dollar of discretionary income and Canadians are finding their budgets tighter than ever. In January 2016, a poll showed that Canadians hoped to increase their net worth and decrease debt during 2016. However, almost a year later, new reports show that Canadians would have tremendous difficulty accommodating an extra $300 a month in unexpected expenses. This month, examine how your debt affected your finances this past year and explore the ways you can tackle debt successfully in the year ahead.
Did you add to your debt or reduce it over 2016?
Which strategies were beneficial to you? Did you set goals and stick to them or follow a budget to reduce debt? If you had difficulty paying down your debt, what challenges did you encounter? Often, making broad, sweeping resolutions such as paying down debt can be too vague and difficult to stick to. Instead, setting small, attainable goals that can be worked into every day will give you results sooner and in turn, keep you motivated to continue. Here are a few goals that you can incorporate now to see results:
- Use a financial app to track your spending. You can choose one that allows you to upload all your receipts or enter each purchase manually, or an app that connects to your accounts and credit cards to track your spending automatically.
- Make debt reduction part of your daily routine. For example, find ways to save by cutting entertainment expenses. There are a number of no-cost and low-cost workshops, drop-in events and family activities on the Sault Ste. Marie Community Calendar.
- Pay yourself first. Living paycheque to paycheque can mean your money is spent before it hits your bank account. Instead, set up an automatic savings account and allot a percentage of your paycheques to savings. This is a good strategy for creating an emergency fund, which will help you avoid future debt.
- Find support. Tell your family and friends about your plan to reduce debt to create an environment of support. You can also find online support by visiting the Financial Consumer Agency of Canada and utilizing Your Financial Toolkit or the Financial Literacy Database.
Have you considered professional debt help?
If you’re unsure how to manage your debt, a professional can help you determine which debt plan will suit your needs. In an initial meeting with a Licensed Insolvency Trustee (LIT) you can explain your situation, and the LIT with help you explore solutions for resolving your debt. You may be able to find relief through budgeting, debt consolidation or credit counselling. If you’re unable to pay your bills, a consumer proposal or bankruptcy may be the answer.
Are you a debt survivor? What strategies will you implement into your debt plans for 2017? Share your story via Twitter with the hashtag #FLM2016 and like the FCAC on Facebook for more financial literacy support.