New Year New Goals Five Tips To Deal With Your Debt

2018-01-25   minute read

Mary Plahouras Rob Shier

Debt Solutions

The year 2017 was one of many highs and lows, from the surge of bitcoin to iconic retailer Sears shutting its doors. Now it's 2018, a new year, with new resolutions and hopefully, new goals. If your New Year's resolution is to set new financial goals, now is a good time to challenge yourself by thinking about your finances and taking action by making a list of sustainable things you will need to do to reach them.

Having financial goals and following through with them can have a drastic impact for a happier, healthier and more prosperous new year for you.

Person talking on a cellphone looking at spreadsheets on their laptop

Five Tips to Deal with Your Debt

1 - Live Within Your Means

Stop the spending sprees, and stop using "painless payment," i.e. credit cards and other types of credit. Buy only what you need and use dollars and sense by forcing yourself to pay for your purchases by cash or debit. If you need to pay by credit, try to use one credit card only.

2 - Prepare a Monthly Budget

Plan your expenses and establish a monthly bill payment checklist. Buy a journal and get into the daily habit of journaling your expenses. Journalizing can become a powerful motivational factor in your daily life by helping you visualize your spending and sticking to your budget.

3 - Be Persistent on Paying Down Your Debt

Make at least the required minimum payment as per your bill statement. Review your credit card statement to determine the required minimum payment. Then, determine what extra amount you can afford to pay. Seeing the amount on one credit card get down to zero will get you excited about paying off your other debts sooner.

4 - Consider Automatic Bill Payment on Your Debts

Determine the amount you will need to pay on a regular monthly basis and set aside that amount from your pay by having the funds automatically deducted out of your bank account on your pay period.

5 - Recognize the Signs You Need Help

For example, you find it hard to pay your credit card debt and other bills each month, your payments barely cover the interest charges on your debt and, as a result, your debt is not going down. Or you're late or missing payments, or you're paying your credit cards with other types of debts such as payday loans. Borrowing money to stay afloat will only result in more unmanageable debt.

Taking the initiative to deal with a difficult financial situation is often the hardest part of the process of becoming debt free. Stay focused on becoming debt free and in due course, your outlook on your finances and your life will improve for the better.

Consider speaking with a Licensed Insolvency Trustee (LIT) to determine if your current debt could be reduced through either a Consumer Proposal, a bankruptcy, or another option that would avoid the use of a formal proceeding. The LIT is in the best position to discuss your financial situation and to review the options available to you. He or she will provide you with a financial appraisal of your particular situation outlining the best-fit solution in dealing with your debts, even if that solution does not involve the services of an LIT.  

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