Resolutions for a Debt Free New Year (3 Minute Debt Break)

It’s a new year! And with it, maybe some new financial resolutions. But, resolving to reduce your debt and making actual progress to that goal are two different things. Here are some real concrete resolutions you can make to ensure you are on the path to being debt free.

First, know how much you owe. Take stock of how much you owe across all your outstanding debts. Review your bills and statements, and all your online accounts. Centralize all this information in a spreadsheet, including the type of debt, interest rates, outstanding balances and monthly payments. Examining your debt situation and keeping it front of mind will help you put a plan in place — and stick with it.

Then review your budget. Create a new spreadsheet and record all your income and regular expenses. Be honest with yourself, making sure to include even small or seemingly inconsequential expenses such as online subscriptions and your morning coffee. Make sure to also include lines for discretionary spending, savings, and your monthly debt payments.

Third step… reduce your expenses. Review your budget with a critical eye and determine which expenses you could reasonably give up or cut back on to help reduce your debt. Some ideas to consider include, eating out less. Create a grocery shopping list to avoid impulse purchases. Purchase regularly used, non-perishable food items in bulk. Reduce the size of your cable subscription and streaming services. Turn down the thermostat. And using public transportation where possible are just a few common ways to reduce spending. And there’s always more ways! 

The next step in reducing your debt is to create a plan, Choose a repayment strategy that makes the most sense for your financial situation and begin outlining steps you’ll take over the next one, two, or three years to begin paying down your debt. Some ideas include focusing on specific debt you want to eliminate. Pay the minimum payments on all debts except that one, which you will focus the bulk of your efforts toward until it’s completely paid off. You could also consolidate your debts into a single, affordable monthly payment.

These are just a couple of ways to address your debt. But you don’t have to face your debt repayment journey alone. At MNP, Licensed Insolvency Trustees offer a Free Confidential Consultation. These conversations are completely free of cost, you do not have to participate in any of the services offered, and there is no minimum amount of debt required to schedule an appointment with MNP. Together, we’ll review your entire debt situation, discuss your specific challenges and goals, and identify opportunities to eliminate your debt for good. 

Subscribe to MNP 3 Minute Debt Break on your favourite streaming service.