Round Up Your Debt Eh

Are your ready to round up your debt? Given today’s struggling economy, increased cost of living and thousands of job losses across the province, many people in Alberta are currently looking for ways to stay afloat financially and viable options for paying down their debt. To best determine your best course of action, the first step is to take a look at where you are right now and consider where you would like to be in the future. Here are three steps to consider as you seek to take control of your finances and round up your debt:

1. How much do you owe?
   

   In order to make a plan, it is essential to review your statements and record all of your debt, along with all applicable interest rates. Keep in mind, many financial institutions raise the interest rates if you have missed payments and therefore, the interest may be higher than expected.

2. How much are you spending?
   

   Understanding how much it costs to operate your household is essential to improving your financial position. Understanding how much income you have to work with each month is key to setting a realistic plan for future financial goals. Record your monthly income from all sources. Record your monthly expenses and be sure to also include those one time, annual expenses such as insurance, auto memberships and vehicle registrations. Try to reduce or eliminate any non-essential expenditures to focus on paying down your debt. Once you know exactly where your money is going and have found ways to reduce spending (think coffee runs, hefty cable bills, etc), determine how much of your budget you can apply to your debt each month. Try to pay off the high interest debts first while keeping the other debts in good standing.

3. Make a plan, set a goal
   

   Making a plan and setting a realistic goal is the key to getting out of debt. If you stick to the plan, reducing your debt can be a rewarding process. If your debt has gotten to the point where it seems unmanageable or you are having a difficult time establishing a realistic plan, seeking out the advice of a Licensed Insolvency Trustee might be a good first step for you in working to achieve a fresh financial start. At MNP, we offer a free, no-obligation consultation where we can assess your unique situation and explain all of the options available so you can choose which route is best as you work to achieve a debt-free life and a fresh financial start.