Simple Debt Management Tips to Get You Back on Track
According to statistics, more than 10 million Canadian adults are in debt. As of October 2018, the Canadian household debt had surpassed the $2 trillion mark which is a significant number. This number shows that many people are overwhelmed by their debts and are looking for ways of attaining financial freedom. The sad thing is that most of them choose to suffer in silence yet there are lots of things that they can do manage their debts and get their financial life back on track.
If you are struggling with a personal loan in Montreal or other debts, then you are in the right place. Below are simple debt management tips that will help you get your financial life back on track.
Know Who and How Much You Owe
If you are looking to get your financial life back on track, then you need to get a clear picture of where you are in terms of debt repayment. Therefore, sit down and make a comprehensive list of your debts.
Make sure that your list includes the creditor, the total amount of money you owe each one of them, the minimum monthly payment, and the due date.
If you can’t remember everything, use your credit report to identify all the debts that you need to pay. Having this list in front of you will give you a clear picture of where you are and what you need to do moving forward.
However, don’t just create the list and forget about it. Refer to it regularly as you make payments and update it as the amount of debt you owe creditors change over time.
Create a Budget and Stick to It
How much do you earn and how much do you spend? Make sure that you also create a comprehensive list of your sources of income in one column. In another column, list all of your essential bills such as rent/mortgage, food, energy bill, your daily transport costs, and among others.
Go through your monthly budget and see if you can eliminate anything from the list to raise more money that will go towards paying off your personal loan in Montreal and other debts.
Consider looking for ways of making extra money such as selling house items that you don’t need or look for a side hustle that will help you raise more money to cater to your needs.
Prioritize Your Debts
Once you have determined how much you owe each creditor and you have a budget in place, it is good to prioritize your debts and come up with a strategy of how you will repay them.
Figure out what you need to address first based on the interest rate or potential penalties. If you discover that you have a personal loan in Montreal that attracts high interest, consider paying it first.
Typically, you should prioritize to pay the debts that will affect you most first.
Accelerate Your Payments to Pay Off Your Debts Faster
Did you know that making the relatively smaller payments more often can pay off a big time when it comes to managing your debts?
If you make the minimum monthly payments only, you will end up paying more interest over the term of your loan. One of the easiest and effective ways of paying off your debts faster is to accelerate your payments.
Consider switching your monthly loan payments to bi-monthly or weekly payments depending on how often you receive money. This simple strategy will save you a lot of money in the long run since you will pay off your debts within a shorter period than you expected.
Know When to Seek Professional Help
Lastly, you need to know when it is time to seek help when it comes to debt management. There is no shame in speaking to a debt management expert about your situation and see how you can benefit.
In fact, this move can save you from depression and a whole host of other problems in the future. Therefore, if you are struggling with debts, seek professional assistance instead of hoping that everything will just be fine.