Jun 07, 2021
When it comes to debt, you’re not alone. Credit rating agency Equifax Canada noted that as of Q3, 2020, the average non-mortgage debt per Canadian is $23,035. Here are a few steps to help you reduce it.
1. Rank your non-mortgage debt. Make a list of your debt and organize it according to the interest rate from highest to lowest
2. Take a 50/50 approach. If you owe student loans, credit cards, or something else, aim to pay off 50% of your available credit and when you hit your target, reset and pay off the rest. For example, if you owe $8,000, aim to pay off $4,000 by making your minimum payments and extra each month.
3. Plan your finances like you plan a vacation. Sit down, look at your calendar, and plan it out. Decide what you want to do, how much it’s going to cost, write down what it will take to get you where you want to go, and set up check-ins to keep you on track and accountable.
4. Save a little. Let’s say you have $400 available. Put $200 towards your debt and the additional $200 into a TFSA or other savings fund. You will be taking steps to pay off your debt sooner while keeping some money around to pay for different urgent needs – so you don’t end up putting those costs back on your credit cards. To ensure this is the correct strategy for you, please consult with a financial advisor.
5. Talk to a financial advisor. Financial advisors can also help you plan to manage your debt. They can assist you with goal development, cash flow management, debt management, investment opportunities and strategies, retirement income strategies and estate, and tax guidance.
These five steps will help you reach your goals sooner and Member Savings financial advisors can help. They have access to a full suite of tools and products to support your debt assessment, planning, and recovery.
For more information, call a Member Savings Financial Advisor or our main Branch 1.888.560.2218 for more details. Schedule a conversation. We’re here to help!