Buy now, pay for it later no longer an issue for some Canadians according to a recent BMO survey
We’ve heard the same story before, the Bank of Canada has even raised alarm bells over this issue – Canadians are drowning in debt at record levels. However not everything is all doom and gloom. A recent survey from BMO Wealth Management says the number one priority of 30 per cent of Canadians is to reduce debt. This is welcoming news considering many Canadians from coast to coast are living paycheque to paycheque.
“The findings from the report are very encouraging for consumers. It suggests debt repayment is top of mind for a lot of Canadians. This could mean consumers are factoring in debt management into their budget instead of wanting to add to their debt load,” says Jeffrey Schwartz, executive director, Consolidated Credit Counseling Services of Canada.
The report also discovered the financial priorities of Canadians changed throughout the different stages of their lives:
- Thirty-four per cent of Boomers (35-54) want to reduce/eliminate their debt
- Twenty-six per cent of Millennials (18-34) want to save more money
- Twenty-nine per cent of Canadians 55 years old and older want to master the art of investing and achieving tax efficiency
“As your life changes so will your finances. You could be adjusting to married life, welcoming a new baby, or preparing for retirement. Whatever the case, it is common to make the necessary adjustments to reflect the different stages of your life,” says Schwartz.
To help consumers continue the trend of focusing on the debt management of their finances, Consolidated Credit Counseling Services of Canada has created the following tips:
Understand what you are up against
Have a clear understanding of what you owe. When you have an idea of your debts, you will be able to create a plan to reduce your debt. You can do this by knowing:
- what your interest rate is
- how much you owe
- what your monthly payments are
The more you know about your debt, the more effective your debt reduction strategy will be. It’s a win, win situation!
Say bye to impulsive spending
Impulsive spending is a sure fire way to landing yourself in debt. Nine times out of 10, you end up buying things you do not need in the first place. To keep your spending at bay, have a clear understanding of needs vs. wants. Of course a new wardrobe is nice however if you can live without it – don’t buy it. You can gain a clear understanding of needs vs. wants by creating a budget including your housing, food, utilities and transportation. Everything else that’s not in your budget will be discretionary so spend only on an as needed basis. Whatever extra money you end up saving from spending less, you can use it to pay down your debt.
Set goals for yourself
It would be nice if you could pay $10,000 down on your debt in a month however if this is not a realistic goal for you, do not set it. Instead, set smaller attainable goals. Maybe you can start at $500 and set a goal to put down this money in a months’ time. Or another option you can choose is to pay off one of your smaller debts and check your progress on a monthly or bi-monthly basis. To stay accountable to your goal, choose an option that is achievable for you.
If you have tried the above strategies and you are frustrated with your progress of slaying your debt on your own, don’t worry, there’s help available to you. Sometimes debt can get out of hand pretty quickly however with the right debt management strategies, it can be manageable. To help you get back on the right track, you can pick up the phone to call a trained credit counsellor now at 1-888-294-3130 or you can go online for a free debt analysis. A credit counsellor will instantly put your mind at ease and help you to tackle your mountain of debt.