Do you enjoy financial stress, suffering from debt problems and living paycheque to paycheque, scrambling to make ends meet? Of course not. Would you rather be in control of your financial future? Of course you would.
“When you are carrying the burden of debt, you often feel like your debt is in charge, because it consumes so much of your life. It’s important to remember that you are ultimately in control. You can have a different life, free of debt problems. The key is deciding to take charge,” says Jeff Schwartz, executive director, Consolidated Credit Counseling Services of Canada.
“It’s not going to be easy. It’s not going to be quick, but deciding to stop the debt cycle once and for all could literally set your life on a different path. It’s worth the hard work and committing to the change. Money doesn’t buy happiness, but taking control over your finances can bring you peace and pride in your accomplishments,’ says Schwartz.
Here are some tips on how to stop the debt cycle and rid you of your debt problem.
The first step to reducing your debt is to stop accumulating it. Shelve your credit cards and commit to cash only. If you’ve been using credit routinely to spend beyond your means, this may be a challenge, but this is probably the most important thing that you can do to stop the debt cycle.
If you keep spending on things that you can’t afford in cash, you virtually ensure that your debt cycle will just keep churning
Full disclosure (to yourself)
It’s time to list all of your debts. One of the by-products of living in a debt cycle is self-denial. Do you avoid your mail because you are afraid of the balance of your credit cards? Are you starting to avoid family and friends because you your substantial debts are causing conflicts?
The only way to get a clean start is to understand the totality of the challenge ahead of you. It’s also the only way to develop a debt repayment strategy that will actually work.
Budget, budget, budget
Your budget is the boss. You need to set up a household budget that lets you pay down debt, cover your living expenses and put a little aside in emergency savings, so you don’t need credit in an emergency.
You need to embrace your household budget for the essential tool that it is. It literally is the framework for spending within your means. If that means you need to cut back on non-essential spending to get out of debt, then that’s what you’ve got to do.
You got yourself in debt. It’s up to you to get yourself out of it. No excuses. Your debt repayment will likely take quite a while, so it is possible that you may veer from your intended path. It’s not the end of the world, nor is it the end of the road for you. Be accountable for your mistakes and get back on track.
Another way to be accountable is to track your spending. Not only does this make you more conscious of your spending, it can help you identify areas for improvement.
Understand that your budget is not set in stone. If you set too stringent a budget, it may actually have the opposite impact, if you’ve been unrealistic in your targets. Revisit your budget at least once a quarter, or sooner if you’re having trouble sticking to it.
Do you need help managing a debt problem? Call us at or check out our online debt analysis.