Just because you are currently in debt doesn’t mean that you have to resign yourself to being in debt forever. However, a recent study shows that a number of Canadians have accepted their debt simply as part of their lives. Don’t accept debt. Work hard to overcome it!
An Ipsos Reid poll done on behalf of BDO shows that :
- Three out of four Canadians are in debt (to varying degrees)
- Twenty-three per cent of Canadians feel that they will never be debt free
- For those that feel that they can conquer their debt, the average expectation is about 8 years to pay all debts down [does this statement include mortgage debt? If not, add that to the statement]
- Forty-six per cent feel that the rising cost of living (including hikes in hydro and food prices) is making them unable to pay as much down on their debts as they’d planned
- Fifty-five per cent worry that they won’t be able to pay their bills if interest rates rise
- One in three respondents feel that “debt is inevitable”
“Debt doesn’t have to be a means to an end. It’s not inevitable or a necessary evil. It’s a choice, whether your debts were thrust upon you because of life events, or because you’ve spent beyond your means. It’s important to remember that, although your debt load may seem to be running your life, you are actually the one that is in control,” says Jeff Schwartz Jeff Schwartz executive director, Consolidated Credit Counseling Services of Canada.
“It’s not easy to take charge of your debt, especially with the cost of living increasing and given that it can take years to fully pay it off. Your success hinges on setting and achieving goals to pay down that debt. You also need to set a smart budget that is flexible to your lifestyle over the long term,” says Schwartz.
Wouldn’t you rather be debt-free, move more quickly towards your financial goals and do without debt stress? Here is how to reduce your debt load and stay ahead of the cost of living.
Decide to make the change
Don’t simply just accept debt! The moment that your life will change is the moment in which you make a conscious choice to move towards being debt free. Be realistic. Depending on how large your debt load is, and what your cash flow is like, it could take several years before you’ve reached your goal. Be patient and expect roadblocks along the way.
Even though you might be inspired to throw every cent that you’ve got towards paying down debt, be realistic so that you can sustain this goal over a long period of time.
Set a budget that is flexible and leaves wiggle room for extra expenses and increases in cost of living. Also commit to reviewing your budget every quarter to see if you are on track.
Combat spending with savings
Even though your focus is paying down debt, your best bet to ultimately becoming debt-free is to focus on setting aside savings in addition to your debt payments.
Having to cover unexpected expenses with credit after you’d paid down a good chunk of debt will re-ignite the debt cycle and erase your hard work and sacrifice.
Where can I cut back?
Cost of living increases mostly centre on energy bills and on food costs. In order to keep these costs down, you’ve got to have them on the radar at all times.
Save energy by turning the thermostat down and wearing a sweater. Turn appliances, lights and electronics off when you’re not using them. Use appliances during non-peak hours.
Save on food by meal planning and only buying what’s on sale. Switch meat out a couple of times a week. Take advantage of price matching and coupons. Buy in bulk.
Are you ready to take on your debt and take steps to get debt-free? The first step is to make that important call to get the ball rolling. Call us today at or visit our free online debt analysis.