(TORONTO, ON) – Canadians are bound and determined to make 2015 the year that they slay their debt. A recent CIBC poll shows debt repayment as the number one financial priority for Canadians this year, leading the way for the fifth year in a row.
There is good reason to worry about debt – we have a lot of it. The most recent quarterly report from credit bureau Equifax shows Canadians owing an average of $20,891 in non-mortgage debt. Factor in mortgages, and we’re on the hook for a combined $1.5 trillion.
Jeff Schwartz, executive director of Consolidated Credit Counseling Services of Canada, is encouraged by Canadians’ resolve but is worried about the pressures of January.
“This is a time when Canadians are faced with the harsh realities of their holiday spending,” says Schwartz. “People like to go above-and-beyond to provide a memorable holiday season for their family, and they’re feeling the consequences now.”
Shopping lists were indeed long this season, with BMO reporting that the average Canadian planned to spend over $1500 on everything from gifts to turkey. And with half of the country living paycheque-to-paycheque, odds are that credit cards had to take the brunt.
Schwartz has a word of advice for those who are bracing themselves for January bills:
“With money as tight as it is in many households, people need more than willpower – they need a plan, not just a resolution.”
Schwartz and the team at Consolidated Credit have provided the following tips to help Canadians fight back against the swarm of bills that are about to attack mailboxes nation-wide:
- Stop spending and put away the plastic. It’s time to stick that smoking gun in its holster. Your credit card probably saw a lot of action over the last few months, and now’s the time to give it a rest. Avoid large purchases and use cash – a frozen balance will be a lot easier to manage!
- Assess the damage and set a goal – Real numbers, real date. Collect your bills so you know exactly what you’re up against, then set realistic goals and choose a time by which you can eliminate your Holiday debt. Think about how much you are going to pay and by what date because you’ll never hit the target if there is nothing to aim for.
- Budget – It’s impossible to tackle debt without a plan. A budget is nothing more than a snapshot of your finances. See where you are spending your money, and identify opportunities to either get the same products or services for less money, or reduce what you are buying to free up some cash. Digging into your grocery, restaurant and cell phone bills can provide easy savings.
- Pay more than the minimum – Accelerating your repayment could save you thousands in interest over the long run and paying the minimums will only mean that you are paying more for your items over time – in some cases, double, or triple! Every little bit extra helps.
- Don’t wait – start paying your balances today! – Don’t wait for that dreadful day when the bills arrive in your mailbox. If you have extra cash (gifts, bonuses), put it toward holiday debt and get ahead of the game.
- Ask for help – These are simple steps, but they might be easier said than done. If you’re simply too overwhelmed by the debt you accumulated over the holidays, ask for help. A trained credit counsellor or other financial professionals can help you assess the damage and help you determine the best debt reduction strategy for your unique financial situation.
About Consolidated Credit Counseling Services of Canada, Inc.:
Consolidated Credit Counseling Services of Canada is a national non-profit credit counselling organization that teaches consumers about personal finance.
For more information or to request an interview with Jeffrey Schwartz, please contact:
Jacob MacDonald, Public Relations Coordinator, Consolidated Credit Counseling Services of Canada, Inc., T: 416-915-7283 ext.1041, C: 647-390-5253, F: 416-915-5200, E: [email protected]