If you’re struggling with debt, the answer to getting rid of it once and for all may not necessarily lie in figuring out how to pay it off. If you are really going to get rid of debt, you have to figure out how you can avoid accumulating debt in the first place. Keep reading for some tips to avoid debt.
“Consumer debt in Canada is growing at a rapid pace. People are becoming desensitized to the dangers of spending beyond their means with credit,” says Jeff Schwartz, executive director, Consolidated Credit Counseling Services of Canada.
Schwartz continues, “In order to reverse the debt cycle you have to re-evaluate your attitude towards debt. Patience is not only a virtue; it’s the cornerstone of responsible money management.”
It’s time to assess the debt damage. Lay out all of your debt on the table (literally) and take responsibility for overusing your purchasing power.
Below are some tips to avoid debt altogether:
Do you see any trends in your spending? Many times, it is the smaller purchases (dinner out or a little retail therapy) that seem innocent at the cash register, but accumulate to create a big problem. If you don’t have the cash in your wallet, and if it’s not covered by your budget, then you shouldn’t spend it.
Become a fine print ninja
Appealing no-money- down, buy-now-pay-later programs for larger purchases, like furniture, cars and electronics can seem like a great way to let you enjoy a purchase while you are paying it off. However, there are financial implications.
If you save the money ahead of time to fund these purchases, you will avoid hefty interest charges. It does not take long for that debt to snowball, as your balance just sits there. Furthermore, there are usually fees and administrative charges with these programs. There may even be a penalty for paying the debt off early. If you buy now and pay later, you are paying a lot more for the same thing.
Debt can be temporary or it can define you
As debt load grows, it not only consumes all of your money, it consumes your life. It limits your opportunities, causes physical and mental stress and creates problems in your relationships.
But debt doesn’t have to have that kind of hold on you. If you take steps to get rid of the debt and to alter the behaviour that got you there in the first place, then debt becomes a temporary problem that you are ultimately in control of.
Focus on emergency saving
If you are taking an aggressive stance on your debt, then you’re probably taking the lion’s share of your income and throwing it down on your debt. Don’t neglect your emergency savings though. Without an emergency fund, you’ll be forced to turn to debt to pay for unexpected expenses, starting that debt cycle over again.
There is no better time than right now to take control of your debt. When you change your attitude towards debt, you can really change your life. To get the ball rolling, call one of our trained credit counsellors or check out our free online debt analysis.