Get rid of debt once and for all
Get rid of debt.
The average Canadian household debt is $96,000 ($107,000 for American households).
Can you believe that? So many people are spending more money than they make, and it’s leaving them with huge debt piles.
Are you are ready to get rid of debt once and for all? Here’s what needs to happen:
Determine just how much debt you actually have.
Who do you owe? Credit card companies, friends, family? Do you have a car loan, mortgage, bank loan or buy now & pay later loan? Write every single debt down. Include the amount you owe, the minimum monthly payment, and the interest rate (if applicable).
Add all of your debt together to get the big number. Try not to pass out.
Track your spending.
In order to see exactly where all of your money is going, you need to track your spending for at least 1 month (3 is ideal). Many people don’t realize how much they spend on little things every month, like coffee, snacks, and magazines. Track every penny. I bet you will be surprised to see where some of your money is going.
Trim the fat.
Do you really need to buy coffee every day? Cut back to once a week and put those savings towards your debt. Are you going out for lunch every day? Again, cut back and put your savings towards debt.
It’s important to make these sacrifices to get out of debt. Once the debt is gone, you can consider doing these things more often again (but not if it will put you back in the hole!).
Get your interest rates lowered.
Call up your creditors and ask them to lower your interest rate. If they say no, ask to speak to a manager. If the manager says no, tell them that if they can’t help you, you will consider transferring to a credit card company with lower rates.
There are so many credit cards out there, that many will lower your interest rate just to keep you as a customer. If they won’t, look around for another card you can transfer to (one with a low-interest rate).
Determine which debt to pay off first.
You should always pay off your debt with the highest interest rate first. If you have a bank loan at 10%, a credit card at 15% and a car loan at 12% – you should pay off the credit card first, then the car loan, then the bank loan.
If there are no interest rates involved, such as a loan from a family member or friend, pay off the smallest debt first so you can start to see some progress sooner.
Make money to put towards your debt.
In order to pay off your debt, you need to make more money or spend less than you make.
The easiest thing to do is to simply cut back on your monthly spending. Can you cut your grocery budget back from $500 to $400 per month? Maybe you can get by on $100 a month for entertainment instead of $200. Some things you may even be able to cut out all together include alcohol, lunches out, and magazine subscriptions.
After you have scaled back your spending, try to make some extra money to throw towards your debt.
The goal is to become debt-free no matter what the cost. The feeling you have when you are out of debt can not even be described. It is amazing.
Some people think that debt is a normal way of life but it doesn’t have to be that way.
With some hard work and determination, you can get rid of debt once and for all.