Living in Canada, you’re bound to run into debt. Between student loans and credit cards, life is a balancing act. It’s hard to believe, but there are 1.7 million Canadians living in debt, collectively owing $28.8 billion — and the average Canadian owes nearly $22,000. The two biggest reasons for this growing problem? The rising cost of living and stagnant job growth has not kept up with our spending habits. If you’re one of these Canadians, you know that paying off debt is a difficult challenge — but it is possible if you take the right approach to tackle your financial obligations.
Increase your income and reduce your expenses
We’ve already established that you are spending too much money and that you need to reduce your expenses. But once you’ve done that, it’s important to consider how you can get a better job or start a business. This is the third step. If you are in a position where you can look for a better job, do it. If you can’t, then find ways to increase your income. Can you start a side hustle? Can you sell stuff that you don’t need? Can you start a business? Can you network with people and try to get referrals? There are so many ways that you can increase your income, and they’re just as important as reducing your expenses.
You’ve probably heard a lot of people talk about this as a way to get out of debt, but a lot of people also believe it’s not possible to live a good life in Canada while reducing your expenses and increasing your income. But, it’s possible. You just have to be smart about it.
Pay off debt with the snowball plan
Pay off debt with the snowball plan: Many people are in debt because they don’t know how to pay it off. One of the best ways to pay off debt is the snowball plan. This is a debt repayment plan where you first pay off all of the smaller debts. Once you pay off all of the smaller debts, you can start paying off the bigger debts. The reason this is so effective is that it focuses your attention on the debts you’re paying off. It is also effective because you minimize the amount of interest you pay over time.
Manage your budget, so you have money to pay down debt
The first step to getting out of debt is to manage your budget, so you have money to pay down debt. You’ve heard it before, but it’s true. The first step to getting out of debt is to manage your budget. If you don’t know how much money you make, how much money you spend, and how much money you have left over, then how can you possibly get out of debt?
That’s the basic idea behind creating a budget. It’s just a way of tracking your monthly spending habits so that you can determine where your money is going. It’s not a way to judge yourself or shame yourself into cutting every expense. It’s a way to determine where your money is going so that you can make better financial decisions. Managing your budget will make you much better prepared for your debt payoff journey. And if you need serious help from professionals with your debt, check out debt relief in Canada for different debt reducing and paying off plans.
Borrowing less is the best way to pay off debt faster
One of the best ways to pay off debt and live a good life in Canada is to spend less money. That seems like a no-brainer. But people can find it really difficult to resist the temptation of credit cards and the “now” mentality. When they think they can’t afford it now, they put it on their credit card and think they’ll just pay it off later. But what happens when they don’t? You end up paying double. It’s much easier to avoid borrowing money in the first place than to pay it off later.
Your spending is the best way to get out of debt, but if you’re already in debt and you’re starting to feel overwhelmed by it, you’re going to need to take a step back and look at what you’re really spending your money on. You’ll need to live on a much tighter budget and cut out many of the things you’ve become used to. The good news is that there are ways to reduce your spending while still finding a fulfilling life.