How to Prioritize Paying Down Your Debt Load in 2019Jan 17, 2019
The key to prioritizing anything whether it be getting in shape physically or paying down your debt load comes down to the plan. At this time of year, it’s tempting to make a dramatic resolution (“I’m going to pay off all my debt this year.”). But, let’s face it, New Year’s resolutions are often unachievable and they rarely succeed. Instead it’s time to change your mindset and break old habits if you want to leave debt behind in 2019.
We know that many economists are predicting that interest rates are likely to rise in 2019. We also know that personal debt is impacting Canadians across the country. Our 2018 survey found that this is especially true for specific groups, including women, millennials and parents. With that knowledge it’s time to look at how to build a plan and see it through to the finish.
- Build your financial literacy
The old saying “knowledge is power” rings true when it comes to paying off debt. Learning about how to effectively manage your money goes a long way in helping you to build an effective plan.
These are some fantastic resources that can help you and the family learn about a variety of topics related to your finances and personal debt.
Financial Consumer Agency of Canada (FCAC): The FCAC is federal government agency which offers an abundance of resources to help you strengthen your financial literacy. This user friendly website covers topics like making a budget, credit reports and scores, managing debt and education funding.
Gail Vaz-Oxlade: Author and TV personality from shows like ‘Til Debt Do Us Part and Money Moron, Gail Vaz-Oxlade knows what she’s talking about and has excellent plans and resources to help you prioritize paying off debt.
The Wallet Diet: Using her own experience of being $35,000 in debt after school, Christine started a personal finance blog that has transitioned into a lifestyle blog with finance as a background theme. It offers advice and tips on everything from finances to travel; it’s well worth some time exploring her site.
Don’t stop at those links. Keep searching and sharing on social media other financial experts you come across so others can benefit and grow their own financial knowledge.
- Focus on what you can control
We mentioned that interest rates are likely to rise and that might stress you out, especially if you have a lot of personal debt. You can’t control what the Bank of Canada decides to do with interest rates, but you can control your budget and how you spend your money.
Try to work on changing your mindset to focus on the small things. When it comes to paying down debt small changes can have a profound impact. A few suggestions include:
- Implementing a monthly budget
- Tracking your spending with a personal finance app
- Setting realistic and achievable goals
- Making morning coffee at home rather than buying it every day
- Turning the heat down a degree or two, or turning the air conditioning up a degree or two
- If debt has you feeling overwhelmed talk to someone
Dealing with finances can be stressful, especially if you’re dealing with a large debt load. The good news is that talking about it can instantly provide relief. Start with your spouse or a trusted family member to get the conversation going.
After that it might be worthwhile to sit and talk with a professional like a Licensed Insolvency Trustee (LIT) who can advise you on all the different debt solutions, including DIY debt repayment strategies, debt consolidation, consumer proposal or bankruptcy.
If you want to learn more about how an LIT can help, check out our blog: How An LIT Can Make Your Life Less Stressful.
The power to pay down your debt load rests with you — but don’t forget there is help available if you ask. So get started on building your solid plan (instead of a resolution) and putting it into action.
Share with us and others on how you’re forgetting about the #NewYearsResolutions and making a plan to #LeaveDebtBehind in 2019!