5 Debt Relief Tips to Use in Your Personal Finances in 2018

Did you hear? Many Canadians would be willing to sell an organ to rid themselves of debt. Considering that one-third of consumers cannot cover their bills and debt payments, it may not come as a surprise that indebted consumers would sell a kidney to become debt-free.

According to a new report, Canadians owed $1.821 trillion as of the fourth quarter of 2017, this is up 1.3 percent from the previous quarter and six percent from the same time a year ago. Though delinquency rates are falling, watchdogs and the Bank of Canada are warning about rising debt levels that could affect the national economy.

These figures are astonishing, but this is the reality millions of households face across the Great White North. Higher taxes, an increase to the cost of living, and stagnant wages plague many of those suffering from credit card debt, auto loans, student loans, and mortgages.

We understand. Your New Year’s resolution in 2018 was to become debt-free, or at least pay off a substantial chunk of the debt you incurred traveling to Venice this past Christmas. Don’t worry, though, you can still achieve those 2018 goals by adopting a few measures!

Here are five debt relief tips to use in your personal finances in 2018:

1. Put Away Your Plastic – For Now

The average person has about three credit cards. This is a recipe for disaster, only because it is enticing to use at least one of them to buy a $5 latte, purchase a $15 movie ticket, or cheer yourself up by acquiring a new book on Amazon.

Here is one piece of advice: put away your pieces of plastic at this very moment.

Most people get into debt by constantly utilizing their credit cards for every single transaction. Yes, it is convenient, and it can help others keep track of what they’re spending on, but you’re in debt for a reason.

So, how can you pay for that Tim Hortons doughnut? It’s simple: do what everyone else did just 30 years ago: use cash.

2. Take an Ax to Your Monthly Spending

There are two types of people in life: those with a budget and those without a budget.

Whatever your case may be, it is important to monitor your spending, and this is achieved by establishing a realistic, honest budget. Once you have written down your daily, weekly, and monthly outlays, the objective is to take an ax to the budget.

Unlike politicians, you are required to live within your means. And the only way you can do this is to ensure you’re spending more than what is coming in.

Cut the cable cord, reduce your Cadillac data plan, eat at home, don’t go to the pictures.

3. List Debts by Interest Rate

Auto loans, credit cards, student loans, and lines of credit. You need to list the debts you have, and then you should rank them by the rate of interest you pay every month.

The aim should be eliminating the debt with the highest interest rate first, working your way down the lowest.

Once you do this, you will inevitably get out of debt – you just need to stay debt-free.

4. Always Make the Minimum Payment

As you’re concentrating on the credit card with the highest interest rate, you still need to make the minimum payments on the other debts to ensure that you’re not facing late penalties, additional interest charges, and other erroneous fees.

Should you fail to make the minimum payment, you will fall behind.

5. Debt Consolidation Could be the Solution

Just how much debt do you have? Be honest with yourself. If your debt is just too much to handle, then there may be a get-out-of-jail free card: debt consolidation.

Essentially, debt consolidation is when you take all of your debts, place them in a pile, and make one giant monthly payment. There are just a few things you need to be aware of:

• You should refrain from adding small debts to your consolidation.
• Your credit rating might take a hit.
• You need to avoid getting back into debt.
• You must cut up and cancel additional credit cards in this process.

Debt consolidation has helped millions of Canadians finally get enough rest at night.

How stressed are you? How many nights sleep have you lost? How ashamed are you of your enormous levels of debt?

Finding debt relief options can be difficult, particularly if you are afraid to face it head on, or even concede that you have a red ink problem. But it is critical that you tackle this personal finance issue immediately by employing debt relief measures.

By the same time next year, you can be confident that you are either free from debt or you’re just inching ever so closer to that sweet, sweet day!