How to beat that debt
How can you beat that debt after losing control of your finances? Here are things you can do to help your situation;
1. Keep track of your spending and make a budget.
If you start keeping track of what you spend so that you can see exactly where your money is going each month. This is one of the smartest things you can do to get control of your finances. Creating a budget and learning to stick to it will help you free up money to reduce your debt.
2. Put needs before wants.
Buy what you need first, and eliminate unnecessary expenses and decide what you can live without.
3. Don’t go into more debt. Keep your credit card in your wallet.
Use cash, or your debit card and live within your means in order to avoid going into more debt. This way, you’ll be spending money you already have.
4. Avoid “buy now, pay later” offers.
These offers typically have administration fees tied to them, and higher interest rates if you don't pay on time which will only add to your existing debt load.
5. Reduce small, recurring expenses.
Saving a little every day can go a long way. Good examples of ways you can save on costs include making coffee at home and not buying it out, and bringing your lunch to work instead of buying it.
6. Reduce your banking fees.
Use ABMs (automated banking machines) from your own financial institution and avoid other ABMs as they will have additional feed to use them. It’s always a good idea to review your banking package every now and then to make sure that it is still the best one for you.
7. Pay down your highest interest rate debts first.
If you carry a balance on your credit card, then this is likely the deby with the highest interest rate. Stick to using cash or your debit card while you pay off this debt to avoid accumulating more. While you’re focusing on paying off your credit card debt don't forget to make the minimum payments on other debts with lower interest rates. If you set aside the main part of your income towards bringing the balance down on your most expensive debt, you’ll be surprised at how much you can save.
8. Contact your creditors.
As soon as you realize that you may be having trouble making ends meet, call your creditors and explain the situation. In most cases, they will work out a modified payment plan that will make it easier for you to pay off your debt.
9. Get a consolidation loan with your financial institution.
This means apply for one single loan to pay off all your existing debts so that you just have one payment to make. For this new loan to save you money, it must have a lower interest rate and a lower monthly payment than all the other loans put together. It is also important to stop using credit cards with balances that you consolidated into the new loan.
10. Talk to trusted financial professionals.
These may include your bank representative, a financial planner, or a reputable credit counselling agency. With a professional's help you will be able to evaluate your current debt situation, determine your present and future needs, make a budget and find ways to pay down your debt.
For more information regarding how to beat that debt, visit the official FCAC website.
