Canadian Households owe almost $2 for every dollar of disposable income they have. It’s no secret that debt is a huge problem, but how does one fix it and take back that dollar? The answer is to well, get out of debt. It starts with making a list of what you owe and knowing the average cost of your monthly expenses. After that, you can create a budget and snowball your debt.
Some do a quick internet search for “fast loans Canada” to find a low-interest rate option that they can put toward their credit card bills. There’s also the tried and true method of picking up a second job.
Are you ready to get started on tackling your debts? Continue reading for an entire list of repayment options.
Make a List of What You Owe
The first step to pay off debt is to jot down a list of everything you owe. This includes credit cards, auto loans, student debt, and mortgage.
Beside each source of debt, record its minimum monthly payment and interest rate.
Decide on a Budget
Now that you know the total amount you owe, it’s time to create a budget. Pull up a spreadsheet and calculate how much you spend on basic necessities.
Subtract that from the amount of money you bring home. The leftover number is what you can reasonably afford to chip away at your debt.
If you don’t have much left over, the best financial advice we can give you is to rethink your spending habits. Drop your gym membership, start bringing lunch and coffee from home, and get rid of some of your reoccurring subscriptions. You can give yourself a cushion by seeking out online loans too.
Snowball Your Debt
Take the debt list you created above and sort it from smallest to largest. Make the minimum payments on the larger debts while spending most of your disposable income on the smallest one.
Once you’ve completely paid off your smallest source of debt, move on to the next one on the list and do the same. This tactic is known as the snowball method. It takes a lot of time and effort, but it works wonders.
Pick up a Gig or Second Job
Starting a side gig is one of the easiest ways to pay off debt. If you have a knack for arts and crafts, you can sell your work online. DoorDash in your spare time or walk dogs.
Do you have a way with words? Start up a blog or look around for freelance writing gigs. You can make a little extra money by taking online surveys too.
If you don’t think a side hustle will help you pull yourself out of debt in time, you may need to apply for a second job.
Lower Your Interest Rate
High interest rates can make it difficult to pay off loans and credit cards. If you have a good payment history with your provider and a decent credit score, they might be willing to lower your rate. Depending on the situation, the arrangement won’t be permanent, but short-term relief is better than none.
You can also move your debt to a balance transfer credit card. Doing so will lower your rate, but you’ll need to have a good credit score in order to qualify.
Consolidation will allow you to roll all your debts into one monthly bill and save on interest. This method can be risky, however.
Once you consolidate your credit card debt, you’ll wipe the slate clean. That means you can begin swiping your cards again. If you can’t resist the temptation, you’ll be right back in the same place in a few months.
Apply for a Loan
Most would advise against taking on more debt to chip away at current financial problems, but it might help you secure a lower monthly payment.
For example, if you have a credit card with a $100 minimum payment, and taking out a loan to knock it out would only cost you $76, that’s an extra $24 in your pocket every month.
If you don’t think you have the credit score to qualify for a personal loan, you’ll be happy to know that King Cash offers no credit check loans!
Get Rid of Your Credit Cards
Once you consolidate your credit card debt or manage to pay them off on your own, close your account. Shred every single last one of your credit cards and never look back.
If you don’t, you’ll be tempted to use them. This will put you right back in the cycle of debt.
Stay Focused On Your Financial Goal
As you can see, pulling yourself out of debt can be challenging. It’s easy to lose your motivation. The important thing is that you stay focused on your financial goals.
Don’t take on any more debt unless you need a personal loan to chip away at your credit cards. Whenever you reach huge financial milestones, reward yourself. You’ve come a long way!
Get Out of Debt and Live Carefree
Most Canadians are plagued by debt. Not only is it stressful, but it can impact a person’s very way of life.
Get out of debt by using the snowball tactic. If that doesn’t work, talk to your loan provider about lowering your interest rate. Get rid of your credit cards or pick up a side gig.
You can also go to kingcash.ca to take out a fast loan. We’ve got quick money solutions that will allow you to say goodbye to your debt. Contact us to find out more about how it works.