According to a recent report, about 47% of Canadians struggle to stay afloat, which leads to debt.
Unfortunately, faced with overwhelming debt, most people become passive and bury their heads in the sand.
While this might relieve the stress and overwhelm momentarily, it does nothing to solve the problem-debt.
If you have found yourself in this situation, the best thing you can do is find ways to clear your debt once and for all.
Here are some tips to help you get out of over-indebtedness.
Figure out How Much You Owe
If you have different debts from different sources, it helps to sit down and compute the total figure of how much you owe.
Having this figure in mind will help you institute strategies to clear it in the easiest way possible. Having a round figure in mind also helps you keep track of your progress.
Minimize Expenses
If you are to live a debt-free life and enjoy the peace of mind that comes from it, you will need to make some sacrifices.
Essentially, this will mean slashing your living expenses to adopt a bare-bones budget.
A bare-bones budget generally means living on as little as possible. You might need to cut off expenses like eating out, cable TV, and so on. The cash you save in this manner should be channelled into debt repayment.
Create an Emergency Fund
An emergency kitty comes in handy when you need cash quickly for any purpose. Without this, you end up borrowing and increasing your debt, which becomes even harder to clear.
Once you have worked out a bare-bone budget, figure out how much cash you can put into an emergency fund. You should keep this going even after you have cleared all your debt, as it will still help you stay out of debt.
Consolidate Your Debt
Debt consolidation means taking out one larger loan to repay other smaller loans.
If you have many little debts with high repayment rates, you can take advantage of a payday loan in Montreal.
This gives you one consolidated loan to repay instead of multiple loans with different repayment days, monthly fees, and interest rates. Often, this becomes much easier to handle and track.
Increase Repayments
The smaller the loan repayments you make, the longer it will take for you to clear debt, and ultimately, the more expensive it will be.
A better way to go about it is to pay as much as you can every month, including making lump-sum payments when you get bonuses at work and so on.
In Summary
Even when they do not seem much, the little effort you make towards your loan repayments will pay off in the end.
Whenever you feel discouraged, think of the freedom that comes with debt-free. This should help you stay on track.
