Getting Out Of Debt Takes Planning And Discipline

Whether we’re financing monster homes, shiny new cars or exotic vacations, the statistics say Canadian households are up to their eyeballs in debt. So what’s a super spendthrift to do?

According to Gail Vaz-Oxlade, borrowers need to consider more than the lowest interest rate. Consider your personal discipline level. For the highly regimented, that means a line of credit as rates are low and there’s flexibility in paying it back. For those impulse buyers, fixed personal loans are best because paybacks can’t be dithered with.

When it comes to managing your debt, take the football approach. You need to tackle it. Go after high-interest loans such as credit cards first and be diligent about mowing those down.

Figure out who you owe money to and how much. Believe it or not, some people prefer to keep their head in the sand when it comes to paying the piper. Or perhaps they owe so many different credit cards and banks that they can’t keep track. Try using a calendar on your computer or mobile device. Set an alert a few days ahead to notify you that a payment is due.

Try not to miss payments. That affects your credit rating and makes catching up on debt repayment all the more difficult.

Work on building an emergency fund. Everyone needs one for those for, well, emergencies. If you don’t have one to dip into, you will likely go further into debt.

Finally, set up a monthly budget. This lets you see if you have enough money to cover your debts and to live. It gives you the heads up that you may need to take action if you don’t have enough money to back down your debt. If there’s money left over, earmark for debt repayment.

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