Lighten your debt load: Strategies for eliminating debt
Sliding into debt is a slippery – and subtle – slope. A little here, a little there and before you know it, most of your money is tied up in paying interest on debt instead of helping you enjoy life now or save for a financially secure tomorrow.
It’s important to identify the behavior that got you into debt in the first place. Once you uncover the real reasons for your debt issues, you can begin taking steps to resolve the issues so your slide into debt doesn’t cause even bigger problems down the road.
Start with a detailed financial review and establish your life goals. Focus on reducing your debt load by targeting ‘bad debt’ first – high interest rate credit or retail cards, for example – through a debt consolidation or monthly debt reduction plan. Then, look longer term with a realistic financial strategy for saving toward life goals that are important to you and your family: your kids’ education, your retirement, or paying down your mortgage.
Your strategy could include:
- Establishing an emergency fund using Tax-Free Savings Accounts (TFSAs)
- Protecting your family with life, critical illness and disability insurance
- Funding your children’s education with Registered Education Savings Plans (RESPs)
- Funding your retirement with a Registered Retirement Savings Plan (RRSP)
Depending on your personal situation, there are other debt reduction and money-saving strategies that could help alleviate stress and get you debt-free. Get back on track for financial security. Your professional advisor can provide both the third-party perspective and the financial planning expertise to develop the plan that will work for you.
June 26, 2015