They debt here, debt there… Whether it’s just after the holidays or something else, debt never ends. But why do most people keep going into debt year after year? We spend more than we earn! The debt-to-income ratio for Canadians is $1.65 for every dollar earned. Our Acces Auto Finance team has looked into this question and suggests a number of solutions.
Establish a budget and stick to it
Start by setting up a budget that includes all your priority monthly expenses, such as :
- Your home
- Electricity
- Insurance
- Groceries
- Internet and phone
- Car and gas
By knowing what you have to pay, you’ll be more inclined to restrict yourself on frivolous expenses. Think about what really matters and what could be taken out of your expenses to minimize your debts. For the rest, keep your bills and update them once a week.
Reduce your current expenses.
Find ways to save! For example, think about modifying your telephone and/or cable plan. Plan your meals in advance, which will help avoid restaurant stops and contribute to your health. Prepare your coffee or favorite beverage at home before you leave.
Identify your debts.
To get an overview of your indebtedness, make a list of your debts, such as :
- Credit Cards
- Student loans
- Car loan, real estate loan, personal loan…
- Bank loan
Make sure you pay at least the minimum required on the due date of all your debts. Sign up for direct payment or schedule reminders to avoid delays. Some people prefer to tackle the highest-interest debts first, while others prefer to tackle the smallest debts to get them off their lists faster. In all cases, opt for what motivates you most.
Consolidate your debts.
Make an appointment with a bank advisor to see if your credit rating allows you to consolidate all your debts. in one place. You can also opt for a line of credit, which usually has a lower interest rate. Then all you have to do is make one payment a month, which will help reduce your stress.
Finally, it’s never too late to start paying off your debts and start saving. For all your car loan financing needs, call on the Acces Auto Finance team!
To find out more about this topic, visit the following links:
https://www.canada.ca/fr/agence-consommation-matiere-financiere/services/faire-budget.html