Managing debt can feel like walking a tightrope. If you’ve spoken to a credit counselor or bankruptcy trustee, now known as a Licensed Insolvency Trustee, about a debt management plan, you know how much money you need to set aside each month to pay back your debt. Making sure you have that much money at the end of the month and still enough to cover your essentials isn’t as easy as you might think at first. Every time you go shopping for essentials, you’re forced to make dozens of micro-decisions that add up in the end. It can be stressful and confusing trying to save.
It can feel like the only way to get ahead is either getting a raise or padding your spending money with your credit card. Credit has never been easier to get and it’s often tempting to use when you shouldn’t. As a result, Canadians are getting deeper and deeper into debt. Including all unsecured debt (credit cards, personal loans, etc.) and secured debt (mortgages, car payments, etc.), Canadians have a 1.71 debt-to-income ratio, meaning they owe $1.71 for every $1.00 they actually earn. In fact, while Americans have seen their debt-to income ratio shrink from 1.67 to 1.4, Canadians have seen theirs go up.
One of the big problems is that Canadians are living beyond their means and relying on their credit cards to fill the gap. Unfortunately, it can be hard to get out of debt once you’ve been living on it.
If you’re not sure how much money you need to set aside, but your credit card bills keep getting higher and you’re worried about your financial future, it may be time to get help. Bankruptcy trustees such as David Sklar& Associates provide consumers with essential insolvency services such as bankruptcy and consumer proposals. These are ways to reduce your debt, although they have an impact on your credit report. To find out about bankruptcy versus consumer proposal, talk to a bankruptcy trustee. If you simply can’t afford to pay back your debt, ask about these services.
However, reducing your expenses can also help you pay back debt without going insolvent. Credit counselling and debt management are offered by David Sklar& Associates, but you can also try these smart shopping tricks to save more money every month.
#1 Think Twice about Special Offers – It’s easy to buy everything on special at the grocery store, but will you really use it? It can be cheaper to buy how much you need instead of paying for more food that will go to waste.
#2 Avoid Impulse Buys – Retailers know how to get you to spend money you don’t necessarily have. Often, they’re items that don’t cost that much, either, like a chocolate bar that only costs a dollar or two. But every time you spend money on something that’s not on your list of essentials, you’re spending money that could go toward your debt.
#3 Make a Shopping List – Make lists a part of your life when you’re trying to save. Stick to the list you’ve budgeted for when you’re out shopping.
#4 Stop Buying Expensive Brands – Branding is expensive. Often you can get cheaper toiletries, packaged food stuffs, and clothes by changing brands.
#5 Do Your Research – For bigger purchases, find out about warranties and how you can resolve issues with the product. That goes for electronics, home appliances, and more.
Reducing your expenses is the first step toward paying down your debt. Start shopping the smarter way.
