3-Step Guide to Adjusting Your Budget During COVID-19
July 21, 2020
4 Things People Do Wrong With Their Credit Cards
August 17, 2020
Stagnant wages and rising costs of products and services have made it difficult for the average Canadian to maintain a lifestyle. Throw in unforeseen expenses, and it is easy to see why many people get overwhelmed with staggering amounts of credit card debt or other forms of loans.
However, being in debt is not a permanent situation. Anyone can improve on credit score with solid advice and a determination to stick to a plan. Here are five tips that can help people break free from debt and get in control of finances.
Make an agreement with creditors
Banks and collection agencies will choose to get something rather than nothing. If a person struggles to make repayments, creditors would often agree to lower the amount to be settled in exchange for a lump sum or an automatic payment.
Whatever the debtor and creditor settle on should be in writing, to ensure that both parties will hold up their end of the bargain.
Enter a debt relief program
Making repayments to various creditors, all with different rates and guidelines, can get confusing. People in debt can make things simpler by participating in a debt relief program, one that negotiates on behalf of the debtor to reduce payments and stop interest charges.
Set and stick to a budget
Budgeting is a practice that all people should adopt. It is not only for those who have trouble paying debts. Making detailed accounts of income and expenses will help anyone reach their financial goals.
After debt consolidation, monthly budgeting and living within one’s means becomes easier. People can use apps or spreadsheets to keep this process efficient.
Get a separate account from loved ones
Establishing a personal credit history is a valuable thing that every adult should have. Sharing a card with a spouse or partner can cause financial stress, especially if the two have different spending habits. Even getting a low-balance credit card used for groceries or gas can help improve credit history.
Track credit history carefully
Identity theft is a serious problem plaguing modern financial institutions all over the world. Since personal and banking data is now online, many dishonest individuals attempt to access others’ funds or use their credit line to make purchases.
If this happens, it can undo the credit-building work a person has done for months, or even years. To avoid this situation, people should carefully monitor their accounts and credit histories. It is good to compile receipts and cross-check these with bank statements to see if there is any unrecognizable activity.
Conclusion
Debt elimination is a long process that involves discipline and a willingness to change. The five tips discussed can help people start a journey toward financial freedom, and speaking with a credit counsellor can help iron out details. Finally, it is good to remember that a clean slate is not an excuse to start spending mindlessly again; once a person implements a change, he should stick to it.
Consult Debt Helpers for all matters regarding personal debt relief. This company offers a range of debt solutions to help people reach financial goals, and it has currently helped more than 14,200 Canadians become debt-free. Get in touch with DebtHelpers.ca today to learn more.