How to Save More and Pay Debt Faster

People who are in debt might feel alone and helpless. This should not be the case, though. About three-quarters of Canadians have an outstanding debt and the Covid pandemic certainly made things worse. The MNP Consumer Debt Index says 30% of Canadians surveyed have stated that there is added debt burden because of the pandemic.

The good news is that there are things that can be done by someone who is trying to juggle all their debts, whether a credit card balance, a student loan, a car loan or something else. Here, Debt Helpers shares some tips:

Set Specific Goals

The first thing a person in debt needs to do is to set goals to know exactly what to work for. For instance, the goal could be to be able to pay off all credit card debts in one year while still being able to build an emergency fund. By having specific goals, it will be easier to create a plan on how that can be achieved, too. 

Track Where All the Money Is Going

To determine the best way to save money and pay debts, one needs to be on top of their spending first. Knowing where every loonie goes can help a person figure out what adjustments can be done. Make sure to list every single expense, including money spent on food, coffee, online purchases, and bills that are paid on a regular basis. 

Cut Down on Spending

A person who has a huge amount of debt to pay should seriously work on not making unnecessary purchases until debts are paid off. Based on what the “dollar tracker” shows, figure out what sacrifices can be made to be able to put more towards credit card payments, for instance. A good first step is to lessen the number of dinners at restaurants or ordering takeout. One can prepare meals and brew coffee so there won’t be any need to order those. If online shopping is a huge temptation, then uninstalling shopping apps and staying away from eCommerce websites are huge steps in the right direction. Take a look at all existing subscriptions to see which ones are not regularly used, too, and unsubscribe from those.

Automate Payments and Savings

One of the reasons people’s debts accumulate is that many forget due dates. This means having to pay interest and even late fees. To avoid these extra charges, automate payments. Speak to the bank to see how an auto transfer can be done and see if there’s an option to pay bills automatically. Make sure to automate savings as well because that’s equally important. It’s a good idea to set an amount, like 10% of the gross monthly income and have it automatically sent to a savings account. This step is especially useful for people who are finding it hard to stick to a budget and to set some money aside for savings and debt payments. 

Try the Snowball Method

The snowball method is where a person focuses on paying debts starting from the smallest to the biggest. Make minimum payments on all the debts and put the remainder towards the debt with the lowest amount. Even when one small debt is paid, this can give a person a feeling of accomplishment – an important factor that could motivate someone who may already be overwhelmed by their debts.

Conclusion

There are many things that a person can do to pay off debts. The tips shared above are just some of them. Many also find it helpful to seek the help of professional debt consultants who can determine the best strategies and help implement them, too. 

Debt Helpers is here for anyone who needs the help of seasoned debt consultants in Canada. Our debt consultants can tailor debt solutions to ensure that every client reaches financial freedom as soon as possible. Get in touch with Debt Helpers today and take one step closer to becoming debt-free!