With consumer debt continuing to rise in Canada, Albertans are starting to feel the pinch each time an interest rate increase it announced. It becomes harder and harder to pay down or pay off debt. Some are working to get their finances under control. Others are looking ahead to the holiday season and wondering how they can still give gifts without overspending on their credit cards.
It is easy to let poor spending habits take over your life. Accumulating unpaid debts can quickly add up to an immense amount of interest if chronically put on credit cards and only minimum monthly payments are made. Budgets do not have to be a taboo topic. You can still tackle your debt and enjoy the plan to be Debt Free®! It takes some time, self-control and a few helpful tips to get you started on the right path.
Start with a Plan to Prioritize and Pay Down Debt
When you assess your financial situation, you begin to take back the control over poor choices or the cascade of circumstances that have left you indebted. If you have more than one source of debt, such as credit cards, personal loans, or auto loans, it can be hard to choose which one to focus on first.
While we recommend setting up a meeting with a credit counsellor, in the meantime here are some suggestions to help you decide where to start:
- Make a list. Take a moment to pull together all your bills. Note the amount owed, the minimum payment due, the interest rate, and the payment due date for each.
- Choose a payment method. There are a couple of ways you can choose from:
- Debt Snowball: Focus on the smallest one. Add any extra to the minimum payment until it is paid off. Then roll that payment to the next bill on your list. This is sometimes called the “snowball” method and can give you a sense of accomplishment.
- Debt Avalanche: Start with the balance that has the highest interest rate, and then proceed to the next highest rate. You can save money because you accrue less interest.
Managing Your Spend During the Holidays
Once you start working on your debt payment plan, you can consider how to afford the holidays, and it does not mean going deeper into debt. Plan ahead and avoid the dread of opening up those credit card statements in January.
- Set your first resolution now instead of January. Many people decide to lose weight or get their finances in order, or a myriad of other options. Instead of waiting until after the holidays, chose now to reign in your holiday spending.
- Starting saving for Christmas now. You can offset any credit card spending by putting money back now. After Christmas, keep saving for the next year. And remember, gifts do not have to involve money. They may be hand-made certificates for lawn mowing, shovelling, dog walking, dish washing etc. Make it fun.
- Keep an eye on your balances. There is more to the holidays than just buying gifts. There are the decorations and entertaining to be done. Decide now how much you are realistically able to spend and especially where you do not need to spend at all. Think hand-made.
- Avoid taking on store cards. When shopping, do not opt to open a store credit card. They carry high interest rates which make it expensive to shop and can be more difficult to pay down later.
Get Professional Debt Advice and Avoid the Holiday Crash
Choose to regain control of your finances now to avoid overspending during the holidays. If you are struggling now, help is available to get you back on your feet or at least on the right track. Schedule a free consultation with the professionals at A.C. Waring & Associates Inc. and learn more about our debt solutions. Our trusted team of experts is here to help you get your financial life back under control.
Call our Debt Help line or our main line at 780-424-9944 or 1-800-463-3328 with your questions and concerns about debt help for the Edmonton and Central/Northern Alberta region.
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