Pay Down Debt and Gain Peace of Mind
Paying down debt is the highest priority for Canadians in 2021. The Financial Post reported in December 2020, that Canadians are worried about their debt and feeling less confident about the economy this year. If that describes you, then you’re not alone. Many people took on more debt last year to cover day-to-day expenses and to replace lost income.
The pandemic has created a lot of uncertainty about the future, and that helplessness can be paralyzing. Especially if you are worried about the debt you are carrying.
Turn this around by taking specific actions, to feel more in control of your finances. It’s much more useful than spending sleepless nights tossing and turning, fruitlessly worrying.
Face the issue head on. Place a call to your Financial Advisor, to frankly discuss your situation and explore your options. A debt reduction plan, one that’s realistic so you will stick to it, will give you greater peace of mind.
A lot of credit card debt can really stand in the way of getting your finances back on track. Those little plastic cards are so easy to come by. However, the steep interest rates will take a huge chunk out of the money you have available for paying down debt. What can you do to bring this situation under your control?
One way is transferring your balance to a card with a lower interest rate. Balance transfer cards typically come with low, or zero interest rates for a certain period of time. This will reduce your carrying costs.
You are effectively using one card to pay off another, and there will be a fee. But it buys you some valuable time in which to take a big chunk out of your debt before the interest rate rises.
Also, try calling the company that issued your credit card, to ask for a lower interest rate. You have nothing to lose, and you might be offered a reduced rate for a fixed term.
Another solution is a banking product that lets you combine your mortgage with your bank accounts, short-term savings, income, and other debts.
This will allow you to:
- Easily increase or decrease mortgage payments
- Access your home equity when you need it
- Reduce your interest costs and become debt-free sooner
You’re most likely to have success with a history of on-time payments and a strong credit score. However, sharing personal circumstances like unemployment or other financial difficulties can help you make your case.
Tackle your debt stress head on, for greater peace of mind. Ask your Financial Advisor to help you plan ways to get your debt load under better control.