How can I spend less on debt?
Here are some good ways to cut your costs by spending less on debt.
- Pay off high-interest debt first, or get a lower interest rate. If you have debt on a high-interest credit card, transfer it to a card with a lower rate. Another solution is to apply for a line of credit or loan at your bank and put all your debts together into one lower interest debt.
- Think about using your home as backing to get a loan. You’ll get a lower interest rate.
- Reduce your monthly bank charges. Pick one with low or no account fees. To find the right banking package for you, use the Financial Consumer Agency of Canada’s Cost of Banking Guide.
How can I get out of debt?
It takes time and good planning, but it is possible to get out of debt. Be sure to set clear, yet realistic, goals. Realistic goals will help you to stick with your plan. For example, "I want to get my debt down to less than 20% of my pay," or "I want to pay off my credit cards by the end of the year," are two clear, precise goals.
Here are seven strategies to help you reduce your debt:
- Budget a set amount each year.
- Get rid of high-interest debt first.
- Cash in investments to pay off debt.
- Consolidate different debts into one.
- Set up an automatic savings plan.
- Use cash from a life insurance policy.
- Make an extra mortgage payment.