With the cost of living increasing, is your debt rising along with it? If you responded yes, you are not alone, more and more people are finding themselves in this position. This can make us feel stressed and anxious, therefore affecting our day to day lives, and this is not ideal!
While it is true that the cost of living is rising, it is possible to adjust along with it. With this said, it is not without some reflection, making changes, and sometimes sacrifices, even if it is only for the short-term. Many people do have the goal of staying debt free, or at least within a manageable window of debt. How can this be achieved? With some time and careful planning, you can make steps in this direction and live debt free. Here are some great starting points:
Look at your expenses - variable (entertainment, travel, dining, etc.) and fixed (rent/mortgage, car payment, insurance etc.). Write this down.
Track your spending for a full month’s cycle so you account for all bills (recurring each month), coffees, and purchases, etc. Be sure to note what expenses are not monthly, i.e. annual payments.
Track you monthly income - what are you bringing in?
Compare your expenses to your income - how does it compare? Is more going out than coming in or vice versa?
Go through your expenses - variable and fixed - see what you no longer need and aren’t using and be sure to cancel it. Also, take this as an opportunity to cut things that are not necessary and that you could do without - whether it be permanently or temporary.
Create a budget based on items 1-5. Allocate your money coming in to your fixed expenses and then with what is left, make decisions about where it should go - savings (or extra to savings if this is already considered an expense), travel fund, fun and variable money etc.
Don’t be scared to shop around for better deals - For example, you may be able to find better internet and phone rates, package insurance (car, content, life, health), and bank charges.
Do you have a mortgage that is coming up for a renewal? Chat with a mortgage professional about your options and how they can help find a solution for your unique circumstances.
Prioritize paying off your debt - put more down where possible so you can pay it off faster, and with less interest charges.
Avoid taking on new debt at all costs - with high interest rates, using the credit will add up quickly if you can’t pay it off quickly.
Finally, talk to a financial advisor - they can help you allocate money, maybe even find money, and offer debt solutions.
I know this may seem like a lot of effort, but I promise it is worth it! It might surprise you where you end up, and how it empowers you to be able to manage your rising debt.
Call or email me if you need any help!
☕️ Chad Eliason⠀⠀⠀⠀⠀⠀⠀
250.804.9874⠀⠀⠀⠀⠀⠀⠀
info@chadeliason.ca⠀⠀⠀⠀⠀⠀⠀⠀
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