Tips to help you pay down your debts during the pandemic
(NC) Too much household debt can cause financial stress and weaken your ability to manage your finances during periods of economic difficulty. On average, Canadian household debt represented 177 per cent of disposable income in 2019. Because of the pandemic, we may even be experiencing higher levels of debt.
That is why it’s more important than ever to learn how to minimize your debts. A budget is especially important if you have trouble paying your bills and do not know where your money is going every month. It will help you figure out how much money you have coming in and how much you spend and save. It will also help you balance your income with your expenses and guide your spending to help you reach your financial goals, such as paying off your debts.
While it may be hard during these challenging times, try to avoid borrowing money as much as possible. If you do borrow, make sure you have a plan to pay it back. Working a plan to repay debt into your budget will help ensure that your plan stays on track. And make sure you understand the cost of different credit products. Shop around, do your research and choose credit products that meet your needs.
If you’re having difficulties paying for basic expenses or think you will have a hard time keeping up with regular payments like your mortgage or credit card charges, it’s a good idea to speak with your financial institution about possible relief options that may be available. Before deciding, weigh the pros and cons of these relief options.
Managing your debt is not always easy, but there are resources to help you. The Financial Consumer Agency of Canada provides unbiased and fact-based information you can count on.