Debt is the four-letter word all of us live with, but don’t like to talk about.
Many of us who struggle with debt become deflated, embarrassed, and stressed. There is an actual medical term for “a pain in the wallet”: Econogenic Glutalgia.
Aside from the stress debt can cause, most of us have the same puzzling questions on our mind:
How did I get in this position? How did the debt get out of control?
Indeed! For each person, the reason(s) are probably different.
- Was there a job loss?
- Were you only paying the minimum on credit cards?
- Is your fixed income or pension not enough to cover your expenses?
- Have your monthly bills increased, due to a divorce or marriage breakdown?
- Have you had to take time off work due to illness?
- Are you easily lured by the credit traps of retail and other credit cards?
Take comfort in knowing this – YOU ARE NOT ALONE.
Many Canadians are battling debt right now. It’s become common practice for credit card companies to offer increased credit limits and more reward programs, even when it’s clear you can only afford to pay the minimum payments, a.k.a. INTEREST. Yes, that’s another nasty word, and one we are all too familiar with.
For those of us who are only paying the minimum on our credit card payments, check out this repayment plan:
WOW! So it will take me 21.5 years to pay off a balance of $10,000 at an interest rate of 19%! Not to mention, I’ll be paying DOUBLE the original amount I owe. What a business these credit card companies have built.
Did you know that credit card companies are now required to disclose how long it will take you to pay off your balance? Some of my bills state it will take me over 100 years to pay off my debt!!! I take my vitamins and eat healthy enough, but I really don’t think I will live another 100 years. It’s almost laughable, as it is helpless to read such a statement.
At the end of the day, debt is a common thorn for many Canadians. Whether you are a student, a successful business person, a single mother of a family, or a retired pensioner, we try our best to budget our expenses and tackle our debt.
Need some help managing your monthly expenses? You can start with a proper budget plan. By completing a budget plan, you will have an idea of where you are spending your money…and how much debt you have. Here are some tips to help you manage your debt:
1. Review your budget to find ways to cut down on your expenses. This is where you need to be realistic, and discipline is required;
2. Is there a way you can pay down more than the minimum monthly payment on your bills? This is the only way you can tackle the actual debt versus only the interest;
3. Focus on paying off the credit cards with the highest interest first;
4. Do not borrow from one credit card to pay off the other. You’re more likely to rack up both credit cards than to pay them off;
5. If possible, do not add to your current debt. I realize this may be difficult to impossible for some, but you need to reach the light at the end of the tunnel..
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