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How to Get Out of Debt and Effective Tips for Getting Your Finances Under Control

By Troy Tisserand

Learn and build wealth

Debt is often viewed as a financial burden, but it can also take a toll on your health. Stress from debt can lead to anxiety, depression, and even physical health problems such as sleep disorders and high blood pressure.

Trying to do too much at once will only lead to frustration and feeling overwhelmed by financial pressure. Break down your goal of reducing your debt into smaller, more manageable pieces so you can better focus on each task at hand.

If you’re struggling with debt, it’s important to seek help from a financial wellness advisor or debtor advocate. These professionals can help you create a plan to pay off your debt and improve your financial well-being.

Let’s look at how this can be accomplished.

 

Effective Budgeting

Creating a budget is a relatively straightforward process that involves analyzing your income and expenses to plan for how you’ll spend, save, and invest your money. Once you’ve identified where your money is going, you can decide which categories should be adjusted to reduce spending or increase savings.

Establishing a budget also allows you to track your progress over time so that you can make changes as needed to stay on top of things financially. This includes removing purchases that are not essential to your daily lifestyle.


Investing Wisely

Making the wrong financial moves can lead to plenty of money lost, which is why it’s imperative to stay focused. Bear in mind how much risk you’re willing to take when investing in stocks or mutual funds.

Understanding your risk tolerance level will help guide you toward investments that are right for you. It’s a great way to ensure financial freedom, and one of the best ways to avoid accumulating debt.

Wise investments can give investors not only financial rewards but also peace of mind, knowing that their hard-earned money is working for them.


Credit Card Tips

Credit cards can be a great tool for building credit, but they can also lead to dangerous levels of debt if used wrongly. In building credit, one common question is, “what credit score do you start with?”

If you want to make sure that you’re using your credit card responsibly, there are several key tips to keep in mind:

  • Avoid impulse purchases and only buy items that you need with your credit card. This will help keep your spending within budget and prevent unnecessary purchases from adding up over time.
  • Always pay off the full balance each month when possible. Carrying a balance can lead to interest charges and higher balances overall, so it’s important to pay off what you owe as soon as you can.
  • Make sure that you never exceed the limit on your card as this can lead to hefty fees from the bank or loan provider.


Seeking Professional Help

Financial wellness advisors are experts in money management, providing guidance on areas such as budgeting and credit management,. Their knowledge can be invaluable when it comes to avoiding debt and maintaining your financial well-being.

Working with a financial wellness advisor provides access to personalized advice tailored to individual needs. They can provide insight into available options for reducing debts or finding ways to save for larger purchases in a much more manageable way.

Additionally, their expertise ensures that mistakes made through inexperience do not become costly future problems.


Increasing Income

One of the best ways to increase your income is to get a second job or perform freelance work on the side. This can provide additional money each month, which can be used for payments on existing debts.

Taking on second work may come with other benefits like expanding one’s professional network or even discovering new career paths and interests they may have never explored before. This includes more investment options for future endeavors.


Conclusion

There are many options to assist in managing your credit. You can reach a multitude of lenders available locally or online that will be happy to help. If there are payments from different sources, settling all debts by having just one might be better.

Another way you could deal with the money owed is to negotiate with the lender by explaining your situation and working out a payment plan. Payments can be made in small increments over a long period. However, do note that this could incur a lot of interest.

By following any of the mentioned tips in this article, you’ll surely find yourself back on a positive credit rating.

 

 

 


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