Often times, it is very hard for Canadians to make ends meet, and therefore feel forced to use their credit cards. When you are strapped for cash, credit cards can actually be helpful, but more often than not, it starts the cycle of debt. Being aware of debt warning signs is important to know if you want to stop the debt cycle before it gets out of hand. Debt warning signs are:
You continue to fall behind on your payments
You use your credit cards to meet your basic needs
You make only the minimum payments required on your credit cards
You attempt to obtain new credit cards to cover your daily expenses
You have taken out a payday loan to make ends meet
You’re stressed about your finances
These are signs of financial trouble. If you are also receiving calls from collection agencies, it’s because your situation is serious. Drastic changes must be made if you want to settle your debts.
Depending on how much debt you have, you may be able to get out of debt on your own. To get on top of your debt, you need to draw up a personal budget. This can be difficult and tedious, but it is essential. Your budget will give you a realistic overview of your situation.
Next, you must take practical steps to make ends meet without using credit cards.
Do not use your credit cards
Cut them up. Freeze them. At the very least, leave them at home. The goal is to ensure you do not have access to them until your financial health is restored.
Cut non-essential expenses
Reduce your expenses to the bare minimum. Keep only what is essential, at least temporarily. For example, cancel your cable subscription. You can reconnect your services later, when you have a surplus of money after having repaid your debts.
Reduce your essential expenses
Set a goal of having more money. Shop around for your car insurance to find the best price. Reduce food waste by making soups with vegetables that are no longer at their freshest. Walk instead of driving whenever possible. Every change, no matter how small, is important.
Be aware
Often, people in debt do not understand how they reached that point. Set a financial goal and be aware of the impact each expense has on achieving that goal. Account for all your expenses and know where your money is going. Do not leave anything to chance.
Increase your income
Find ways to increase your income and use those added funds to repay your debts.
Get a second job;
Consider selling items you no longer use; or
Find a roommate or boarder.
If you follow these tips, you will certainly be on the right track to balancing your budget. This does not guarantee a quick resolution to your problems, but at least you will have regained control over your situation.
If you try these steps and still find yourself struggling, it may be time to ask for help. We are open late and on weekends to meet your scheduling needs and offer free, no-obligation consultations. Contact our office today!
