Financial LiteracyPersonal BankingPersonal Finance

Debt Planning 101: Get Out of Debt, Fast

 

 

 

 

 

Debt has a way of making you feel helpless. Like no matter what you do, your debt will continue to grow and you will be stuck paying bills and expenses for the rest of your life

Trust us, we get it.

Albertans carry more consumer debt than residents in any other province in Canada. In fact, a recent survey by MNP Ltd. reported that 26 percent of Albertans say they are within $200 of not being able to pay their bills.

The point is? You aren’t alone. While your financial situation might seem dire right now, there are some things you can start doing today to begin to pay your debt off and work towards a brighter future.

Know What You Owe

When it comes to debt, ignorance might be bliss but it only makes the situation worst. Write down every single debt you have. Next to each debt, write down…

  • Total amount owing
  • The interest rate you’re paying
  • Minimum monthly payment

Determining how much interest you pay each month will help you establish a game plan moving forward. It will also help you prioritize which debts need to be paid off first.

Get Organized

Now is the time to look your debt in the face and make an action plan. That means making sure all your accounts have current contact information on file for you. That way, you never miss a bill-payment reminder or important information about your account. Next, you want to put your bill due dates on a calendar. Then, put together a bill-payment system for yourself.

You want to keep track of when you pay your bills and any reference number that accompanies those payments. Be sure to review your bills as well. Credit companies and lenders make mistakes. Don’t pay more than you need to.

Debt Payment Plan

Like we said before, debt can feel like a hopeless situation. You go to work, get paid and all your hard-earned money goes to straight to bills. Meanwhile, it feels like your debt is barely going down. What you need is a plan.

Take a second to go over your bills and make an action plan for each of them. How can you make it smaller? Can you choose a lower plan? Can you cut out an expense altogether? Do you really need two subscriptions to a certain service? Can you find a program that combines things you are getting from other services into one?

Making small steps to decrease the amount of money leaving your account each month will add up in a big way over time. Soon, you will start to see your debt going down.

Consider a Debt Management Program

A debt management plan helps you get out of debt by consolidating all your credit and other debt-related payments into one single monthly payment that is based on your current budget. At Cashco Financial, we can sit down and work out a debt management program with you.

You make the monthly payment to us. We disperse it to your creditors accordingly. Most lenders will even reduce your interest rate if not eliminate it altogether if they learn you are working with a debt management program.

Avoid Debt Altogether

Avoiding debt is easier said than done. Not everyone has the financial means to have cash readily available every time they need it. However, being financially stable also means building a budget and sticking with it. That’s why we recommend only using a credit card when you have the means to pay it off right away.

Credit card companies usually charge retailers up to 5% on your purchase plus they charge you up to 20% interest of any debt that is left outstanding at the end of the month. Plus, that interest is compounded over time! The number one way to avoid debt in the first place is to avoid carrying a credit card balance into a new month. This way you avoid paying interest and falling into a debt trap.

Buy Some Time

The Cashco Financial Buy Some Time program gives everyday Albertans the ability to focus on paying off their debt without worrying about overdraft and NSF fees. If cash falls short one month, you can skip a payment with no fee. You can also access lower NSF fees with our new cash and time savings bundle.

Buy Some Time gives you the freedom you need to focus your energy on your bills and break the frustrating cycle of debt. After four months of on-time bill payments, NSF fees reset to zero. If you miss a payment after the reset, the first is $0, the second is $10 and the third is $45. It’s one of the only programs of its kind in Alberta, and it was designed to give you hope in an otherwise hopeless situation.

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