Paying Down Debt in Challenging Times

(NC) The high cost of living is making things worse for a lot of people—nearly one in three Canadians say they’re short on money at the end of the month. If you’re struggling with debt, there are things you can do to pay your loans and feel more at ease:

Create a budget. A budget helps you figure out how much money you get, spend and save. It can guide your spending to help you reach your financial goals, such as paying down debt.

The Financial Consumer Agency of Canada has a budget planner that allows you to create a personalized budget and save it online. It offers tips and suggests your next steps. It also creates charts that show you where your money is going.

Set affordable repayment timeframes. For each loan, calculate how soon you can pay it down depending on how much you can afford to put towards it each month. It can be a balancing act: if your timeframe is too long, you'll pay more money in interest, and if it’s too short, your payments may be higher than you can afford. 

Don’t hold off on getting help. If you’re struggling financially, contact your bank as early as possible. The earlier they understand your situation, the more they may be able to help. Options could include mortgage relief, credit card payment holidays or lowering the interest rate on your credit card temporarily. 

If you feel like there’s no way to get your debts under control again, you still have options. For example, a licensed insolvency trustee could help you get back on track. Being in debt can feel like being in a deep hole, but with the right plan and making use of available relief resources, you can get equipped to start the climb. Learn more at canada.ca/money.

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