Tips to manage your debt

by | Feb 15, 2024 | Finance and Business

Having too much household debt is one sure-fire way to create financial stress for many of us. On average, Canadian household debt represented 177 per cent of our disposable income in 2019, and many Canadians are struggling even more since the pandemic.

That’s why it’s more important than ever to learn how to minimize your debts.

A budget is especially important if you have trouble paying your bills and do not know where your money is going every month. It will help you figure out how much money you get, spend and save, balance your income with your regular expenses, and it will guide your spending to help you reach your financial goals, such as paying off your debts.

While it may be difficult to escape during challenging times, try to avoid borrowing money. If you must, make sure you understand the cost of different credit products before you decide, and borrow only what you need. Shop around, do your research and choose credit products carefully for your needs.

If you’re having difficulties paying for ongoing expenses or think you’ll have a hard time keeping up with your regular payments, it’s a good idea to speak with your financial institution about possible relief options that may be available. Weigh the pros and cons of these options before deciding on any of them. The Financial Consumer Agency of Canada has a mandate to provide unbiased and fact-based educational information to help Canadians manage financial health.

If you do take on debt, make sure you have a plan to pay it back. Working a debt repayment plan into your budget will help your plan stay on track.

Managing debt is not always easy but there are resources to help you take control. Find more information at canada.ca/money

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