For many individuals, money worries are a source of stress. And the higher cost of borrowing we are experiencing can make things worse for those who are struggling to pay off their debts. There are no miracle solutions, but here are a few tips that could make a difference:
Create a budget. Making a budget will help you manage your money. It will allow you to identify your income and expenses and prepare you for unexpected situations. Don’t know where to start? Try the Financial Consumer Agency of Canada’s budget planner, a free and unbiased tool that helps you to create a personalized budget. It gives you tips and guidelines and helps you figure out your next steps with suggestions.
Make a plan to pay off your debt. You can start by making a list of all your current debts and the amount of debt you owe. Then, think about your strategy. Set a payment timeframe that is reasonable and affordable for each. Depending on the type of debt you owe, it may be best to pay off certain debts first. For example, by paying off the debts with the highest interest first, you’ll pay less interest, which will help you be debt-free sooner.
Contact your bank to know more about your mortgage relief options. If you’re experiencing financial stress, contact your financial institution. They may be able to offer mortgage relief. That could include delaying your mortgage payments for a defined period of time or extending your amortization period. Keep in mind that if you make changes to your mortgage contract, you may have to pay fees and you could be paying more interest in the long run.
Take advantage of electronic alerts. Your bank will send you electronic alerts when the balance of your checking or savings account falls below $100, or another pre-set amount you’ve chosen. These alerts can help you avoid paying costly overdraft fees.
For more information, tools and resources to help you reduce your financial stress, visit canada.ca/money.
— News Canada