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How to Make DIY Debt Relief Work for You

In Prince Albert, debt relief may be on the minds of many out-of-work oil workers and anyone concerned about job stability. Although the rest of Saskatchewan has seen an uptick in employment so far in 2017, Prince Albert remains behind with unemployment rates passing 10 per cent. Those without work or who are employed part-time may be having difficulty in not only meeting their monthly expenses, but servicing their debt load as well.

How to take charge of your debt

Getting a grasp on your finances can alleviate financial stress and help you in making money decisions each day. Furthermore, planning ahead reduces the impact of unexpected expenses and can help you avoid debt after a job loss. Here are some changes you can incorporate into your everyday money management:

  1. Add an emergency fund to your budget
    Your budget will show you where your money is being spent, allow you to adjust for upcoming expenses and reduce unnecessary costs. Part of your budget should include savings, and an emergency fund is a powerful way to reduce your reliance on debt in the future. You can easily begin saving in an emergency fund by automating your savings with your bank. Download an app or use an online budget calculator to tally up your monthly expenses and income, then figure out how much you can set aside for emergencies each month.
  2. Calculate your debts
    Use an online debt calculator to add up all your debts and their interest rates. From there, implement the debt snowball or debt avalanche method of debt repayment. These methods involve attacking either your lowest debt or your highest-interest-rate debt with as much extra money as possible each month. Once you’ve zeroed out one debt, move on to the next.
  3. Consolidate your debts to save interest
    When you have multiple debts with multiple interest rates, it’s in your best interest to simplify them. You can often transfer your high-interest debt balances onto a lower-interest credit card or line of credit. You may also be able to take advantage of a debt consolidation loan. Shop around for the best rates and determine which consolidation options are best for you.
  4. Speak to a debt professional
    Without a steady income, debt consolidation may not be an option. In this scenario, speaking to a Licensed Insolvency Trustee (LIT) about your debt repayment options is an excellent choice. An LIT will work with you to determine the best possible debt relief solution for your situation, which may include filing a consumer proposal to reduce and conslidate your unsecured debts.

 

Have you made DIY debt relief part of your budget? To learn more about formal debt relief and compare your debt repayment options, check out BDO’s online calculator



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