In 2011, Canadian household debt was 2.5 times higher than it was in 1989. This has many Canadians worried about the impact this is having on them now, or will have on them when interest rates go up.
Here are some warning signs to watch for. Are you:
- feeling stressed or worried about your debt load?
- having trouble paying your bills in full and on time?
- using your credit cards for day-to-day expenses?
- using one credit card to pay off another?
- dipping into your RRSP to access cash?
- arguing with family members about money?
If any or all of these signs are troubling you, there are steps you can take to manage your debt differently.
- Start by making an appointment with your Financial Account Manager.
- Prepare a realistic budget. Then stick to it.
- As part of your plan, develop a strategy to pay your debt down, starting with the debt that has the highest interest rate.
- Consolidate your loans.
- Change your monthly payments to bi-weekly. For most people, this mirrors your pay period and results in extra payments over the course of a year.
- Set up an emergency fund and commit to saving it for emergencies only.
Of course, debt helps us acquire things we need, like a home, an education, a car. But using credit to finance your lifestyle can be a dangerous and slippery slope.
Become more optimistic about your financial future, talk to your account manager today.
Excerpt from asterisk October 2011 print edition.