How to Get Out of Debt

person holding an empty wallet trying to improve his financial situation

Whether you’re in debt from mortgages, credit cards, personal loans, or bills, turning around your financial situation can’t happen unless you put in the work.

Between keeping up with your monthly bills and saving up for a rainy day, it may feel like it’s impossible to make debt payments without making your life miserable. As much as you’d like to pretend you’re not in debt, ignoring the issue will only make things worse.

Choosing to prioritize getting out of debt is the first step in taking back control of your life, and as you build better spending habits, things will get easier over time.

With a clear plan and some fundamental changes to your lifestyle, you can get yourself out of debt quickly, even on a low income.

Track Your Spending and Set a Budgeta woman setting her budget for the month

There are two ways to get out of debt: earn more money or spend less of it.

While picking up a part-time job or side hustle may not be feasible, cutting back on your spending will help you keep some more money in your pocket. Start by tracking your expenses and arrange them based on their level of importance.

Classify each item as a need or want and highlight expenses that can be reduced or eliminated. Adjust your budget accordingly and use the money you freed up towards your debt payments.

Pay More Than the Minimum

If you only make the minimum payment, it will take a long time to get out of debt, as most of the money will go towards paying interest fees rather than reducing the amount you owe.

Review your budget and set an amount to put away towards debt repayment each month.

Paying more than the minimum will save you money on interest and help you get out of debt faster.

Of course, any chance you get to add more will help you reach your goal faster.

Try the Debt Snowball Methodsnowball method used to manage debt repayments

If you’re paying more than the minimum payment, you can also reduce your debt with the debt snowball method. This strategy calls for you to make the minimum payment on all your debts except for one.

That specific debt, whether your biggest or smallest one, will receive more than the required monthly amount and will therefore be paid off quicker. The debt snowball method can help you build momentum and motivate you to stay on top of your payments.

Get Professional Debt Help in Ottawa

Getting out of debt isn’t easy.

Reshaping your attitude towards money and debt is the most important change that has to happen. It can be incredibly easy to fall into more debt, which is why you have to understand the consequences of swiping your credit card and taking out new loans.

We pride ourselves on providing world-class credit counselling services and debt management solutions for all types of dues. Our insolvency experts will work with you to design a tailored plan that caters to your specific abilities and needs so that you can start working towards living a debt-free life.

Book an appointment with one of Lazard and Associates’ Licensed Insolvency Trustees immediately to discuss your debt relief solutions.