October 23, 2019

How to tell if you’re over-using credit—and get it under control

According to the most recent report from Statistics Canada, the average Canadian currently owes over $23,000 in non-mortgage debt, and that even elders age 65+ owe about $16,000. It appears we have become too comfortable making minimum payments on credit cards and other forms of credit. One way for Canadians to determine if they’re at risk for financial problemsis to go “cold turkey” by putting all your credit cards away & stop using credit for a period of 3 months. After all, you can hide your true financial state for 1 month by using up what’s in the freezer or temporarily adjusting the way you live. But a 3-month stretch is a truer test of your ability to just use cash or a debit card. Perfect your 3-month test by taking into account seasonal expenses like school clothes or car maintenance to determine if you really can cover living expenses without using credit. Adding up expenses and dividing by 12 can enable you to set aside the amount of income you need each month. Remember to allow time to get out of debt, and to take a realistic approach to debt solutions.

“Remember that it took time to get into debt, so it will take time to get out of debt”

Read more: https://www.moneysense.ca/save/getting-out-of-debt/

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