Does paying down your debts feel like a useless exercise? Month after month you make your debt payments, only to find that you aren’t really getting anywhere. Are you, as the saying goes, constantly robbing from Peter to pay Paul? Do you and your spouse look at each other and say: We make good money, so why are we constantly broke?
If you are one of the thousands of Canadians living with debt, paying interest and fees month after month and never seeming to catch up, the debt treadmill can be an emotionally draining place to be. If you are stuck, the strategies below will help.
- Work on your budget. I have blogged on the topic before but it bears repeating. If you do not have a household budget or spending plan, this is the first place to start in your efforts to get off the debt treadmill. A monthly spending plan identifying the monies coming into the home and the monies going out will help you find areas of excess and opportunities for cutting back. A budget can give you the information you need to break the cycle.
Need a little help with building a budget? My Credit Coach blog about taking control of your finances with a budget will help.
- Take control of your cash. Often people on a debt treadmill feel helpless due to the pre-authorized payments and post-dated items grabbing at your available monies every month. NSF fees, overdraft interest and stress all result when creditors take a payment you forgot was due. If you need control, do not be afraid to move your banking. With a new clean bank account you can now get some breathing room to choose the creditors that need to get paid and negotiate a plan with those that can possibly wait.
- Reach out for help. If your budget won’t balance and taking control over your cash isn’t enough, search out a Licensed Insolvency Trustee. A qualified LIT like myself will sit with you during a free initial consultation and explain all of your options. They may include a referral to a credit counsellor, or choosing to file a consumer proposal or personal bankruptcy. If you choose either a credit counselling or a debt help repayment agency be sure you’re aware of what program you are agreeing to. Not all debt help is the same and not all professionals provide the same level of care or service.
- Communicate with your spouse and family. Being stuck on the debt treadmill is not fun. It’s stressful, hard on relationships and your work can sometimes suffer. Don’t be afraid to share with your spouse or to reach out to friends or family. You can also search out help through a local not-for-profit counselling agency or the Employee Assistance Program where you work. Like so many other problems we face, having someone to talk to can make a big difference.
Are you stuck on the treadmill? Do you want to get off the ride? Take control and search out a solution — they do exist. Often our problems are not as difficult as we see them once we get the right help.
Tell us your debt treadmill story in the comments below, or share a solution that helped you, using #DebtSolutions on Twitter.
Jayson Stoppel is a Licensed Insolvency Trustee and Chartered Accountant with BDO First Call Debt Solutions. With over 18 years in practice, Jayson assists individuals, families and companies with financial difficulties in Thunder Bay and throughout Northwest Ontario. To reach Jayson by email: JStoppel@BDO.ca. To find Jayson on Twitter: @CreditCoachJS.
