March 4, 2024

Follow these tips to help get yourself out of debt

There’s no question that personal debt is a barrier for those of us wanting to put a little money away for the future. But, writes Christopher Liew for CTV News, there are a few ways that can help kick-start your drive to leave debt in the rearview mirror.

First, he writes, you have to fully understand what your total debt is, and from all sources – student loans, credit card debt, personal loans, auto loans, and mortgages.

The interest rate on these debts should help you set priorities for paying them off, he notes.

“Mortgages and student loans typically have lower interest rates, so paying them off quicker may not make as big of a difference. As long as you’re making your minimum monthly payments, I would prioritize paying off high-interest debt first, as the compounding interest can cost you a lot of extra money in the long run. This is how credit card companies trap you,” he explains.

Liew offers up five debt-reducing strategies.

You can consolidate all your debts into one loan, “typically with a lower interest rate. This strategy can simplify your monthly payments and potentially reduce the total amount of interest you’ll pay over time,” he notes.

Another idea is to get a side job to make higher debt payments, he explains.

Side jobs that you could consider so you can pick up a few extra bucks include food or grocery delivery companies, being a ride share driver, waiting tables or bartending on weekends or looking for freelance jobs.

You can also, Liew writes, try to negotiate better terms with your creditor.

“Approach your lenders to discuss options like lowering interest rates, waiving fees, or modifying repayment plans. Be honest about your financial situation and be ready to present a case for why the adjustment is necessary,” writes Liew.

“Successful negotiation can lead to reduced payments or interest rates, making your debt more manageable and accelerating your journey to being debt-free,” he adds.

You could look at cutting your living expenses to free up more money to pay down debt, he writes.

A whopping “51 per cent of Canadians under 35 are living beyond their means,” notes Liew, citing research from the Healthcare of Ontario Pension Plan.

You can cut costs by trading in “your newer car for a more affordable used car,” cutting back on streaming subscriptions, “your personal shopping habits,” and “eating out and ordering in.”

The dollars you save by cutting back on life costs can be redirected to debt reduction, Liew explains.

Finally, you can always go ask your employer for a raise.

“One of the simplest ways to get out of debt quicker is to increase your income, and one of the easiest ways to increase your income is to ask your employer for a raise,” Liew writes.

“While some companies give out raises on a steady annual basis, others are a bit more stingy and wait for their employees to come to them first.”

Once you have taken control of your debts, you’ll have more money to put away for the future. An ideal place to put those hard-earned dollars is the Saskatchewan Pension Plan. Find out how SPP has been helping Canadians save for retirement since 1986! Check out SPP today!

Join the Wealthcare Revolution – follow SPP on Facebook!

Written by Martin Biefer

Martin Biefer is Senior Pension Writer at Avery & Kerr Communications in Nepean, Ontario. A veteran reporter, editor and pension communicator, he’s now a freelancer. Interests include golf, line dancing and classic rock, and playing guitar. Got a story idea? Let Martin know via LinkedIn.


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