How Much Do You Know About Debt Control and Savings?Dec 20, 2016
The economy is still struggling in Alberta, and elsewhere across the country. Many consumers are looking for help with debt control and savings. With the year-end in sight, it’s a good time to brush up on financial strategies that could help you achieve your financial plans and feel secure in an otherwise uncertain time. For 2017, set a goal to become better acquainted with your own finances.
There’s always more to learn
Even if you feel like you have a pretty good handle on your personal finances, there’s always more to learn. A recent study by Tangerine found that only half of Canadians think they are well-educated about personal finance matters. Others said they had just enough knowledge to get by.
Having just enough know-how to keep your (financial) head above water is risky. As Canadians have experienced over the last two years, a sluggish economy, unstable job market, and natural disasters like the Fort McMurray fire, can dramatically and negatively impact your financial well-being, through no fault of your own.
Debunking financial myths and misunderstandings
There are a number of beliefs consumers hold about money and financial processes – some beliefs turn out to be true, others are not. It’s the myths or misunderstandings that can stop you from achieving your financial goals and increase your stress.
What you should know about debt options
Let’s look at debt more closely. One of the prevailing myths is that if you’re experiencing financial difficulties and having trouble making your payments, filing for bankruptcy is your only option. This is not true — in fact, the option to file for bankruptcy is always the last resort, and a qualified Licensed Insolvency Trustee (LIT) will work with you to determine if there are other options that may be more suitable for you.
On the other hand, it’s important to understand that if you do need to file for bankruptcy, it does not mean the end of your financial hopes or goals. There are cases when bankruptcy is the quickest and least expensive debt solution, and doing so may help you to recover sooner.
What you should know about payday loans
Whenever possible, look at your budget for ways to free up money before seeking credit. You may find that you can adjust your spending or contributions to cover unexpected expenses or debt payments if necessary. If you do need a loan or credit, explore your options. In the last seven years, Canadians have more than doubled their usage of payday loans. The appeal of these loans is that they’re quick and require little checks, so borrowers can get money fast. But along with that convenience comes some daunting consequences. Some interest rates can be up to 500 per cent, making it difficult or impossible to pay back the loan.
What you should know about getting debt help
Finding help for your debt is a smart move. Exploring online resources like those available on the Financial Consumer Agency of Canada (FCAC) website is a good place to start. Financial literacy websites and personal finance blogs can help you gain control and inspire you to set your own financial goals. You don’t have to wait until your debt is an emergent situation before you speak to a LIT. If you are unsure about how to deal with your debt, seeking help early can get you back on track so that you may not need to consider formal debt solutions.
Alternatively, if you’re struggling to make progress with your savings or other financial goals, working with a qualified financial advisor can help you to make strategic decisions that get you to your goals faster to help you achieve your savings and investment goals.
Finally, if you need a little help creating specific attainable goals, the FCAC has a straightforward and simple to use Financial Goal Calculator to help you set debt reduction and savings goals. You can create timelines and set regular debt repayments or savings contributions to achieve your goals.
Increasing your knowledge of your own finances can be empowering. Besides finding debt control strategies, you will also learn more about your own spending and saving preferences. In the long run, the more you know, the better you’ll be able to create clear and realistic financial goals.
Have you recently learned a new debt reduction or saving strategy. Share with us on Twitter. #BDOdebtrelief #LetsTalkDebt