Friday, December 16, 2011
Canadians and Debt
If an expensive emergency were to occur, many households would experience major financial hardships. A study has shown that Canadians are paying out more than 40% of their income towards debt. It is at this point that it becomes difficult to keep up with their payments.
Our household has incurred some additional debt this year. I have already decided though that we must get our financial house in order. Our mortgage is up for renewal in 2 years. The goal is to pay off 90% of our debt before the renewal.
It is easy to say that we will pay off our debt, but not so easy to maintain that pledge. One can achieve this feat if goals as well as a plan are put into place. I am still formulating a plan for the Hubby and I, but I already have some important points to ignite the plan:
Make a Budget
Every month I ceate a budget listing all of our fixed expenses. Recently, I have thrown in savings as well. We have our separate accounts, but share a joint account for expenses and one with ING for our savings as well. All we have to do is deposit the dollars for the expenses and savings listed, and I make sure the bills are paid. I then transfer savings into our joint ING accout.
Do Not Shop With a Credit Card
Enough said! The only extracurricular thing I do with my card is apply payments to it. It is my first time using a spread sheet to track my spending. I hope to have money left over to apply to my credit card debt. I do make payments to my VISA bi-weekly, but the only way I will make a dent in the balance is if I delibrately strive to throw extra money towards it.
For Goodness Sake! Save Something
Something will always come up. That is is reason one to have money put away for a rainy day. For once, I would like to be somewhat prepared for an emergency. I hate having to use my credit card toget out of a jam. Or how about going on a vacation, paying for it in cash, and not paying it off with interest?
Include a Reward
There is nothing wrong with rewarding your self for displaying good financial management. I am doing this with my Nail Polish Challenge.
What are the few financial steps you used to kick start your way to a debt free life?