How Debt Relief Can Help Make Basic Necessities AffordableOct 21, 2018
Struggling to afford day-to-day basic necessities is something no individual or family should have to experience. Yet, according to our inaugural Affordability Index, affordability is a real struggle for an alarming number of Canadians — across the country and among all age groups. If you’re one of those Canadians that’s looking for relief, make sure you have a strong plan to manage your debt. It can make a big difference in what you can and can’t afford.
Let’s look at some of the challenges Canadians are facing according to our Affordability Index before diving into some helpful debt solutions.
- Three-quarters of Canadians carry personal debt.
- Three-in-10 say they don’t have enough money to meet their needs.
- 23 per cent told us they find their debt loads overwhelming and they’re unsure what to do about it.
- The average non-mortgage debt load is just about $20,000, but Canadians with higher incomes and more education owe more, on average.
The Index also revealed that affordability is definitely affecting Canadians’ future financial well-being. Women and millennials told us they’re poorly or terribly prepared for milestones like buying a home, having children and retiring. Seven-in-10 Gen Xers have either too little or no retirement savings.
Saving for major life events is crucial, but so is keeping the lights on and putting food on the table. How can you do it all when you’re currently struggling or feeling overwhelmed with managing debt and your personal finances?
These three steps can help: review, plan and get help with your debt.
- Review your finances
This is the first step in understanding the real state of your finances. Set aside the time to do a deep dive into your money situation. The “actual” column of this budget worksheet can help you determine what information you need.
- How much income do you have coming in?
- How much are you spending each month? What are the average costs of utilities, groceries, rent/mortgage, transportation, etc.?
- What debts do you carry and how much are the monthly payments and interest rates?
- Planning your finances
You’ve done some heavy lifting, now it’s time to create a plan that includes a real-life budget along with debt reduction and savings goals.
There are tons of blogs and resources on each of these topics; we encourage you to explore our site and other online resources on how to build a solid plan. Here are a few links we’ve put together to get you started:
- Budget Calculator and Worksheets
- Financial Goals Calculator
- The debt snowball or debt avalanche: two strategies that can help you reduce debt
- Get help with debt
Feeling overwhelmed with your debt load is common and nothing to be ashamed of. Canadians across the country are struggling with debt, and sometimes figuring it out on your own just doesn’t work.
Debt relief options are designed to help you tackle the issue that’s likely putting the most pressure on your finances: your debt load. Debt relief can include credit counselling, debt consolidation, an informal debt management plan, a consumer proposal or bankruptcy.
The earlier you seek help, the more options you may have available to you. A Licensed Insolvency Trustee (LIT) is qualified and obligated to explain all debts solutions when you meet with them. An LIT will listen and learn about your money challenges and work with you to find a solution to reduce and eventually eliminate your debt.
Getting relief from your debt can make daily life more affordable by working to eliminate one of the biggest obstacles that impacts affordability: personal debt.