With Canada Day on the horizon, it is common for many of us to look forward to spending some quality time with our family and friends. From food to drinks, to visits to Canada Day events and fireworks displays, these types of attractions and gatherings will typically cost a bit of money.
With that being said, if you have debt you might be even more concerned about spending more money this holiday, as well as other times throughout the year. Well the good news is that you have some time – time to work towards paying down some of your debts by the time July 1st rolls around. With a bit of planning, you can lower your debt and enjoy this Canadian holiday even more.
Here are 3 steps that can help you clear out your debt by the 1st of July.
Step #1: Examining Debts & Checking your Credit Report
First and foremost, if you really want to make a dent in that debt, you will need to take a good hard look at your finances. This of course includes identifying your total amount of debt, as well as the different types of debt you have. You can also take this time to review your credit report and see which credit areas have most harshly impacted your credit score. This information may for example reveal that the volume of debt you have is dragging down your score, as well as even missed or late payments, and so on.
Once you have identified any areas of credit that may be the most damaging, this may provide an good indication of the emergent need to reduce that specific debt area. For example, is it your credit card debt that is most problematic? If so, then focusing on this portion of your debt will be a good plan of action.
Here you should also pinpoint the total debt amount as well as the breakdown of how much you owe for each debt area. From there you can get a better picture of which debts you will need to focus your attention on moving forward.
Step #2: Making a Plan & Sticking with It
Next is where you will need to come up with a plan for reducing your debt and you can start by setting a timeframe for when you want to have it paid off/paid down by – in this case by the first of July.
Since you have already gathered insight into certain credit issues you may have identified on your credit report, as well as the total amount of debt you owe – now you are actually ready to devise a plan to go about paying it off.
Again, perhaps credit card debt is the major contributor in your debt load, and therefore this is where you will likely start. You might begin with looking to pay more than just the monthly minimum balance on your card – or cards. You can even look to make two payments each month, if you can’t afford to pay a larger payment in one false swoop. Here you can make sure to make one payment by your credit payment deadline, to ensure you won’t get dinged for a late/missed payment, then you can also make a second payment later in the month to pay down a bit more of your credit balance. Now, if you do carry more than one credit card – and have one with a higher interest rate, then part of your debt repayment plan may involve paying off this card first.
Another method of combating debt is to set up automatic payment withdrawals. This way you won’t miss payment deadlines, and you can set these payments for certain amounts. This can save you time as well as provide the added comfort that you are not going to fall behind on payments. Once you see the debt going down, this can create the momentum you need to continue to follow through with your debt reduction plan.
Step#3: Reevaluate your Budget & Minimize Spending
Perhaps another part of your debt relief plan will also include examining your budget and looking for areas of your spending you can cut back on. For one thing, if you are currently spending beyond your means, this of course translates into more debt.
Therefore, you want to instead look at your budget and identify how much money you have coming in compared to how many expenses you have each month. If your expenses do indeed outweigh your monthly income, then finding out how you can reduce your expenses will be important.
With that being said, you can start by budgeting for your necessities and seeing if you can perhaps purchase these for any less. Discounts, buying in bulk, shopping at less expensive stores, etc. are some examples of how you can lessen your overall spending. Also are there any services and items you can cut out of your monthly spending agenda?
You may be surprised at how many items and services you don’t actually need. Perhaps even trying to go without certain things until you pay down your debt will be a useful method of reducing your spending, while not being too difficult to manage on a temporary basis.
When all’s said and done and you find you are spending less each month as well as budgeting your money more effectively, not only are you not creating more debt, you may also find you have some extra money that you can use towards paying down your debts. It’s a win – win!
If you really want to reduce your debt, why not set a goal for having it paid down? With Canada Day only a few weeks away, this can give you the motivation you need to start lessening your debt – so that there can be even more reasons this year for celebrating our nation’s birthday.