…of bad debt
With so many exciting events and celebrations to come over the summer months, one important day that holds great meaning in our country is of course the July 1st Canada Day Holiday! As we all plan to spend this day in a variety of celebratory ways – one issue that can really put a crimp in our plans is living with a large dark cloud of debt overhead. Even if your 1st of July plans do not include expenses that are too costly, the mere thought of having debt can also be enough to ruin your day. That being said, why not take action now and work towards getting your finances on the right track that can lead towards being debt-free.
Here are three ways to help you put this financial plan in motion, starting with getting your debt under control this summer:
1. Review Your Spending & Re-evaluate Your Budget
Going back to where it all started and checking in with your current budget – and more specifically how successfully you have stuck to this budget will be a very good place to start. Chances are, if you are in debt it may be due to the fact that you have exceeded your previously-set budget. While this may be easy to quickly identify – knowing exactly where you went wrong may take a bit more time. As it is, you will need to review your spending behaviour over the last several months. This will help to shed light on where you did in fact overspend and so you can then make changes to these financial patterns moving forward.
At this stage, you will also want to set the new terms of your budget. With the knowledge of which areas you have exceeded in your necessary spending, you will make adjustments accordingly and dial back your spending wherever you can. Implementing a weekly budget as well as a monthly one may also help you to stick to your financial obligations during the next term and not spend more than you are earning. Perhaps you may even choose to enlist the help of an online budgeting app that can help you monitor your ongoing spending areas. Additionally, you can use budgeting software support to set your own personal financial goals.
2. Review Your Credit Report
Next on your debt-tackling summertime pursuit is to review your credit report and find out just where your credit stands going forward. It is always a good idea to periodically check your credit report for errors or negative information that may provide insight into mistakes you’ve made in your financial actions – not to mention details that may have been incorrectly added to your file. It is possible that in the process you may notice suspicious transactions that can indicate you have been the subject of identify theft. All in all, as a result you will be able to view all of your own financial movements and make sure to catch anything that was not a banking transaction performed by you.
Taking such action can prove to be both a precautionary step as well as a learning experience for you to improve your financial stability in the future. For example, you can then work towards cleaning up your credit, in the event your credit score was particularly on the low side. As a result you can then come up with a plan to pay off your monthly balances and make payments more consistently. Since your payment history does make up a large percentage of your total credit score it is very important to be aware of the situation. Your credit score should also begin to rise when you start paying down your debts, and this then leads us to the third and final point.
3. Creating a Debt Re-Payment Plan
If you really want to get your finances straightened out in the upcoming months, you will of course also need to develop a strategy for how you will go about paying off your debts. There are a variety of methods of achieving this goal and there may be one or more that make the most sense for you – and for your finances at this point in time. Maybe you will look at consolidation your debts into one loan as this method can also work well if it is credit card debts you are mainly trying to pay down. If you are able to pull some money together you could also look at making a large lump sum payment towards the bulk of your debt balance. Additionally, some payment plans will include paying down the smallest to the largest debt, and others instead will start with the debt with the highest interest rate to get things rolling and finally getting rid of that debt.
While you are weighing your options, keep in mind that it will be the type of debt you have that will determine which payment plan may be the best one to identify as your starting point. In the big scheme of things, what really matters is that you have begun this process and have started to make some progress in your own path to debt-relief.
Ultimately however, the sooner you begin ridding yourself of debt, the more enjoyment you will feel towards life in generally – after all there is a whole lot of summer fun coming your way — starting with the fireworks and other festivities that are so often a part of our Canada Day Holiday and you don’t want to let debt stop you from taking part in these yearly activities.