3 Reasons Your Debt is Pushing Your Goals out of ReachOct 14, 2018
What do 30 per cent of Canadians have in common? They’re most likely to feel overwhelmed by their debt loads. According to our Affordability Index poll, many Canadians are having trouble covering their expenses, and debt may be one of the reasons. Not only can it make everything seem more expensive, it can also keep you from hitting all your goals.
Affordability is a serious issue for Canadians
As outlined in our new poll, here are some interesting highlights about what Canadians had to say about how they spend money and what’s the least affordable for them:
- Millennials, Women, and GenXers with kids are most likely to be dealing with heavy debt and conflicting obligations such as old student debt, high mortgage debt, non-mortgage debt and finding it hard to pay for everyday expenses, especially those raising a family.
- Three-quarters of non-homeowners aren’t likely to buy a home in the next 5 years either because they are living paycheque to paycheque, or it’s simply too expensive for them.
- 30 per cent of Canadians say they don’t have enough money to cover their basic needs.
- Half of Canadians also said they don’t earn enough money to live debt free.
3 ways debt may be keeping you stuck
Debt is a definite roadblock for many Canadians and not everyone knows how to deal with it. Here are some ways debt might be keeping you from your goals:
- Your paycheques go toward servicing your debt. Credit card debt payments, auto loans, student debt…all these can take up a huge chunk of your paycheque, leaving you little leftover to pay for important things. If you’re just paying the minimum on your debts, you’ll be stuck in this cycle for a long time.
- You have no money for savings. If an emergency comes up or an unexpected expense, you may not have a savings account to keep you afloat. Not only should you have an emergency fund, you should also be saving for larger goals such as retirement, your child’s education, and shorter term goals such as holidays or big ticket items.
- Your debt drains you. Not just money, but it drains your energy and keeps you stressed. It’s hard to plan ahead and set goals when you’re pre-occupied putting out financial fires.
What you can do about it
If you feel like your expenses are out of hand and your debt is holding you back, it’s time to make a change. Here’s how you can fight back:
- Reduce your expenses – Create a budget or re-work your current budget to track what you spend in a month. Where are you spending the most? Find ways to reduce your expenses whether it’s using cash instead of credit to allow you to stay within your pre-determined budget.
- Set your goals – Write them down, print them out, tell a friend – whatever it takes to motivate you. Use this guide to learn about setting SMART goals and sticking to them.
- Deal with your debt – Don’t just stick to paying the minimum. Use this tool to compare your debt relief options or speak to a debt professional such as a Licensed Insolvency Trustee who can help you get past your debt and put money back in your pocket.
- Celebrate your successes –Don’t forget to learn from your mistakes and celebrate each milestone that you hit, whether it’s paying off a small debt, or reaching your monthly savings goal. There’s no quick fix for your financial life, but you can choose to do it better each day. Your future self will thank you!