Advice for today
Managing cash flow and debt
How to balance debt repayment with your financial goals
Budgeting and paying down debt can seem like conflicting goals, but the right balance can embed resilience into your finances.
Jul. 15, 2020
3 minute read
Whether you have debt in the form of student loans, car loans, credit cards or lines of credit, these tips can help you create a repayment plan that works for you.
1. Sit down and assess your debt and future goals
It’s certainly not a fun job, but it’s necessary. Understanding how much debt you have, in addition to the amount of interest you’re currently paying on each loan will allow you to develop a repayment and savings plan that works for you.
2. Prioritize paying Off high interest debt first
This is a golden rule Once you’ve identified which sources of your debt have the highest interest, prioritize paying those off first.
Pay above the minimum on these high-interest sources of debt as often as possible. You want to avoid paying high sums of future interest, which could otherwise be diverted toward making your financial goals happen.
3. Don’t be tempted to create more debt
In the age of social media, keeping up with the Jones’ is more tempting than ever.
- Once you’ve developed a budget, stick to it. Look at sources of unplanned spending in your life and try to reduce your exposure to them. Whether that means unsubscribing from your favourite stores’ email lists or avoiding social media, you can try to limit the temptation.
- Whether your goal is to be debt-free, buy a house, or take a vacation in the future, keep those objectives top of mind through visual reminders or by frequent check-ins with your savings account.
4. Consider consolidating your debt
Depending on your individual circumstances, consolidating your debt may be a good option by helping you save on interest payments.
Our financial advisors are trained to help you sort through the noise and make tailored spending, saving and debt repayment plans that can help work for you and your priorities.
We can also help with reviewing your investments to determine whether your current amount of risk is in line with your lifestyle and broader financial goals.
As mentioned above, we can also assist with debt consolidation and setting up accounts for spending, saving, and investing for the future. To learn more, schedule an appointment with an advisor.
