Paying off debt

Carl: I've finished school, got a good job, and I'm looking to buy my first car, but I still have my student loans to pay off. What are the steps to help me get started on the right financial foot now that I've finished school?

Carl is excited to meet with a CIBC advisor who understands where he's coming from and where he wants to go in life. She explains how three simple strategies can help him manage his everyday finances:
 

Create a budget

A budget will help Carl see how much he spends in each area of his life and differentiate between "must-haves" and "nice-to-haves." Doing without a "nice-to-have" like a $5 a day coffee habit could give Carl $1,300 extra each year to put towards his loans.
 

Create a debt repayment plan

One of the best ways to reduce debt is to establish a regular repayment plan and, when possible, make lump sum payments towards the principal. "Every time you make more than the minimum payment, you'll pay off more principal and reduce the overall amount of interest you're paying," explains his advisor.
 

Use credit wisely

To help Carl manage credit wisely, his advisor recommends choosing a credit card that meets his needs and matches his lifestyle. "There's a whole range of cards to choose from," she explains, "including cards with no annual fee, cards that offer rebates on purchases, and cards that pay 'rewards' points that you can use for travel or merchandise."

Before long, Carl is feeling confident about his finances and is saving for the down payment on his car. With his budget now in place, Carl is starting to shop for a vehicle he can comfortably afford and plans to discuss car loan options with his CIBC Advisor when he is closer to a decision.


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