Drowning in debt?
TOP 10 TIPS TO HELP STAY OUT OF THE DEEP END
Debt is a difficult cycle. The bills keep coming in and your paycheque disappears before you even see it. Like many Albertans, you just need a little help. And helping is what we do best.
Here are 10 tips to keep you out of the deep end.
1. Write down your debt and make a budget
Looking at the list of expenses helps you draw the line between your wants and needs. The needs are the focus. Make a realistic budget and stick to it.
2. Pay more than the minimum
You won’t pay off your debt by paying only the minimum payment. The minimum payment on a credit card covers only the interest, not the actual loan or credit card amount.
3. Pay off your most expensive debts first
If you can afford to pay one bill first, choose the one with the highest interest rate. This way, you’ll immediately begin saving money. If you have a few different bills at high interest rates, consider a consolidation loan. Did you know that we offer a payment break from your personal loan without penalty? Skip-a-payment on your Chinook Financial personal term loan*.
4. Consolidate your debt
One bill, one payment. Organizing your debt under one roof can save you money. A low interest consolidation loan with flexible repayment options can free up some funds to save you more
5. Cancel old credit cards
If you belong to your favourite department store's credit card program, you’re probably paying close to 30% in interest. The rate on your consolidation loan is nearly half that! Get rid of those credit cards to help avoid the temptation and quit paying exorbitant rates.
6. Stay away from Payday Lenders
A high interest payday loan isn’t your only option. The Cash Crunch Loan is a loan for people facing unexpected budgeting challenges, where their expense and income timing is misaligned. Avoid the predatory interest rates and find a loan to keep you on the debt-free path.
7. Cut back on costs
You can’t avoid electricity or water bills, but there are some costs you can cut to lessen the burden. Work with your cell phone provider to see if you can change your package. Carpool with your coworkers to work and shop at thrift stores for housewares and clothing. Cutting a few simple costs can save you an extra $50-100 per month, which can be put towards debt or savings.
8. Change your spending habits
Make crafts or dinner for friends’ birthdays, and host movie night at your house instead of going to the theatre. There's a lot you can do in your community, visit your local town centre for the free events happening near you!
9. Gain financial freedom
Now that you’re on the path to becoming debt-free, don’t slip! Use those extra funds to begin a savings plan. Make your money work for you. Contribute to a Registered Retirement Savings Plan (RSP), open a Tax-Free Savings Account (TFSA) or invest in something else. Have you ever heard of Socially Responsible Investing? Learn the basics about investments.
10. Get help
Whichever step you’re on, we’re here to help. Financial planning is what we’re good at. As your local credit union, our personal bankers take a special interest in removing barriers to banking and creating financial freedom for everyone in the community.
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