WHAT TO DO WHEN YOUR LOAN PAYMENTS ARE TOO MUCH TO HANDLE
Shopping around for a car is fun and exciting especially when you have a specific make and model in mind. However if you are searching for a popular car like a Honda, Mazda or Ford etc. – you will need to have a little patience. How so? Some makes and models literally fly off the car lot as soon as it is listed. To have an upper hand while shopping around for a vehicle, some consumers prefer to have some money on hand to put a deposit down. However before you put your money down or pay for anything, make sure your mechanic gives your dream car the thumbs up first!
In a perfect world we would all have enough money to pay for our new car in cash, but that’s simply not reality and we turn to debt. Whether it’s a personal unsecured loan or a secured loan using the car as collateral, we need to make sure it fits within our budget. Too often the emotion of buying a car, one that we really have our hearts set on, clouds our financial judgement. Unless we plan ahead, and factor our budget into the purchase and ongoing expenses, we end up living beyond our means. If this scenario happened to you, don’t worry – you are not alone. Many Canadians across Canada are living paycheque to paycheque trying to make ends meet on a monthly basis. The good news there’s help available to get you on track without claiming bankruptcy.
Your five-step debt management plan:
- Gauge your financial health. How much of your paycheque is used to service your debt load? Is 50 per cent of your pay going towards your debt? You can get a better idea of your financial situation by calculating your debt-to-income ratio. Keep your debt-to-income ratio under 36 per cent to avoid drowning in debt.
- Create a plan. Create a budget to gain an understanding of where your money is going, and cut whatever isn’t absolutely necessary to free up cash. Whatever extra money you gain, you can apply it to managing your debt.
- Carry only cash everywhere you go. When you use only cash, you are able to spend within your means. Once your money is gone, it’s time to leave the store.
- Limit buying your meals outside of your home. Instead make your meals at home. You will save hundreds maybe even thousands of dollars a year. Economic meals start with smart shopping behavior! Create a healthy meal plan, buy in season, and shop for the week!
- Seek credit counselling. If you are feeling overwhelmed by incorporating the above tips in your lifestyle, seeking the guidance of a trained credit counsellor will help you to get back on track with your debt management. You do not have to do this alone, seek the appropriate help.
Get your financial house in order today and the best part, you can do this without leaving your home! You can pick up your phone to speak to a trained credit counsellor now at 11-888-696-9376. A trained credit counsellor will help you to create a budget and slay your debt in record time!