Consumer debt is on the rise in Canada and globally.
So, what is consumer debt? It can be defined as any debt that is used for consumption.
The things you buy or pay for using money that you don’t have and pay interest for. Consumers are building up credit card debt, using payday loans, cash advances and cash loan services at incredible rates. Industry Canada says that the average debt has risen by 70% since the mid 80’s.
The ease at which we borrow without reviewing the drawbacks has lulled us into a sense of security.
Nothing could be further from the truth. Loans, credit card debt, borrowing and interests make you a slave to work and make payments. Your interest rates may be incredibly high and may take longer to pay off than your think. You may have heard that there are two ways to take care of your bills – earn more or spend less.
what can you do
There are a few more things than the two step earn more, spend less.
- Reduce your spending
- Take an inventory of monthly bills
- Increase your earnings and investment returns
- Check and improve your credit rating
- Negotiate better terms and rates on loans and debt
- Consider debt consolidation loans
- Improve your money management skills
- Use credit counseling services if you are still overwhelmed
- change your lifestyle
In short, it’s time to step back and put a more simple plan into action. One that you can handle.
Choosing a lifestyle that is comfortable for you is certainly important. Consider looking at the things that truly add value to your life. With a large amount of consumer debt you will be compromising these things in the future. Your future is important, right?
Take about half and hour and make a quick list of all your passions and interests. How do you want to spend your life? If you are a family, have a meeting and get together to discuss the things important to you. This will give you a starting point to discover where you really should be spending your money, time and energy.
The above exercise gives you a chance to look at the things that are really important to you. It will help you learn where you want to spend your time, effort and money.
Putting it where it counts.
Having consumer debt control those things will reduce your ability to enjoy an abundant and meaningful life. Time to grab the bull by the horns and avert your consumer debt crisis.
Our next article will expand on the steps you can take to start getting your debt under control. Simple steps, one at a time.