Excellent Financial Habits to Minimize Your Debt

Debt itself isn’t anything to be scared of, but there are some telltale signs your debt has gotten out of control. If you’re making only minimum payments, late payments, or no payments at all and creditors are calling you and maybe even garnishing your wages, then it’s time to get help. Financial counselling from a Licensed Insolvency Trustee will let you make an informed decision on how to best negotiate your debt. This could look like a consumer proposal: a legal process that allows individuals to make an agreement with their creditors to pay a portion of the debts in regular payments.


From there, it’s important to establish a long-term debt reduction plan and improved financial habits. If you aren’t sure when a consumer proposal is right for you, your trustee will thoroughly evaluate your situation to help you make a decision. Healthy financial habits are incredibly important to have, so here are some tips for healthy holiday spending and credit card use to minimize your debt.


Holiday Shopping Smarts

The holidays come with a whole host of extra costs so knowing how to plan ahead and trim down expenses can be pivotal in sticking to your debt recovery plan. Handling debt throughout the year and trying to find balance can be difficult, and it’s certainly tempting to splurge at the end of the year as a way to treat yourself and your loved ones. But do you really want to set yourself back further and start out your new year in even more debt?


It’s easy to trim the cost of your gifts during the holiday season. For one, you can arrange to set up a gift exchange like a Yankee Swap with a fixed dollar limit for gifts. Gift swaps are fun and a great opportunity to make memories that are as valuable as the presents themselves.


If you’re planning a holiday party, don’t feel obliged to pull out all the stops and exceed your budget. Here are some holiday party planning tips that can help you build towards healthy financial habits:

  • Buy items in bulk where you can to cut costs
  • Go potluck style with the food
  • Repair and revitalize old decorations instead of buying new ones
  • Find free games and activities online


Credit Card Use

During the holidays and the rest of the year, your credit card use should be based on what you can afford and maximizing your rewards. When traveling, use your travel card for reservations and accommodations to earn miles. Only use store credit cards if they offer rewards and you can pay off the balance in full — the interest rates are too high and will end up hurting you in the long run.


Finally, if you’re someone who struggles with handling credit card use and you’re already working to pay off a balance, make a plan to pay off your rewards/travel/store cards first to eliminate that interest and make the minimum payment on your low APR card. Once your balances are paid, work towards paying off your low APR card at a rate you can manage.


Healthy spending habits will go a long way in helping you get out of debt and achieve your financial goals. If things are bleak and you’re even considering bankruptcy, then don’t wait, Licensed Insolvency Trustees are here to help.

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