Say goodbye to debt in 2021
This has been a very hard year for countless Canadians and there are many who will be suffering this Christmas.
I have received a lot of emails from readers who feel they are on the brink of declaring bankruptcy and are drowning in consumer and credit card debt.
To those who are struggling this year, don't beat yourself up about your debt. It can be fixed.
First, begin by reviewing all your options and really open your mind to all possibilities.
Do you need to downsize your home to reduce your debt? Should you change your career and get a different job? Don't be afraid to get out of your comfort zone to fix your finances.
Declaring bankruptcy should be viewed as a last resort and you should exhaust all other solutions before contemplating this.
Yes, the bankruptcy will ruin your credit. However, it is recoverable if you have to choose this option. Once the bankruptcy has been settled and cleared, it is important to re-establish good credit right away. This could take up to three years, but remember you must do the incremental steps over time to get back in the game.
Be honest with yourself and be committed to change. Let go of any past indiscretions or setbacks and start again in 2021.
Look to consolidate high-interest loans into a new mortgage, line of credit or consolidation loan to capture a lower rate and increase monthly cash flow.
This consolidation should be viewed as a one-time transaction to put you on the right road to a debt-free lifestyle and should never be used as a continuous solution to get you out of future debts.
If this is not an option, make a list of all your debts and begin to tackle one liability at a time. Pick the one you are going to concentrate on and put as much as you can down on this debt every month, while only paying the minimum payments on the other loans.
Once this debt is paid, then move to the next one, repeating the process of paying down one and maintaining the others with only minimum payments.
Once all the credit is paid, you can use these new-found funds to start a savings program toward investing. This is when you will stop feeling helpless.
Be sure to avoid sugar-coating your finances or making excuses to flee from finally resolving your debt this year.
It is necessary for you to take action and get out of the victim mentality. If this means finding ways to make more income, getting a new job or cutting back on spending — then do it!
It is in the reach of every person to become financially comfortable. Let's make this new year your time to succeed. Believe in yourself and most of all, believe you are worth it!