Why You May not Get out of Debt Any Time Soon

• November 22, 2017

Most Canadians are in debt and desire to get out of debt. However, some will never get out of debt, or will take far too long to do so, because they are doing certain things, which only sabotage their chances to break free of debt.

Here are some things which may cause you continue to be in debt for longer than necessary:

You don’t know how much debt you have

Most people have a general realization that they are in debt, but they just don’t know by how much, and where they stand compared to the average Canadian. It is ridiculous to think about getting out of debt when you don’t have the actual figures regarding how much you owe. The first step towards being debt free is to make a list of all your debts, and develop a clear picture of what you need to pay off. Only then can you come up with a plan to clear your outstanding debts.

You pay only the minimum

Getting out of debt will require real effort, and this will be difficult to achieve if you are only committed to paying the minimum balance due. You should realize that the more you pay, the faster you will get out of debt, but if you continue paying the minimum, you will be in the hole for the long haul.

You have a big mortgage

A mortgage is one of the most significant sources of debt for the majority of Canadians. If you take out a huge mortgage, then it will likely mean that it will take decades before you become debt free. If you want to get rid of your mortgage debt, there are a number of options at your disposal, including making extra payments toward the mortgage, downsizing to a smaller and less expensive home, or refinancing at a lower rate to reduce the time required to pay off the mortgage.

You don’t track your expenses

If you are the kind of person who doesn’t know where their money goes, or you simply can’t say NO to your kids’ financial demands, then be prepared to be in debt for a relatively long time. It is important to know where your money goes and to know that you must not get your kids everything they request. By tracking your expenses, it becomes so easy to know what to cut down on, and how you can increase the amount of money you save, which you can then put towards clearing your debts.