Step by step to erase debt

Over three quarters of Canadians are in debt. Chances are that you are still being plagued by your student debt. Debt is everywhere. With credit cards, home loans, car loans, student loans, personal loans, quick loads – debt is everywhere. Economies are run on debt. And yes, in a way, the system is to blame, but you are in control, you are the one who can break out of debt cycle.

Here’s what you need to do.

Step 1: Identify the cause

Try and answer these questions:

– Why are you stuck in the cycle of debt?

– Why do you keep accumulating debt, month after month?

– Why are you unable to pay the debt?

– Why do you find yourself short of paying the debt?

It is vital that you answer these questions truthfully and honestly. No excuses, no blames. What are the answers you have?

Behavior: You keep incurring debt because you overspend at the grocery store or restaurant, or you take more loans that you can manage, to buy more things (cars, homes, etc) that you don’t need. This is a behavior problem.

Poor Financial Management: You aren’t able to pay off the debt at the end of the month because the lack of money, the blame is to go to your financial skills. Money tends to slip through your fingers too easily.

Your Emotions: Feeling distraught, tension and worry because of a troublesome moment in your life can lead you to ignore debt.

These are just some possibilities.

Step 2: Find a Cure

Next, find a cure.

– Budget

  • Track your Spending: Once you track your spending, you are aware of where your money is going and how it is being utilized.
  • Analyze your Spending: Identify buying behaviors that incurs more debt. It could be eating out too often or buying chocolates too often.
  • Craft a Budget: You craft a budget so that you allocate and reduce your spending. This way you save more, which can be used to pay off the debt.

– Take Help

If you are plagued with an emotional or medical problem, then take help. Join a debt support group or join shopaholic anonymous. Don’t do it alone!

Step Three: Plan to Get Rid of Debt

And now you get to tackling debt.

You need to, as much as possible, wipe your slate clean. You have several options.

Plan for Each Debt:

You can plan to deal with each debt. The challenge is to juggle the multiple debts and ensure you have enough money to pay them at the end of the month – without fail, if you plan to get rid of it. You can try to renegotiate with the lenders to get a better interest rate and change the timeline.

Switch to Cash

Whether you are a shopaholic or just a regular person in debt, switching to cash is a wise thing to do. Once you get rid of the credit cards, in a single stroke, you stop getting more debts from them.

Consolidate the Debts

If juggling all the debts is a problem, you consolidate them. This way you bring all your debts to one account, preferably the one that charges the least amount of credit.

Debt Settlement

Through this, you get your lenders to agree to a full one-time payment and the rest of the debt amount will be forgiven.


Despite all the bad publicity put on declaring bankruptcy, it is not as bad as you heard. You get to keep vital assets and have the slate wiped clean for you.

If you are thinking of jumping to Step 3 directly, you will be making a mistake. By following Step 1 and 2, you ensure that break free of the debt cycle so you don’t get back to it.

What you are attempting is not easy, but it can be done! Get to it!


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