The average Canadian household debt is over $50,000. For many people, having debt is a frustrating experience that never seems to go away no matter how much they try. More so, some slowly get sucked into a debt hole that is really difficult to get out of. Credits score dips and collection agent come after debt defaulters are just some bad debt signs.
So why have you not been able to get out of debt? Here’s why.
- Ignore the Debt Bills
The easiest thing to do is to ignore debt bills. The downside is that the debt won’t go away and furthermore, once you default on it, the lender will levy a fine on you – which makes the debt worse.
2. You don’t have a budget
A budget does several things. It accounts for your income and expenses, and assign funds for your spending. A budget is THE most effective way to manage your money. First, you account for your total income and expenses. Next, you assess which expenses are not needed, like luxury spending and you cut down on them.
This way, you gain more money to pay for your debt and manage your money better.
With the dawn of the credit card, it is very, very easy to spend money you don’t have. You pick items that you don’t need. In psychological terms, over-shopping is a serious problem, and the more you spend, the more you get into debt.
4. You keep taking on More Debt
When you already have debt, it is not advisable to take on more debt. Many with bulging student debt do this by taking car loans, home loans and multiple credit cards. Reduce the amount of debt profiles you have and you will be able to better manage them.
5. Not Lowered your Interest
The reason that your debt keeps doubling is because of the interest rate. You need to ask the lender to reduce the interest rate. For this, you will either have to have a good credit score, or explain to the lender why you are having difficulty in managing your debt.
6. You Don’t know how Much Debt you Have
This is the biggest sign that you are either ignoring your debt, or you aren’t paying attention enough. This reveals that you aren’t good at managing your own debt and need help.
7. Don’t have a Debt Consultant
A debt consultant is a professional who knows the ins and outs of the debt and financial world. He will be able to take your situation in context and give you the best solution, because when it comes to solving debt, you have more options than you think!
At 4 Pillars, you get the best debt consultation anyone can access.