Going on a Debt Diet - Article Published in Snap East Kootenay

Managing personal debt – going on a debt diet

For many Canadians debt-freedom has become a top priority. A recent survey indicated that debt reduction was a goal of 76 percent of the respondents. Now is a good time to address this issue; as interest rates rise, which is inevitable, debt becomes harder to support.
The survey also indicated that only 43 percent of respondents were able to stick to the budget they set a year earlier. Setting a budget and having the discipline to follow it are two different things. For many what is needed is professional help, particularly in the area of cash management.
Getting out of debt begins with sticking to purchases that can only be made with available cash, no credit cards or financing purchases. Second is to reduce the high interest debt of credit cards. If possible debt consolidation and cutting up the credit cards is critical to any action plan.
There are several types of mortgage vehicles available to home owners that can help to control and manage debt. A variable rate mortgage that charges interest on the daily balance and that has the ability to be the only bank account has the advantage of reducing the interest paid whenever there is a deposit made. In other words you can use your monthly income to reduce your debt, even if it is only for a short period of time the reduced interest charge will make a difference. A debt that is amortized over 25 year term could be reduced as much as 15 years. That does not mean that it is the be all and end all to debt reduction; success of any debt reduction plan requires learning restraint. However if you can reduce the amount of high interest credit card debt to a more manageable level and use the savings to further decrease debt achieving a debt free goal will be a lot easier.
If you are serious about debt reduction consult a financial advisor the have the tools and access to the right vehicles to help you achieve your goal.