Everyone has heard the mantra of “good debt,” but that’s not exactly accurate. Holding onto debt that’s keeping you from saving towards your future and moving forward in your life can feel destabilizing. Instead of paying $1,200 a month in a combination of student loans and a car loan, think how much you could do with your life without the debt burdening your budget.
Of course, investing in a home or a rental property and carrying a mortgage could prove beneficial. An asset like an affordable home will likely appreciate and keep your costs fixed. A loan on a brand new, fully loaded car will depreciate and won’t hold its value as you continue to make payments.
The next step is figuring out how to pay off debt. According to Credit Karma, millennials owe $17,000 in student loan debt. That can feel daunting to tackle, but there are strategies that can help.
First, free your budget from miscellaneous expenses that you can do without and apply towards your debt. Some people prefer knocking out the higher interest rate first on a credit card or loan. However, addressing those smaller debts first can help you gain momentum and see more immediate results. Taking on a side hustle for extra cash can also help see fast results in paying down debt.
If you’re struggling with your finances, or just want to improve your handle on money, you’re not alone. Over “half (53%) of Canadians are living paycheque to paycheque and one in four (25%) say their debt load is overwhelming. More than one-quarter (27%) don’t have enough for their daily needs” according to Investment Executive. The good news is it’s never too late to take control of your financial education and take steps in the right direction. Here’s how to get started.
Start with a budget and slowly add in these financial strategies to lay a foundation for success. Want to learn about more spending and budgeting strategies? Email us today at: firstname.lastname@example.org