How to Find the Best Debt Relief Tools for Your DemographicNov 07, 2018
Finding it harder and harder to make ends meet? Three in 4 Canadians are living with at least some sort of debt. the average non-mortgage debt in Canada is just below $20,000. Some demographics however, are dealing with higher debt and higher expenses than others. That’s why this month, we are taking the mystery out of debt repayment so you can find the resources you need to get past your debt.
What financial challenges do Canadians have in common?
Recently, we looked at how Canadians are coping with their everyday expenses and how they think they’re managing with long term expenses such as saving for retirement. Here are some highlights from the BDO Canada’s Inaugural Affordability Index:
- Personal debt loads – 34 per cent of both millennials and families with kids said they’re overwhelmed by their debt and don’t know what to do about it. Higher income, homeownership and higher education are also indicators of higher debt loads.
- Retirement savings – 69 per cent of Canadians find it challenging to save for retirement. Among the demographics, women, millennials and GenXers are the least likely to have any retirement savings.
- Clothing and essentials – 42 per cent of women, 44 per cent of millennials, 43 per cent of GenXers and 30 per cent of Boomers find it challenging to afford these basic essentials.
- Saving for a major purchase – More than half of Canadians are living paycheque to paycheque with just enough money to cover their needs each month. That means saving for a major purchase can seem nearly impossible, especially for women, millennials and GenXers.
Although inflation, interest rates and income play a major role in Canadians’ ability to afford their lifestyles, we found that debt is an important factor as well. Dealing with debt, on the other hand, can significantly improve financial well-being and make it easier to hit financial milestones.
How to know what’s right for me?
Maybe you’ve tried a few strategies that didn’t stick, or maybe you don’t know what works best for you. That’s why it’s good to experiment with different tools and resources to keep you on track with your money management and debt repayment.
Millennials – Staying connected to friends and family is important, but the same is true for your money. To track your money easily, check out these resources:
- Mint.com – This budgeting app connects to your bank account, showing you exactly what you’re spending and how to improve.
- Wally – Another great app that allows you to take pictures of your receipts which automatically get filed into categories such as clothing, food, entertainment, etc.
- Debt repayment calculator – Use this tool to compare different debt relief options. Just plug in your debt numbers and see how long it will take to pay back your balances, based on which option you choose.
Gen Xers – If you’re raising kids, time is a premium. Use these quick, on the go strategies to help you control your money:
- Financial podcasts – Jessica Moorhouse’s ‘Mo’ Money Podcast’ or BDO’s monthly podcasts are a great way to brush up on your financial literacy while on the go.
- Check up on your financial health – A few short questions can tell you how you’re handling your current debt load, and which steps you can take to deal with it. Take the quiz.
- High-interest savings – Set up a quick, online savings account to easily add to your emergency fund or retirement savings. Set up automatic withdrawals so you can set your savings on autopilot.
- DIY debt control – Use the debt avalanche method to squash high-interest debt balances quickly. Put all extra money toward your highest debt while paying the minimum on the rest.
Boomers – Still have kids at home? You need to make your money a top priority:
- Finance bloggers – Boomer and Echo offer solid money advice for those headed toward retirement years and how to make the most of them.
- Budget worksheets – Use this handy worksheet to make sure you’re staying on track with your spending each month.
- Make debt repayment a priority – You don’t want to carry a balance into retirement. Speak to a debt professional such as an LIT to help you navigate the debt repayment process so you can enjoy your retirement years, debt-free.