What Every New Graduate Should Know About DebtJun 18, 2018
BDO is back with another podcast episode and this month we are talking about the four things that every new graduate should know about debt. Our Licensed Insolvency Trustee’s (LIT) from across the country provide answers to questions like:
- What’s the first thing a new grad should know if they’re finishing school with a debt load?
- Where should paying off debt fall in their list of priorities?
- What credit card strategies should you adopt to avoid debt problems?
- What should you know when you just can’t keep up with paying your debt?
When setting financial priorities where should paying off debt come for new grads?
Craig Fryzuk, an LIT from the BDO Calgary office provides some insight into this debt topic for us. He recommends:
- Prioritizing debt repayment as much as possible.
- At the very minimum keep up with your minimum payments to start building good credit history.
- Aim to reduce high interest debt first such as credit cards.
- Lastly, along with prioritizing debt repayment be sure to check out this article for 31 quick and dirty tips to get your finances in shape for 2018.
In addition, the best way to make sure you are prioritizing your chances to reduce debt is to take a thorough look at all aspects of your finances. Review your monthly income, debt payments and any other expenses (groceries, rent, utilities, transportation, etc.) to develop a healthy and fair budget.
After analyzing your finances, determine how much you can comfortably put towards your debt. Aim to make more than just the minimum payments each month, to save you on interest charges and help be debt free faster, but also make sure you leave enough room in your budget for your daily expenses, so you won’t have to rely on credit cards and loans to fill in the gaps and gain more consumer debts.
Should you find yourself feeling overwhelmed by debt – as most grads exit university or college with a lot of decisions to make – it’s important to remember there is help with debt available. Whether it’s talking to a family member, a debt counsellor, or a Licensed Insolvency Trustee.
You can also find great resources from these podcasts and blogs to develop your financial literacy further and ensuring that you are working towards paying off student debt in a responsible and effective way.