REGINA – Five years in a row now Canadians have said “this is the year” to pay off their debt, according to a new CIBC survey.
Then we let it slide, in part due to the allure of shopping for purchases big and small. So a new year and the same resolution: buy less and reduce what we owe.
Many of us are just dreaming about eliminating debt, though. Credit counsellors say you need to have a plan that starts with a better understanding of your money.
“That doesn’t include just our basic monthly rent, mortgage or car payments, but also gas, groceries, entertainment and a little bit of savings,” said Angela Wilkes with the non-profit Credit Counselling Society. “The budget is a lot broader than most people realize.”
Problem is, it’s a lot more fun to buy a new toy.
With offers like low monthly payments on vehicles or “no money down” on a big screen TV, it seems easy to seal the deal.
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But Wilkes says just because you were approved for a loan doesn’t mean you can afford it.
“Those things are eating up 50 or 60 per cent of your income, which of course takes away from everything else in the budget,” Wilkes said. “Any of that ‘fun money’, like eating out or entertainment, which is what most of us typically overspend on each month, that’s what we need to cut out.”
Only then, once the payments are done, can we focus on what many Canadians picked as their second financial goal for 2015: finally building a savings.
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