FLM 2017: 2 Tips that Will Help You Reduce Debt in 2018Nov 01, 2017
Paying down debt — whether it’s a car loan, a credit card balance, or a mortgage — is something that Canadians do every day. Changing how you pay down debt is like changing any habit. It doesn’t happen overnight. Much like preparing to run a marathon, new habits are created through repetition and practice.
Developing the habits you need to successfully manage your money and your debt is what Financial Literacy Month (FLM) is all about. Each November, the Financial Consumer Agency of Canada (FCAC) gets the word out about the importance of helping Canadians strengthen their financial literacy. The more you know, the better you’ll be able to meet your financial goals, including paying off your debt.
Late fall is the perfect time to sit down and think about your goals for 2018.
Maybe you have lingering student loan debt that is squeezing your budget. Or you’re not paying off your credit card debt as quickly as you’d like. Now is the time to dedicate yourself to changing your debt repayment habits in the year ahead.
Here are two tips for getting started.
- Set SMART goals
A SMART goal is one that’s: Specific, Measurable, Achievable, Realistic and Time-Framed.
Let’s say you want to pay off your used car loan. That’s specific and measurable right away. Now, investigate whether it’s achievable and realistic — can living without dining out or Netflix help you make extra loan payments? Finally, set a date to make it time-framed. For example, you want to have your loan paid off by the end of 2018.
The FCAC offers step-by-step advice on how to set your own SMART goals in their Financial Toolkit.
- Avoid finance misconceptions and change your mindset
Money Coaches Canada has a great blog about folks who feel like they can’t get ahead with their debt. You feel like you could pay off debt, but you’re not making enough money.
This is a misconception. There’s always something you can do to reduce debt, and relief options exist for those who can’t. The blog outlines five misconceptions and “new beliefs” you should take on. When you’re setting your financial goals, adjusting your mindset to be more positive and realistic will help.
Take advantage of FLM 2017 to the fullest by using the Canadian Financial Literacy Database to find out what events or programs are offered near you.