That’s it: You’ve made a commitment to get your personal finances in order by 2023.
With inflation and interest rates soaring and showing no signs of slowing down, you may see your debt as an insurmountable obstacle. Luckily, it’s still possible to take control of your situation and come out of it with your head held high.
Follow these tips from Jean Fortin’s personal financial advisors to see things more clearly. They allow you to put in place a solid plan to help you reduce your debt… and increase your well-being!
1. Get your debts in order
It’s possible that you’ve lost track of your debt because you’re worried about your situation — and that’s perfectly normal.
However, to restore your finances, you must take the time to take stock of your debt: student loans, credit cards, buy-now-pay-later purchases, and your personal and auto loans. Include the amount owed, the interest rate, and the monthly payment required to keep it up.
Are you the owner? Check if your mortgage has a fixed or variable rate, a fixed or variable payment, and the due date.
Finally, check your Equifax or TransUnion credit report and verify that it is free of errors.
2. Measure your debt level
There are free online tools for this, such as Jean Fortin’s Debt Ratio Calculator. This is also the best way to determine if your debt level is acceptable to creditors.
Since this number also has a direct impact on your borrowing ability and costs, it’s a good estimate for avoiding over-indebtedness.
3. Set a realistic budget
This piece of advice keeps popping up because the budget is an ideal tool for keeping personal finances under control. Using an online budget will help you avoid miscalculations and oversights on expense items.
This calculation grid should include your fixed expenses (rent, electricity, heating), your variable expenses (food, trips, clothing, etc.) and your income.
By doing the budget exercise, you can know exactly what you’re spending your money on and then identify where you can save. Don’t try to cut your spending too much and be honest about your situation: after all, a realistic budget is more likely to last than an idealistic one!
4. Plan a debt reduction plan
Once you have a good idea of your financial situation and budget, you can create a plan to pay down your debt at a pace that works for you.
How to get there:
- First, if possible, transfer your credit card balance to a line of credit with a lower interest rate.
- Did you manage to find a surplus in your budget? Use this amount to reduce your debt, starting with those with the highest interest rate.
- Prioritize the smallest debts over the big ones to motivate yourself.
- If necessary, contact an expert to help you through all these steps.
If the task seems impossible, rest assured that a Jean Fortin personal financial advisor can offer you a free, confidential and non-binding consultation.
Don’t let your debt take over! Contact a personal financial advisor to Jean Fortin to fix your situation quickly. In less than 24 hours you will have all the answers to your questions and you will have a plan how to get out of this.