Managing debt is something that we all must prioritize in our personal finances. Debt is, unfortunately, a part of life in the modern world. Yet, debt doesn’t necessarily have to be a bad thing. Managing debts with ease and grace is something that many people strive for, but it can be difficult to find with the rigors and stressors of life often getting in the way of debt reduction efforts.
With this guide, learning how to manage your debts more successfully can jumpstart your financial future and set you on a new path to success faster than ever before. Read on to discover some powerful approaches to the debt reduction solutions that you’ve been looking for.
Build an emergency fund, today.
Emergency funds are a crucial account type (in addition to your checking account, securities products, and other savings accounts) for those looking to manage their personal financial needs more effectively. This is especially true for anyone looking to reduce their debt burden in a meaningful way. Emergency funds help consumers ease the pressure off of their credit cards and other lines of credit.
Credit cards are great for consumers who need capital in a pinch, and for people looking to build their credit score over the long term. Yet, a credit card is an easy way to build up debt that can be difficult to repay in a hurry. The longer you carry these debts, the larger they get, eroding future purchasing power right from under you.
Emergency savings helps alleviate this. While emergency funds can be difficult to get going, once you’ve established a savings routine with the help of one of many great online banks in Canada, the savings will continue to pile up, giving you increased breathing room for your finances and personal needs. The best way to choose an online bank is by looking at the interest rate they offer to their clients. A traditional bank will only provide a meagre interest rate to grow your savings account, yet an online bank like EQ Bank, Simplii Financial, Tangerine, and even other credit unions provide their customers with enhanced rewards as a result of their online bank status. These financial institutions reduce their own costs by cutting out the brick-and-mortar locations in order to pass on great interest rates and other benefits to their users.
Flipping the script in your favor is the first stop on the way to financial independence, and an online bank is a great way to achieve this.
Consolidate debts with a debt relief partner that you trust.
Debt relief can be accomplished in a variety of ways, but a debt relief company’s direct approach to debt elimination remains within its mandate. These financial institutions allow you to consolidate your monthly payments into one lump sum, and they negotiate on your behalf in order to reduce the overall burden that you’ll have to pay. A debt relief advisor gives you the ability to negotiate directly, although your lending opportunities will become a bit tighter in the years following this restructuring.
Another option is the debt consolidation loan. A loan from your credit union or bank will provide you with the funds necessary to pay off debts, and then you can pay a single monthly payment for the term of the loan until the debt is repaid in full. These are both great approaches to minimizing the stress and burden of managing multiple and expensive monthly payments.
With the help of these paired approaches to managing debt, you can get clear of any outstanding credit card, medical, or other bills in a hurry. Debt is a part of modern consumer life, but it doesn’t have to be stressful and all-consuming.