Preparing for Higher Interest Rates & Higher Costs of Living
As the Bank of Canada announces interest rate increases and the cost of goods start to rise, it becomes more and more difficult to manage debt. The following are strategies to consider to help deal with debt while managing these increases:
Pay Down Higher Interest Debts First
Payday loans and credit cards typically carry the highest interest rates. Targeting these debts first and setting goals to pay these types of debts off quickly can spare you as interest rates continue to rise.
Consider Consolidating
Talk to your bank about converting high-interest payday loans and credit cards into personal loans or lines of credit, which typically carry lower interest rates.
Review or Create a Household Budget
Paying down debt faster while the costs of goods increase can be tricky without carefully reviewing your budget. If you don’t have a budget, now is the time to create one. You can refer to our blog post Basic Budgeting for more information about budgeting.
Trim Expenses Where You Can
Review spending transactions over the last three months and highlight expenses that can be reduced or eliminated to facilitate making more funds available to pay down debt.
Lock-In Interest Rates While You Can
If you have a variable rate mortgage, talk to your mortgage lender about when and if you should consider locking in your rate before it becomes unmanageable.
Talk to a Debt Professional
When debt levels are unmanageable no matter what you do, it may be time to talk to a Licensed Insolvency Trustee at Beverley & Associates about options to reduce or eliminate your debt load.
Start your journey to financial freedom. Book your free, no obligation consultation today to connect with one of our experienced BC/Yukon Licensed Insolvency Trustees.
