Statistics shows that almost 2/3 of all Canadians are in debt. In simple terms, debt is part of life for a good number of Canadians. Unfortunately, the types of debts we are talking about here are not the beneficial ones, such as car payments and mortgages. We are talking about credit card debts, payday loans, and other avoidable loans that pose greater risks for Canadians.
The first mistake that most people do is thinking they have a handle on their finance, but the truth is that it is extremely easy to make a poor financial decision that can create a way for an ever-growing debt. It is only by identifying the traits that cause debt that we can all heal our financial situations.
Below is a compilation of some of the most common behaviors that lead to debt:
1. Going for the minimum payment trend
Almost every Canadian adult has a credit card or two. Unfortunately, most of us choose to pay only the minimum payment allowed at the end of every month. Consequently, our debts pile as a result of the high-interest rates that come with such options. The only way to beat this behavior is to forget this common trend of paying only the minimum payment is opting to pay everything in full.
2. Living beyond your means
This is one of the most common financial mistakes many Canadians make, especially because credit cards tend to encourage us to spend more that we have. To beat this behavior, create a monthly budget and stick to it by all means. Alternatively, you can get rid of your credit cards altogether.
3. Ignoring the total buying prices
Many Canadians today rarely look at the final buying price when purchasing things, such as cars, is the total buying costs. We tend to look at the monthly payments, and if they are manageable, we go for it. Looking at the final buying price is a wise idea as it will help determine if you can afford whatever you are looking to buy based on you current financial standing.
4. Ignoring the importance of saving
Emergencies happen all the times, and when you don’t have any money to take care of them, it is easy to turn to credit, and this can quickly set you up for a dangerous debt cycle. On the other hand, when you have savings to fall on during such times, borrowing becomes unnecessary
All in all, if after reading this you find that you are a victim of any or all of the above common behaviors that lead to debt, no need to panic, there’s how at the end of the tunnel. If you already own a home with established equity, contact us today, and we’ll all come together to see how you can obtain the finances you need to control your debts.