The Secret To Paying Off Debt…Isn’t Really A Secret

If you’re reading this post, it’s likely because you owe more money than you’re comfortable owing, you’ve had enough and now paying off debt has become your top priority. We completely understand.

Depending on the amount of money you owe in total and the goals you’ve set for yourself that are obstructed by your outstanding loans – we know how paying off debt as fast as possible can become a top priority for Canadians.

So then, what’s the fastest way to get started? A budget.

It’s only human to spend money without really giving it much thought. For instance, one of our biggest flaws is to look at items priced $2 to $5 and think to ourselves, “meh, it’s really not expensive, why not!”

However, if you make eight $5 purchases throughout the day, you soon find yourself spending $40 a day without even realizing you’re doing it. That’s where the budget comes in. The moment you take all of your purchases into account, paying off debt becomes incrementally easier because you now know how to find more money to apply towards your debts.

To help make your budgeting efforts, we strongly recommend you get a spending tracking app for your phone. The premise is simple – every single time you make a purchase, you immediately enter the price, no matter how small and the tracker will show you where you’re overspending.

Paying off debt also means conducting an honest reassessment of whether or not you really need some of the things you buy on a regular basis. For instance, the average Canadian spends $8.99 on lunch while at work and makes this purchase three times a week.

Over the long run, the compound effect of this spending is a $20,000 loss. That’s enough for a down-payment on a house…and it’s being wasted on food that likely isn’t all that healthy for you to begin with.

Cooking from home is easily the area that most Canadians don’t do enough and stand to benefit if they put more effort into bringing homemade meals into work.

Paying off debt also means cataloging how much money you feel you can exist on each day. What this means is, if after paying all your debts for the month, how much of the money left over do you want to save?

Let’s say you have $1200 left for the rest of the month. Would it be possible to sock away $600 and live off of the remaining $600 for the rest of the month? That means you’d have to restrict yourself to spending only $20 a day…

…of course, for that to work, you must be honest with yourself and know what your daily spending will allow and whether or not there are daily purchases you can phase out.

As you can see, paying off debt simply requires a few simple systems and pre-calculations. You also have to bear in mind the long-term consequences of certain behaviors to keep yourself in check (like how 3 cheap restaurant lunches a week equals a down payment on a home in 10 years). Want to learn more? Contact us and we’ll be happy to help.