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As the cost of living rises, paying off debt is more important than ever

These helpful tips will help you get started on your debt repayment journey.
These days, it’s more important than ever to reduce your debt. Photo via: iStock.

In recent years, an increasing number of Canadians have been struggling to make ends meet as the cost of living continues to rise.

Albertans lead the country with the number of people behind on mortgage payments, and a recent study also suggests that 47% of Albertans plan to rely on debt to cover essential living costs.

These days, it’s more important than ever to reduce your debt, and if you’re ready to start managing your debt, here are five tips to help you get started.

Find your motivation for paying off debt

It can be tough to resist the temptation of buying that new pair of shoes or joining your friends for a night out. Setting realistic goals can help keep you on track. Decide what you’re working toward, and reward yourself when you achieve what you’re working toward.

Know exactly how much you owe

How much money do you owe exactly? If your debt is spread among several sources, it can be tough to get a handle on your finances.

Sit down and figure out exactly how much you owe to get a big picture of your debt. From there, prioritize paying off the debt with the highest interest rates first.

Track your spending

Sometimes it feels like we can’t leave the house without spending $20.

Not sure where your money is going? Set a budget and track exactly how you’re spending your money, whether you use the envelope system to manage your cash or an online financial tracker.

Pay more than the minimum installment

It can take years to pay off your credit card if you’re only making the minimum payments.

Anytime you can put a little more towards your debt, you pay less interest down the road and reduce the amount of money you’ll ultimately owe.

Find ways to make extra money

The best way to speed up debt repayment is to make more money. Can you think of some ways to bring in a little extra income?

Whether it’s asking for a raise, selling household items you no longer use, or taking on an extra shift, every little bit can help to reduce your debt quicker.

iCASH is an online loan provider in Alberta that provides financial help.