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Credit Coach: Five steps to help you get control of your debt in 2018

January offers us a great opportunity to start fresh.
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January offers us a great opportunity to start fresh. Now is the time to put a plan in place and set some goals to lose the debt — it’s not as complicated or intimidating as you might think.

Each year around this time our thoughts turn to getting the new year off to a great start. A new diet or exercise program, a pledge to declutter the basement, a promise to stop smoking — New Year’s resolutions offer us an opportunity to start fresh. For many Canadians that are struggling with debt, though, the changing calendar does little to help with the challenges they’re carrying forward on credit cards and lines of credit into the New Year. Trying to make progress on debt repayment can seem overwhelming.

As a Licensed Insolvency Trustee who has counselled many people on credit management and debt repayment, I know that you can get on top of your debt this year. It just takes some planning and a set of clearly defined goals. Here’s how:

  1. Start with a review of your finances. Before you begin a diet or exercise program, you first need an understanding of your current situation and the issues you are facing. The same is true when you’re creating a debt repayment plan. Make a list of all your debts, including all monies owed on credit cards, lines of credit, cash stores, etc. Be sure to include any money borrowed from family and friends. Your list needs to be complete so that the plan you come up with won’t be jeopardized by any debt(s) you chose to ignore. Just like when starting on that diet, its best to be honest with yourself about where you are at.
  2. Set your goals. Now that you’ve put together your list of debts, take the time to write out your goals for debt repayment. Clearly defined and written out goals may seem somewhat of a strange exercise to undertake for debt repayment. Generally most people view written goal setting and success visualization as an exercise reserved for Olympians and captains of industry. It is and it works! So take a page out of a gold medalist’s playbook and set some written goals.

The Financial Consumer Agency of Canada has a handy online Financial Goal Calculator that can help you get the job done.

  1. Create a budget. Once your debt repayment goals are set, it’s time to work on that budget. Keep it simple or make it elaborate, but get it done. If you get stuck, a quick review of this Credit Coach Blog from last January can help.
  2. Review your goals and your budget together. Do they support each other? If not, go back and edit or adjust either your budget or your goals, so they work together. For example, your goals may be too ambitious, based on your available cash. Simply make the adjustments. Or maybe you have more room than you expected in your budget to put towards your debt repayment goals. Again, simply make the necessary adjustments.
  3. Seek out some help. Fitness trainers, weight loss groups, diet coaches and nicotine replacement patches all exist to assist people with the achievement of a goal. If you want to swim better, lift more or run faster, you seek out a coach or trainer. So, if your debts are controlling you, why not look for help? Make an appointment at a local credit counselling agency for budget advice or talk to friends and family about debt solutions that have worked for them. If the pathway forward seems insurmountable, call a Licensed Insolvency Trustee to talk about options for debt relief.

The above steps are by no means the only way forward. What is important is that you take active steps. Debt that has become a problem, just like the 10 pounds of turkey weight gained over the holidays, will not just melt away without an effort.

 What is your financial resolution? Please share your thoughts in the comments section below or go to @JSCreditCoach.

Jayson Stoppel is a Licensed Insolvency Trustee and Chartered Accountant with BDO First Call Debt Solutions. With over 17 years in practice, Jayson assists individuals, families and companies with financial difficulties in Thunder Bay and throughout Northwest Ontario. To reach Jayson by email:  JStoppel@BDO.ca