Track Your Spending
As the famous quote states, "Knowing is half the battle." Tracking your spending for a 30 day period, including every dime you spend on miniscule things, will give you an accurate reading of your spending habits.
Evaluate Your Habits
An evaluation of the habits will help you devise a realistic budget that takes into account even the minor expenditures such as the morning coffee. Also give some thought as to where some you can do some trimming as this will optimize the success of a new budget. This Financial Consumer Agency of Canada site has a great basic budget calculator that's easy to use.
Paying Your Debt
Next step would be to look at all debt, the balances, the minimal payments, and the interest rates. Is there an opportunity for you to transfer balances to a credit card with better terms and conditions. By transferring your balances, it will reduce the number of payments and potentially the interests rates you are paying. Some major credit card companies will encourage this and offer good low introductory rates.
It is recommended that you pay off the highest interest costs first, like department store credit cards. Pay the maximum amount on higher interest cards and pay the minimum payment on all other debt until you're back in the black. As each debt is repaid, alter the payments to accommodate the next highest interest payment and repeat as needed.
When you manage to remove all unsecured debt from your monthly obligations, then it's time to look at options for reducing the balance on your mortgage. A small increase in your monthly payment can make a substantial difference on the total amount of interest you end up paying.
Monitor Your Credit
Ensure that you review your credit report at least every 6 months. Make sure that the information reported is accurate. Keep in mind that a payment you just made might not show up on the report because the information will likely be on a 30 day reporting cycle.
Investigate any unknown creditors that appear on your credit report. Creditors must have your authorization to review your credit report so if you don't recognize a creditor on your report, make sure you get to the bottom of it.
Get Professional Help
Should you find yourself struggling to make the minimum payments each month, give some serious thought to engaging in a debt management program. Working with a credit counselor can help you put together a plan for debt repayment and get you back on track. This can be done in a variety of methods, ranging from serious debt restructuring, to more minor matters.
Consumer debt is at an all time high, but it doesn't mean it has to be unmanageable. Contact your CENTUM Mortgage Professional to review some of the many options that may be available to you for sound financial planning.