Are you drowning in debt? If this is you are not alone.
Debt has grown like a virus over the last 10 years in Kelowna. Incomes in the Okanagan are stagnant for many, others are out of work and now paying off personal debt seem almost impossible.
Stack Your Debt
Debt Stacking is nothing new, and it can shave years off your debt.
- Is write down all you current debts and payments from smallest to largest.
- Add any prepayment amounts to the first debt of list in addition to your current payment and continue paying all your other debts.
- Once debt 1 is paid off add the payment plus and addtional payment to next debt on the list.
- Continue with this until all is paid off.
Consolidate Your Debt – Unsecured Loan
This also is nothing new, and if done right can help you manage and pay off your debt faster. Consolidations ideally works for some that is having a cash flow issue and can’t maintain your current payment plan.
Here a few things to consider
- Don’t be to aggressive on your payments. If you are running behind each month (as most people are that are in debt for a long period of time) may sure you can pay the debt off.
- This approach almost always ends up costing you more than you expect. If you are doing this because it seems cheaper …. think again.
- Make sure to get a competitive interest rate, with flexible terms. Things can happen during the life of the loan, and should have freedom pay off sooner if you can.
- All the issues from the Unsecured Loan above apply
- When redoing your mortgage you could very likely have fees to rewrite your mortgage.
- Depending on the amount you are adding it could also push your mortgage high ratio and this can cost you even more.
- Update your budget and monitor your spending at least once a month until you are debt free. Do not spend until this is done.
- Is your spending the issue or is your life style too expensive to maintain. Make changes where you can.
- Use cash for all future expenses and STOP using you credit cards.
- Use every extra dollar to pay off your debt as quick as possible. If you are using stacking 2-3 years, Unsecured loan 3-5 years, and mortgage now more than 10.
- Don’t focus on interest rates, flexibility will save you more.
- Reward yourself in small ways as you achieve your goal.