Debt is, and has always been, a tough situation to work your way out of. The fundamental principles and practices you need to get out of debt today are really not all that different than they would have been last year, or five years ago, or maybe even ten years ago. However, in addition to these time-honored ideas, each new year brings with it a new slate of tools that you can use to make your journey toward going debt-free easier to manage. So, we have to admit that this title is a bit of a fake-out: there isn’t really a new or best way to beat debt in 2019, there are just more ways to make it simpler and more efficient. This can be your year!
Start With the Basics
Before you go looking for the latest and greatest in debt reduction optimizations, take a look at the fundamentals.
1: Pay Yourself First
This is about as simple as it sounds. Figure out the time period (in months) in which you want to reduce your debt by a certain amount, or eliminate it altogether. How much money per month will you need to save to get there in that time? Now that you know this, set up an automatic contribution to your savings account in that amount for every paycheque (or, for gig economy or non salaried workers, at the start of each month.) This money gets saved away BEFORE you budget for the month and start spending – you’ll never be tempted to dip into it for discretionary purposes. This is the number one, failsafe way to get your debt out of the way over time.
2: Use Your Momentum
Debt often looks insurmountable, but it can be conquered with continuous forward progress. If you have multiple sources of debt, you’re paying multiple interest payments, adding up – sometimes it can be hard to pay down the debts because your finances get tied up with just covering the interest. However, if you focus on the debt source that has the highest interest rate and try to pay it off completely, you will suddenly find a lot more breathing room. You can use the money you’ve saved on interest payments to redirect into your savings and to pay down other debt sources, in turn making it easier and easier over time as the aggregate amount of interest drops.
Customize, Streamline and Automate
With the above fundamentals in mind, it’s your turn to make your debt solution fit your life and needs. Progressa’s debt solutions are engineered to make sure that you can budget around your debt reduction goals without having to sacrifice the day-to-day rhythms you’re already comfortable with. In addition to solutions like ours, the cutting edge of debt reduction is really about making your journey to debt-free as low-impact and intuitive as possible. Whether you need to track spending, automate contributions, automatically apply coupons and savings to online purchases, find the best deals, or otherwise streamline your financial life, you now have the power to do that (largely from your phone’s App drawer.) Your financial reinvention will be on your own terms and largely without the intervention of a bank. One caveat to that last thing – we do always recommend taking the time to sit down with a financial advisor, should you want the most detailed picture available of your plan to get debt-free. However, the tool kit you use and how you use it is open to your whims, desires and best intentions. The only bad tools are the ones you don’t use!
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We have helped tens of thousands of Canadians improve their financial health by paying off outstanding collections items, improving their credit and getting them back to living their life. Learn more here!.