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Great Tips for Controlling Debt

Whether you realize it or not controlling debt relies heavily on the debt that our government gets into.  The general trend right now is that most countries that are developed throughout the world are increasing their spending which means that their debt ratio is increasing.  The same can be said about Canada.

When the debt of the country increases than the responsibility for meeting its responsibilities trickle down to the residents of the country through the costs that are laid upon them such as taxes and payments for services.  While the only control you have over this is a by electing  a government that you feel is going to be trustworthy and diligent with the government coffers, it doesn’t mean that you should just sit back and throw up your arms feeling that there is nothing that you can do about your personal debt.

The best step to take is to get yourself into a financial situation where the expenses that are laid on you by the government are not as devastating. It should be remembered that an election year is not the only time of year that you can have your say.   You can work with your member of Parliament both on the provincial and local government levels to handle concerns that you have with the way the government spending is progressing.

Getting back to your own household and what you can do for your debt is an area that you really need to concentrate on.   You not only have to plan for the here and now but for the future as well.   This means saving for your senior years and looking at what is available now to help you maximize your savings.  In most cases those that retire at 65 end up relying on pensions such as the CPP and the OAS and GIS if they are eligible.

Rather than second-guessing as to what you were going to have for those future years it is important that you become proactive now and take a look at what your income will be if you continue on your present path of saving and planning.

The other factor that you must consider is dealing with the debts now such as your credit cards and other loans.   If you take a really close look at them instead of shoving the invoices in the drawer as they come in each month, you are going to be sickened by the amount of interest rate that you are paying.   If you were to add up just the interest over the next five years that you will be paying on your card if you do not bring the principal amount down it will be mind-boggling.

Your first step is to tackle all of those that have high interest rates and get the principal owed down as much as possible.   Ideally starting with the largest amount owed that has the largest amount of interest to it should be your first objective.

Once you get the ball rolling on reducing your debt you are going to find that you are getting some relief in knowing that you are really being proactive in your financial situation and dealing with those financial factors that you do have control over.

 

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Sam Seidman, CPA, CA, LPA
629 Sheppard Avenue West
Toronto, Ontario
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Chartered Professional Accountant, Chartered Accountant, Licensed Public Accountant

Email: sam@torontoaccountant.ca

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