If you haven?t heard or read about it already, November is Financial Literacy Month in Canada. As a personal finance blogger, this month excites me for two reasons: 1) the blogosphere and various news sites fill up with all kinds of new financial information and advice, and 2) it gives me an opportunity to share what I already know with all of you.
Now, because I?m not a financial adviser or planner, I have no authority to give you any ?real? advice. I can?t tell you to what percentage of your paycheque should go towards this or that, or offer the best ways to save for your retirement, or even help you invest in any particular stocks. And I?ve?already shared my best budgeting secrets?with you, this year. So the best piece of advice I can offer has to come from what I know?
Big surprise! My best financial tip is? you guessed it: get out of debt.
What kind of debt am I talking about, exactly? Well, this is where I have to tell you to trust any gut feelings you have about your own financial situation. You could have $500 on a store credit card, $5,000 on your regular credit card, or $20,000 in student loans. The dollar amount is not what I?m talking about here. But if any of the following three points describe you in some way, I would encourage you to trust your gut and make a plan to change your financial future.
You should make a plan to get out of debt if:
1. Debt is your first expense on pay day
For the past 17 months, I have spent many a night before pay day calculating where nearly every penny had to go, with debt repayment at the top of the list. It is painful to see how quickly each paycheque vanishes, after putting some towards debt, then considering rent, other bills, food, savings, etc. If you?re like me, there isn?t much leftover, after the necessary expenses are all accounted for.
This is where the debt trap usually starts. You have to put something towards your debt on pay day but then, since you don?t have much leftover, you can easily rack it up again. It?s a vicious cycle but is one that I believe is possible to beat.?Wouldn?t it be nice to have a pay day come and have every single one of your hard-earned dollars be truly yours? Can you imagine putting $500 into savings instead of towards debt?
2. Debt is holding you back from living the life you want
How many times have you had to tell your friends that you can?t afford to go shopping / do something fun / travel somewhere new, because you?re broke? And how many times have you felt sad / jealous about the fact that your friends just bought their first home, when you?re still scraping by to pay your rent? I?m not writing this to make you feel worse. I?m making this point because I?ve been there. Heck, I?m still there!
My savings is nowhere near where I?d like it to be and homeownership is a fairy tale fantasy, at this point. However, I am putting anything extra that I can towards my debt, so that one day I can do all of the things I want to do. When the day comes that debt is not your first expense on pay day, you can finally start accomplishing some of your short- and long-term goals. Until then, it?s sad but true: debt will hold you back.
3. Debt stress is taking a toll on all areas of your life
Have you ever avoided looking at your credit card statement? Or seen how close you were to your limit and felt sick with worry about it? Yes, it hurts to think you?ve done that to yourself? but what you?re feeling there is stress. Because of the first two points I?ve made here, it?s not hard to understand why you might be stressed. But think about all the other ways that stress is affecting you.
Have you lost sleep over it? Are you irritable? Are you fighting with your family/partner/friends more often than you?d like? Admitting that you have too much debt (even just to yourself) is not easy. I was in denial for years and it wasn?t until I paid off my credit cards that I felt I could tell my family. But making a plan to get out of a debt (and sticking to it) will lift a huge weight off your shoulders ? this much, I know is true.
You are worth getting out of debt for. You are worth saving for. You are worth investing in. And I can promise you one thing: you will never, ever, ever regret making a debt repayment plan and sticking to it.
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xavier joan crawford joan crawford john goodman kendall marshall whitney houston news sylvia plath
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