As of June 2020, for every dollar Canadians earn, they are $1.77 in debt. Another way to think about it is every hundred dollars that you earn, you owe $177. That’s an alarming number and this stat has been increasing over the years.
There are many suggestions for how to pay off your debts. In my opinion, the best solution is to use the money trapped in your home to pay off your debts. You may have heard terms like ‘refinancing’, ‘equity take out’, or ‘debt consolidation’. Let’s keep things simple- they all mean the same thing: get rid of your debts.
This past week, I was able to help a family who had $50,000 in credit card debt. We looked at their financials together and decided to add the debt to their mortgage. This family was living paycheque to paycheque, and their money worries were keeping them up at night. We were able to fix the cash flow issue and free up $800 per month.
Before we met, their current plan would have put them in debt at retirement. So, we put a new plan in place to pay off their mortgage before retirement. With the adjustments we made, their interest rate reduced by a huge amount- from 18% to 3.5%. We also built an emergency fund so they don’t go into debt again in the future. When it comes to debts, it’s all about planning. If you fail to plan, you plan to fail.
This is really exciting for me! Watching the burden lift off their shoulders was so rewarding. The best part of my job is seeing my clients succeed and improve their financials.
Combine your debts into one and start seeing increased savings!
Book a call with me today to get started.