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New Year's Resolution: Being Debt Free

New Year’s Resolution: Being Debt Free

Besides getting fit, getting out of debt is one of the most popular New Year’s resolutions every year. Most people would find their year fulfilling when they are able to get rid of their overwhelming debt. Hence, they look for ways to achieve this goal in the New Year.

Being debt-free can be made simpler if you have a clear plan for how you intend to be free. You can get out of debt permanently by setting proper goals and employing debt relief options in 2023. You can follow the steps outlined below to begin your debt-free journey.

Making a Plan to be Debt Free (Set goals)

It’s easy to lose sight of your financial goals as the year unfolds, which is why it’s essential to set specific goals and targets—a solid and simple plan to be debt-free.

You can’t prioritize goals unless you know what they are. Therefore, setting goals and then breaking them down into smaller, more manageable ones is the first step. The strategy suggested by Miss A or Mr. B may not work for you, so you don’t have to adopt it. Set aside time to develop a plan for yourself.

Make a List of Your Debt

Make a List of Your Debt

The burden of debt affects many people. You don’t need to feel ashamed, even if it’s something you’re not proud of. The fact that you’ve taken the time to learn about ways to get out of debt indicates that you’re prepared to organize your finances. Confronting your debt and letting it know you’re not afraid is the first step towards dealing with it. The right attitude and a positive mindset help you to conquer fear and obstacles.

Make a list of everything you owe, who you owe it to, and how much interest you’re paying. You can do this on a spreadsheet if you want to be a cute techie. If you need to do it quickly, a piece of paper will suffice. You may sort it by the amount you owe or the interest rate to keep things in order.

Review Your Budget

It’s time to review your budget or create one if you don’t already have one. A budget can be made in just a few easy steps.

  • Put down your net income first, which is the sum of money you receive each month after paying taxes and other deductions from your pay.
  • Next, list your fixed expenses, which are those that remain the same month after month. Examples include your rent, utilities, cell phone, and internet subscription.
  • Then, make a note of the minimum payment due on all your debts.
  • Next, make a list of your variable expenses, which are items that vary each month, such as groceries, entertainment, gas, etc.
  • Finally, deduct your total monthly expenses from your monthly net income to see if you are spending more than you earn.

Are you in the negative? If so, you might need to modify your way of life to manage your debt. Is your income greater than your spending? If this is the case, you’re in a good position to set aside extra cash for debt repayment.

Decide on a Strategy

Making payments before your loans are due should be your top priority if you want to avoid collection calls and late payment penalties. However, just paying the minimum amount each month will not get you very far because of the interest rates that creditors demand.

Paying more than the minimum will help you reduce your balances and finally pay off your debt. You should then decide if you want to pay down the debt with the higher interest rate or the one with the lower balance. Whichever one you choose, what’s more important is that you commit yourself fully to paying down your debt. Other strategies involve debt settlement, consumer proposals, or filing for bankruptcy. You can speak with a debt relief expert at EmpireOne Credit to find out more about these options. By speaking with one, you can pay off your debt, reduce it by up to 80%, and stop all interest immediately.

Avoid Taking on More Debt

If you want to empty a drum of water, do you add more water to empty it? The answer is obvious. You can’t plan to be debt-free and still take on more debt. If you have reviewed your budget, you should try not to go beyond it. Taking on more debt means your journey to becoming debt-free may become longer and probably harder. 

Consolidate Your Debts

Consolidating your debt means merging all your debts into one. All you have to do is make a single payment each month instead of multiple payments on different debts. One of the major benefits of debt consolidation is that you can get a lower interest rate on the new loan. However, if you don’t have a good credit score, you may not be qualified for this loan.

Carrying Out Your New Year’s Resolution Will Be Easier With the Assistance of a Debt Expert

Carrying Out Your New Year's Resolution Will Be Easier With the Assistance of a Debt Expert

If your debt is getting out of control or you’re not sure of what to do next, think about seeking debt expert assistance. Our debt experts at EmpireOne Credit can also advise you on your options for budgeting, debt consolidation, consumer proposals, or whether filing bankruptcy is a reasonable choice.

The most important thing to remember is that you are not alone. In 2023, commit to doing something about your debt, even if it’s just reaching out and speaking to us about your worries, and see how things can get better from there. You owe this to yourself, being debt-free is just a phone call away, with no judgment, just simple solutions. Contact us today 416-900-2324 for a FREE consultation.

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