This Year, Accept that Paying Off Debt Takes TimeJan 23, 2018
The new year is here, and it’s often a time for self-evaluation. What progress have I made on paying down my debt in the last year? What can I do better in the year to come?
When it comes to large debt loads, too often this evaluation can bring on a sense of frustration and hopelessness. Repaying debt is a marathon, not a sprint, and when you’re looking at another year of repayments, it can leave you feeling stuck in a rut.
While making new budgets and paying down debt should continue to be important to you in 2018, it can be equally important to change how you think about your debt. One facet of this is coming to grips with the fact that paying off debt takes time, and that there’s no “quick fix.”
In the Atlantic provinces, debt is still a real issue. According to Equifax’s latest consumer trends report, Nova Scotians are indebted with an average of $22,504, and have the highest rate of delinquency in Canada. This is a result of many factors, but it points to a reality that many are facing — a long haul to debt freedom.
So, how can you take real steps to changing your mindset when it comes to debt? How can you stay motivated for long periods of debt repayment?
It starts with doing some research, and making a plan for 2018.
Learn the facts about debt solutions, and what might work for you
While filing a consumer proposal or declaring bankruptcy allows you immediate relief from the telephone calls and mail from your creditors, they are both serious, long-term solutions to debt. The consumer proposal process can take three to five years, a bankruptcy usually lasts nine months. However, your credit score and ability to borrow money will be impacted for a number of years with both options.
Learning what solution works for you is important. You can also start right at home with a debt repayments calculator. Here, you can see how long it will take to pay off your total debt, with different solutions and different monthly payments. Speak to a Licensed Insolvency Trustee (LIT), who can explain other possibilities — such as a consolidation loan or credit counselling services.
Accept your plan, and list ways to stay motivated in 2018
Once you have a general roadmap and understanding of the length of time it will take to pay off your debt, use the beginning of 2018 to find ways that motivate you to stay on track.
Jordann Brown, writer for the finance blog My Alternate Life, has some great tips for “keeping the spark in your debt relationship” which can really help the resolutionist in everyone.
She recommends making a big payment if you know you have a tax refund, rebate, or birthday money coming. Also, it’s important to keep your future in mind, and imagine what it looks like without debt in the way. Having that extra push towards your-life-without-debt is really helpful when you’re in it for the long haul.
Ultimately, your plan for paying off debt should be something that fits your life. If you need a little wiggle room in your budget for self-rewards, make it so. If you need to write down your successes on a regular basis, that can help you in the long-term too.
Accepting that paying down debt takes time is a great first step. Keeping yourself on the marathon track is the next.