Get out of debt

Is your debt on your mind? Owing money can often feel overwhelming.

But the good news is, you’ve come to the right place. This step-by-step guide will teach you all the tips and tricks you need to know to help you get out of debt faster and get back to your life.

Your Guide to Getting out of Debt

Frequently Asked Questions

There’s no set one-size-fits all timeline for getting out of debt. Creating a budget and a debt payment plan for yourself will help you reach the finish line as fast as possible. Focusing on accomplishing one goal at time will also make the whole process seem much more manageable. Plus, if you’re reading this, you’ve made a good start already! 

It’s generally a good idea to pay down any debt you may have first, even if you’re saving for retirement. However, keep in mind that some debts are “good debts” such as a mortgage. These don’t have to be paid off before you put money away for saving. 

If possible, make a plan to pay off any debt before heading into retirement. This may mean putting retirement saving on hold until this is accomplished. However, setting aside a small emergency fund first may help give you some peace of mind in the process. Everyone’s situation is unique, so speaking to an advisor will insure you do what’s right for you.

Help is always available to you, and getting it sooner, rather than later, is a good idea. If at any point you feel overwhelmed or have missed a couple of payments in a row, you can contact a Scotia advisor or credit councilor to help you make a plan and get back on track. 

If you have a low credit score, there are a few things you can do. Making all of your minimum payments on time is a good place to start. If you’re using a credit card, try not to use over 50-60% of your credit limit. Over time, the closer you are to your limit, the more it can negatively affect your credit score.

As a good rule-of-thumb, tackle the debt with the highest interest rate first. This is also called the avalanche method. However, if this doesn’t work for you and you have many smaller debts you want to get out of the way, paying those off first may give you the momentum and focus you need to handle the larger debt. 

Aside from a mortgage, it’s good to pay off any debt you may have before saving. Creating a budget will help you reduce your expenses so you can pay down debt faster and get back on track for saving.

You’re ready to put your plan into action

Dealing with debt can feel overwhelming. But, you’ve already taken the first step by reading this how-to guide, and that deserves a pat on the back. The journey to being debt-free may take a while, but with a good plan and a healthy dose of patience and focus, you can make your debt disappear faster. 

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