Money does not solve money problems
When people find themselves in financial difficulty, their first thoughts turn to “if only I could borrow some money I could fix this situation”. This tends to lead to borrowing from high interest lenders that can charge 40% plus interest rates on their loans, obtaining additional credit cards, seeking out payday loans, and/or collapsing RRSPs.
Most people want to pay off their debt, but at some point, this goal may become unobtainable. The simple truth is that unless you address the underlying root causes that brought you to where you are and make appropriate changes, borrowing more money will not result in you being in a better position than you are right now. In fact, you will find yourself worse off than you were before you took on the additional debt.
The first step is to take inventory of where you are now. Review you monthly bank statements and itemize where your money has been going. Identify any spending areas that you could do without, and modify or find a cheaper solution in order to free up funds each month. As an example, if you are dining out frequently, what savings would there be if you cut back on the frequency of doing this.
Secondly, identify any assets (i.e., things you own) that could be sold to generate funds that you could use to support your basic needs, such as food, shelter, clothing, and transportation or be used to pay down your debt.Thirdly, identify ways to generate additional income. Get a second job. Turn a hobby into a part-time business; you are already spending money on the hobby, why not try to earn some income from it while doing something that you enjoy.
Lastly, before borrowing more money, getting a payday loan or cashing in your RRSPs, all of which have impacts on your future financial health, reach out and speak with a Licensed Insolvency Trustee. At JW Weber & Associates Inc. we offer a free, no-obligation, confidential consultation to review your circumstances and review your options with you for dealing with your debt. Call us at 403-836-6690 or visit our website at www.correctthedebts.com and book an appointment on-line.