You CAN Pay Down Your Debt

  • By Jillian Taylor-Mancusi

If there’s one thing that’s certain about debt, it’s how easy it is to accumulate and spiral out of control. It’s also easy to feel like there is no way to get out of debt. Luckily, this couldn’t be further from the truth—you can pay down your debt, no matter how helpless you think it is.

Here’s how to get started:

Find out how much you owe.

Many people take a “head in the sand” approach to debt and bills. While it’s easier to ignore debt, it doesn’t make it go away and can actually make things worse. That’s why the first step in tackling debt is finding out how much you owe. Get out all your statements and make a list of all your debts, including credit cards and personal loans.

Make a plan.

Once you know how much debt you have, you can start to make a plan. Your plan should include:

  1. Which debts you’re going to pay off first. Some people recommend paying off the highest interest balances first, but starting with the smallest balance first can have major psychological benefits. It will keep you motivated and encouraged.
  2. How much money you can put towards debt reduction each month. Do a budget and look for places you can cut and put towards paying off your debts. Look for creative ways to pay off debt as well. For example, you can have a yard sale in the spring, sell your clothes to secondhand stores, or put windfalls like gifts or tax returns towards your debt reduction.
  3. A realistic timetable of paying off your debt. Look for online debt reduction calculators, such as the ones found on, as you plan. This will help you see how long it will take you to pay off your debts and give you a deadline to stick to.

Always pay more than the minimum amount.

Have you ever looked at your statement each month and thought your balance just isn’t budging? If this is happening, chances are you’re only paying the minimum payment. The minimum payment will keep you in debt for as long as possible, getting the most interest from you as well. Even if you think you can’t afford much more than the minimum amount, keep in mind that a little goes a long way. For example, if you owe $2500 on a credit card, by paying just $5 more a month, you’ll pay your card off in just over four years instead of twelve and cut the amount you pay in interest almost in half.

Consider a consumer proposal.

Even if you have a staggering amount of debt and don’t see how you can pay it off with interest, there are still options. A consumer proposal lets you pay off your debts for less, allowing you to pay one monthly payment you can afford each month. Most consumer proposals, you’re debt-free within 5 years. A Licensed Insolvency Trustee can help you find out if this is the best option for you.

Paying down debt may seem insurmountable, but you CAN do it. Just take a deep breath, sit down, and make a plan!

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