New bank poll suggests saving becoming harder

by Joel Sandwith on October 15, 2010

A new poll released by the Royal Bank shows that Canadians are having a harder time saving money, due at least in part to the amount of debt they are carrying.

This poll really exposes the issue facing people who are carrying debt – how to build a financial future.  There are many causes of debt, such as loss of job, relationship breakdown, health issues, and for some, inability to control spending.  The poll noted that 8% of the respondents admitted to difficulty controlling their spending.

Once you are carrying a lot of debt, everything can be more difficult to manage.  I’ve pointed out before that on a $10,000 credit card debt, with an interest rate of 19%, you are paying more than $150 per month on interest charges alone.  So, not only do you have a mountain of debt to move, you are working a day or two each month just to cover the interest.

So, how do you build a stronger financial future if you are carrying debt?  First and foremost, you need to concentrate on one financial goal at a time, if at all possible.  Don’t try to do too many things at once, or you risk not accomplishing any of them.

That first step has to be to solve the debt problem.  Putting money away in a savings account or RRSP is a good idea, but not if you are paying interest on debt.   Look at your budget (or create one if you don’t have one) and see if you can pinpoint how long it will take to repay your debt.  Can you do it over the next couple of years?  If so – great, put that plan to work and try and meet your goals.

What if you can’t pay the debts over the next few years?  You certainly don’t want to continue in the cycle of paying only the interest, or worse, taking on more debt.  If this could be the case for you, we may be able to help.  There are several options that can help with debt repayment, or elimination.  Here in our Sarnia office, I meet with people everyday who felt they could never be debt free, but we helped them find a solution, such as a consumer proposal or a personal bankruptcy, that will help them meet their goals.

If you’d like to meet to discuss these options, please call us, toll free at 310-PLAN.

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