Interesting article in the Vancouver Province

I came across a great article in The Province yesterday entitled "Rejig those debt loads". I have included a brief synopsis of the points that Terry McBride makes regarding debts and your best way to pay them off. If you'd like a copy of the whole article, let me know and I can scan it and email it to you (girlfriday1080@gmail.com).

Consolidation

- one of the most popular debt management strategies which enables you to combine various loans into your mortgage or a line of credit.
- the great thing about doing this is that you then only have one interest payment to pay off as opposed to numerous interest payments.

* I consolidated my credit cards, line of credit and car a few years back and it made a HUGE difference in my ability to pay this off. I tended to only pay the minimums on my credit card (which I know a lot of people do) and was getting nowhere. Now, I pay a bit more a month (which I have factored into my budget) and am paying everything off at the same time. Just go into your bank and ask to speak with someone regarding a consolidation - the planner will walk you through your best options (long term vs. short term payment options), will run an employment check and you'll be good to go.

Amortization

Amortization is how long you are scheduled to repay an installment of a loan. If interest rates rise, consider stretching the repayment period on an installment loan to reduce the size of your monthly payments.
A negative to this is that if you continue to make smaller payments over a long period of time you will eventually pay much more interest in the long run.

Debt snowball
A strategy for cutting down your overall debt:

- Make a list of debts and note how much you pay on each loan
- Pick the smallest debt to tackle first. Pay the minimum on all debts except your target debt (this could be included in your budgeting...putting more money aside for paying off this debt than the rest)
- Continue with this debt strategy by then choosing the next debt on your list. Pay that off. And so on and so on.

Emergency Fund

Instead of borrowing money when there is an emergency (car problems, emergency flights home etc), build into your budget an emergency fund.
A great way to increase your money is to open a high interest, tax-free savings account (ING is a great one that I have) that you cannot access by debit or credit.