How to Get Rid of Debt and Start Your Savings Today

Debt is sweeping Canada away. In the third quarter of 2021, Canadians acquired $51.6 billion of new debt. For every dollar of household disposable income, Canadians have $1.77 of credit market debt.

You must take steps to get rid of debt before you buy a house or a new car. Getting rid of debt can be difficult. But you can take some easy steps today to improve your finances.

What should you do before you start paying off your debt? How should you pay your debt off? What are some ways you can reduce your expenses and increase your income?

Answer these questions and you can get rid of debt and move on to a better financial future. Here is your comprehensive guide.


Write a List of Your Debts

It’s hard to pay off debt if you don’t have a good sense of what you need to pay. Go to your creditors and understand what your payments need to be.

Then write down a list of all of your debts. You should write down descriptions of how much, who, and when you have to pay.

Don’t worry about organizing the list until you have all of your debts down. Once you have them written out, you can organize them in a way that makes sense to you. You can place the largest debts or the debts you have to pay soonest up top.

Keep the list in a location where you can view it. As you start getting rid of your debt, you should edit the list and cross off the debts you pay. If you acquire new debts, you should add them to your list.


Learn About Your Personal Finance Situation

Once you learn about your debt, you should learn about your savings. Visit your bank and take a look at how much money you have in your account. If you can pay off debt now, you should do so.

You should keep in mind your other assets. You may have expensive property or a real estate holding. You can use these resources to pay your debt off.

Yet you should not put all of your money into your debts. You should build an emergency savings fund, putting enough money in it to cover three months of expenses. Once you build this fund, you should start paying your debt off.

If you find personal finance confusing, you should educate yourself before you start making debt payments. You should visit a finance professional and read guides online on how to start saving today.


Try Out a Debt Payment Strategy

There is no one way to pay off debt. You can examine a few different strategies and then try out one that makes sense to you. If it’s not working, change it before you waste too much time on it.

Debt Snowballs

A debt snowball involves placing minimum payments on as many debts as possible. You then put your extra money into your smallest debts so you can pay them off sooner. Once those debts are paid off, you move on to the next-smallest ones.

This strategy works if you have several debts that require different amounts of money. You can pay off your smallest bills as soon as possible and you can give yourself momentum to pay everything off.

To start a debt snowball, take your list of debts and organize the debts from smallest to largest. Attach your payment dates so you know when to make payments on time.

Debt Avalanches

A debt avalanche works the opposite way of a debt snowball. You make minimum payments on all of your debts, then you channel your extra money into your highest ones. If your debts are roughly the same size, you can use your extra money for your debts with the highest interest rates.

This method works best if you have very high interest rates. You will have your debts under control before you have to pay extra amounts. But it can be hard to build momentum through an avalanche, so bear that in mind as you proceed.


Debt consolidation will let you combine your debts together in one package. You will borrow a debt consolidation loan and use the loan to pay off your debts. You then need to pay off the loan with one monthly payment.

Many people find it easier to pay off debt once they have consolidated everything. You may be able to avoid very high interest rates and change your payment schedule.

You can consolidate your debt once you try another payment approach. Before you sign onto a loan, read the contract carefully and make sure you know what you need to pay. You can also talk to a financial advisor to check that the loan is fair and manageable.


Develop a Personal Budget

Making a budget will let you control your expenses and funnel money into your loans. Start with your most important expenses, like food and housing. Then go through each thing you spend money on, including your utilities and your discretionary spending.

Once you’ve calculated how much money you spend, you should find ways to reduce your expenses. You may want to shop from a different grocery store or use coupons to spend less money on food. You can move out of a bigger apartment into a smaller one to save money on rent.

You should spend money on internet access, as you may need it for work or school. But you should eliminate your discretionary spending as much as possible. You don’t have to order takeout or buy trendy clothes.

Evaluate your budget over time. It is okay to spend a little more money during one month. But if your budget starts to rise significantly, think about steps you can take to bring your expenses down.

If you’re tempted to buy something, sit down for a moment and think it through. You may be able to rent the object instead of buying a new one. You can also make the money you need for a new thing by selling an old thing in your home.


Stop Using Your Credit Cards

Even if you don’t have credit card debt, you should stop using your credit cards. It is easy to spend a lot of money with your credit cards without thinking about it.

Start paying for your groceries and other services with cash. If a company asks for an electronic payment, you can use a service like PayPal. Check your balance on a regular basis to make sure you are not losing money on fees.


Make More Money

The more money you make, the more money you can put toward your debts. Keep your current job if you have one, and find a full-time job as soon as possible if you don’t. Then find another way to make money so you can get rid of your debt sooner.

Monetize Your Hobbies

Consider turning your hobby into a side gig. If you make art, you can sell your artwork in local galleries or through companies like Etsy. If you make music, you can try busking during the weekends.

If you like playing video games, you can start streaming your performances online. You can use your webcam and built-in microphone to stream, or you can rent high-quality technology. Try streaming a few times a week so you build a devoted audience.

Many schools and community centers are looking for tutors for various subjects. Approach a school near you and volunteer your services as a tutor or substitute teacher.

You can try starting a blog, though it can be hard to earn money quickly. You should write for the blog on a regular basis, posting about important topics in your industry. Attach tags to your posts so people can find them easily.

Rent Out a Spare Room

If you don’t want to move out of your big apartment, you can rent out a spare room. Someone may be willing to stay in the spare room and pay you money for it. A person may even want a spare closet so they can store their belongings.

Take photographs of your spare room and then write a description of it. Then make posts on social media and housing websites about what you offer.

Make sure you vet your applicants and find someone who will pay you on time. They should take care of their own utilities so you are not losing money on electricity and water.


Get Rid of Debt Today

You can get rid of debt in no time. Get a clear picture of your financial situation and write down all of your debts.

You should have a debt payment strategy, whether it be a debt snowball or an avalanche. Consider resources like debt consolidation, but try paying things off on your own first.

Stick to a personal budget that keeps your expenses down. Build your savings by monetizing your hobbies and selling your spare possessions.

Get help with your debt however you can. helps Canadians cover their debts. Request a loan today.

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Get your online loan, paperless & fast.

Quick Personal Loans for Canadians :

  • No credit investigation
  • No documents required
  • Repay in up to 90 to 120 days
  • $500 short-term loans