The Canadian population has had a saving culture for many years. This culture is no longer popular as household debt has increased over the years. In 1982, Canadians were saving about 20% of their annual income. This percentage had dropped to about 3.6% in 2014. The growing debt has become one of the worrying Canadian finance issues. Households are turning to debt to maintain a middle-class lifestyle. Part of the debts go to buying cars and furnishing homes. Many students use student loans and credit cards to meet their needs. Hence, young people are embracing a debt culture instead a saving culture. In fact, some studies indicate that Canadians now save less than Americans who spend large amounts of money on luxuries. One of key components of household debt in Canada is mortgage debt. Many households have used mortgages to buy and furnish their homes. At the same time, housing prices have been rising at an alarming rate in Canada.
The high housing prices and demand for mortgage loans have increased the level of household debt significantly. The high prices have favored the old generation that invested in real estate in the 1980s and 1990s. However, young families are rushing to take mortgage loans in fear that housing prices will continue to rise in the coming years. In the last 1970s and 1980s, 34-year old Canadians were spending about 38% of their income to buy houses. By 2010, the same group was spending about 46% of their income on housing. Economies have warned about the adverse effects of the rising debt culture on the economy. The rising housing prices is not only one of the alarming Canadian finance issues but also an indication of higher interest rates in the future. Financial institutions are likely to raise their lending rates as the demand for mortgages and other loans by households continue to increase. Household spending has exceeded disposable income while debt to income ratios have reached their highest mark in history.
Many people have their own thoughts as to what financial freedom means. For the purpose of this blog, financial freedom refers to living debt free. Living debt free takes time and patience as it is not an easy task, but it is possible and has many advantages such as the establishment of a personal savings or emergency fund to keep you from incurring further debt.
When you pay only the minimum amount due on credit card balances each month, very little is put towards the principle balance. To get rid of credit card debt it is necessary to make higher payments each month. Take advantage of special offers such as a lower interest rate as this makes it easier to pay the balance remaining on your credit cards. If you prefer to stay within your current monthly budget, try contacting credit counselors to inquire about a rate reduction and lower payments.
Credit cards are a convenient way to purchase items you want or need, but to get rid of debt you need to stop using them and carry cash. When carrying cash, you are more likely to only buy what you can afford; decreasing you chances for incurring further debt. To better understand how much you can afford to spend each month, it is necessary to create a monthly budget.
Unfortunately, there may be times when it is absolutely necessary to use your credit card as emergencies do happen. If you find yourself in this situation it is best to pay off any new charges each month instead of carrying the balance over month-to-month. This is important to continue living debt free.
The same concept applies to any loans you may have for a car, house, boat etc. Choosing shorter term loans allows you to save money by paying less interest and paying the debt off in full much sooner.
Maintain a savings account that is used for emergencies only. Each pay period you can choose to deposit a specific percentage of your wages into this account. If emergencies happen or you experience job loss, using this emergency fund can help you maintain your finances without incurring further debt from using credit cards or loans.
Finally, reducing overall spending is necessary. Stick to your budget and only spend what you can afford. Avoid expensive trips and dining out as these are likely to increase debt if these expenses don’t fit within your budget.
Debt consolidation is an excellent option for those who have multiple debts which they find hard to repay. In case, the rates of interest on the financial obligations are variable, or perhaps you don’t have sufficient time period to settle your debt, debt consolidation is a great solution. This will save you from personal bankruptcy or even losing your possessions. Debt consolidation financial loans makes it less difficult for you to pay off more than just one high-interest personal loan. You will get assistance from numerous sources should you be looking for the best free debt consolidation.
It is possible to approach nonprofit, as well as, government departments for totally free debt consolidation support. If it is not possible to employ a debt consolidation company, this can be the smartest choice to suit your needs. By means of best free debt consolidation, it is possible to comprehend your true economic condition and whether or not you require a second loan, mortgage loan or just an alteration in lifestyle.
The most effective free debt consolidation can be obtained over the Internet. You just need to use the Internet and search for the listing providing debt consolidation. Look for a totally free online quote. Never ever shell out anything for the quotes; a legitimate organization is not going to charge anything at all for any debt consolidation quote.
You can select the company that provides the least expensive quotes. Obtaining the best cost-free debt consolidation is the greatest solution to improve your financial resources and help you control the rise of bad debts.
The ideal free debt consolidation can be obtained through numerous non-profit agencies too. You might make contact with individuals at the church or club to comprehend nonprofit organizations providing the very best 100 % free debt consolidation. If you require a financial loan, you will end up being forwarded to an organization associated with the government to enable you to pay off your debt immediately.
The most effective cost-free debt consolidation services assist you maintain personal credit record and also steer clear of upcoming loan issues. It is feasible to find out methods for minimizing the likelihood of getting into financial debt once again through guidance which is provided by the best free debt consolidation programs.