FLM 2017: Debt Advice for Families Who Fear Rising RatesNov 02, 2017
Interest rates finally went up in Canada — and that can be reason for worry for those families dealing with debt.
This year, after long-stagnating rates, the Bank of Canada increased the benchmark rate in July and again in September. Another rise is possible before the end of the year.
Canadians may have good reason to be worried. A survey by Manulife Bank found that 40 per cent of homeowners would have financial difficulty if their mortgage payments increased by more than five per cent.
With budgets being squeezed, it’s important to prioritize paying off debt to give yourself some financial wiggle room.
This November is Financial Literacy Month (FLM) in Canada, and it’s the perfect time to explore debt relief options, or do something as simple as starting a budget.
For those who fear higher interest rates, here’s some debt advice.
Read more about your debt and whether a rise in benchmark interest rates affects you.
This BDO blog that explains what debts are affected by the Bank of Canada’s changing rate. It also explains the situation with credit cards and lines of credit. This is a good place to start, as it may help you decide on a debt repayment strategy. Having a plan in place can also relieve some stress.
Use online debt calculators to help you figure out a plan
Paying off debt starts with knowing what you owe, and how long it will take to pay it off. Try BDO’s online debt calculator for this.
After that, try out this calculator from NerdWallet. It shows you how making small (or large) changes in spending (skipping coffee shop purchases, cancelling a Netflix subscription, selling your car) can affect your debt payments.
Read up on your debt relief options.
Personal finance blogs are a great source of information and inspiration for paying off debt. Start with these Canadian bloggers, then do some “Googling” of your own to add to your reading list.
For more on how changes in spending habits can seriously affect debt repayment, check out Jordann Brown’s blog “How I Paid off $38,000 in 24 Months” on My Alternate Life.