Written by Financial Toolkit Creator, Eva’s Financial Literacy Toolkit Creator

This is the second post in a series that will use the advice from the Eva’s Financial Literacy Kit to share tips on budgeting, spending, debt and credit. This post offers some sage advice on how you can get any outstanding debt under control.

Debt, like most things financially-related, means different things to different people. Our relationship with debt depends on how much we owe and our ability to repay it. It can drag us down, riddling our lives with added difficulty or it can be something that goes unnoticed, being automatically withdrawn from our accounts every month that we don’t think twice about. There can be good debt, when we’re investing in our future that allows us to access something now that we otherwise could not have. There is also bad and ugly debt, which is what really taints debt’s reputation and creates fear in our youth.

I once heard debt described as a strange aunt that stays in the basement and never comes out. All the neighbours know that she’s in there, but no one talks about her. Well, what a shame! I think we should talk more openly about debt (and about our crazy family members for that matter) – let’s talk openly with our friends, families and in schools about the risks, the benefits, and our relationship with debt. It is this openness that will help our society understand it better and create strategies to avoid bad debt. We need to start to give debt a break, and take the responsibility on ourselves to open communication and share best practices.

5 Debt Tips:

  1.  Always ensure that you get a fair and clear deal. Don’t rush through any contracts.
  2. Don’t borrow the most you can – only borrow what you need.
  3. Have automatic withdrawals set up for repayment so you won’t be late or aren’t tempted to just not pay that month. With this said, keep an eye on your account to make sure that your repayments aren’t putting you into overdraft (this is a very expensive debt!)
  4. On that note… stay AWAY from overdraft if you can!
  5. Make a repayment plan and stick to it. I like Gail VazOxlade’s: http://www.gailvazoxlade.com/resources/own_up_to_debt_worksheet.html

Check out our full Financial Literacy Toolkit here: www.evasfinancialkit.ca

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