Paying down debt a top priority in 2019
By NextHome Staff
January 03, 2019
January 03, 2019
It may be a new year, but not necessarily a happy one for everyone. A new CIBC poll finds paying down debt is the top financial priority for Canadians in 2019. Almost a third (29 per cent) say they've taken on more debt in the past 12 months, citing day-to-day expenses as the key reason for piling up debt.“Debt weighs heavily on Canadians, so it's no surprise that Canadians continue to put debt concerns at the top of their list of priorities each year,” says Jamie Golombek, managing director, CIBC Financial Planning and Advice. “Debt can be a useful tool for achieving long term goals such as home ownership or funding education, but if you're turning to debt to make ends meet, it may be time for cash-flow planning instead."
Key poll findings:
- Canadians say their top sources of debt are: credit card (45 per cent), mortgage (31 per cent), car loan (23 per cent), line of credit (22 per cent), personal loan (11 per cent)
- 28 per cent say they have no debt
- Top concerns are rising inflation (64 per cent), low Canadian dollar (34 per cent), and rising interest rates (31 per cent)
Tips to make your money go further in 2019
- Write down your income and expenses for a three-month period to determine if your cash flow is positive, neutral or negative
- Make a plan. If you're cash-flow positive, use the extra cash to pay off high-interest debt – not your mortgage – first. Use the surplus to build long term savings in an RRSP or TFSA, and if you have kids, put away a little extra in an RESP. If your long-term savings are on track, consider increasing your mortgage payments. If you're cash-flow neutral or negative, look for ways to cut expenses or lower interest by consolidating debt at a lower rate
- Automate your plan. Time your savings or debt-repayment plan with your payroll. Putting money directly to your goals right off the top can help you both achieve your goals and get by with less
- Review and prioritize your goals. You likely have many goals competing for your wallet. Meet with an advisor to build a financial plan that gets you on track to achieving what's important to you today and the many years ahead