It's Your Money  

Finding yourself in debt for the first time

Dealing with debt

If you find yourself in debt for the first time, it can be a stressful and overwhelming experience.

However, there are steps you can take to get back on track and regain control of your finances.

The first step is to assess your situation and understand how you got into debt. This could include identifying any overspending habits, unexpected expenses, or changes in your income. Once you have a clear understanding of the root cause of your debt, you can begin to develop a plan to address it.

One of the most important things to do when dealing with debt is to create a budget. A budget will help you understand where your money is going and where you can make adjustments to free up money to pay off your debt. This can include cutting back on non-essential expenses, finding ways to increase your income, or a combination of both.

It is also important to prioritize your debts. This means paying off high-interest debt first, such as credit card debt, as it is costing you more money in the long run. You can also consider consolidating your debts into one loan to make payments more manageable.

Another important step is to communicate with your creditors. If you are having trouble making payments, they may be able to offer you a payment plan or a reduction in interest rates. It's important to keep in mind that creditors would rather work with you than pursue legal action, but if you don't reach out to them, they will not know what's happening.

You may also want to consider seeking professional advice. This can include talking to a financial planner or a credit counselor. They can help you develop a plan to pay off your debt, as well as offer advice on how to improve your credit score.

Finally, it is important to remember that while getting out of debt takes time and effort, it is possible. It will require discipline, commitment and a willingness to make changes in your spending habits. It's important to stay motivated and remind yourself of the end goal of being debt-free.

It's also important to note that there are some debt relief options available, like debt settlement and bankruptcy, though they both have some negative effects, like damaging your credit score, and it's important to understand the consequences before considering them.

If you find yourself in debt for the first time, it can be a stressful and overwhelming experience - but it is important to remember that you have options.

By assessing your situation, creating a budget, prioritizing your debts, communicating with your creditors, seeking professional advice, and staying motivated, you can regain control of your finances and work towards becoming debt-free.

This article is written by or on behalf of an outsourced columnist and does not necessarily reflect the views of Castanet.

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About the Author

Brett has worked in the financial advice industry for over 15 years and is designated as a chartered investment manager(CIM) and certified financial planner (CFP).

In 2014, Brett was appointed to the board of directors of FP Canada (the national professional body for financial planning) and spent seven years on the board, including his final two as board chair. More recently, he was appointed to the Financial Planning Standards Board (FPSB), which is the international professional body for this industry with a three-year term beginning in April 2023.

Brett has been writing a weekly financial planning column since 2012 and provides his readers with easy-to-understand explanations of the complex financial challenges that they face in every stage of life.

Enhancing the financial literacy of Canadian consumers is a top priority of Brett’s and his ongoing efforts as a finance writer and on the regulatory side through the national and global boards focus on this initiative.   

Please let Brett know if you have any topics that you’d like him to cover in future columns or if you’d like a referral to a qualified CFP professional in your area by emailing him at [email protected].


The views expressed are strictly those of the author and not necessarily those of Castanet. Castanet does not warrant the contents.

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