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BDO Niagara Falls

4728 Dorchester Road Suite 9,
Niagara Falls, Ontario
L2E 2G5
Phone: (905) 358-7335

How Can a Consumer Proposal Help With Digital Debt?

Canada’s debt crisis continues. And although Ontario hasn’t been hit quite as hard as other province in terms of the number of insolvencies, there is still reason to be vigilant about paying down personal debt. In a tourist town like Niagara Falls, the summer months are booming but the colder months can be very difficult for those who are seasonally employed. This can add to stress as residents may turn to credit cards to stay afloat, potentially pushing debt levels even higher. Depending on the amount of credit card debt you’re carrying, here are two options for paying down that digital debt.

Use cash, save cash

As Canada becomes more reliant on digital technology and ditches cash, keeping track of money and maintaining a budget can become increasingly difficult. Tap and go purchases can add up to 30 per cent more to your budget, according to a 2015 MasterCard report. Mobile payment apps like Apple Pay make parting with money even simpler. The problem is that digital money isn’t always thought of in the same as physical cash. Before you tap your card for a purchase, do you ever stop to wonder how many hours of physical work it will cost you to pay back that item? One approach for getting your credit card debt under control is to switch to a cash-only diet — even if it’s just for a few months. The benefits of switching to cash may include:

  • Detox your spending habits and force yourself to think long and hard before each purchase.
  • Savings of 20 per cent! Some findings indicate that simply switching from credit to cash can save you 20 per cent because you’ll be more conscious of where your money is going.
  • Reduced stress. Your money is delegated each month toward debt repayment, savings, investments and expenses. Leftover money for spending must be carefully budgeted because once it’s gone, it’s gone. You may have less sleepless nights now that you’re not worrying about credit card bills.

You don’t have to forego all digital options. Money management apps such as Mint and Wally can help you get a handle on your finances with intelligent budgeting software. If you need to keep a few purchases on credit cards, start with small monthly payments like a Netflix subscription. Using tech to your advantage will help you plan your future expenses (holiday shopping, winter vacation) and also your long-term savings goals such as retirement.

Learn more about a consumer proposal

If you carry a lot of credit card debt, a DIY solution like switching to cash only may not be enough. Filing bankruptcy in Niagara Falls may seem like the only option when debt becomes unmanageable, but there are a number of options for debt relief. Next step is to speak to a credit counsellor or a Licensed Insolvency Trustee (LIT). The role of an LIT is to walk you through all of your options: budgeting, credit counselling, debt management, debt consolidation, consumer proposal and bankruptcy. A consumer proposal is a popular alternative to bankruptcy. If you’re at the point where you’re missing bill payments but you’re still able to repay some of your debt, a consumer proposal may be the solution. An LIT will explain the steps involved in filing a consumer proposal vs. filing for bankruptcy to help you decide.

If you have a seasonal income like many people in Niagara Falls, your best defense against future debt is savings. If you can, save as much as you can during the summer months to avoid going into debt during the winter. If that’s just not possible, get help for your debt as early as possible.

Have you considered a cash diet to take control of your debt? Are you a seasonal worker who could use some help with debt management and budget goals? Join the online conversation by searching the Twitter hashtags #LetsTalkDebt #BDODebtRelief

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