A New Year's Resolution To Reduce Your Personal Debt

TORONTO - January 17, 2001 - January means a fresh start and a perfect time to make a balanced budget part of your New Year's resolutions. Thousands of Canadians carry large debt loads and worry about paying off what they owe. Whether you are having trouble managing a long-term loan or facing a new stack of bills from the recent holiday season, a few small steps now can help you look forward to a brighter financial future.

• Keep track of your spending. Record all of your Interac purchases and save your credit card transaction slips. With all the transactions made during the holiday season, you need to be aware of your spending and to be vigilant of errors or fraud. Guard your PIN number and check the accuracy of your bills and statements.

• Use a budget blueprint. Following a budget will help you regain a sense of control over your finances and let you sleep at night knowing you are working to reduce your debt. First, itemize all of your necessary living expenses such as housing and food costs. Don't forget those irregular expenses such as car insurance and license plates and optional expenses like entertainment and vacation. Once you have set a plan, stick to it.

• Eliminate any unnecessary spending. This often includes eating out, impulse purchases, or expensive entertainment. If you examine your lifestyle and make some short-term adjustments, it can make a big difference in freeing up funds and speeding up your debt repayment plan.

• Look for ways to save money. Clip coupons, buy generic products and consider shopping at discount warehouses and consignment shops for clothing or any necessary big ticket items. These measures can bring you enormous savings throughout the year.

• Don't ignore your bills. This may have an effect on your credit record and add to your stress. Once you know what you can realistically pay, contact your creditors and tell them you are having difficulty. Most creditors will appreciate your honesty and good faith and may be willing to work out a reasonable payment schedule with you. Once you have your immediate credit problems at bay, you need to follow your spending plan to methodically chip away at your debt during the year.

• Prioritize Debts. If you are juggling several hefty debts, focus on paying down the highest interest bearing debt first. Once you pay that off, you can move onto the next highest, etc. Use any savings, tax rebates, or cash windfalls to pay down your debt.

• Seek out help. If your expenses and payments surpass your income and payments are falling behind, a call to your local not-for-profit credit counselling agency can be the most important step you take. A professional counsellor will work with you to change your financial situation based on your needs. This can range from a few budget counselling sessions to get you on your way to establishing a financial management plan, where the counsellor negotiates a debt management program with your creditors on your behalf. Under such programs, creditors may agree to waive interest payments or reduce the number of payments on your debt.

Make 2001 the year you maintain a balanced budget. It's one resolution that you can't afford to break.

For help developing a budget or to receive financial counselling assistance, contact Credit Counselling Service of Toronto. CCST is a non-profit, charitable organization that provides confidential credit counselling and education programs to financially troubled consumers. It is an accredited member of the Ontario Association of Credit Counselling Services.

To schedule an appointment with a CCS Counsellor, please contact CCST at 416-228-3328 or 1-800-267-2272 (outside Toronto).