Controlling debt...

Controlling debt...: "Mar 24, 2006


Mike Lacey - More from this author

Managing personal finances is among the biggest challenges facing Canadian households. Personal debt continues to climb as people seem either unable, or unwilling, to effectively manage their money.

This time of year is when the giving of the Christmas season comes home to roost, says Steve Wesley, manager of the credit counselling program at the Community Counselling and Resource Centre.

He explains many of those unable to meet the credit card bills that pile up after the holiday season are facing collection agencies. Many people don't know where to turn as they're swallowed up by debt.

Mr. Wesley and others with his organization provide free credit counselling services to those in need, helping to set up personal budgets and provide tips on ways to get rid of debt.

He says there are some simple, common sense steps people can make to ensure they don't end up in financial trouble.

'The first thing anyone should do is sit down and draw up a monthly expense sheet,' he says.

'This is a snapshot of where the money is going.'

That way, a person can see if more money is coming in than is going out. If it is the reverse, the next step is to look at what expenses can be trimmed back or taken out of the equation all together.

'What are the necessities of life? Rent, mortgage, food, clothing, things you have to have to survive,' he says.

Items not necessary can be put aside, at least until the finances are in better shape.

'It's 99 per cent common sense but, for some reason, a lot of people will shy away from sitting down at the kitchen table [and putting together a budget],' he says.

That's a good plan for those who are not burdened by too much debt. But those facing an avalanche of bills can turn to Mr. Wesley and his staff. To book a free and confidential appointment with one of the organization's counsellors, call 742-1351 between 9 a.m. and 4:30 p.m. Monday to Friday.

Meanwhile, Credit Counselling Canada also provides the following tips on getting debt under control:
·Sell unsecured assets. Have a garage sale, sell used clothes or get rid a second vehicle if it's owned outright.

·Consolidate your debts. A consolidation loan can bring all of your debts into one payment with lower interest.

·Refinance over a longer period of time. Extend the length of time you have to pay on a personal loan, a car loan, a lease or a mortgage. This may reduce the monthly payment required.

·Borrow from friends or relatives.·Attempt to make a lump sum payment. If you're expecting a large sum of money, such as a tax refund or from selling an asset, talk to your creditor about them accepting a lump sum.

·Set up a repayment program with creditors if possible.