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How to help keep debt in check

With a faltering economy, unprecedented job losses and the impending arrival of post-holiday season credit card bills, debt counsellors’ phones are ringing off the hook.

With a faltering economy, unprecedented job losses and the impending arrival of post-holiday season credit card bills, debt counsellors’ phones are ringing off the hook.

Scott Hannah, president and CEO of New Westminster-based Credit Counselling Society, said his organization received 40 per cent more calls at the end of 2008 compared to the same time last year.

“We saw this coming (and) hired additional counsellors,” Hannah said.

Hannah offered some tips to get debt under control in a Q&A with Metro:

How have people gotten into debt?

Given the fact that we’ve had such a buoyant economy for the past five years, people have been living beyond their means. (Now) people are having difficulty paying their bills, and given the state of the economy, they’re worried about seeing their situation worsen.

What small things can people do to get out of minor debt?

• Track every dollar you spend over the next 30 days, then determine if you’re spending more than your income. Don’t spend more than comes in.

• Look for (small) savings in all your expense categories … and reduce (spending) rather than eliminating it.

What big things can people do to get out of more serious debt?

• Get rid of one of your vehicles or trade it in for a less expensive car.
• Reduce debts with the highest interest first and consider getting a consolidation loan with set monthly payments.

This will take time, but you’ll make progress.
How can people avoid getting into this situation in the future?
• Don’t spend more on your credit cards than you can pay off over three months.
• Monitor your progress every few months and set aside savings for emergencies.
• Adopt good money habits and if you’re not sure how, get help.

 
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