Carrying a high amount of debt can be extremely stressful so, this week, we are going to look at a few strategies that may help.

“The road to zero debt” says J.P. Collins, Wealth Advisor, Assante Capital Management Ltd., “involves taking an uncomfortable look at your finances and probably making a few sacrifices when it comes to your spending habits. But the relief you’ll feel when your debt starts shrinking (and your savings start growing through investments) will be worth it.”

This week’s Action item is to create a checklist of all your debt, then prioritize it by interest rate. Collins advises: “Make the minimum payments on all debt but focus on paying off the debt with the higher interest rate. This is the most efficient path to zero debt, with less overall interest paid.”

Minimum payments

Another strategy: pay more than the minimum monthly payment when you’re able. If you’re only making the minimum payment, you are likely only paying interest, not the principle.

Non-essential spending

In a credit card culture, it is easy to treat yourself now and ‘worry about it later’. However, sticking to your budget and monitoring non-essential expenses can prevent debt from accruing.

Use cash

It is so easy to overspend when we are using plastic. Having the money in hand can make you more aware of what you’re spending.

Good debt?

“Not all debt is created equal,” says Collins. For instance, “mortgage interest rates are usually much lower and generally considered a ‘healthy’ form of debt since you’re increasing your net worth as you pay off your property – but it’s only healthy if you can afford to pay your mortgage payments and regular expenses, plus make savings contributions, without relying on credit cards.”

The bottom line, Collins explains: “Your income must be greater than your expenses. If not, you’ll need to cut down on spending where you can or get a side hustle for extra income to balance your budget.” Now that you’ve considered your debt load, work toward decreasing it using some of these strategies.

Check out the Week 4 Blog on Starting your Savings.