The bells are ringing – and they’re not cheerful sleigh bells, they’re alarm bells. Statistics Canada reported that Canadians now owe $ 1.77 in credit market debt (excluding mortgages) for every dollar of household disposable income (the money left over after basic needs are paid).

It’s no surprise that Canadians are worried about how to get out – and not get into debt – from debt, especially with spending pressure this holiday season.

Debt reduction tactics all boil down to one principle: effectiveness. And, the most effective way to crush debt is to pay it off as quickly as possible at the lowest possible rate.

Motivated to free yourself from your debts? Tackle Your Debt With These Effective Strategies:

Consolidate your balances at a lower rate

Consolidation is the best way to eliminate debt. The problem is, if you don’t fix the underlying debt accumulation behaviors, you will consolidate repeatedly every few years and never progress financially. It is essential that as you pay off today’s consolidated debt, you strive to understand how to break free from bad spending habits so that you never need to consolidate again.

The most common consolidation methods are:

Before committing to any of these options, take a look at the interest rates and compare the payment terms: how much will be the monthly or bi-monthly payments and how long it will take to become completely debt free. Obviously, the lowest rate at a payout amount that you can afford is the best.

What if you don’t qualify for a consolidation loan?

Loan policies differ from financial institution to financial institution, but they all have one thing in common: they won’t grant you a consolidation loan if you’re unlikely to pay it back (because you can’t pay the payments or if there is a history of bankruptcy or consumer proposals).

If that’s you, the debt reduction strategy you’ll need to follow is to call each lender first and negotiate a better rate, then focus on paying off the highest interest balance, and then move to the next highest interest rate, and soon. Whatever you do, be sure to make the minimum payments as this will negatively impact your credit score.

If you just can’t keep up with the pace, you need to talk to an accredited credit counselor from a nonprofit credit counseling company.

Increase your payments

In either case, the easiest way to speed up the debt reduction process is to pay a little extra. It doesn’t have to be a huge amount – even $ 20 a week will make a difference. And if you happen to earn a little extra money, maybe you’ve sold something on Kijiji or received a little bonus from the job, put that money on your debt.

I understand. Talking about debt while on vacation is no fun. But not having a plan to pay it off effectively in the New Year is worse. So, if financial well-being is one of your goals for 2020, get ready to face your debt.