Consolidating your debts and getting organized

Consolidating your debts and getting organized
Several ACEFs offer individual budgeting consultations at no cost to draw a portrait of your financial situation.

Amélie couldn’t find a job and things weren’t getting any easier. So Simon’s father suggested that his son and daughter-in-law find other ways to borrow money, such as from a personal loan or line of credit. These two financial products generally offer lower interest rates than a low-rate credit card. What’s more, they normally don’t charge any annual fees.

Despite consolidating their debts thanks to a personal loan, their situation remained fragile. Tired of the stress and arguments over money, they made an appointment with their local family finance cooperative (ACEF).

Several ACEFs offer individual budgeting consultations at no cost to draw a portrait of your financial situation. “With the results from this first meeting, the consultant then discusses various solutions available to you, such as restructuring your budget or consolidating your debts,” says Olga Cherezova, budget consultant at the Montreal East ACEF. “A follow-up meeting can then be scheduled if needed.”

If your financial situation shows warning signs of debt, it’s important to reassess your income and expenses.

These associations also offer budgeting courses at a very reasonable cost, to help participants objectively calculate their current finances and plan an effective budget. “This method helps people make real changes,” adds Cherezova. She says a budget allows you to:

  • know where your money goes
  • reduce your stress
  • avoid or eliminate debt
  • avoid spending on impulse
  • face the unexpected
  • save to fulfill a dream.

Once you’ve established a budget, it’s important to get organized so that you stick to it. One trick is to keep all your invoices in the same place and then to sort them by budget category.

Olga Cherezova explains that it’s important to track your bills regularly, at least once a month, but ideally at the beginning of every week, to plan your expected income and expenses. Knowing where your money goes will make it easier for you to know where you need to cut if ever your expenses exceed your income.

Making a budget gives you peace of mind when paying your daily expenses.

The budgeting consultant also suggests setting a goal, such as a family vacation, for example, or a gaming station for the family. This will make it easier to find the motivation to save, even if it’s just a small amount. Next, it’s essential to develop the discipline to resist unnecessary spending.