How to Prioritize Your Debt after GraduationJun 01, 2018
For those graduating university or college in Canada, student debt may be the first type of debt they carry. As student loan amounts rise, though, it can lead to other forms of debt, like credit cards and lines of credit.
How do you choose which of your debts to prioritize and what kinds of strategies work over the long-term?
By using some of these online resources, millennials can equip themselves with a game plan for reducing debt.
Newfoundlanders can get help with student debt — For some advice that focuses close to home, this BDO podcast includes information on Newfoundland’s student debt forgiveness programs.
Consider limiting the housing costs by paying rent to…Mom and Dad — In this article from CBC, finance expert Rubina Ahmed-Haq discusses the growing number of Canadians between the ages of 20 and 34 who are living at home. Find out why it’s happening and why paying rent at home can be an amenable solution for you and your parents.
Focus on living off what you earn — Finance writer Gail Vaz-Oxlade has a great series of blogs on how to focus your finances in your 20s. This first part discusses not spending more than you’re making and “bridging the gap with credit.”
Explore the “latte factor,” or reducing smaller, everyday purchases — Finance blogger Christine Drummond writes about her student debt experience in this blog on The Wallet Diet. She expands on her strategy of cutting back on everyday purchases, which allowed her to pay off $42,000.
Consider debt as a whole, then choose between an avalanche or a snowball — Are you motivated by quick wins or paying less interest? This blog from our St. John’s office website gives a breakdown of the avalanche and snowball methods of debt repayment, and explains how online debt calculators can help.
Pay down student loans or save for retirement? — A common question about debt is whether it’s better to just pay it off or prioritize saving for long-term financial goals? This blog from Money We Have explores the issue in detail.
When does bankruptcy make sense for student loans? — If you’re behind on payments and struggling, you may need a solution that is more serious than consolidation or a consumer proposal. This resource page on our national website outlines when bankruptcy might be the right option.
The above resources can help you put pen to paper and start working on your plan to reduce student debt. Over three-quarters of Canadian graduates under 40 admit they have regrets over their spending in school — having a plan is a great way for grads to reduce stress and regrets right away.