If your debt load is more than you have ever expected, you need not fret as you’re not alone. According to the Statistics Canada, the debt-to-income ratios of the Canadian households have reached record highs, ranging somewhere above 148%. This alarming figure shows that the Canadians owe $1.48 on every dollar of their disposable income that they have. If you’re one such Canadian, you need to take some solid steps that will help you lighten your overwhelmingly large load. The consumer debt crisis in Canada has been in the centre stage, it has been surveyed that the Canadian homeowners owe a whole of $1.5 trillion of debt. Though debt settlement can be a worthy option when it comes to repaying your debts, yet you must take some steps on your own to make sure that you manage this debt level that is soon spiraling out of control.

Debt usually results from reckless spending habits and out-of-control usage of credit. It needs no mention that credit is important as it helps us purchase things that we cannot afford with money, yet too much usage of credit may lead you into high interest debt that can take a toll on your personal financial lives. Credit needs to be managed wisely so that it doesn’t become a burden on you. Following some simple personal finance management tips you can easily get a grip on your finances and thereby reduce your debt burden. Getting out of this spiraling debt level not only seems attainable but you may also feel rewarding. Have a look at the perfect recipe for a debt reduction plan.

1. Study your monthly expenses: Make a list of your income and expenses so that you can ease off the pressure on your wallet. Create a monthly spending plan by implementing a frugal budget so that you can eliminate all the unnecessary expenses and concentrate only on the things that you need. Monitor your savings so that you can have enough funds to pay off your debts on time.

2. Restrain the usage of your cards: Unless you restrain the usage of your credit cards, you can never see positive results in your debt life. The more you use credit while shopping for things, the more you dig yourself deeper into the debt hole. Lock your cards in your cupboard and carry cash while you go out. Stop shopping as soon as you exhaust your cash.

3. Consolidate your debt: Having one monthly payment will be easier on your wallet than having to manage multiple payments in a month. Choose to consolidate your debts whether by signing up with a debt consolidation company or by taking out a debt consolidation loan. With minimized interest rate, debt repayment will become easier for you and you can let go of the thought of filing a bankruptcy.

4. Choose to make bi-weekly payments: If you want to make debt more manageable, you have to explore the ways in which you can get debt free sooner. Paying bi-weekly means you need to make 26 payments instead of 12 payments in a year. If you pay more frequently, you have to pay lesser on interest rates and therefore you can become debt free sooner.

5. Speak to a financial planner: A financial planner in Canada may help you take the best step towards your financial goal. Paying off credit card debt and consumer debt can become easier if you get help from a financial planner. He will tell you how to balance your income and expenses simultaneously.

Pull out your credit report once in a month to confirm whether or not everything is being listed in it. Make needed changes to boost your score and remain creditworthy to your lenders. If needed, you can either consolidate your debts or go for debt settlement to repay your creditors on time.