Top 5 Strategies to Pay Off Your Debt

Believe me, I know – if you’re in debt, whether it’s big or little, getting started on paying it off can be overwhelming. Here are my top five strategies to get you started and moving in the right direction and tackle that debt. Find a strategy that works for you and stick with it!


1. Pay off your most expensive debt first

If you have one particular debt with a super high interest rate, try making that debt your priority. You’ll need to maintain minimum payments on your other debts, but really putting everything you can into your most expensive debt will help to make your overall future debt less. The power of compound interest means that this debt has the possibility to grow the fastest, so eliminating it first is a solid step in the right direction.

2. Pay off your smallest debt first

This is a strategy for when you really need a win to get you motivated. By maintaining minimum payments on all of your debts and focusing on the one that will be the fastest to pay off, you’ll quickly get a little victory to keep you moving forward with the rest of your debt repayment plan.

3. The cash diet

Especially if you can get yourself into trouble with a credit or even debit card, the cash diet is a strategy where your budget becomes absolute law. You plan your budget (give our budget calculator a try), then take out cash to see you through a set amount of time like a week or the whole month. Once the cash is gone, that’s the end of your spending. It’s helpful to break up the cash into your individual budgets for things like groceries, gas, or pet expenses.

4. Use a tool to track your spending

If you’re struggling to find the money to pay off your debt, knowing exactly where all of your money goes is an important first step on finding room in your budget. Use our spending analysis tool or there are lots of great free apps that you can hook up to your bank account and credit cards that will track and categorize every transaction. Maybe you’ll realize you’re spending $30 a month on subscriptions you don’t even use, or that your grocery budget is way more than you thought it was. Knowledge is power, and with detailed knowledge of your spending, you can build better habits and cut out excess. For recommendations on how much of your income should go to which areas of your life, check out our how much money should I spend blog.

5. Ask for help

The burden of debt is worse if you’re suffering in silence. Talking to your friends, family, partner, or trusted mental health professional about how you want to start tackling your debt can help to make the stress more manageable. You can also talk to a financial expert, like one at Conexus, on your best path forward, and they can even help you refine your game plan. You can also talk to your creditors. It’s worth a phone call to see if any of your creditors are able to lower your interest rates, especially if you’ve been keeping up with minimum payments.

Debt is personal, so any strategy for tackling it that will work for you is the right strategy!

What debt strategy have you found success with? Let’s talk about it in the comments.

A woman is making an online purchase and is holding her credit card in her hand and entering her credit card number

The Real Cost of Carrying a Balance on a Credit Card

Do you know what it actually costs when you carry a balance on your credit card?
We’ve broken it down and even have a tool to figure out how long it might take you to pay off your balance.


Balance is a good thing… right?

Sometimes because of unexpected costs or not enough planning, you end up carrying a balance on your credit card. But what, exactly, does it cost when you don’t pay your credit cards in full each month?

Let’s start by defining a few important terms when it comes to credit:

Principal – The amount you originally borrowed. Yes, anything you spend on your credit card is borrowed money.

Interest – What your credit card charges you for the privilege of borrowing money. This is usually presented as an annual percentage rate.

Compound Interest – Interest that is added to your principal … which is then charged interest. Interest on your interest is how credit card debt can stack up so quickly.

Minimum Payment – The smallest amount of money you can pay in order to keep your credit card and not damage your credit score.

Credit Score – This is essentially a measure of how good you are at fulfilling your financial commitments. A good credit score can help you buy a house or a car, get a loan, start a business, or even get you better interest rates.

Interest grows your debt

Let’s use an example. Say you’ve got $1,000 on a credit card with a 19% interest rate. That’s not bad, right? $1,000 isn’t that much at all, and 19% is a pretty standard interest rate. So, let’s say you put $20 each month toward paying off that debt, which is an approximate minimum payment. Do you want to know how long it would take to pay that balance off? More than eight years! And what would it cost you? About $997, which is basically doubling your debt load! And that’s with only paying off your principal with no additional borrowing.

With compound interest, every dollar you leave on your credit card ends up costing you more and more. It’s a powerful thing that can be used to your advantage when it comes to saving, but that’s another blog post.

The example above is just that, an example, but you can use our repayment calculator to help you figure out exactly what your debt might cost you.

A credit card can be good

There’s an obvious solution here, right? Just don’t get a credit card!

Well … it’s not quite that simple. In order to build credit, you need to use credit. So, if you hope to own a home one day, or even get a car loan, you’ll have to work to build your credit. The best way to do this is to use your credit card and pay off the entire balance each month.

Some good tips on using credit with care are:

  • Keep your credit limit sensible
  • Use credit cards for recurring payments that are a regular part of your budget
  • Plan for larger purchases
  • Use credit cards to build good credit within your budget, not as a tool to spend more than you earn
  • If you can’t trust yourself with your cards, leave them at home

See how long it’ll take to pay off your credit card balance

Credit is an important part of your financial life, but carrying a balance, or not managing it well can lead to a struggle with debt. Try our repayment calculator and remember that debt is something that can happen to any of us, so never be embarrassed to talk about it.

Did you learn something about credit cards? Are there other questions you still have about them? Let’s talk about it in the comments.

Couple reviewing how debt stacks up against other Canadians

How Does Your Debt Stack Up?

Let’s have a look at debt in Canada.
How much do people owe on average? How does it break down by age group?


Debt

Almost all of us have it, and most of us are worried about it. How does your debt compares with the rest of Canada and Saskatchewan?

What Canadians owe

Let’s start with the big picture. On average, Canadians carry about $22,000 in non-mortgage debt.

That’s everything like credit cards, lines of credit, loans, car payments, and student loans.  Now the bad news – that number spikes to nearly $24,500 in Saskatchewan. That’s like an entire part-time job’s yearly income worth of debt.

To put it another way, according to Statistics Canada, many Canadians owe $1.74 for every $1.00 of disposable income they have.

Canadians have a lot of debt.

Gen X are the most in debt

Good news for Millennials though, it’s Gen X that’s bearing the biggest debt load right now! People aged 35-54 on average have more than $10,000 of consumer debt alone, while those aged 18-34 have way less at about $5,600. People aged 55+ are sitting in the middle with an average consumer debt of around $9,000. And this is all just consumer debt, or the debt that comes from buying stuff, not investing in anything like a home or your education.

One of the major factors in Canadian’s debt is probably pretty familiar to you – income is staying the same or even going down, while costs of just about everything keep rising.

D*bt happens

Whether your debt is at, above, or even below some of these averages, the real takeaway here is that struggling to stay in the black is a Canadian experience. The first step in tackling your debt should be to talk about it. In fact, one of the main reasons that it’s believed Millennial consumer debt is as low as it is right now, is that that generation has been taught to be more debt averse than others to the point that many are delaying or even rejecting home ownership.

Keep an eye out for our upcoming blogs about the real cost of a credit card balance and our top tips for paying off debt.

So, how did you stack up? Does your debt load make you feel stressed, or are you feeling a little better knowing that so many other Canadians are struggling with debt too? Let’s talk about it in the comments.

Person putting credit card into ATM

Cash advances | What to know and advice

Here are some things to know about a cash advance and tips before you withdraw.


It’s the first Monday of the month…payday isn’t until Friday…you’re already into your overdraft, and…your three kids forgot to tell you that school pictures are on Wednesday which they need $20 each in cash. Cash that you don’t have – what do you do? You start to weigh the options:

  1. Call the grandparents and ask for picture day money.
  2. Stop at a local Cash Store or Moneymart (but you already know the fees are outrageous and don’t want to get caught in the vicious cycle of payday loans).
  3. Borrow money from another parent at the school.
  4. Swing by the ATM and get a cash advance from your credit card.

Option #4 is your decision, and it’s what we’re here to talk about – The Cash Advance!

So what’s the big deal? You’ll be able to pay off the cash advance at the end of the month when you pay your credit card bill. True, but what will you be paying?

A cash advance works a little different than just paying with your credit card. The biggest difference being that interest is calculated the moment the money comes out of ATM until it’s paid back. You pay a fee to get the money and continue to pay interest until the money is returned. So, by the end of the month your $60.00 may end up costing closer to $70.00 when you pay it back!

CashAdvance_Shock_CreditCard_Interest_Monkeys

Yep, that’s how I felt, when I learned about cash advance interest.

In contrast…when you tap (or swipe) your card to make a purchase, and pay it back “in-full” by the end of the month, you only pay the amount you spent (no interest is charged) – we call that a grace period. A grace period is the period of time the credit card company gives you to pay your new charges without charging interest on the balance. This period typically runs from the end of a billing cycle to the next payment due date – for most credit cards it’s about 21 days. For cash advances though, there is no grace period.

So that is that short and sweet about cash advances, but not the end of our blog. Let’s take this one step further and give you some practical advice on how to avoid needing a cash advance.

Practical advice #1 – Create a budget

The best thing to do is to create a budget. The purpose of a budget is to help us manage the money we make, the money we spend, and the money we save. My budget includes things like rent, gas, groceries, entertainment, music gear and my tall, 1/2 sweet, non-fat, extra espresso shot, vanilla latte from Starbucks. Because let’s be honest with each other, there should always be a budget line for Starbucks coffee – maybe not all the time, but every so often to treat ourselves for a job well done.

Practical advice #2 – Add cash to the budget

Once you have your budget all figured out, think about adding cash or a misc. expense line into your budget. I run on a bi-weekly budget because I get paid bi-weekly and part of my budget is adding $40.00 – $60.00 of cash into my wallet. The cash isn’t there for a specific purpose, but for moments that I need cash – those miscellaneous expenses I didn’t plan for, such as picture day fees. If I still have the cash in my wallet the next time I get paid, I celebrate because I’m now saving money that I would have normally taken out as cash, which leads me to my final piece of advice…

Practical advice #3 – Save when you’ve over budgeted

What do I mean by that? Sometimes we set out a budget and at the end of the month, we didn’t spend all the money we budgeted and have money left over. I don’t know about you, but my first reaction is usually…

Though I’m tempted to spend it, what I’ve learned to do instead is put that money into my savings account, TFSA, or talk with my financial advisor to get advice on what I could do; especially if it happens often.

Hopefully, you now have a better understanding of cash advances, along with tips to help you prepare for those unexpected expenses. If you have any questions about a cash advance or budgeting, please ask in the comments section below. We’d be happy to chat with you!

Finally – here are a few additional action items that can help you improve your overall financial well-being:

  1. If you’ve never created a budget I would recommend you take 10 minutes and try our newly updated BUDGET CALCULATOR! It’s free to use!
  2. If you want some free financial advice fill out the form on the bottom of our site!
  3. Leave a comment and ask more questions! Conexus #MONEYTALK blog is meant to be a 2-way-conversation!
  4. Read Laura’s amazing blog on “10 Ways to Control Your Finances” 
  5. If you really want to take your financial journey to the next level why not Become A Member of Conexus, where your financial well-being drives everything we do!
couple sitting on couch, looking at a computer

10 ways to take control of your finances

A New Year means resolutions and often times have a financial component to them. Here are 10 ways you can take control of your finances this coming year.


New Year. New financial you.

It’s hard to believe the New Year has already begun. With a New Year often comes resolutions – creating a plan for the future using lessons from the past – and many times have a financial component to them.

Here are 10 ways you can take control of your finances this coming year.

1. Set goals

We all have dreams of what we want to do and what we want to achieve. Make these dreams a reality by setting goals to achieve them. Organize your goals by priority and be sure they’re realistic and achievable. Tip: Start small. Small goals are easier to reach and help train your brain into believing you can achieve it, increasing your chance for success of future goals. Get started by checking out our Goal Setting Blog.

2. Take action

It’s one thing to say you’re going to do something and actually doing it. Put action to your words by creating an action plan setting dates you want to achieve parts/milestones of your goal by. Hold yourself accountable and reward yourself when achieving each milestone helping you to keep motivated.

3. Create a budget

A budget helps you manage your money, showing you how much you’re bringing in each month and where you plan on spending your money. It can help you not spend above your means and focus on what’s important to you. To make budgeting easier for you, we recommend using our online Budget Calculator.

4. Track your spending

By tracking every nickel you spend, you’re able to get an accurate picture of your spending habits – sometimes it can be very shocking how quickly or how much your purchases add up. Tracking your spending will also help you create a more precise budget based on your spending habits and allow you to identify areas where you may need to change your spending behaviours.

5. No-spend challenges

Each month challenge yourself to a spending freeze for a day, weekend or even the full month for all non-essential items. Or pick a different non-essential category to not spend on such as ‘No Eating Out March’.

We recommend challenging yourself for a day or weekend if doing for the first time. Check out our No-Spend Weekend Challenge Blog helping you succeed in taking an entire weekend off from spending.

6. Save for an emergency

Life can sometimes throw us a curveball, threatening our financial well-being and causing us stress. Set money aside each month into an emergency savings fund for those unexpected life events. Having a fund ensures if your car breaks down or your furnace goes in the middle of winter that you’re prepared and gives you peace-of-mind knowing you won’t need to stress trying to find money to cover these unexpected expenses.

7. Prepare for retirement

We all dream of the day we’ll retire – no more alarm clock, being able to take a nap whenever we’d like and playing that golf game on a Wednesday afternoon. Being able to retire the way we want though requires some planning in advance. Start preparing now by checking out our blog, Retirement: will you have enough?

8. Save your extra money

Throughout the year we come across extra money such as an income tax return or a cheque from our Grandma for our birthday. Though we may be tempted to treat ourselves, consider putting any extra, unexpected money you come across into savings – you’ll thank yourself at the end of the year when you have extra savings in the bank!

9. Invest in a TFSA

A tax-free savings account (TFSA) is a great way to save for just about anything, whether it be a short-term or long-term goal. What you save is not tax deductible nor are you taxed when you withdraw your earnings. As well, in 2019 contribution maximums have increased to $6,000. Learn more here.

10. Plan/review your estate

We often think that planning our estates is something we do when we’re older but in fact, everyone young or old should have an estate plan in place in case something unexpected were to happen to us. Having an estate plan helps our loved ones understand our wishes and how to carry them out if we were to pass. This can include naming guardians for children, instructions for your burial/cremation and how you’d like your property divided up and should be updated at each life event such as marriage, children, divorce, retirement, etc. Start your plan by speaking with a local estate planner or lawyer today.

A New Year symbolizes a fresh start and new beginnings. Hopefully, these quick tips help you feel more prepared to take on the new year and take control of your finances. For more financial advice, we encourage you to check out some of our other blogs or contact us today to set up an appointment with a financial advisor.

Girl holding a credit card

Building blocks of credit

Credit isn’t a bad thing if used responsibly and can be a tool that can help your future.


The word credit may be scary or viewed as something negative, but it can be the opposite. Credit isn’t a bad thing if used responsibly and is a tool that can positively help your future. Looking to get a mortgage? How about a loan for a new set of wheels? Building and having a good credit score is essential throughout your life and enables you to borrow money for these life events.

Importance of credit

Building credit is important as it identifies how you manage debt. By paying back the money you borrow with on-time payments, it shows you can responsibly manage debt and sets you up for the future.

A credit score will be given to you based on your credit behaviours. Credit scores range from 300 up to 900 points. When you’re first starting out, you’ll be at the lower end of the range. As you build your credit and display good credit behaviours, this score will increase. A score of 700 or above is considered good while a score of 800 or above is considered excellent. As good behaviours help improve your score, it’s important to note that bad credit behaviours can decrease this score. This score is with you forever, and it’s important you display positive credit behaviours.

You may think playing it safe by avoiding credit all together is the way to go, but in fact, it may be hindering you in the future. Without credit, you can’t show if you can manage debt responsibly which can impact your ability to get a loan, mortgage, etc.

Building credit

Start building credit as soon as possible. Start by applying for a low limit credit card after high school and paying the entire balance monthly. Credit cards are a great credit-building tool and can offer great additional features and benefits above and beyond just helping to build credit. Benefits from credit cards can range from insurance coverage to rewards points and even cash back to help pay your balance!

Good credit behaviours

Remember, good credit means you display positive credit behaviours showing you can responsibly manage debt. You can do this by:

  • Paying your monthly bills (utility, cell phone, etc.) on time each month. Consider setting up automatic payments.
  • Understand your spending and talk to a financial advisor to ensure the credit you have (credit cards, loans, etc.) is manageable and fits within your financial situation.
  • Pay your credit card balance in full each month. Remember your credit card statement ‘due date’ is the date the money is due on the account and payments typically take a few days to process. Make payments at least 2-3 days prior to your due date to account for processing times.
  • Do not apply for multiple loans or credit cards all within a short amount of time. Each time you apply for a loan, mortgage or credit card, the issuer does a hard credit inquiry or ‘a hit’ on your credit score showing that your credit has been checked. Excessive applications could affect your ability to be approved as it may look like you’re a riskier borrower or could be perceived as desperation.

Understanding your credit score and how your behaviours impact this score is important.  You can do a soft inquiry (an inquiry only visible to you and that doesn’t affect your credit score) by using www.transunion.ca. We also recommend speaking to your financial advisor. They’ll work with you to understand your credit and create a plan to help you reach your financial goals.

As you can see, credit doesn’t need to be a bad word. Building and developing good credit behaviours early on, help set you on the right track for life. Contact your financial advisor today to see how credit can be a positive for you.

What questions do you have about building your credit? Ask below and we’ll be sure to answer.

bill that says past due

Kick-start your finances: eliminating debt

Debt can have a negative impact on your day-to-day life. Here are a few things to know to become and stay debt-free.


It’s no secret that money can be stressful and is one of the top stressors on individuals, relationships and our ability to give back to our communities. Debt can be one of the reasons for that stress and play a huge roll in your health (physical, mental and emotional) and in the way you interact socially.

Debt can also prevent us from getting ahead financially. Whether one larger debt or a combination of several small ones, it can be difficult to make payments to eliminate that debt while still saving money for your goals. What is the key to eliminating debt and having financial freedom to save more money for your goals?

Don Hendrickson, Conexus Member Experience Coach, says there are three things to know to help you succeed in eliminating your debt:

  1. Being aware;
  2. Creating a budget; and
  3. Setting up automatic transfers.

“It’s key to understand how much you owe and the interest rates on each area of debt so that you can create a realistic plan on how you’ll eliminate this debt,” said Hendrickson. “As part of this plan, you need to create a budget that sets out a schedule on how you’ll spend your monthly income which should include your debt repayment amounts. If you’re struggling to find money in your budget for your debt repayment, look to see if any of your want expenses such as entertainment can be reduced.”

Once you’ve created a plan, set up automatic money transfers to have your debt payments come directly from your account each payday. This helps reduce the temptation on spending elsewhere and keeps you on track to reaching your set goals.

When it comes to multiple debts, Hendrickson says tackling your highest interest debt first will save you the most money in the long run but you may also want to consider paying off a smaller balance first to help motivate you.

“There’s some research that shows paying off a smaller balance first gives you the feeling of success and will help motivate you to continue,” said Hendrickson. “For example, if you have a $1,500 line of credit balance and $10,000 in credit card debt, tackling the $1,500 will give you the feeling of success and may also provide a great learning experience that you can then apply to tackle your other debt.”

When it comes to avoiding debt, Hendrickson said there are many things you can do including:

  • Living below your means and not spending more than you earn.
  • Don’t feel the need to ‘keep up’ with those around you. Only do what you feel comfortable with and that your budget allows.
  • Pay yourself first by making a habit to take 10% or more of your income and put towards your goals including an emergency fund. Having an emergency fund will ensure you’re prepared for whatever curve life throws you.
  • Sit down with a financial advisor at least once a year to review your short-, medium- and long-term goals and make a plan, or re-evaluate your existing plan, to ensure you’re on your way to successfully reaching those goals.

Debt can be stressful and coming up with a plan will not only reduce this stress but also help you towards financial freedom. Be sure to contact your financial advisor for assistance. Not only will they be able to help you come up with a plan to eliminate your debt, but also work with you to set a plan for your future. There’s no better time than now to take control of your finances – get started and make tomorrow, today.