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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.

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.

girl taking picture of food

Do you have the fear of missing out?

In a society of technology, we continually face the pressure of spending money – seeing what our friends are doing and purchasing and feeling like we have to keep up. This fear of missing out (FOMO) can have a big impact on our finances.


The fear of missing out (FOMO) is real. In a time where social media impacts spending habits, people are often urged to “keep up” and are constantly looking for the next big purchase, rather than save – because you can’t Instagram your savings account balance, but you can Facebook that vacation and Tweet that new pair of shoes. So, is the fear of missing out putting you into debt?

FOMO & debt

According to a recent study by public relations firm Citizen Relations, 56% of Canadian millennials (those aged 18 to 30) feel driven to live beyond their means because of social media. It’s the “fear of missing out” on trips, events, meals, shopping, sales – the list goes on.

Keeping up with your friends’ spending can be linked to social media as often when you make a big purchase you share it. If you miss that trip with your friends you are constantly reminded through social that you’re not there from their posts. Another study from Credit Karma found that nearly 40% of millennials have gone into debt to keep up with their peers. In an age of destination bachelor and bachelorette parties and destination weddings – how do you limit yourself to only spend what you have while still being able to afford the important life moments.

Say no to FOMO

  • Ask yourself “why”
    Before making a purchase ask yourself, “Am I making this purchase because I can afford it and it will make me happy?” or are you purchasing because your friends have it? Being able to identify a want vs. a need is an important question to ask yourself before you spend.
  • Limit yourself
    Figure out what works within your budget and set that as your limit. If you can afford to go out once a week for dinner and drinks with friends then stick to that. Find other solutions to going out, like inviting friends over and everyone brings a bottle of wine and appetizer.
  • Social media detox
    Limit your time on social media. Constantly keeping up with social media can directly relate to the feeling of keeping up.
  • Evaluate who you’re following
    Clean up the accounts you are following on social media by unfollowing stores and blogs. The less you see, the less temptation you will face to “swipe up” and swipe your credit card.
  • Buy for you – not your friends
    Recognize that everyone’s budget is different. We all have different incomes and expenses, so going on the expensive trip or upgrading your kitchen may have fit into your friends budget, but might not fit in yours and that’s OK.
  • Ignore the pressure
    Just like in high school, saying “no” to your friends might seem hard, but your friends should understand that sometimes you have other financial obligations. Finding an alternative hang out plan or trip that is affordable or further in the future that gives you time to save are great solutions to avoid the pressures of going out to spend.

Remember, FOMO is not an excuse to put you into debt. We’re not saying you should deny yourself of every experience, but instead when making purchases ensure 1) you can afford it and 2) it is making you happy – not your friends. Folding to the pressures of social media and your friends will not help your budget and will affect your finances later in life. It’s important to recognize the pressures of FOMO spending habits so you can spend responsibly.

income tax form

Smart ways to spend your income tax refund

It may be tempting to spend your income tax refund on a new pair of shoes or a fancy dinner, but that good feeling of splurging is only temporary. Consider spending your income tax refund using one of these options.


According to the Canada Revenue Agency, close to 90% of Canadians who have filed their 2017 income taxes received a refund, with the average refund being $1676. Do you anticipate receiving a refund this year? If so, how do you plan on spending it?

It may be tempting to use all of this money to splurge on yourself but that good feeling you get from splurging is only temporary. Here are a few smart ways to spend your income tax refund – helping you feel financially-well now and in the future.

Pay off debt

Have a balance on your credit card or line of credit? Working to pay off your student loan or car loan? Consider using your tax refund to reduce or eliminate this debt. Putting towards your debt will not only reduce the amount of debt you have but also decrease/eliminate the interest you’re paying on this debt.

Emergency savings fund

Are you prepared for an unexpected emergency such as job loss, injury or illness? If your car engine went on you tomorrow, do you have money set aside to have it fixed? An emergency savings fund ensures you’re prepared for life’s unexpected curveballs. Use your refund to start or contribute to an emergency savings fund. Unsure how much you may need? Check out our Importance of having an emergency savings fund blog to help you out.

Extra payment on your mortgage

Some mortgages have the option to make extra payments allowing you to pay down your mortgage faster – check your mortgage agreement to see what extra payment options you may have. Consider using your refund to make an extra payment on your mortgage, which will be applied directly to the principal amount. This will not only reduce this debt faster but also reduce the amount of time you’ll be paying off your mortgage.

Put into an RRSP

Retirement may seem far away, but it will be here before you know it. Help reach your retirement goals quicker by putting your refund into a Registered Retirement Savings Plan (RRSP). Check out our Retirement Planner Calculator to see if you’re on track for your retirement goals.

Put towards your child’s education

Post-secondary education costs for your child can add up quickly – will you be ready? Consider putting your refund into a Registered Education Savings Plan (RESP) to help pay for the costs of this education. Our RESP Calculator can help you figure out the cost of your child’s post-secondary education and map out the savings required – through individual contributions and government grants.

Save the money in a Tax-Free Savings Account

Tax-free savings accounts (TFSA) allow you to save money in an investment tax-free, with a maximum yearly contribution limit of $5,500. These accounts are great tools for saving money for short and long-term goals and give you the flexibility to withdraw the money you save at any time. Saving for a family vacation or a new car – consider using a TFSA to get you started. Check out our TFSA Calculator to see your potential benefits to investing your tax refund into a TFSA.

However you choose to spend your tax refund, be sure to do so wisely. A new pair of shoes may be nice, but your return on investment would not compare to using one of the options above. We’d love to chat and see which option may be best for you. Contact us today!

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.