Debt does not always have to be classified as a negative thing. After all, you can use a mortgage to fulfill your dream of owning a home and build wealth when the home appreciates. However, too much debt or the wrong types of debt, such as high-interest credit cards, could hinder you from pursuing other financial goals. Consider the following tips to help you effectively manage your debt.

Have a list of all you owe

The first step in managing your debts is to know your financial obligations. Begin with a list of all that you owe. It should include every debt like car loans, mortgages, student loans, credit card balances, or any outstanding loan. For every debt item, write down the balance owed, minimum payment made, interest rate, and its due date. This note will help you know your current financial situation and help you prioritize the repayment of the debts.

Consider consolidating your loans

If you have various high-interest loans, consolidate them into a loan with a lower interest rate. Consider low-interest loans like ODSP payday loans or other means of debt consolidation to pay off your high-interest credit card balances.

Make the lowest payment every month

Irrespective of your debt repayment strategy, always make the lowest repayment possible for every one of your monthly debts. Not doing so could result in an increase in interest rates, a negative impact on credit scores, and late fees. If you cannot repay the debt in full, making the lowest possible payment shows you are resolved to meet your financial obligations. Remember that even if you make the lowest repayment possible, it only keeps you in good standing; it doesn’t do much to reduce your primary debt.

Have an emergency fund

An emergency fund goes a long way to managing and even avoiding debt. You may encounter a lot of unexpected expenses in life, like sudden loss of job, car repairs, or medical bills. Not having an emergency fund might force you to rely on loans or credit cards to cover these expenditures, which leads to more debts. Try to save about six months’ worth of your living expenses in an emergency fund that you can easily access. Begin by setting apart a small part of your monthly income. Then, you can gradually increase the savings with time.

Make debt repayment a priority

Every debt has its interest rate and outcomes when there is no repayment. You should make it a priority to manage debt repayment effectively. Usually, experts advise repaying high-interest debts first since they would cost more as time goes on. This is called the debt avalanche repayment method, where you repay the highest interest-rate debts first and then make the lowest payments on others.


Debts come in various forms, like credit card debts, car loans, mortgages, or student loans. While debt incurred can be vital for making significant life investments, it could be a burden when not properly managed. Without deliberate action and strategic planning, your debt can quickly get out of control, resulting in financial hardship and stress. The above strategies and tips can effectively help you manage your debt repayment.