This unsettling amount shows how the recession and global political problems and chains have started to affect Canadians. In times like these, you need a good hold on your money and be able to think rationally.
With the continuous changes in the world economy due to numerous factors, prices and living costs are soaring in many places in Canada. So, naturally, it will create a gap between income and expenses, which people will try to fill with credit. This increasing gap between income and expenses is why people depend more on credit cards.
According to Equifax, the total non-mortgage debt per consumer is $21,188 on average, which was seen in 2020. So, this increasing debt is causing serious problems in many people’s life.
At PrestoCash, we know how credit can change the life of a person and also how it can ruin it. We have been giving Fast e-transfer loans in Canada for a long time and have seen many people go rags to riches and also from the penthouse to mobile van. So, in times like now, we would like to provide you with some practical tips to help you manage your credit efficiently to avoid getting into a debt trap.
Is Canada in a recession?
Many popular economists have projected that Canada will encounter a recession in 2023 mid. However, in an article at Proof Point, experts have predicted that the recession will hit Canada as early as the first quarter.
And with its effect, it will rob $3000 purchasing power from an average household. But this won’t lower the person’s needs, so what will happen next? People will start relying on credit, increasing their dependency on credit cards.
What are the common mistakes of people?
When used smartly, credit can make life easy, but if used irresponsibly, it can be a big problem for people.
1. Taking loans blindly for every single thing
Doesn’t it feel good to take a loan and see that money in your account? There are a lot of reasons why people may need a loan. And that’s fine! But many people also take a loan just because it feels good to see that money or get that feeling that they have a lot of money, which is pointless and serves no purpose.
This type of loan does nothing but drag you down. So, are you committing this mistake? If yes, then you know you should stop it.
2. Buying for showing-off
One of the most common problems with modern people is that they will buy things that they will never use. Most of the time, they do this because they want to show people they have achieved something.
Now here we are not saying you shouldn’t buy expensive things or stuff that you want to buy. Rather we are saying you shouldn’t buy things, especially on credit, when it serves no purpose and doesn’t change or help you in any way.
Such things are purely an expense which, if you are making, you should stop and think about how it is damaging your finances. As a rule of thumb, you can consider buying a thing only if you have twice the money you are spending on it.
3. Do not keep track of credit.
Not checking your spending is one poor thing that can result in a poor financial situation and bad financial decisions. This is one of the common traits of poor financial life.
For some people, keeping a check on money is problematic because it involves some calculations. Although these calculations are not that intense, they still require a sense of awareness and memory to remember where and how much money you have spent.
If you are one of those who do not set a budget or limit on what they are spending, then it is natural that they will struggle with money.
4. Not keeping a hold
In financial matters, it is extremely important to be disciplined with money. You must resist the desire and urge to spend money on unnecessary items. But is being disciplined and holding on enough? No! More than just holding the money is required. First, you have to live life and make the necessary spending. Then you should make budgets and follow them through to have a stable life and finances.
Are you making these mistakes? If yes, you should start amending it and improving your finances. Although, after reading this, the first problem you will encounter is where to start.
This is normal because if you have a financial issue, you need to figure out what’s going on with your finances. Because if you do, you wouldn’t be in this place. Therefore, we have gathered some practical tips which are more helpful and practical.
Practical tips to Improve finance
Once you understand the problem, now is the time to improve the situation. Here is a list of practical steps to improve your finances.
- Financial analysis
Begin your financial analysis by summing up your money in the bank and gathering all the assets that produce money or investments that you have. Then next, add up all your expenses, such as mortgages, loans, insurance, etc. When you sum up, you will have a clear idea of how much money you have and how much loan you have to pay back.
- Gather income and set aside payments
Sum up your income and set aside money for your loan. This will ensure you will get all your loan repayments. Then make a budget with the allotted money and stick to that budget.
- Spend less
When focusing on reducing your credit, you should keep your unnecessary spending under check. After all, this spending has been summed up that brought up the current situation. So, keep your spending in check.
At last, keep your finances strong because things can get even more difficult in the coming time. If you need extra help with loans, PrestoCash is here to provide instant e-transfer loans in Canada anytime.