With the today’s announcement that for the first time in seven years the Bank of Canada has raised the Canadian interest rate to 0.75 per cent from 0.5 per cent, it is a good time to get your financial house in order using both a cautious and deliberate approach.
Rob McLernon, a Licensed Insolvency Trustee with Grant Thornton’s Nova Scotia practice, offers the following 5 recommendations to Canadians:
- Review your debts. Do a complete review of your debts to determine whether they will be susceptible to a rate increase now (variable rate products) or at renewal (fixed rate products).
- Review your spending plan. If you don’t have a spending plan, create one. Determine how much money you have left at the end of the month presently, the impact the interest rate increase will have and make adjustments.
- Create a debt repayment plan. Create a structured and focused approach to paying down your debts. For the greatest impact and most improvement on your monthly cash flow, attack debt with the highest interest rate first.
- Consider making cash-only purchases. Stop the accumulation of more debt and interest by relying less on credit.
- Seek out the advice of a financial expert. Debt help experts, such as License Insolvency Trustees, can provide free advice regarding your personal financial situation.
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