Don’t be like Congress

Five tips to avoid hitting your debt ceiling



Online only.


America has until August 2 to decide whether to raise its debt ceiling, which is currently at US$14.3 trillion. While Canadians won’t be hitting those numbers anytime soon, a BMO survey says that one-third of us are living at or beyond our means.

Here are five common-sense tips to help you avoid hitting your own personal debt ceilings.

Spend less than you make
This is the key to staying out of debt. It’s a simple concept, but often difficult to execute. Live below your means and save the rest.

Curb credit card debt
Switch to a low-rate card and  pay it down as quickly as possible.

Invest to save
Open a TFSA or a high-interest savings account and start an emergency fund. ING and Ally are two good options–they have interest rates up to 2%.

Pay off your mortgage.
Mortgage is debt too. Increase your monthly payments and cut your amortization by five years to save thousands of dollars in interest.

Have a plan B
Stuff happens.  You could get sick, lose your job or have your car stolen. You need to plan for these worst-case scenarios.

One comment on “Don’t be like Congress

  1. Your first tip of course calls to mind the timeless words of Mr. Micawber (in debtor's prison) from Dicken's David Copperfield: "Annual income: Twenty pounds. Annual expenditure nineteen nineteen six. Result: happiness. Annual income: Twenty pounds. Annual expenditure: Twenty pounds ought and six. Result: Misery."


Leave a comment

Your email address will not be published. Required fields are marked *