Monthly Archives: November 2020

How to Escape Credit Card Debt

Blog featured image how to escape credit card debt

 

Let’s start by being completely honest. This isn’t going to be easy. It’s going to take hard work, on your part, and dedication to following a strategy.

 

Credit card debt is pretty much the worst kind of debt you can have. This is due to the exorbitant interest rates, and the ease of continuing to add to the burden.

 

A lady holding a credit card downing in debt

 

With that said, how can you actually go about addressing credit card debt?

 

First Step

 

Stop spending money you don’t have. If you are trying to pay down this debt, adding more to the card is only putting you in a worse and worse situation.

 

Second Step

 

Apply for a balance transfer credit card. What is a balance transfer credit card? Well it’s another credit card that will often charge you 0% interest or at least a much lower interest than your current card for a promotional period. This period is often six months to one year. The benefit of this is it allows you to focus on paying down the principal, without accruing additional interest.

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Introducing the RRSP Snowball Technique

Hey everyone my name is Greg Tomkins from Simplemoneycanada.com. Today I’m going to show you a strategy that I like to call the RRSP Snowballing technique.

 

This technique works to increase the amount you can deposit into your RRSP year after year, without increasing the amount you personally need to save.

 

Usually what people do is they take their $1,000 a month, save it to their RRSP, then come tax time they spend the tax refund. This is not how an RRSP should be used.

 

What we are going to do instead, is invest that $1,000 a month, and also reinvest the tax refund back into the RRSP.

 

Right let’s take a look at how that looks for someone who makes $150,000 a year, saves $1,000 per month and invests their tax refund into the RRSP as well. I’ll assume a conservative 5% rate of return inside the RRSP.

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