If you fear your debt has spiraled out of control, you aren’t alone. According to a September 15, 2017 Statistics Canada report, the second-quarter amount of household debt owed by Canadians compared to their disposable income is at an all-time high of 167.8%. That’s up from 166.6% in the first quarter, and means that Canadian households owe on average $1.68 in debt for every $1.00 of disposable income.

If this sounds like your household, don’t despair. Getting back on track with your finances is absolutely doable. You’ll simply create an actionable plan to take charge of paying off what you owe – and then follow it.

Use these seven tips to manage your debt when it’s out of control.

#1. Stop Spending Now

It’s a deceptively simple statement that’s easier said than done. Stop spending now.

Remind yourself of the differences between needs and wants. Curb unnecessary spending while you’re working on debt reduction. Cut up credit cards so you aren’t tempted to add to your current debt. Either carry cash or a debit card for day-to-day purchases. This helps prevent debt from spiraling further out of control.

#2. Add Up Everything You Owe

Calculate exactly how much you owe. Find your current balance on the following:

• All credit cards, including retail cards
• Credit lines, including RRSP or investment lines of credit
• Consumer loans, including furniture or home improvement loans
• Auto loans
• Student loans
• Private loans

Seeing your debt in dollars and cents gives you and your spouse a goal to work towards.

#3. Calculate Minimum Payments

Add up your monthly minimum debt payments. Ideally, you’ll make more than minimum payments each month, but if you make at least this total payment, you’ll minimize future damage to your credit score. Include all of your installment loan payments, plus the required minimum payment on each credit card and credit line.

#4. Look for Debt Consolidation and Balance Transfer Opportunities

Have you managed to keep a good credit score while racking up debt? If so, you may qualify for a debt consolidation loan. This loan pays off the combined total of all your debts, leaving you with just one monthly payment to manage. At typically a lower interest rate than you’re currently paying on your various credit accounts, you’ll save time and money paying off your debt.

If you have available room on a low interest credit line or credit card, consolidate debt on your own. Transfer higher interest balances onto the lower interest account.

Warning: Don’t tempt yourself with open credit lines or credit cards that you’ve paid off or down. So if you get a $50,000 loan to pay off a $30,000 credit line balance and a $20,000 credit card balance, close the credit line and credit card so you can’t rack up additional debt.

#5. Make a Budget

Managing finances and debt means taking control of the money flowing through your household each month. Create a budget using a free online tool, the Kawartha Credit Union Excel budget template, or a paper and pencil.

Add “debt repayment” to your current bills and expenses to prioritize debt reduction. Include the maximum payment you can put towards debt each month.

Start contributing to an emergency fund each month. This builds savings to access if you face unexpected expenses – instead of borrowing and increasing your current debt.

#6. Look for Moneysaving Opportunities

The more money you pay towards debt each month the faster you’ll pay it off. To increase this amount cut your other monthly expenses, boost your income, or both.

Review your household budget to find opportunities for cost cutting. For example, save money on food by reducing or eliminating restaurant and coffee shop meals. Shop according to supermarket sales, use couponing apps, and plan meals to use up all ingredients and make the most of leftovers.

Shave a few dollars off your smartphone, Internet and television accounts by “bundling them” with one provider or looking for a more cost-effective plan.

Apply your savings and extra income to your debt. Once you’ve paid it off, you’ll have money to put towards your other short or longer-term goals, such as retirement savings.

Gaining control of spiraling debt takes hard work and commitment, but it is possible. For professional advice and help on how to manage your finances, visit your local Kawartha Credit Union branch today.