Being in debt can be debilitating. Not only does it put a huge strain on your finances, but it also is a leading cause of stress. A July 2020 survey found that money was still the most commonly reported stressor for Canadian households – and in the midst of a pandemic, that’s saying something.

If you’re finding yourself worrying about money, stressing about whether you’ll ever be able to retire, or frantically pulling together cash for bills, now is the time to act. You can get a hold of your debt – and with the right strategy, you can make a dent in as little as 90 days!

Of course, your personal finances are completely unique, and so is your debt. Successfully reducing debt means choosing the method that makes the most sense for your financial needs, habits, and goals. Take a look at the debt reducing plans below, and take back your financial freedom by choosing the 90-day plan that works for you. Also if you feel comfortable incorporating express loans, then that's fine too. Whatever works for you.

The debt snowball

This is one of the most popular debt reduction methods out there, and for good reason – it’s incredibly effective and only takes a few minutes to set up. And for those who feel like they’ll never be able to make headway with their debt, this method sets up small milestones along the way, boosting your confidence in getting rid of debt. Here’s how the debt snowball method works:

1. Make a list of all of your debts, including: credit cards, car loans, personal loans, tax-related loans, home equity loans, and medical debt.
2. Order them from the smallest amount of money owed to the largest.
3. Put as much money as you can each month to the debt with the smallest balance owed (but don’t forget to continue making minimum payments on the rest).
4. Once the smallest debt is paid off, take that same payment amount and apply it to the next one on the list.
5. Keep going until all of your debt is paid off!
   

Depending on the size of your debts, you may not be able to get one paid off before the 90 days is up – after all, there’s no denying that a $300 debt will be easier to pay off than a $3,000 debt. But no matter where your debt falls, using the snowball method means you’ll be making significant headway in decreasing the lifespan of your debt. Payday loans in Ontario also went up for some people. As they used it to balance debt out. Guess everyone has their own way of doing things.

That makes a huge difference, and once you’ve paid off your first debt in full, you’ll be energized and motivated to keep going!

The budget plan

Minimizing your debt is all about changing your spending and saving habits – and budgeting is one of the best ways to get those good habits to stick for the long run! Having a budget is helpful for all financial situations, whether you are making $1,000 a month or $10,000.

The good thing about budgeting is that there are plenty of ways to customize your budget style and approach to your unique needs. Here are a few ideas to get you started:

Budgeting apps

There are tons of budgeting apps available to keep your personal finances at your fingertips. Budgeting apps will give you real-time, 24/7 access to where your money is going each day, week, and month – and the best ones can even give you tips on how to get better at spending and saving.

50/20/30 rule

If you want to take a more hands-on approach to your budget, the 50/20/30 rule is a simple and effective place to start. All you need to do is take each paycheque and split it up into 50/20/30 pieces.

50 percent goes to the must-haves in your financial life, like housing, groceries, water, or utilities. 30 percent is for fun things, like restaurants, entertainment, and trips. Take the remaining 20 percent and put it toward your debt!

Kakeibo budgeting

Finally, you can try the kakeibo method of budgeting on for size. This helps you learn how to be more mindful about where your money is going each month, and over time, it retrains your mind to think about money in new ways. Even better, anyone can practice kakeibo, since all you need to set up your budget is a notebook and a pen.

For kakeibo to work, you’ll need to write down all of your monthly expenses, keep track of your purchases (every single one), and categorize your expenses. Each expense should fall into one of four key categories: Want, Need, Unexpected, and Culture.

After 90 days of categorizing and organizing your expenses, you’ll start to get a clearer picture of where your money is going each month – and most importantly, whether your money could be better spent.

The side gig plan

The pandemic has forever changed the way that we spend and make money. For many, that means that getting a side gig could be a new and exciting opportunity to earn cash to apply toward debt.

Even if you only work on the weekends, or set aside a handful of hours during the week to work on your side gig, the money you earn from another job can help you shave off years from your debt. Here are some ideas for a side gig that you may not have considered:

• Delivering groceries
• Driving for a ride-share company
• Dog-walking and pet-sitting
• Editing and proofreading
• Writing blogs, emails, or company docs
• Scheduling meetings as a personal assistant

You could even use your skills that you employ in your day-to-day job as a freelancer to make money on the side. Become a consultant in your area of expertise to help other individuals (or entire companies) boost their own profitability, and you’ll create your own income stream dedicated entirely to paying off debt.

The spending re-evaluation plan

We often find ourselves in debt based on the amount of money we spend each month – and you might be spending more than you need to without realizing it. If you’re looking for an easier way to free up extra cash, look no further than your own wallet.

Cutting back on a few “necessities” can make a big difference when it comes to finding money to pay off debt. Not only will you boost your ability to decrease money owed, but you may even find that you are able to save some money each month, too! Here are some ideas to help you start thinking about ways you can decrease your monthly spending:

• Decrease your streaming subscriptions.
  From Amazon Prime to Hulu to HBO, there are plenty of ways to save on monthly spending. If you have more than one or two streaming services, it’s time to re-evaluate and cut back – even an extra $20 a month is worth it!
  
  
• Adjust your mobile plan.
  Are you paying for a ton of data that you don’t use? Could you save money by switching to a different provider? Take a good look at your wireless bill and talk to your carrier to see if you have any options to cut back on spending.
  
  
• Shop around for better car insurance.
  Cheaper car insurance isn’t always better – but if it’s been awhile since you’ve shopped around, it’s worth it to see if you could be saving money on your insurance premiums.
  
  
• Start cooking at home.
  We’re all guilty of waiting to plan dinner only to default to our favorite takeout menu. While it’s great for saving on time preparing food, it’s not so great for your wallet. Eating at restaurants or ordering takeout can easily rack up hundreds of dollars each month – and those are dollars that could go to your debt instead!
  

Once you’ve made changes in your spending, keep track of the money you’ve saved over the next 90 days and make sure to apply that to your debt. You might be surprised at how much your financial situation changes!

Learning how to decrease your debt takes work, and in many cases, it requires you to completely change the way that you approach your finances. Be patient with yourself, and remember: although you might not be able to reduce all of your debt in 90 days, you will be setting yourself on the path to living debt-free! And that path is more than worthwhile.