Going Cashless? Tackling Debt Needs to Be In Your PlansDec 19, 2016
Thinking of leaving cash in the bank and taking your wallet into the world of smartphones and wearable devices? To the Canadians that are going cashless, don’t forget to include debt reduction in your digital financial strategy. If you are dealing with debt problems, making the switch to digital can still be done, just be sure that your debt repayment plans play a significant role in order to prevent adding to your debt. Here are three tips for keeping debt plans top of mind when transitioning to a digital wallet:
- Understand your financial and debt situation before making the switch.
Before switching to mobile payment solutions do a thorough review of your financial situation. Performing a financial health check allows you to identify if there are debt problems that need to be addressed or spending habits to be aware of. As part of your financial health check here are a few things to review:
- Your monthly income
- Regular bill payments
- Details about your outstanding debts, including amounts owing and interest rates
- Your monthly budget
- Savings goals
Having this knowledge beforehand allows you to make informed spending decisions moving forward. Taking the time to reflect if a purchase is a want or a need can help you avoid overspending with your digital wallet.
- Use other financial tools to complement your mobile payment app.
There’s nothing wrong with deciding to go cashless — even baby boomers and seniors are increasingly adopting newer payment technologies. Remember, though, that mobile payment methods like Apple Pay or tap-enabled credit cards can make it quicker and easier to spend money. A study by MasterCard revealed a 30 per cent increase in spending for those who switched from traditional credit cards to those with tap-technology. This is why other financial tools like a budgeting and spend-tracking app are a nice complement. Take the time to input the details of your monthly budget. This way your purchases are tracked in real-time, and you can receive notifications and warnings before you exceed your budget.
- Make plans to address your debt situation.
Debt plans are an important part of your financial strategy whether you plan to go cashless or not. Financial tools like a debt calculator and repayment options calculator can bring perspective to your financial situation. The debt calculator will show you how long it takes to pay off your debt and the amount of interest you will pay. The repayment options calculator shows you your approximate monthly payment using a variety of professional debt relief options, including debt consolidation loans, consumer proposals, or filing for bankruptcy.
If you need advice about how to properly address your debt problems, a Licensed Insolvency Trustee (LIT) in Timmins is an excellent person to chat with. They will work with you to develop an appropriate plan of action to resolve your debt issues. An LIT may also provide suggestions for sticking with your debt reduction goals as you move to a cashless wallet.
As Canadians continues to transition to new financial technology, cash might be getting left in the dust, but that doesn’t mean your debt plans should too. Any successful transition to a cashless life should prioritize a monthly budget and debt reduction goals.
Have you gone through the transition to a digital wallet? Share your own tips for avoiding the pitfalls of digital overspending using #LetsTalkDebt and #BDODebtRelief.