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Escaping Your Debt Trap by Making Savings a Priority

Jan. 30, 2015
2 mins
mom works on laptop in living room while son watches tv beside her

Are you one of the many Canadians counting down the days until payday? Today more Canadians than ever are a paycheque away from financial ruin. Over half (51 percent) of Canadians are living paycheque to paycheque, according to the Canadian Payroll Association’s sixth annual survey.

As humans, we have to show restraint in many aspects of our life (even though we may not enjoy it). We try to eat healthy, exercise and get enough sleep, not because we enjoy it, but to avoid the consequences of bad behaviour. If we don’t do all these things, we could become overweight or worse, we could get a serious disease like diabetes.

While we’re used to showing discipline in our lives, why do so few show discipline when it comes to spending? By living paycheque to paycheque, you’re not just robbing yourself today; you’re robbing your future self.


Debt is treated a lot differently by today's’ generation. When our grandparents grew up during the depression, many people were frightened about debt. Although many people bought houses, they tried to pay their mortgages off as soon as possible.

How times have changed. Although today’s homebuyers are benefiting from record-low borrowing costs, we’re saddled with a record level of debt. The thought of six-figures of mortgage debt would have been downright scary a couple of decades ago, but now people are taking on even bigger mortgages to buy their dream home.

The problem is instead of saving like our parents, many of us are relying on credit to finance our increasingly expensive lifestyles. Why go through the pain of saving, when you can get what you want today with debt? Here’s one good reason: you’re living on borrowed money. You may not have to pay up today, but you’ll have to pay the piper eventually.

Goal Setting

How do you get out of the debt trap? You can escape with goal setting. Set a SMART goal – one that’s Specific, Measurable, Attainable, Realistic and Time-bound. For example, instead of paying off your mortgage “someday,” circle the date of your mortgage burning party on your calendar and take the necessary steps to get there. With each passing day, you’ll be further motivated as you inch closer to reaching your goal.

Pay Yourself First

Would you be interested if there was a quick and easy way to make savings automatic? Good news, there is! Savings is a lot easier through the power of an automatic savings plan. With an automatic savings plan, the money is transferred to your investment account before you’re tempted to spend it. By “paying yourself,” your savings will become another important line on your budget you’ll need to set money aside for on a monthly basis. When you pay yourself first, you’ll find meeting your financial goals is a lot easier.


The RATESDOTCA editorial team are experienced writers focused on sharing stories and bringing you the latest news in insurance and personal finance. Our goal is to provide Canadians with the information and resources they need to make better insurance and financial decisions.

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