Envision Financial

Envision Financial

September 04, 2012 12:02 ET

Envision Financial Expert Responds to Recent Report on Rising Personal Debt Levels in B.C.

LANGLEY, BRITISH COLUMBIA--(Marketwire - Sept. 4, 2012) - Following a recent report citing B.C. residents as holding the highest personal debt ratios in Canada, many British Columbians are asking how they can reduce their debt loads. As reported by TransUnion, the average B.C. resident holds close to $40,000 in personal debt, potentially limiting their access to loans, such as mortgages, and making them more vulnerable to changes in the market and interest rates.

"It's an alarming trend, but one that has a simple solution," says Steven Gillespie, investment advisor for Envision Financial. "Many of my clients have asked how they can lower, if not eliminate, their personal debt and while the answer may seem like common sense, the trend towards an increase in personal debt shows that it is valuable to review the basics."

The "B" word

"Develop a budget and stick to it," says Gillespie. "You would be surprised by the number of people who don't have a budget. Keeping to a strict budget will ensure you pay for your fixed expenses while visually setting goals and milestones for paying down your debt.

"When setting a budget, make sure you're realistic with your goals," adds Gillespie. "Debt usually doesn't get paid off overnight-it takes time and patience. For those who find budgeting difficult, there are many programs and applications online that can make the process easy."

Establish an emergency fund

"Nothing can wreck a budget faster than an unexpected expense," says Gillespie. "Establishing an emergency cash fund will keep you from resorting to your recently paid-down credit cards should unexpected bills arise. The key to building an emergency fund is to put a small portion of your income away each month and make sure you don't touch it. When the unexpected happens, you won't need to borrow to meet the need."

Live within your means

"We hear it continuously-don't spend more than you have," says Gillespie. "We live in an era where people can keep spending even when they've run out of money and that's where the trouble begins. By living within your means you stay away from using borrowed money for the everyday purchases, and you save up for the big ones."

When eliminating debt, start with the highest interest rate

"When you're trying to pay down debt, start first with higher-interest debt to save on interest costs," explains Gillespie. "Home equity can be a valuable tool for consolidating debt at lower interest rates, but make sure to lower your limit as the debt gets paid off. If you need some help coming up with a plan, talk to a financial planner you trust. They'll work with you to come up a plan that fits your family's needs and budget."

About Envision Financial

Envision Financial is a division of First West Credit Union, B.C.'s third-largest credit union with 37 branches and 29 insurance offices throughout the Lower Mainland, Fraser Valley, Kitimat and Okanagan, Similkameen and Thompson regions. Led by Launi Skinner, First West has approximately $6.6 billion in assets under administration, over 169,000 members and nearly 1,400 employees. For eight years running, Envision was named one of the 50 Best Employers in Canada. Envision is designated a Caring Company by Imagine Canada.

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