Consolidated Credit Counseling Services of Canada, Inc.

Consolidated Credit Counseling Services of Canada, Inc.

February 22, 2013 13:43 ET

The Debt Dilemma

Should you pay down debt or invest in your retirement this tax season?

TORONTO, ONTARIO--(Marketwire - Feb. 22, 2013) - With one week left to contribute to a Registered Retirement Savings Plan (RRSP) for the 2012 tax season, many Canadians may find themselves facing a debt dilemma. Should you pay down your debt, or invest in your retirement fund?

This is an age-old question and, with household debt sitting at 164.6 per cent, a question many Canadians families will be asking over the next week.

"While both options are important for a healthy financial future, neither one is possible without a sound financial plan," says Jeffrey Schwartz, executive director of Consolidated Credit Counseling Services of Canada, Inc. "This means creating a budget, living within your means and setting realistic goals to pay down debt and save for the future."

This is especially true for younger Canadians. According to RBC's 23rd Annual RRSP Poll the average Canadian does not start saving for retirement until the age of 32.

Between, student loans and credit card bills, many younger Canadians have a hard time focusing on the future while trying to pay down debt. While, tackling debt and investing in the future do not need to be mutually exclusive, high interest debt can be a barrier to successful savings.

"If you are carrying high interest credit card and a line of credit card debt, make paying it off your top priority," adds Schwartz. "Once you pay down your high interest debts, you can create a solid financial plan that redirects your freed-up cash flow into retirement savings."

Developing a sound financial plan can get you on the path to a healthy financial future. To get you started, Consolidated Credit offers these suggestions:

1. Determine your financial goals. Do you want to buy a house, start saving for retirement, eliminate student debt or plan a vacation?

2. Review your monthly spending from 2012. Gather your monthly bank and credit card statements, along with your monthly bills. Organize them into fixed, flexible and discretionary expenses. Add up your spending in each area and compare it to your income.

3. For your 2013 budget, add your debt repayment and savings goals to your monthly expenses.

4. Take a good look at your budget and be merciless about cutting your expenses so you can reduce debt and increase savings.

5. Put your credit cards on ice and use cash or debit to avoid increasing your debt load.

By creating a budget and sticking to it, Canadians can avoid the debt dilemma all together and plan successfully pay off the past and save for the future.

About Consolidated Credit Counseling Services of Canada:

Consolidated Credit Counseling Services of Canada is a national non-profit credit counselling organization that teaches consumers about personal finance. For more information, visit or call the toll-free phone line at 1.800.656.3920.

Contact Information

  • For more information or to request an interview with
    Jeffrey Schwartz, please contact:
    Consolidated Credit Counseling Services of Canada, Inc.
    Kylie-Anne Doerner, Communications & Public Relations Manage
    416.915.7283 ext. 1057 or (C) 289.231.7900