Getting out of debt

You open your wallet and there’s one five dollar bill.  But just the other day you took out $80 at the bank machine.  Where does it all go?

Answering that question is the first step to getting control of your finances and getting out of debt.

“You need to know where your money is going and what you can truly afford” says Sarah Deveau (BA Communication and Culture 2001) author of Sink or Swim: Get Your Degree Without Drowning in Debt.

She says getting ahold of your finances is especially important when you graduate. “You’re going to start thinking about things like a decent car, and RRSPs and paying back a student loan and maybe getting a mortgage.  You need to know exactly what you’re spending so you can budget for each thing.” 

And that means recording everything you buy.   Deveau suggests investing in a little notebook and hauling it out every time you open your wallet: “Every time you eat out for lunch, every time you buy something, you get a coffee, every little thing like that.”

It may be a dull chore, but it’s important.  “You want to find out where you’re spending your money so you can find out what categories you can cut out completely or cut back” Deveau says.  “You need to realize how much money you’re wasting on things you don’t need, or even that you don’t want.”

Deveau says review your spending every week and make some decisions on what you can cut; expensive treats such as going out for dinner and a movie or buying books instead of going to the library.

Finally, she says:  “Get thee to a financial advisor!”   Deveau says even if you contribute only $50 or $100 a month, you can get a financial advisor working for you and your future.

“Get a plan right from the start instead of just going wild when you get out of school or thinking ‘I deserve to treat myself for a while.’  You may be surprised to find that six years later you’ve got no house, no decent car and no savings because you’ve just been treating yourself."