Work & Money

5 things you're doing wrong while trying to get out of debt

Despite your efforts, you could be sabotaging them. Read on to stop it already!
(Credit: Getty Images)

At the end of 2016, CBC reported that the average Canadian household is $22,081 in debt. This staggering amount excluded mortgages and Boxing Day sales! As a nation, that adds up to $1.7 trillion in consumer debt. Now look at your neighbour and ask, how the heck do we pay this off?

It turns out there's no one-size-fits-all solution. You need to sit down and figure out a plan that will work for you. Remember, this is the year we take control of our finances, right? And while I can't tell you how to shed your debt specifically, I can alert you to five mistakes you're probably making, because I've made them too.

You've set poorly defined goals

A debt can look huge and all-encompassing when looked at as a whole, and it's tempting to merely commit to getting out of it. But, as with any other large project, you'll have more success if you break it down into baby steps. Make a workback, listing smaller milestones you know you can hit, and itemize the steps to help you actually reach them. Checking off the steps as you go means you are actually getting somewhere.

You're budgeting with numbers instead of "real" bills

Making things a little less abstract might be the key to success that's been missing for you. Canadian finance expert Gail Vaz-Oxlade suggests in her book Debt-Free Forever that, if you're a literal thinker, simply writing down numbers on paper might not be the best way for you to make a budget. It may make more sense for you to actually feel the money in your hands. Raid your monopoly game or invest in a set of play money. Count out your monthly income and from that amount, assign and label piles for all your essential expenses. If you have a variable income, use the lowest amount. Be sure to make a pile for debt payment. What you're left holding will be money for "wants". It probably won't be a lot, but you'll have more to play with once you've paid off your debt.

You see your wants as needs

Gym memberships are wants and food and shelter are needs. Got it? It may seem obvious but it's worth re-examining, because if you're throwing money at wants before, say, making debt payments, then you're in not going to hit those benchmarks you set very quickly. Exercise is vital, but is the gym your answer, over the next few months? If you're serious about re-working your budget, be serious about this step. Vaz-Oxlade has excellent tips for building a budget here.

You're not making enough money

Yes, it's that simple. You need to have more money coming in than what's going out. And while it's easy to get caught up in everyday life and work a job you kind of like, it's important to step back and see the big picture. Are you reaching your full potential? Is there a position higher up in your company that you could consider moving into? Chances are it pays more. Or if you are stimulated and happy in your current position, are you adding value to the company? If so, maybe it's time to ask for a raise. Sites like and can help you figure out what you're worth. Don't be shy. Watch this video to learn how to ask for a raise.  

You're choosing to be financially illiterate

That may sound harsh, but it's a choice! Compared to the latest releases on Netflix, finances can be a really boring topic. But the longer you remain financially illiterate, the more mistakes you're going to make. Claiming ignorance doesn't keep you from doing yourself harm.  A lack of understanding mean that banks, credit card companies, and mortgage brokers could take advantage of you. They are in the business of looking out for, well, their businesses. Arm yourself with knowledge, so that you can look out for you. You've taken a step by choosing to read this article, check this one out too to avoid these seven more money mistakes.

Jessica Brooks is a digital producer, trained chef and DIY investor.