5 Ways to Get Out of Debt Faster in 2021

Date: February 1, 2021

You lay in your bed, tossing and turning. You can hear the clock tick-tick-ticking in the front room. Cars shuffling to and fro down the street. When you roll over you see that you’ll be getting up in a few hours and haven’t slept a wink as the sheep have turned into utility bills, retirement plans, and credit card statements.

During the first quarter of 2020, Canadian households’ debt to income ratio was 175.4%. That means for every dollar earned the average Canadian owed $1.75! It’s no wonder finances are one of the top stressors amongst Canadians.*

Here’s our recommendation of where to start. Let’s work those percentages. Crunch those numbers. Get on the budgeting treadmill and take the Financial Fitness Quiz to see how financially fit you are.

Westoba Financial Fitness Quiz

So, you’re strong-minded, pocket-book healthy, and have started down the path to becoming Financially Fit.

1. You’ve taken the Financial Fitness Quiz
2. You’ve created a budget. You have a plan to manage your money.
3. You’re tracking your income, your expenses, and your extra spending. You’re following the 50/30/20 method:

  • 50 per cent (or less) of your after-tax income is going towards your needs: Housing, transportation, insurance, groceries etc.
  • 30 per cent (or less) is going towards your wants: Dining out, another pair of shoes, a fun new tech gadget etc.
  • 20 per cent (or MORE) is going towards your financial future – building up savings and paying down your debt

What is the best way to pay down debt when you have debt in many places? Should it be credit card debt, line of credit, vehicle payments, and so on?

Roll up your sleeves, tighten your belt, fill your water bottle and focus; cause we are getting down to business crunching some numbers and working on how to become more financially fit while learning how to get out of debt much faster!

5 Ways to Get Out of Debt Faster in 2021


1. Make a list. When you can SEE it, it’s easier to understand.

Start by creating a list of all your debts including:

  • Credit cards
  • Student loans
  • Vehicle loans
  • Personal loans
  • Line of credit
  • Mortgage

Make sure to include the name of the financial institution, amount owed, interest rate, frequency of payments, and minimum payment required, and when the loan will be paid off. Recreate this table as a guide!

Westoba Budgeting Table Blog

2. Plan Your Attack. You Are a Financial Fitness WARRIOR!!

Two of the most popular ways to attack debt include:

  • Avalanche debt payoff method
  • Snowball debt payoff method

This depends on which plan works best for you. No matter which method you choose, you will ALWAYS pay the minimum payment on all debts. Stay the course and the course will keep you moving straight.

With the Avalanche Method, your focus will be paying off the debt with the highest interest rate. Once that debt is paid off, you will focus on the next highest interest rate and so forth.

Pros – Save money on interest.

Cons – It may take a while to pay this off, and you may have a hard time staying motivated. But you can do this. Remember – you are a Financial Fitness WARRIOR!

With the Snowball Method, you will choose which debt to pay off first based on the balance. Start by paying off the debt with the smallest balance. Think of the phrase “the smallest rock can make the biggest waves”.

Pros – Satisfaction of paying off debt sooner.

Cons – Potentially paying more in interest.

Jordan Stewart, Westoba Financial Consultant in Brandon, recommends sitting down with a professional to assist you with a cash flow statement. This will determine how much extra money you have to put towards debt repayment. Jordan shares, “By completing a full Financial Fitness Checkup, we may even recommend a debt consolidation loan. This would mean that all your debt would be compiled, and you’d only have one payment.” She continues, “If there is sufficient equity in your home, you could even consider refinancing your mortgage to add the funds necessary to pay off your debt.”

3. FOCUS. The mind is powerful and is the door to possibility

Now that you’ve decided HOW you pay down your debt, it’s time to FOCUS.

  • Which one you will pay off first?
  • How much extra will you contribute?
  • What day will it be paid off?

It’s important to chip away at one form of debt at a time because you’ll be paying more on the principal and ultimately saving on interest costs.

Monthly, Semi-Monthly, Bi-Weekly Payments? Which is best?

Jackie Shoemaker, Westoba Branch Manager (Pilot Mound and Swan Lake) recommends making bi-weekly payments when possible. With bi-weekly payments you essentially make one extra monthly payment a year, so you will pay less in total interest. Therefore, paying down debt sooner.

“We find that bi-weekly payments work especially well for people who are paid bi-weekly from their employer, and we can usually adjust payment dates to match their paydays,” adds Jackie. If you are paid semi-monthly, or monthly you will essentially have an extra month’s worth of mortgage payments compared to paychecks each year. This could be particularly hard to line up if people have a tight budget. However, there are options to have the necessary amount set aside from your monthly paydays and your payments applied bi-weekly from a separate account.

It’s best to speak with a financial consultant to help determine what will work best. They aren’t just for the wealthy—working with a consultant is a great choice for anyone who wants to get their personal finances on track and set long-term objectives.

4. Stick to your budget

You already have directions on HOW to make a budget.

It’s important to stick to it! If you’ve slashed your expenses, it might even be wise to take a look at your credit card expenditures.


You might think it’s a good idea to just cancel your credit card rather than freeze it. Creditors look at how long your cards have been active. The longer you’ve had credit the more financially responsible you’re considered.

What if you have multiple credit cards? Credit scores are based on how you manage your credit cards, not how many you have.

5. Get Support. A professional’s knowledge is invaluable.

Debt management isn’t easy, and no one expects you to be an expert. Make the time to speak to a Financial Advisor. They’ll learn about your goals and create a financial plan to reach them – with a focus on personalized planning, practical solutions, and professional advice.

Don’t forget to take the Financial Fitness Quiz, it takes 3-minutes to complete and you can email yourself the results! You don’t need to be a Westoba member to take the quiz or get a free Financial Fitness Checkup!

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