Three inspiring stories to help you get out of your debt

Life is filled with milestones and celebratory moments that we look forward to with excitement, despite the obstacles they can bring. One of those potential hurdles is debt, and it can happen to anyone. For Karine, Sophie, and Alexis, it wasn’t about to get in the way of their dreams—or their credit scores! Read on for their stories and advice.

A long job search after studies abroad

After graduating from bar school, Karine decided to pursue her studies in Scotland, setting her sights on a master’s in international law. Even with the help of various student loans and bursaries, Karine was forced to borrow $50,000 from her bank to cover her steep tuition fees.

“I had no anxiety whatsoever about debt while actually completing my master’s because I was having such a good time there. I was convinced I’d have no problem finding a job and be able to start paying off my loans right away.”

Karine had a rude awakening when she returned. It took more than six months to find an internship, a mandatory step for all aspiring lawyers. She spent another year and a half earning a mere $200 a week before finally landing a job with a paycheque that allowed her to begin chipping away at her debt.

Now almost 30, Karine is still tens of thousands of dollars in debt, but she has zero regrets about choosing to study abroad. That said, if given a do-over, she would approach things a little differently.

“I would make sure I was better prepared and try to limit unnecessary expenses. If you’re thinking about taking a similar path, be responsible and aware of the struggles you could face if it ends up taking a few years to reach financial stability. Most importantly, don’t borrow too much in relation to the salary you expect to earn during your first years in the workforce.”

Excessive spending after landing a first job

Sophie embarked on the job hunt after completing her studies and soon found herself with a well-paid job. After a few years, however, her bank account was $30,000 in the red, and her anxiety was taking a toll.

“The deeper I got into debt, the more stressed I felt. The more stressed I felt, the more I bought. It took some time for me to really understand what was happening. Online shopping had become a kind of addiction, a coping mechanism to hide a bigger issue.”

Once you start making a real salary, it’s worth taking the time to revisit your budget. In addition to consulting a psychologist to address her anxiety, Sophie made an appointment with a financial advisor. In the end, she opted to consolidate her debts for the second time in three years.

During this process, Sophie also came to realize that she wasn’t happy at her current job and was willing to change employers, even if it meant taking a pay cut.

Today, Sophie is still working hard to become debt-free. Once she realized that she didn’t need to own the hottest clothes or an arsenal of chef-grade kitchen tools, she was able to simplify her life.

“It can be hard to ask for help, but knowing you’re not alone can take such a huge weight off your shoulders. These days, I feel more comfortable about spending money, and I even managed to save up for a trip to Iceland with some friends.”

Unexpected costs after buying a first home

At age 26, Alexis decided it was time to start a new chapter in his life by purchasing his first home. After the disappointment of seeing his first mortgage application turned down and failing to find alternative funding, he sought the help of a financial advisor. As it turns out, those credit cards Alexis thought he’d cancelled were still active, and they were pulling down his credit score.

Once he got up to speed on the importance of his credit report and how to manage it, Alexis returned his attention to becoming a homeowner. He also took note of his financial advisor’s recommendations on the maximum amount he should borrow. A few open houses and one approved offer later, Alexis was calling the movers.

And yet, one year later, with his newfound financial awareness, Alexis was puzzled to discover that he was spending far more than he was bringing in. The reason? He hadn’t thought about all the expenses that come with owning a home, such as the welcome tax and renovations.

“I was facing one of my biggest life projects all on my own. My stress went up when I realized my savings were gone. I was having a lot of sleepless nights.”

That’s when Alexis’s parents agreed to help him out. Their only condition was that he create a realistic budget. Alexis used a budget template provided by his financial advisor.

“Setting up a budget allowed me to see where my money was going and helped me make the right decisions. My best advice is, create a budget, use a tool that factors in all of the costs related to buying a home, and get help from experts. You’re never alone!”

To take charge of your finances, you have to take things one day at a time. Getting out of debt can require professional expertise. But with the financial tools that are now available, improving your credit score has never been simpler!