Debt riddance

1. Accelerate your payments If your mortgage allows extra payments, consider putting your annual bonus, tax refund or gift money towards the principal. Better yet, build a couple of extra mortgage payments right into your schedule. “Something as simple as making biweekly mortgage payments rather than monthly payments will reduce the time it takes to pay it off by several years,” says Alfred Feth, a fee-only adviser in Waterloo, Ont. 2. Pay your debt down first Not sure if you should save your cash or pay down your mortgage? Consider this: If you have a mortgage at 5%, paying it down is like getting a guaranteed 5% return on your money. “It’s an even bigger slam-dunk if you’re paying off high-interest credit card debt,” says Jason Heath, a fee only adviser in Toronto. “That’s a guaranteed 19% return in many cases.” 3. Cut your spending Look for savings in your household budget and use that cash to pay down your mortgage or other debt faster. Start by slashing luxury spending. Trimming a few hundred dollars a year from restaurant expenses, clothes, haircuts, manicures and travel will go a long way towards lowering your debt load. 4. Pay off high-interest debt If you have any long-term high interest debt, such as a large amount on your credit card, paying that off should be a top priority. Consider taking out a secured line of credit at a lower rate to pay off your high-interest debt. 5. Fight for a better rate Call your credit card company and negotiate a lower interest rate. Once you’ve paid off your credit card, look into using those savings to make extra payments on your mortgage.