How can an advisor help me manage my debt?

There’s no shame in getting into debt – it happens to the best of us at times. However, if you do find yourself with a growing debt load, it’s important to take stock of your situation and come up with a plan of action to reverse course quickly.  

If this sounds like your current situation but you aren’t sure how to take a step forward, seeking out the help of an advisor might be the right choice for you. An advisor can help you take action in a few key ways to reduce your debt as soon as possible.

1.   Help you assess the situation

To start chipping away at your debt effectively, you’ll need to know exactly where you stand today. Completing a financial roadmap review  can be a great way to ensure that you fully understand the intricacies of your individual situation before you start figuring out how you’re going to beat your debt.

While you could do so on your own, seeking out the help of an advisor is an excellent way to help ensure that you’re well informed of your financial life before moving forward. An advisor can help you understand how all your assets and liabilities stack up. They can also help you highlight areas of financial risk and positively reinforce what you’ve been doing right. 

2.   Help you prepare your strategy

Most people don’t plan on getting into debt. However, to get out of it, you might benefit from a financial roadmap to follow. Without one, even if you’re consistently making payments on what you owe, minimizing your debt load might take much longer (and cost much more) than it needs to.

This is where the support an advisor can be beneficial. An advisor can take the information you collected in your financial roadmap review and help you translate that into a guide towards reducing your debt. This might involve prioritizing your debts so that you’re paying down the most expensive ones first, ensuring you’re still able to cover your fixed costs each month, debt consolidation and more.

Though the final decisions are always going to be yours to make, having a strategy can greatly increase the likelihood that you make progress towards eliminating your debt. Plus, your advisor will be a great resource to turn to if life necessitates a change of plans. They’ll be able to help you adjust course and come up with a new set of options that will benefit you most.

3.   Help you avoid making the same mistakes again

Once you’re out of debt, you’ll be faced with a new challenge: staying out of debt. If you’ve spent a long time devoting some of your income towards debt payments, it’s going to feel like you’ve got a lot more disposable income to spend once you’re back on track. Plus, it’s possible that old spending habits might come back to haunt you once it feels like you can afford to indulge again.

While this isn’t to say you don’t deserve to treat yourself from time to time, this can be a dangerous game. For many people, debt is a cycle that they repeat over and over – pay off your credit card, then max it out all over again. If you don’t want this for yourself, you’re going to need to make some proactive changes to the way you interact with your money.

This is where your advisor comes in. You may not need them to hold you accountable to your debt repayment plan anymore, but they can help you in other ways that’ll set you up for post-debt success. For example, an advisor can open your eyes to strategies for your overall financial well-being, like automating your savings and determining what your goals are. An advisor can also help you find places to reduce your spending, answer questions you may have about complex financial topics and can serve as a source of counsel if you’re not sure what steps to take in the face of a financial challenge.

Ultimately, getting out of debt and staying out of it is much, much easier if you have a support system helping you make better choices with your money. Having an advisor on your side can help you confidently improve your financial health and literacy as you eliminate your debt.

*Sun Life Assurance Company of Canada and Sun Life Advisors do not provide legal, accounting or taxation advice to clients. Make sure you seek advice from a qualified professional, including a thorough examination of your specific legal, accounting and tax situation.