With the skyrocketing cost of living, your budget may be tighter these days. However, it is important that this reality does not lead you into a spiral of debt and on the verge of bankruptcy.

By becoming aware of your financial situation, you will be able to avoid this dreaded avenue. After all, we have no control over the price of gas or milk, but debts can always be taken care of!

Here are 5 tips from personal finance advisor Jean Fortin to manage your debt in this time of inflation.

First, write down each of your debts (personal loan, line and credit card, etc.) indicating the amount owed, the interest rate and the monthly payment. The amount granted to them each month should never exceed 15% of your paycheck.

Then, take the opportunity to measure your level of indebtedness with the tool used by financial institutions when applying for a loan, the debt ratio.

Your debts on your credit cards and lines of credit generally have the highest monthly interest rate. They are therefore the ones who risk dragging you into the vicious circle of debt.

If you have outstanding credit card balances and you have an unused portion of a line of credit, you should pay off the cards with it. For a total amount of $5,000, you could save about $1,200 in interest charges.

Obviously, it is not advisable to borrow money on one credit card to make the minimum payment on another. It just shifts the problem.

To make sure you don't fill the ends of the month with credit, establish a realistic monthly budget of your expenses including the monthly payment for your debts. Avoid the infamous blank page and instead opt for an online budget tool that will do the math for you and list the expenses to remember.

When preparing your debt reduction plan, focus your efforts on those with the highest interest rate first, then attack the one with the lowest balance first. Settling debt one at a time will give you small wins that will encourage you to keep going. Each monthly payment on less debt means more money in your pocket!

To get your head out of the water, there is no point in reducing your debts on one side if you are in debt on the other. Keep only one or two credit cards. Leave them at home when shopping and avoid “buy now, pay later” offers at all costs. They suggest that you can afford everything ... or almost, encourage impulse purchases, add to your debt without you realizing it and can have a negative impact on your credit report.

By calling a personal finance expert, like Jean Fortin, you can speak to an advisor or get an in-person consultation. It's confidential, free of charge and without obligation.

By taking charge of your personal finances, you will be exactly where you are, you will have the answers to your questions and valuable advice to better manage your money!

Don't wait any longer to take charge of your finances and contact a Jean Fortin advisor today.