Personal Finance

Parachute’s Tips for Debt Management

At Parachute, we believe that debt does not have to be a big scary cloud. With the proper tools and outlook, you can manage your debt, pay it off, and ultimately build your wealth.
Bruce Hodges
March 18, 2024
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Parachute’s Tips for Debt Management

More than half of Canadians have debt, which makes debt management an increasingly important and life-changing topic. The way you manage your debt can have long-lasting effects on your financial health, your mental health, and your life as a whole.

At Parachute, we believe that debt does not have to be a big scary cloud. With the proper tools and outlook, you can manage your debt, pay it off, and ultimately build your wealth.

In this article, we’ll explore our top tips for debt management that you can start using today.

Tip #1: Understand Your Debt

Getting up close and personal with your debt is of the utmost importance. Ignoring, avoiding, or misunderstanding your financial situation can impact every financial decision you make. 

Gamifying the process, getting excited about progress, and checking in regularly are all healthy habits that can help you build a positive mindset. Debt is a part of life, so getting comfortable with it and motivated to tackle it is crucial.

Here’s a good rule of thumb to follow:

  • DAILY:
    • Monitor your daily spending to ensure you’re sticking to your budget
    • Review upcoming bills and/or payments to ensure no deadlines are missed
    • Review your budget and adjust as needed based on your weekly spending
    • Check your credit score/credit report
    • Check your bank statements
    • Review your budget adherence at the end of every month
    • Review your budget and financial plans, adjust for new life goals or big changes
    • Meet with an advisor or other financial professional

Tip #2: Be Realistic, Be Human

Making lofty goals or ignoring life’s realities will only hurt you in the long run. Being realistic about your financial situation means acknowledging that unexpected expenses can arise, even when you're actively working on debt management. Instead of aiming for perfection, strive for progress. Remember to be kind to yourself throughout this process—financial setbacks are a normal part of life, and it's essential to maintain a healthy perspective.

Your goals can be big, but ensure that they are also achievable and in alignment with your income, expenses, lifestyle, and other obligations.

Don’t neglect the role of savings and emergency funds in your budget plan, which can provide a serious cushion in the event of any unexpected setbacks.

Tip #3: Pick a Lane

Choose a budget and a debt payment strategy that you can stick to, and stick to it. One of the biggest issues that people face with debt management is simply not creating a plan. If you’re not following a path, how will you ever reach a destination?

A budget and a debt payment strategy can help you build a set of rules and cut down on the amount of things you have to think about on a daily basis.

First, decide on how you’ll tackle your debt repayment. Here are some common strategies that you could pick from:

  • Snowball Method: This strategy involves paying off your debts starting with the smallest balance first while making minimum payments on all other debts. Once the smallest debt is paid off, you roll the amount you were paying on that debt into the next smallest debt, creating a "snowball" effect.
  • Avalanche Method: With this approach, you focus on paying off debts with the highest interest rates first, while continuing to make minimum payments on other debts. By tackling high-interest debt first, you can potentially save more money on interest over time.
  • Debt Consolidation: Consolidating your debts involves combining multiple debts into a single loan with a lower interest rate. This can simplify your payments and potentially reduce the amount of interest you pay overall.

It’s important to select a strategy that not only sounds good, but that works for you mentally. If you find yourself not adhering to a given strategy, don’t be afraid to switch to another one.

Tip #4: Automate Good Habits

Identify small optimizations you can make, and automate them. If you have budgeted a certain amount of debt payments per month– why not schedule them to get paid automatically? 

Here are a few ideas of financial habits that you could automate or semi-automate:

  • Set up automatic bill payments, debt payments, and/or savings contributions
  • Use a budgeting tool or app that connects with your bank account, to automatically update your spending and progress
  • Set up automatic credit alerts to receive an email each month with your credit score, or an email alerting you of any suspicious activity

Tip #5: Adjust

Our first 4 tips focused on things you can do without making any actual changes to your debt or your income. Those are amazing habits to build, but you can also pair them with adjustments to have the maximum impact. Ask yourself a few questions to get started:

  • Is there a way to decrease the amount of interest I’m paying? High-interest loans can often be consolidated to decrease your overall interest rates. This could make a huge impact on your monthly payments and your debt repayment timeline.
  • Is there a way to increase my income? Side hustles and yard sales are valuable assets if you’re trying to manage debt– every little bit counts!
  • Is there a way to decrease my expenses? Simple swaps like cutting down on entertainment costs or searching for forgotten subscriptions in your bank statements could make a big difference in your month-to-month.


Managing your debt is an ongoing journey, and the more good habits you build, the easier it gets. By putting some new habits, automations, and plans into place, you can take control of your finances.

At Parachute, we use behavioural science to help you rebuild your wealth and get rid of high-interest debts. You can explore if debt consolidation might be the right choice for you here.

Bruce Hodges
Bruce, Founder and CEO of Parachute, worked for several of Canada’s top Banks, published research for the Canadian Bankers Association, and taught E-commerce Strategy in Wilfrid Laurier University’s MBA program. His first start-up built credit solutions for the likes of National Bank, Fair Isaac, and Ford Credit globally. Prior to starting Parachute, Bruce was COO of Foresters Financial, and EVP Transformation at CIBC, one of Canada’s top 5 banks. Bruce founded Parachute to disrupt the financial wellness space taking on payday, and high interest predatory lenders, with the intent to bring at risk Canadians back from the brink to good financial health.
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