How to manage the mindset around debt as the cost of borrowing increases

Globe & Mail
February 27, 2023.

In a persistently low-interest rate environment, the often painful consequences of taking on debt are minimized.

Borrowing money during the past 14 years or so has felt almost free, leading borrowers to assume that their rates will stay low and debt payments will remain the same. However, during the past year, interest rates have risen faster than in any other one-year period during the past 30 years. While this sharp increase has affected most asset classes negatively, many people are feeling the pain most acutely when it comes to managing debt.

Conversations about debt management are a critical part of managing an overall wealth management strategy. Working with an advisor to look at both sides of a balance sheet can ensure Canadians understand how the amount and type of debt they take on will affect their financial goals.

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