Debt Management

What is the True Cost of Debt?

you have now is $85 that is lost. Today, that sacrifice may be two nice meals out – something we can all manage without. If that money was put into an RRSP, however, it grows over time and potentially that $85 becomes $125 by the time you retire (again, these are arbitrary numbers and do not reflect any interest rate predictions). Sure, by that time, inflation being what it is that may be the same cost for your two nice meals out, but it can also be a gift for grandkids or a tank of fuel to drive out to cottage country. Looking at this scenario, you can start to see where debt can be better alleviated by lump sum payments rather than sprawl over time. Bear this in mind when looking at sudden income increases like a bonus at work or tax credits.]]>