So you’d like to get a pay raise, but you are afraid to go ask your boss for a raise? How could reducing debt help that? This is a cornerstone of Financial Literacy.
Here is a novel way to get more Net income, pay down debt! By reducing debt you have more disposable income. The arithmetic is simple, less debt payments (after you have paid down debt) means more money for you.
This is the simplest of arithmetic problems, yet it seems to be missed by so many people that I feel it is important to enumerate it for you.
Net Income = Income (I) – Expenditure (X)
X = Σ all money spent (S)
I = Σ all money earned (E)
Where Σ simply means the sum of the variables in this case things like bills, pay cheques etc.,
Straight forward? So to increase your Net Income you can either increase your Income (I) or decrease X (your expenses), haven’t lost anyone have I?
So if we look closer and see that:
X = sum ( Mortgage Payment,Car Payment,Hydro,Natural Gas,Credit Cards,Interest on Credit Cards,Eating Out, …)
The whole idea is to minimize X (expenditures) and thus your Net Income or Savings increases.
This means the less you spend, overall, the more you have left over. It is much easier to lower your spending, than it is to increase your income (these days). You don’t have to ask your boss for a raise, or work overtime, you simply, spend less.
BCM Simple Rule of Money #1
If you want to make more money, you either increase your income, or you lower your expenses.
The rule seems quite simple, but is it?
Reducing Debt in 2025
In 2025, the cost of living in Canada is basically playing on expert mode. Grocery inflation is at 7%. Rent rivals mortgage payments. Interest rates might make your Visa cry. Reducing debt is still one of the fastest ways to win. Why? Every dollar of debt you pay off is like giving yourself a raise. You don't have to suck up to your boss or sell feet pics on OnlyFans. Is that still a thing?
The psychological win of paying something off is also massive. It makes you feel good. When those monthly payments disappear, it's like finding extra income hidden under your couch cushions. The best part is, you don't have to vacuum. Who has time to do that?
🔺 Red flag:
If your monthly debt payments (excluding mortgage) are more than 25% of your take-home pay, it’s time for a financial U-turn. If you have paid your house off and have no other shelter expenses (i.e. living with Mom and Dad) then this is a Yellow Flag.
📚 Helpful link:
- GetSmarterAboutMoney.ca – Debt Repayment Strategies
Debt Reduction FAQ
By paying off debt, you eliminate monthly payments and interest charges, which means more of your income stays in your pocket instead of going to creditors.
In theory, maybe. But in practice, reducing expenses (especially debt payments) is often faster and more controllable than increasing income.
As someone in their 30s trying to stay afloat in a country where rent now comes with a side of despair, this article resonates nicely. It’s simple, maybe too simple, but that’s the point. Reducing debt isn’t sexy, but it works. And honestly, most of us don’t want to ask our boss for a raise because… well, we’re scared they’ll say, “In this economy?”
What’s refreshing is that the math isn’t hidden behind jargon. It’s clean, blunt, and reminds me that skipping Uber Eats and throwing that $40 toward my credit card isn’t pointless. That said, some modern touches would be great: mention snowball vs. avalanche debt repayment, or even how credit card interest compounds faster than a YouTube rabbit hole. But overall, solid advice with no judgment just how we like it.