A survey of Canadians released by the National Payroll Institute in September 2016 revealed that 48% of Canadians said it would be hard to make ends meet if their pay cheque was delayed even just one week.
If you are struggling with debt, you are not alone. It can be a very stressful experience and can feel overwhelming when trying to figure out where to start to manage debt. While not every option will work for everyone, here are four options to consider as a starting point:
1. Consolidating debt:
Speak to your bank about the possibility of consolidating your debt into one payment with a lower interest rate. This may be helpful especially if you are carrying debt on credit cards or other high interest loans. Lowering your interest rate will allow you to pay down your debt faster and consolidating into one payment will make your spending plan easier to accomplish. *Tip – ask your financial institution to match your loan payment dates with your payroll pay dates to make monthly cash flow planning easier.
2. Tracking spending and making a plan:
A monthly spending plan can help determine your monthly expenses and where you are spending your money. You may be surprised where you may be able to cut back in order to pay down debt and enhance your savings plan. If you have consolidated your debt, you will want to avoid increasing debt so you considering putting together a spending plan that matches your income. Review your spending habits from your tracking exercise and determine where you can make some changes. There are many online budget calculators and spreadsheets available, you may want to start by looking at the Financial Consumer Agency of Canada website.
3. Building a savings buffer:
In addition to paying down debt, building a savings plan for those unexpected events or emergencies is a good idea. Speak to your financial institution about setting up a savings account where you can make automatic contributions. It’s important to “pay yourself first” when it comes to saving for retirement and other events. *Tip – have the automatic contributions match your payroll pay dates.
4. Speak to a professional:
There is support available from a number of organizations and financial or debt repayment professionals. There are many options to choose from, so it’s important to do a little research first – find out what sectors are regulated, read up on your rights as a consumer and look into what services are provided at what cost.
There’s a lot to know and many resources at your disposal related to debt management. Only you know what’s right for you.
If you feel like something isn’t right, reach out to us
If you walk away from signing a contract or paying for a product or service and something just doesn’t feel right, contact us. We are responsible for overseeing certain consumer protection laws in British Columbia. Depending on your concern, another organization may be the ones to speak to; other times, court or legal assistance may be the best solution. Either way, we will do our best to give you the most relevant information.