How to Make Debt Control a Priority on a Low IncomeDec 21, 2016
Living on a low income while prioritizing debt control and basic living expenses can be a challenge for many families. During the holidays, this situation can easily cause stress, especially as the cost of hydro and basic living continues to rise. This month, it is a good idea to review your finances from the past year and look ahead to 2017. Is debt a concern for your household? What steps can you take to set goals to reduce debt and plan for the financial year ahead?
Local economic conditions can contribute to debt control problems
New data shows that 57,000 residents in and around Orillia are considered low income and are experiencing food insecurity within their households. This can cause a myriad of social and health concerns, especially for children and elderly adults ranging from depression, diabetes and high blood pressure to increased health care costs. Although reliance on food banks is down in many other parts of the province compared to 2015, Orillia is the exception. The Sharing Place Food Bank alone reports 1,400 individuals seeking food assistance each month but see a rapid increase around the holidays as they fill and deliver food hampers. Soaring hydro and utility prices are further adding to the difficulty that Orillia families are facing when it comes to debt control.
Planning ahead for 2017 and finding help
When incomes are stretched, it can be easy to turn to credit and debt to fill in the gaps. Unfortunately, this can result in additional financial stress, creating a cycle that is hard to break. Setting goals for the upcoming year, such as decreasing money-related stress or getting debt advice can improve your financial outlook. Ask yourself these questions to get a better picture of your finances:
- Do you have a budget? Each Canadian should use a budget to guide their spending, predict upcoming expenses and save for the future. Gail Vaz-Oxlade’s Life-Pie diagram outlines what a balanced budget can look like in regards to housing, debt payments, life expenses and savings.
- Are you able to save at least 10 per cent of your paycheques? Adding money into an emergency fund each month can save you from turning to debt for unexpected expenses. Savings can mean making small changes to your everyday habits. Example: Skipping your morning Tim Horton’s coffee can save you $10-$15 each week. Also, taking a lunch to work instead of buying one can save $50 each week.
- Is debt holding you back from paying bills and saving money? If debt has become problematic, it’s time to get debt advice. A debt relief professional can assess your needs based on your individual situation and suggest the best course of action. If you have questions regarding consumer proposals or the process of bankruptcy, a Licensed Insolvency Trustee can answer your questions.
Look ahead to the upcoming year and set goals that follow the SMART approach. Your financial goals should be specific, measureable, achievable, realistic and time-framed in order to keep you motivated. By following this criteria, you’ll be better equipped to deal with difficult situations as they arise and you’ll also be better prepared for the future. Remember to set short, medium and long-term goals for savings, debt control and everyday events. The Financial Consumer Agency of Canada (FCAC) can help you plan your financial goals with the help of a Financial Goal Calculator.
Have increased utility costs added to your financial stress? #BDOdebtrelief #LetsTalkDebt