Life Happens: Living on a reduced income

5 steps to eliminating your debt

By Leah Drewcock, LIT, CIRP

A reduced income can happen for any number of reasons, from maternity leave to retirement.

Whatever the reason for your reduced income, you’re likely experiencing financial stress as a result. You may be feeling scared, alone and exhausted, but know that for every situation, there is a solution, hope and most importantly, a chance to start over.

Licensed Insolvency Trustees are like the doctors of the financial world – we fix and rehabilitate and try and make things better for everyone. Every day we work with people who have experienced debt problems in every way imaginable.

Whether your income reduction is only temporary, like a seasonal layoff or maternity leave, or if it’s a permanent change, like retirement or an inability to work due to injury, there are some steps you can take to minimize the impact on your life.

1. Set a budget and stick to it

  • Write down what you spend. Find a method that works for you. You may find that having a spending journal or notebook handy is helpful. Others may prefer to use a smartphone app or spreadsheet. Most important: record what you spend!
  • Now, set realistic goals and develop your budget – estimate your expenses based on your spending history and adjust spending so expenses don’t exceed your income.
  • Put your plan into action – continue tracking expenses and pay bills on time.

2. Sell something

  • Consider selling non-essential assets to pay down your debts.
  • Have a garage sale.
  • Sell or trade-in luxury vehicles and downsize to more affordable vehicle, considering factors like fuel economy and lower payments.

3. Reduce costs of living by cutting back on unnecessary expenses

  • Review your monthly bills – Can you go on an equal-payment plan to reduce the seasonal bill fluctuations, such as higher winter heating costs?
  • Negotiate better plans internet/cable/satellite/phone whenever possible.
  • Reduce banking costs – Are you paying more service fees than necessary?
  • Reduce the number of times you dine out or get take-out.
  • Make a meal plan and a grocery list for the ingredients needed to make these meals.
  • Don’t shop hungry and stick to your list!
  • Carpool or rideshare.

4. Make plan for paying down debts

  • Always maintain minimum payments on all debts.
  • If you can, increase your payment to more than the minimum on the debt with the highest interest rate.
  • Pay down the highest rate credit cards / debts first.
  • Talk to your creditors and negotiate interest rate reductions or extended payment terms.
  • Once you’ve paid the highest rate debt, take the money you were paying on that debt and add it to the payment you are making on the next highest interest rate debt.
  • Continue paying off debts and adding the payments to the next highest rate debt until all debts are paid in full.

5. Seek help

Have you tried it all and still feel like you’re drowning? Seek the help of a licensed and reputable professional. Licensed Insolvency Trustees are the only professionals licensed and monitored by the federal government’s Office of the Superintendent of Bankruptcy (OSB), a division of Industry Canada, to carry out bankruptcy and proposals. We can stop ongoing and pending legal and collection action for debt.

***

Based out of Prince George, Leah Drewcock is a Licensed Insolvency Trustee and Vice President at MNP LTD. To learn more about how MNP Debt can help, contact our local office at 250-596-8321 or toll-free at 310-DEBT (310-3328).

Comments are closed

Just Posted

Volunteers organize annual clean up of illegal dumping sites

Waste found by Copper River included an abandoned RV, leaking batteries

Terrace’s “free store” reopens following generous donation

Ksan Society’s donation room will run again until April 2020

Terrace residents take council to task for safer active transportation

Cyclists, pedestrians press city to take action on past commitments

Firefighters burn cops in Guns and Hoses game

Annual tournament saw a 10-5 win, $12,000 raised for charity

LETTER: LNG’s mistakes will affect us too

Dear Editor, Regarding the Nov. 7 issue’s article on Top Speed Energy… Continue reading

VIDEO: UBC exchange students offered $1,000 to help with leaving Hong Kong

The university said 31 of its students were attending four universities in Hong Kong

Woman calls 911 to say she was late for train, asks Ontario police for ‘emergency ride’

Peel Regional Police received more than 180,000 improper calls so far this year

It could take you 218 years to save up for a house in this B.C. city

It would take 27 years in the most affordable city in the Lower Mainland

‘Actors can play any roles’: Debate over ‘colour-blind’ casting after Victoria lawsuit

Tenyjah Indra McKenna filed a complaint over racially-motivated casting

Infants more vulnerable to measles than previously thought: Canadian study

Babies typically don’t receive the measles vaccine until they are 12 months old

Shatner, Obomsawin among 39 inductees to Order of Canada today

Shatner is being given one of Canada’s highest civilian honours for his 60-year career

John Mann, singer and songwriter of group Spirit of the West dead at 57

Mann died peacefully in Vancouver on Wednesday from early onset Alzheimer’s

Teacher tells B.C. Supreme Court that student was ‘happy’ to watch smudging ceremony in classroom

Case being heard in Nanaimo over indigenous cultural practice in Port Alberni classroom

VIDEO: B.C. high school’s turf closed indefinitely as plastic blades pollute waterway

Greater Victoria resident stumbles on plastic contamination from Oak Bay High

Most Read