FLM 2017: 3 of the Best Debt Help Tips When Money is TightNov 13, 2017
Gen Xers might be the demographic who could use debt help the most. Their financial responsibilities range from childcare costs, housing costs, student loans to debt repayment. Juggling all these expenses can be tough, especially while dealing with the costs of living in the GTA. That’s why it’s important to know your options and how to make the most of your money when you’re working with a tight budget. Here’s some advice:
- Evaluate your budget
You might think you know where your money is going, but chances are you might be overspending somewhere. Sticking to a budget is essential when you have a lot of expenses because it’s the best way to stay on top of payments. To make things easier, automate your bill payments so you’ll have less to think about each month. Cut expenses where possible by looking at wants vs. needs and make trade-offs. Example: Ditch cable or satellite and switch to a streaming service, or reduce your entertainment costs by eating at home instead of restaurants.
- Just say NO to debt
Adding to your debt to boost your income or pay off other debts creates a debt cycle that can make you feel trapped. Instead, try DIY-ing your debt relief by using the debt snowball method. You can also speak to a debt professional, such as a Licensed Insolvency Trustee (LIT), about your debt options. An LIT can help you consolidate debt, refer you to a credit counsellor or assist you in filing insolvency.
- Carve out room for savings
Even when you’re on a tight budget, you must find room to save if you want to stop relying on debt. Once you’ve trimmed your expenses, automate your savings so you can save money without thinking about it. Speak to your bank to set up a specific schedule. You might also consider a high-interest savings account, so your money can earn more money. Tom Drake from Maple Money explains how and why you should be paying yourself first.