Living from one paycheque to the next can be emotionally and financially draining. If most of your salary goes toward expenses, you might be unable to pay off your debt. Here’s how you can regain control of your finances under these circumstances.
CALCULATE YOUR EXPENSES
Start by making a complete list of your monthly expenses. It’s important to be honest and tally up day-to-day spending, such as your morning coffee and take-out meals, since these quickly add up.
Next, use this list to identify which expenses are essential and which ones you can do without. From there, you’ll be able to determine the cost of your necessary living expenses and keep track of extra money that could go toward paying off your debts.
Related: The First Step: Why You Should Keep A Money Diary
REDUCE YOUR SPENDING
The next step is to create a budget that helps you cut back on unnecessary expenses. This doesn’t mean you can’t spend money on leisure activities. However, forgoing certain wants and finding cheaper alternatives will go a long way to saving you money that can be used to pay off a debt. For example, consider waiting for items to go on sale or reducing the number of streaming services you subscribe to.
FIND A BUDGET BUDDY
It can be a lot easier to make lifestyle changes and stick to your goals if you have someone to help you stay committed. Even just telling a friend or family member about your objectives is a good way to hold yourself accountable. You can also form an online support group of people who are in a similar situation or work with a credit counsellor to set achievable goals and develop a realistic plan.
PICK A STRATEGY AND STICK TO IT!
In order to successfully pay off your debt, you’ll need a plan that goes beyond simply reducing your expenses. One option is the snowball strategy, which consists of putting a set amount of money toward your debts every month. These consistent payments will allow you to steadily pay off more and more of your debt, so long as they exceed the minimum monthly payment.
Related: Debt Management Advice from D. & A. MacLeod Company
GET THE SUPPORT YOU NEED - SPEAK WITH US TODAY!
At D. & A. MacLeod Company, a licensed insolvency trustee can help you assess your financial situation and develop an achievable plan to pay off your debt. If you’re considering filing for bankruptcy or making a consumer proposal, our team can walk you through your options and process. Contact us for a free consultation in Brockville, Kingston, Ottawa or a nearby community today!