Financial challenges can take a toll on your emotional well-being. Being honest about that is also an essential part of your financial recovery. At Rapport we know when people are struggling with money, they tend to carry a lot of shame, and this often keeps them from dealing with it head-on.
If you’re seeking that path right now, there’s plenty of support in your corner here at Rapport. Your financial wellness is our priority, and we’ll do all we can to help you move through this challenge including reaching out by phone for a financial wellness check in, answering your questions by email or even hosting a face-to-face Zoom meeting. Not just for the time being, but also for the future and long-term security that you deserve.
It’s crucial to separate feelings from facts when figuring out how to manage a budget on a reduced income. While money is an emotional hot-button for most of us, there’s always a path to improved financial health. Like any challenge, it takes a clear plan and the determination to see it through. We know it’s not easy, but there are several helpful strategies to get more mileage out of the money you have available right now.
Revisit Your Budget
If your income has changed and your expenses haven’t, it’s a good time to revisit your budget. Start with an inventory of how much you make vs. how much you owe and own. From there, make a detailed list of what you are spending your money on each month. With that in front of you, decide what essentials are and what you can eliminate or cut down on until your income normalizes.
Some of these things could include:
- Subscriptions and memberships Streaming and cable services
- Mobile phone costs
- Entertainment and travel
- Dining out and take-out food
- Automobile expenses (loan, insurance, gas, parking, etc.)
Living life on an “essentials only” mindset could be the key to getting your financial footing back again.
Supplement Your Income
Are you able to supplement your income with another part-time job or contract gig? If not, now would be an excellent time to take advantage of government programs like Employment Insurance (EI).
Check https://www.canada.ca/en/department-finance/economic-response-plan.html to understand your eligibility for the program.
Keep in mind that you will have to pay taxes next year on some government benefits you received this year.
Consolidate Debt
Consider refinancing to consolidate credit cards, loans and other debt payments into one lower monthly commitment if you own your home. If you don’t own your home or don’t have enough equity to refinance, you could consolidate debt by taking out a personal loan.
Apply For a Line Of Credit
If you already have a line of credit, use it to help bridge the gap until you’re working or at fulltime hours again. If you don’t have a line of credit, it could be helpful to you right now. You only need to apply once, and then you have access to your approved credit limit whenever you need it. While you will accrue some interest as you repay it, rates are typically low. Using your line of credit to consolidate higher interest debt is also a way to reduce your interest costs.
Withdraw From an Investment
If you’ve invested in an RRSP, TFSA or other savings product, you could make a withdrawal. It’s your money, so you won’t need to apply or pay interest fees. On the other hand, there will be administrative fees and taxes to pay. You will also lose earned compound interest. Depending on how long you have until retirement, this could be a substantial amount. Before you withdraw funds from an investment, it’s smart to speak with your trusted advocate.