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One of the hardest things to do is to stop living paycheque to paycheque when costs are soaring and debt levels are high.

Housing costs, interest rates and rent are on the rise and we need to buckle down if we want out of the debt game.

The problem is that access to money is cheap and spending it is even easier causing more concern for Canadians.

However, there is light at the end of the tunnel but it won’t be solved sitting around waiting for that next paycheque to arrive.

The problem today is that we rely heavily on the next paycheque because it’s a sense of security and relieves stress, but only temporarily for some people.

Simply going out to work and earning a paycheque doesn’t mean that you are managing your finances.
Your Paycheque Shouldn’t Own You
Don’t get me wrong, I used to live paycheque to paycheque but only when I was young because I never wanted to worry about money.

I mean, I worried about money but I didn’t want it to control my life so I decided to do something about it.

We don’t often talk about how we were able to pay our mortgage off in 5 years with friends nor that we are debt-free.

I’m not sure why we feel the need to hide this from people apart from being segregated from friends.

There’s a taboo around talking about how much money you earn at your job and what you have in the bank.

To be honest I haven’t talked to many people who disclose this personal information just for the heck of it.

I do however speak with many people including friends and colleagues about how much debt they have.

It’s ironic that people are more comfortable to discuss their failures rather than their successes when it comes to finances. 

Perhaps it’s because when you are financially successful you must have it together but when you’re in debt you’re seeking a way out.
Stop Being Comfortable With Debt
Most often trying to find that magic fix is a long stretch and two of the most obvious places people turn to are loans and credit cards. 

The only problem with that is debt is often being shuffled around or temporarily on hold with lower interest rates.

I find that when one or both of these come into play the relaxation mode settles in until there is a financial crisis again.

The idea when you are left with loans or credit cards for balance transfer options is to pay it off as fast as you can.

Sadly, this doesn’t often happen and consumers find themselves back at square one.

The excuses pile up and because we struggle to take control of the very thing that causes daily stress and depression debt wins again.
Spending Money Before Your Paycheque
I want to give you an example as to why we need to stop and be mindful of our money.

Last week my wife was selling an item on Facebook Marketplace and a lady messaged her about the item.

It was a large home decor orange vase that we listed for $50 from Pier 1.

The lady offered us $30 for the vase and wanted to pick it up in a weeks time when she got paid.

She told us that it was all she could afford because she was on mat leave and didn’t earn much money.

So, she justified wanting the vase at a lower price because she obviously did not have the money in the bank and was living for her next paycheque.

THIS right here is the problem folks. 
Stop Spending Money
We must stop spending money on things we can’t afford and start paying for the debt we already have or saving it for an emergency.

Of course, I am making assumptions and perhaps she does have a budget and emergency savings and she was spending her allowance.

I can’t say for sure and if she is then great but by the sounds of the conversation she had with my wife she was struggling.

Did she REALLY need the vase?

Probably not, and lots of people spend their time searching for bargains online for things they don’t need.

Sometimes boredom and stress play a role as to why people spend money they don’t have.

It’s the easiest way to window shop for deals and to spend money without leaving the comfort of your home apart from picking up the item.

It’s not that she doesn’t deserve to splurge on a vase but when the struggle is real you have to stop and question every expense.

There are plenty of things I want but can wait for because it’s not something that is an emergency situation.
Stop Living Paycheque To PayCheque
So, how can you stop living for that next paycheque?

I’ll tell you how I went from having little money in the bank and living for my next paycheque to forgetting about payday.

I want you all to remember that this has nothing to do with income levels either because even rich people are poor.

This is about taking what you earn and having to do without until you build up savings and get rid of consumer debt.

It is possible to survive with little money however being strong about what your goals and sticking to them will be your success.
1. Track Your Expenses
Generally, your debt should not be any more than 10 to 15% of your net paycheque and that includes your mortgage.

Calculating your debt to income ratio is a fairly easy process and a starting point to knowing your financial health.

That being said you need to track your dollars so you know where the money is going.

You can download and print our free expense tracking sheet and monthly budget here.
2. Change Your Habits
Stop using credit to fill the gap waiting for your next paycheque to arrive and change the way you spend your money.

If you can’t afford it then you don’t buy it or perhaps look for what you need at a second-hand shop.

When you do shop only look for items you need and avoid telling yourself that you must have something else you’ve found.

Even thrift stores can be a big financial burden on those who shop in these stores for savings as they overspend.

Learn how to say no when your friends invite you out and have a plan of attack with your significant other.

Both of you need to be on the same page for debt repayment to work.
3. Start A Savings Account
A savings account is a great place to stash slush money, emergency savings or extra cash that you might need in the future.

We personally have 3 bank accounts with PC Financial for emergency savings, projected expenses and our chequing account.

Each bank account functions for something different and we funnel money into them manually once a month.
4. Chop Expenses You Don’t Need
Eliminating or lowering expenses is one of the toughest things for people to do because it involves convenience.

Owning a vehicle is easier than taking the bus, walking or riding a bike but far more expensive.

Going to the library to use free wi-fi is more hassle than having it at home.

Eating out is simpler than having to cook a homemade meal.

Using a cell-phone is far more expensive than a home phone but is a must-have.

The choice to pay off debt is manufactured by the decisions you make to slim down your financial process.

Take it for what it is but consider ways you can lower your bills whether it be by eliminating them or reducing services or even asking for promotions and discounts.
5. Find Extra Income Sources
I did work more than one job throughout my career and education to make ends meet and to save extra money.

This is how we were able to save a higher amount as a downpayment on our house and to pay off our debt.

I know it’s not feasible for everyone but even earning a little bit extra each week is better than nothing.

There are many ways you can earn extra income from starting a blog, babysitting, senior care, before and after school care, odd jobs or using your skills on the side.

One of the easiest ways to earn extra money is to take advantage of rewards programs in Canada such as;
Nielsen Homescan Swagbucks Rakuten Honey Survey Junkie Checkout51 Great Canadian Rebates 6. Credit Counselling
If you just don’t feel you can climb out from the debt that you have before considering bankruptcy think about credit counselling.

Credit counselling will help you to consolidate your debts and work with your creditors to arrive at a monthly affordable payment.

A credit counselling agency can provide a range of services, such as:
one-on-one counselling group courses, tips and seminars on topics such as how to make a budget and stick to it or how to use credit wisely debt management plans
Talking to a credit counsellor won’t affect your credit score either.
You Struggle Or You Succeed
You don’t have to feel guilty about spending money on yourself however if you don’t have the money stop and question the expense.

What is more important to you? The roof over your head or that vase that you can’t afford until your next paycheque.

That vase can fall over and break and you’re left with a pile of broken pieces but your mortgage and rent will still be due.

Your bills will still need to be paid and groceries will need to fill the cupboards and refrigerator.

Two of the most important tips I can give to you all about getting out of the paycheque rut is to change your attitude and behaviours.

You don’t have to be perfect all you need is self-control and a willingness to succeed.

Question everything and never let debt win. If you’re already in debt then you should know the answer.

Discussion: What other tips can you give to people living paycheque to paycheque who want it to end?

Drop me a comment below and I’ll be sure to respond.

The post How To Stop Living For Your Next PayCheque appeared first on Canadian Budget Binder.
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