One-third of Canadian households living paycheque to paycheque
One-third of Canadians still live from pay-cheque to pay-cheque, according to Globe and Mail. We can empathize as many have gone through such periods, but do we have to continue this way. Skating on thin ice and peace of mind becomes an elusive goal.
A new survey suggests fewer Canadians are living from paycheque to paycheque, and more are putting money aside for a rainy day or retirement.
But there are still a large number that would face difficulties after one week of not receiving their cheques, and savings rates remain low, the results show.
The survey by the Canadian Payroll Association found 47 per cent saying they would be in financial dire straits if their pay was delayed as little as a week.
What happens when the unforeseen happens?
The biggest problem if you live from pay-check to pay-check is what happens in the event of an emergency. You could have an auto accident or lose your job. There could be a natural. If you have no cash to fall back on what do you do in the event of an unforeseen occurrence? The fact is that if you live from paycheck to paycheck this can be a disaster. It’s not good from an emotional standpoint, either. When you do have an unforeseen event your only option is to get into or fall further into debt. Debt has a way of ballooning and your stress level can balloon along with it.
What are the biggest and common mistakes people make with their finances?
From owing a house that you can’t afford to carrying thousands of dollars in debt on credit cards, many of us are struggling to meet minimum payments without realizing how much debt costs us in the long run. For example, even if you always make the minimum payments on the $1,200 you owe to a credit card company, over the course of 20 years, you will have paid them roughly another $3,600 in interest. People also don’t realize the “real” cost of home and car ownership, and are crippled when a $500/month house mortgage becomes $800/month with maintenance and utilities.
What are the key steps to getting out of this situation of “living from pay check to pay check?”
A positive attitude
There could be many reasons to get into this situation. Below are the most commonly categorized issues.
Whatever your circumstances – whether you’ve lost a high-paying job or your expenses have exceeded your income – the importance of remaining positive and starting to think rationally about money is vital. Re-define your idea of success so it has less to do with material wealth and more to do with personal happiness and security.
Know how to make more money
Identify ways to bolster your income, either by upgrading your skills through education and finding a better-paying job, or by taking on extra work or a second job. Don’t refuse a job simply because it doesn’t pay as well or better as the one you may have lost – those bills have to be paid somehow.
Know your options if you are in debt
“A lot of people panic and freeze up when times get tough financially, and end up making bad decisions,” If you know your options ahead of time, it’s much easier to cope. Sell off all extra sources of debt – like a house or car you can’t afford or contacting creditors and arranging lower minimum payments on your debts. These measures can help you dig your way out of trouble and avoid the last resort, declaring bankruptcy. To remedy the problem in time, you must recognize the signs of impending financial woes – like living off your credit cards, only making the minimum payments, and having to dodge irate creditors.
Understand you Options clearly:
There are many companies out there to take your money and put you into further troubles than you already have:
Debt Settlement Companies, non-profit making organizations, Debt Consolidation Services and Credit Counseling Services, Trustee in Bankruptcy and so on..
Understand clearly that there are no freebies in life. If you don’t pay for the services, the companies get paid by the Creditors. Typically, they get about 20% of the settlement amount as their commission or fee from the creditor.
“The more that settle – the more they get” Who do you think they are working for you or the creditor?
Clear Debt Solutions is registered Debt Advocate working in accordance to the “Bankruptcy and Insolvency Act” to negotiate and settle on your behalf – We work for you – for the Creditor.