Nobody plans to have money troubles and not pay their bills. Life happens! There are many circumstances we find ourselves in that are out of our control. Here are the most common ones:
1. Lack of budgeting and money management skills
The #1 reason people get into trouble with their finances is because they really don’t have the skills to manage their money. Let’s face it, if no one has taught you the basics of money management and budgeting, how would you learn? Or even worse, you may have picked up some bad habits from your parents who probably never had any lessons on money management themselves. It’s a vicious cycle, but there is a way out. Spending your hard earned money without a budget plan is like driving into unfamiliar territory without a GPS. With the proper tools, you can learn how to budget your money and get on the right track.
2. Decrease in income
One day you have a great paying job and the next thing you know, your company has downsized and you’re out of work. In this economy, we all know jobs are not as readily available and you may be forced to take a lower paying one in order to make ends meet. If you were lucky enough to have the recommended 3-6 months of savings put away, you may be okay. If not, your debt payments may start to fall behind. Stay in touch with your creditors and make arrangements during this time. If the situation becomes too much to handle on your own, contact CCS of Atlantic Canada who can help you find a debt solution that works for you.
3. Marital and family issues
Couples don’t say “I do” with the intention of not staying together, but statistics show that 4 in 10 marriages in Canada will end in divorce and one of the primary reasons is financial issues. This one is really twofold. If your relationship ends, there is a greater chance you may experience some form of financial hardship just because you are suddenly forced to live on one income. In addition, a lot of relationship issues stem from financial problems. Communication is key! It’s not just your life plan you need to talk about, your financial plan is important too. Develop a realistic budget together and talk about money often to ensure you’re working toward the same financial goals.
4. Health and Medical expense
What would happen if you were in an accident and were out of work for an extended period of time? Your income could drop to approximately 40% of what it originally was, or maybe even lower. We don’t like to think that these things could happen, but unfortunately, they do. In addition to a reduction in income, you may end up incurring additional medical expenses such as medication, physiotherapy, and more. Where do you turn? How do you make ends meet? During a time like this, you need to focus on getting well. Contact a credit counsellor for help with your financial health and well-being.
5. Education expenses
What do parents say today? “You want a good job, you have to get an education”. They just forgot to follow that up with …”in order to do that, you need to save anywhere from $40,000-$60,000”. The average university student is leaving campus with close to $28,000 in debt and it could take an average of 14 years to pay it off based on an average starting salary of $39,523. Imagine starting your first job already in debt for a full year’s salary! With the declining housing market and increasing student debt, life is getting harder and harder for young people. Use a Student Budget calculator so you’ll know exactly what you need to put away for your education.
If any of these financial problems sound familiar to you, contact Credit Counselling Services of Atlantic Canada today at www.solveyourdebts.com. We can help you get back on track!