Financial advice for families living paycheque to paycheque
New report says 50% of working Canadians just making ends meet
If you're living paycheque to paycheque, here's some small consolation: you're not alone.
A new report by the Canadian Payroll Association says half of working Canadians are just making ends meet and would be hard-pressed to meet their financial obligations if their pay was delayed for a week.
Financial expert Leslie-Anne Scorgie has some practical steps you can take to reduce the strain on your cash flow.
1. Trim the fat
Scorgie recommends slashing any expense that isn't a necessity, including gym memberships, entertainment, home decorating and more expensive cuts of meat, for example.
"It's hard to make changes to spending, especially when you've been keeping up with the Joneses," Scorgie told CBC Calgary News at 6.
"But don't dig a deeper debt than what's there already. That's financially risky and hard on your emotions as well. This is about keeping yourself and your family afloat."
The goal is to get out of the red and achieve a balanced budget.
Scorgie said some families may need to consider selling a second car, or even downsizing their home in the medium-term.
"These times can call for some pretty drastic measures."
3. Delay your savings
Scorgie recommends shrinking the contributions to your RRSPs, RESPs, TFSAs, and other long-term savings plans in order to avoid taking on immediate debt, particularly for single-income households.
You may worry about falling behind if you reduce your retirement savings, but Scorgie says you can play catch-up later on down the road.
"Those are the things that can be picked back up once you've got two incomes in the household and the economy improves."
4. Swallow your pride
If you can't afford to cut your expenses, Scorgie recommends boosting your income by taking on a job for which you may be over-qualified.
You could move to a location where there is work, or look for a part-time telecommuting opportunity.
"The markets are cyclical and we are resilient Albertans," said Scorgie.
"What's true about our situation is that this won't last forever. But we need to save in good times and plan to ride out the bad times."
With files from CBC Calgary News at 6