Tips to Get Out of the Red



In my role at CUA, I work with several members who find themselves in difficult financial situations, perhaps due to job loss, sickness, or a change in marital status.  According to a recent survey, 45% of Atlantic Canadians are $200 or less away from not being able to pay their bills, so it’s a more common situation than you may think.

I understand that discussing missing payments can be uncomfortable but it doesn’t have to be. If you find yourself in a challenging financial situation, I hope these four tips will help you get back on track:

  1. Be knowledgeable about your finances - Do you know your income vs. expenses each month? If you’re not sure where your money is going at the end of each month, you may consider developing and tracking your household budget. This will help you see where your money is going, and you’ll be more likely to see a potential financial problem in advance, which leads into my next tip.
  2. Acknowledge and address issues as soon as possible - In my experience, it’s usually not as bad as you may think and there are options. The earlier you address the problem, the better. If you know your situation may soon be changing (an upcoming job loss, for example) contact your banking institution or creditors as soon as possible. When I first talk to members, I usually ask them, “what’s changed?” and I like them to share as much information as possible. Many times, there will be something in the details that will allow me to find a solution.
  3. Ask about insurance - When you contact your banking institution or creditors, ask if you have insurance that could be of assistance. For example, homeowners who had less than a 20% down payment may have a mortgage insurance through CUA that has a deferral option for job loss. Similar options might be true with insurance on loans and other lending products.
  4. Plan for the unexpected - This last tip could just as easily be the first. A common reason why people often get behind on bill payments is because of an unexpected expense. With a little planning, these expenses can be managed. If you have a car, plan for maintenance or repair bills. If you have a pet, plan on sudden vet costs. I recommend preparing for these items in advance by saving and start by saving small. That may be setting up an Automatic Funds Transfer, so that a regular amount goes into a savings account or an “emergency fund” automatically each week, every two weeks or monthly. You may not need to dip into this fund for awhile but it will be there if and when you need it.
Having some level of debt is common – the key is to ensure it is manageable and to know your options. If your situation changes and you are finding it difficult to make your payments, have this important conversation and together we can work through your circumstance to find the better way.
Lisa

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