Tips on Surviving From Payday to Payday

Many Canadians are feeling the financial pinch but with some planning and lifestyle adjustments, weathering the financial storm is possible. (Kmpzzz/Shutterstock)

Nearly half of Canadians say they are living paycheque to paycheque, which can bring complications to household spending.

However, with some planning, it is possible to survive tough financial times.

As the cost of living and inflation continue to squeeze Canadians—46 percent of Canadians are reportedly $200 away from being broke—there are some ways to survive when things get tough. Here are some tips on how to survive between paycheques without going into debt.

Make a Change

When money is tight, find ways to stay busy and entertained at home. This can reduce how much is being spent on going out, whether it is to eat out or pursue a hobby.

Consider learning new skills by watching online videos rather than paying for a class. Plan board game nights with friends and family, or get movies from your local library rather than streaming or heading to the theatre.

Another way to reduce costs is to build a workout plan you can do at home so you can cancel your gym membership. There are plenty of Youtube videos that will walk you through exercises at home. You can even invest in some second-hand equipment to boost the burn.

Declutter

Cleaning up your living space not only makes you feel better, it can also be a way to earn money. Put aside items you don’t want or need anymore and sell them for extra money. Post an online ad on Facebook Marketplace or on a site like eBay or Kijiji.

Stick to a Budget

Sixty percent of Canadians do not make a monthly budget, according to BDO Canada.

While it can seem boring, tracking your spending is an important way to find out the areas you can save money. One way to make budgeting easier is to keep it simple. You don’t need a fancy spreadsheet with various calculations. Just create a document that tracks what you earn and what you need to pay (mortgage, utilities, groceries, car payments, etc.)

When making your budget, be realistic with what you spend. It’s no use if your budget looks great on paper but you aren’t sticking to it.

Create Savings

It’s important to save a little each month in an emergency savings fund, even when things are tight. Life can be unpredictable and when an emergency happens, like your car breaks down, you’ll want to have a financial buffer to cover unexpected costs.

Boost Your Earnings

Consider ways that you can bring in a little extra cash each month. It could include selling off some items you don’t want anymore or finding a ’side hustle' to boost your monthly earnings. Gigs like freelance work, delivery jobs or ride-sharing are simple ways to earn extra income while choosing your own schedule.

Pay Down Debt

It’s important to keep paying down debt even during financially difficult times. While you don’t need to pay it all down quickly, keep chipping away at it and try not to miss a payment. Skipping payments won’t just set you back financially, it could also impact your credit rating.

There are two main approaches to tackling debt. The first focuses on paying down the debt with the biggest balance, whether it’s a credit card or credit line. The second approach focuses on paying down the debt with the smallest balance. Once that debt has been paid off, roll the monthly amount from that debt payment into paying off the second smallest debt, and so on.

How to Get Through Difficult Financial Times

Life can be unpredictable, and when an unexpected expense hits when you’re living paycheque to paycheque it can be stressful. Decisions made during emotional times can lead to poor financial choices. The Financial Consumer Agency of Canada recommends taking time to seek advice when facing financial hardship.

Start by contacting your financial institution and let them know the situation and find out if they have options available to help you out.

Review your mortgage contract and talk to your lender to see if you have options to postpone or reduce your payments. However, some changes to your mortgage contract could involve fees. It’s important to know if any additional fees will apply.

Inquire about whether you can have the interest rate reduced for your credit card, which can help lower the amount you have to pay, even temporarily.

Canadians struggling financially can also reach out and contact a financial professional, such as an advisor or credit counsellor. These professionals can help develop a plan together.

Jennifer Cowan contributed to this report.