How do you deal with debt?

[brunt]

Been there, done that.
There are a number of decisions to be made, but the biggest one is this - is your current situation the result of some short term bad luck, or is it an issue with the irregular and too small paycheques?

In my situation, there was some bad luck that made the crunch happen, but it was the realization that self employment just wasn't working out that really changed my life. So we sat down, had a serious discussion and decided that I was to take the best paying job that I would enjoy for one year.

Best financial decision ever. That was 21 years ago, and I am still working in a similar situation and greatly enjoying the work and security.

You can have the best products or services in existence, but if you live in an area with minimal call for them (partially my problem) and/or you aren't the best sales person (also part of my problem), then you are in a situation that is almost guaranteed to fail financially speaking. Failure is not necessarily your fault, but failing to recognize it and act accordingly is.

I would seriously consider taking a regular job - full time preferably, but part time is possible if you are just under the break even point. Commit to a length of time, and save like the dickens during that period. You may find that the extra financial security beats the freedom of being self employed hands down.

[Ciel]

The discussion about what to do when there is money left over-it reminded me of Gail Vaz Oxlade's column on variable income (the article in the Star had her write that people need to prioritize things as A's, B's and C's).

The one from her website is almost the same article (without the letters-I'll look up the article I photocopied for my reference at home):
http://gailvazoxlade.com/blog/archives/97

[coupon girl]

hubby and i always pay our credit card off every month ,have been doing that for 30 some odd years
we try to save for a rainey day
always buying on sale or price matching or waiting for a sale ,or buying thrift
stocking up on various items
not going above our means or living up to the jones
we now have gone down to one carwe
own our own home -have no mortgage or car payments

[Ciel]

Global News posted an item about the gig economy and cash-flow management. New York state has an act to protect freelancers!
https://globalnews.ca/news/5169041/f...ow-management/

[julius]

Another way of paying off debt is by taking online survey that pays cash you can easily make money everyday with survey companies i have one where i make up to $100 per day , you can easily earn $700 per week check about me on my profile for more info

[mgaut]

My two cents.... the first step would be to get into a position where your income is predictable, and to a point where it reliably exceeds your spending. This may mean looking for longer term contracts, charging more for your services, or considering going back to working at a company for a regular paycheck for the short term (lots of companies open to remote working these days!). With that in place, you can focus on paying off your debt, since you are losing money every month on interest payments that would negate any gains you would make by rrsp contributions. Hope that helps!

I am also interested in feedback from the community here so I can help more with situations like this one.. I am doing some research to help people understand their spending habits and have a 1 question survey that I'd love any and all feedback on for those interested. If interested please DM me.

Cheers

[saundyl]

Thank you for the response! We consolidated debt and it is all on a LOV with a 7% interest rate so one payment.

Our children are young (4 and 18 months). I do talk to our oldest about money through. Our step daughter is 17 and lives with her mom who is careless with money and spends ridiculous amounts on items and we end up on the hook for things we did not consent to. But that’s a whole other conversations

So would the smartest idea be to put all extra money into an emergency fund until we’ve built up enough and then work on debt?


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Oh, being on the hook for things you didn't consent to adds up fast! That's happened often with my Stepson's momma too. Sports, clothes, extra items... And EVERY time we travel south (we are super remote) she seems to think that we have tons of money to blow and starts texting DF get this and that and how about this pricey item for them.

When i started reading the thread my first thought was if debt is creeping up (it has been for us too) My suggestions are:

-Try not to use your credit cards.
-Move any Credit Card debt over to a line of credit with a lower interest rate.
-Look at things like Satellite, Cell phones, Phone and see if there's newer better priced plans that meet your needs to cut costs (we cut 35 dollars off our satellite bill this spring by taking away a bunch of channels we or our now teenage boys don't watch)
-Try a week or two of pantry/fridge/freezer only eating - you may be surprised at what you actually have.
- if you do have a month with extra income try to put some of it back into your emergency fund and some of it on to the debt.
-Make a little cash back by having a Facebook or online "yard sale" in the classifieds group for your area. Or look for ads where people might be looking for something you have but dont use.

[MrMike]

Aside from the money you need to live (rent/food), get that debt paid off first. Then you can start with an emergency fund.

When all that is done, I would just have money set aside. My wife does contract work and we keep $5K set aside for her down months. I get that sometimes it sucks to have $5K just sitting there, doing nothing but that's what it takes to be financially safe.

[simarbhalla]

The best option to deal with your debt is to pay your credit card bills every month.