This story is part of a Global News series called ‘On the Brink,’ which profiles people who are struggling with the rising cost of living. In this story, a financial advisor and an insolvency trustee give tips to reduce spending and debt.
As the cost of living continues to rise, a Halifax-area financial advisor is offering up tips to help families cut back on extra costs.
Angela Mercier, the owner of Mercier Mediation & Financial Services, said she’s seeing an increase in people seeking her services.
“I have clients that are coming to me that work with the banks, work with other financial advisors, and they’re just asking for a second opinion and what they’re looking for is, ‘How do we make our dollar go farther?’” she said.
“And that’s not an easy answer, because if we had a simple math equation that we could solve, then no one would be in this predicament.”
She said she’s even seeing people who make “good money” struggling to keep their heads above water.
“The reality is that everything is costing more, and yet the incomes for Canadians are not going up as fast as the cost,” she said.
But still, she said there are a lot of little things people can do to cut costs where they can.
“I use the analogy of a boat,” she said. “So you have holes in the boat, and there’s money coming out of your bank account, and how can we plug the holes? What can we do to help ourselves?”
The first thing people should do, she said, is do a “in-depth investigation of their spending” to see where their money is going.
“What are we spending on cable? What are we paying on our cell phones? What are we paying to Nova Scotia Power? What are we paying for oil? What are we paying for a mortgage?” she said.
“And is there somewhere that we can negotiate something?”
Mercier said one place where people might have wiggle room is their food budget. While grocery prices are soaring, she said food is still one of the few areas where people have more control over their spending.
Eating out less, meal prepping, and smarter grocery shopping can help people save money in their food budget.
“You have to meal plan, and you have to take a list when you go to the grocery store,” she said.
Mercier advised people to take a look in their cupboards and fridges and take inventory of what they have. There are phone apps and programs that can help people build recipes based on what they already have in their pantries.
She suggested shopping at discount and bulk stores like Gateway and Costco to find deals on food.
She also said credit card debt is “the one thing that really hurts Canadians.”
“My suggestion is take your credit cards, put them in a Ziploc bag and put them in the freezer,” “Get it out of sight, out of mind.”
In terms of paying off debt, she suggested the “snowball” method: finding your bill with the highest rate of interest, and paying that down first.
She said people should take a hard look at the automatic payments that come out of their credit cards, like Spotify and other monthly subscription services.
“We’ve got to start looking at how we spend money authentically and organically, and get away from having it tied to credit cards,” she said.
But some people might be in so much debt that these tips might not be enough, and for those cases, Mercier recommended getting in touch with a trustee.
‘Now is the time’
Kimberley Burke, a licensed insolvency trustee with BDO Debt Solutions, said more and more people are turning to credit cards and loans because they can’t keep up with the rising cost of living.
She agreed that people should look at their budgets and figure out what little things can be adjusted, like turning off the lights and heat when they’re not home, trying couponing and price matching, and keeping an eye out for sales.
But when it becomes too much, she said it’s time to reach out for help and look at their options.
“I know bankruptcy has a negative connotation, but it’s actually designed to give people a fresh start and rid an honest debtor of their debts,” she said.
She said BDO has free consultations, and added that although there’s a stigma of talking about finances, it’s never too late to reach out.
“If you’re having a financial difficulty, come and see someone and talk to someone sooner rather than later,” she said. “Now is the time to do it.”