Credit counsellors are warning people to stay on top of their finances.
Unfortunately many families are already overextended, and unprepared for job losses or extra expenses.
Two years ago, David Vink was $30,000 in debt.
He was maxed-out on credit cards, loans and a line of credit.
“With my income, I didn’t have enough money allocated to make the minimum payments. Period,” said Vink.
“That’s when the panic attack happened”.
He turned to Money Mentors, and today, he is paying his debts and is back on a budget.
Unfortunately, many are not on-track.
According to the Bank of Canada, 12 per cent of families are highly in debt – double the number 15 years ago.
Credit counsellors say too many people live pay cheque to pay cheque, and are not ready for unexpected expenses or a loss of income.
“Obviously there’s no cushion there at that point in time because if that pay cheque is delayed, then they’re in trouble,” said Brian Betz who is a counsellor with Money Mentors.
“So we want to put together a spending plan. We want to have people understand where they’re at”.
To develop a plan, you have to re-evaluate, revise and adapt your budget; set goals and prioritize spending; determine your current financial situation; and then build a “spending plan”.
“There are always things that are happening in life, and part of this whole financial cycle is to constantly be re-evaluating, revising and adapting, so this is a good time to reset,” said Betz.
That message is getting through to some, but not everyone is worried.
“We’re in a down time, and we’ve been putting money away, and shopping within our means,” said one Calgary shopper.
Two years ago, Vink didn’t have a plan.
Today with falling oil prices and economic uncertainty, he is glad he has a rainy day fund.
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