Making a Consumer Proposal Work With Your Budget
Do you feel as though you are over your head in debt?
If so, then it is time for you to make a change.
Here you can find out everything you need to know about consumer proposals and how you can help to manage the stress that comes with being in debt.
Determine your Income
The first thing that you need to do is try and determine your monthly income.
You need to find out how much it compares to the expenses you have.
This includes any tips, bonus government grants and your spouse’s earnings.
If you are paid every 2 weeks then this means that you will receive 26 payments a year, so if you want to work out your income here then you need to multiply your average net pay by 26 and then divide it by 12.
If you are able to put all of this information in writing, then this will help you to work out how much you can spend.
You won’t have access to any kind of credit if you have a consumer proposal, so you will need to try and limit your spending if you want to try and keep below your net income.
Assess your Expenses
When you have worked out how much net income you have, you will then need to track your monthly spending so you can come up with a list of all of your non-essential expenses and essential expenses.
Some of your essential expenses might include:
- Mortgage Payments.
- Essential Internet.
- Public Transport.
- And more.
The following can be determined as being non-essential spending:
- Eating out at restaurants.
- Ordering takeout.
- Using taxis.
- Impulsive shopping.
- Grabbing a coffee.
- Going to the movies.
You need to make sure that you track your spending every single day for around a month.
The more months you can do this for, the better.
If you write down your spending every day then this will become a very valuable source of information and it will also become a very valuable resource too.
There are so many apps out there that can assist you with what you need, not to mention that it also helps you to avoid debt in the future.
Live within your Means
When you have gotten into the swing of being able to make your payments, you then need to start looking for any expenses that you can cut back on.
When you are trying to pay down a huge amount of debt, it’s vital that you don’t spend money on things that you don’t need.
This could involve bringing your lunch to work instead of eating out or even finding recipes that don’t need as many ingredients.
How to Cut back on Expenses
If you want to cut back on your expenses, then there are many ways that you can do this.
If you have a lot of streaming subscriptions, then cut back to just having one.
You might also want to try and avoid eating out at restaurants, and making your own coffee at home instead of visiting a coffee shop.
Carpooling to work is also an option, along with exercising at home instead of signing up with a gym.
Paying for everything in cash and avoiding the use of a bank card is a fantastic way for you to try and keep track of everything that you want to pay for.
When you use cash, you will soon find that you become much more aware of what you are buying, and you can also reduce impulsive purchases overall.
It doesn’t matter whether you are cutting back on expenses or whether you are trying to put some money away into your savings every month because it is always helpful for you to try and set short-term goals.
If you put them in writing then this will help you to be much more accountable for your actions and it also helps you to make progress with your consumer proposal debt too.
Getting your debt under control is certainly something that you should take pride in.
If you file for a consumer proposal, then you should know that this is not an easy decision to say the least so make sure that you pat yourself on the back when you take those first few steps.
When some time has passed and when you feel much more comfortable with your finances, you then need to try and treat yourself.
This will stop you from feeling completely deprived.
This doesn’t of course, mean go out and buy yourself a new car or even a new TV.
You need to think much smaller.
This could involve buying some new clothing or even a pastry at your local coffee shop.
Work on Rebuilding your Credit
When you are much more stable with your finances, it is then time for you to turn your focus so you can rebuild your credit.
First, pay down your consumer proposal as soon as you can.
You won’t be able to miss payments, but you can easily pay it off faster without having to worry about penalty.
The sooner you pay it all off, the sooner you will be able to strike it from your credit report.
Note, the consumer proposal will be removed 3 years from when you made your last payment.
When you have paid off your consumer proposal, you might then want to try and apply for a secured credit card.
The great thing about having a secured credit card is that you will need to make a deposit before you can use it.
This may end up being your credit limit in the beginning.
Over time your lender may then extend you some credit so that you can build your rating.
If you have a good income, then this shouldn’t be a problem at all.
If you want to make sure that you are budgeting properly then you need to contact Bankruptcy Canada.
When you do, you can then count on us to help you with just about anything you need.
You can contact us by phone or by email.