By Jeané Herman, LIT, CIRP

A reduced income can happen for any number of reasons, from maternity leave to retirement. After all, life happens.

Whatever the reason for your reduced income, youÏ㽶ÊÓƵֱ²¥™re likely experiencing financial stress as a result. You may be feeling scared, alone and exhausted, but know that for every situation, there is a solution, hope and most importantly, a chance to start over.

are like the doctors of the financial world Ï㽶ÊÓƵֱ²¥“ we fix and rehabilitate and try and make things better for everyone. Every day we work with people who have experienced debt problems in every way imaginable.

Whether your income reduction is only temporary, like a seasonal layoff or maternity leave, or if itÏ㽶ÊÓƵֱ²¥™s a permanent change, like retirement or an inability to work due to injury, there are some steps you can take to minimize the impact on your life.

1. Set a budget and stick to it

• Write down what you spend. Find a method that works for you. You may find that having a spending journal or notebook handy is helpful. Others may prefer to use a smartphone app or spreadsheet. Most important: record what you spend!
• Now, set realistic goals and develop your budget Ï㽶ÊÓƵֱ²¥“ estimate your expenses based on your spending history and adjust spending so expenses donÏ㽶ÊÓƵֱ²¥™t exceed your income.
• Put your plan into action Ï㽶ÊÓƵֱ²¥“ continue tracking expenses and pay bills on time.

2. Sell something

• Consider selling non-essential assets to pay down your debts.
• Have a garage sale.
• Sell or trade-in luxury vehicles and downsize to more affordable vehicle, considering factors like fuel economy and lower payments.

3. Reduce costs of living by cutting back on unnecessary expenses

• Review your monthly bills Ï㽶ÊÓƵֱ²¥“ Can you go on an equal-payment plan to reduce the seasonal bill fluctuations, such as higher winter heating costs?
• Negotiate better plans internet/cable/satellite/phone whenever possible.
• Reduce banking costs Ï㽶ÊÓƵֱ²¥“ Are you paying more service fees than necessary?
• Reduce the number of times you dine out or get take-out.
• Make a meal plan and a grocery list for the ingredients needed to make these meals.
• DonÏ㽶ÊÓƵֱ²¥™t shop hungry and stick to your list!
• Carpool or rideshare.

4. Make plan for paying down debts

• Always maintain minimum payments on all debts.
• If you can, increase your payment to more than the minimum on the debt with the highest interest rate.
• Pay down the highest rate credit cards / debts first.
• Talk to your creditors and negotiate interest rate reductions or extended payment terms.
• Once youÏ㽶ÊÓƵֱ²¥™ve paid the highest rate debt, take the money you were paying on that debt and add it to the payment you are making on the next highest interest rate debt.
• Continue paying off debts and adding the payments to the next highest rate debt until all debts are paid in full.

5. Seek help

Have you tried it all and still feel like youÏ㽶ÊÓƵֱ²¥™re drowning? of a licensed and reputable professional. Licensed Insolvency Trustees are the only professionals licensed and monitored by the federal governmentÏ㽶ÊÓƵֱ²¥™s Office of the Superintendent of Bankruptcy (OSB), a division of Industry Canada, to carry out bankruptcy and proposals. We can stop ongoing and pending legal and collection action for debt.

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Based out of Kelowna, Jeané Herman is a Licensed Insolvency Trustee and Vice President at . To learn more about how can help, contact our local office at 250-979-2580 or toll-free at 310-DEBT (310-3328).