Warning Signs Of Financial Difficulty

2015-07-14   minute read

Leah Drewcock

Lifestyle Debt

Sometimes it seems that financial duress can sneak up on you. There are however, certain warning signs that may indicate you are in financial trouble, such as:

  • Receiving frequent calls or letters from creditors or collection agencies.
  • Not having any savings.
  • Spending all of your money before payday.
  • Stalling one creditor to pay another.
  • Buying things impulsively.
  • Failing to budget or make a financial plan.
  • Using credit cards or other loans to pay for everyday expenses.
  • Having a consolidation loan applications rejected.
  • Having difficulty making the minimum payments on your credit cards.
  • Not fully knowing what your real monthly expenses are.

If you find yourself in any of the above situations, it is time to reevaluate your financial situation and commit yourself to a budget plan. Breaking these habits that lead you to insolvency may be hard.  You will have to work to end the cycle of poor money management.


The easiest way to manage your money and ensure that you don’t find yourself facing financial difficulties is to create a budget.

What is a budget?

A budget is an itemized estimate of expected income and expenses for a given time period. Budgeting is an important tool for creating a financial plan that will work.  Preparing a budget and planning for expenditures will mean making decisions on where you can compromise with your spending habits, however, you will find that by developing and following your budget it will be easier to achieve your financial goals.

Budgeting is a never ending project, income, expenses and financial goals will change over time. Be sure to revisit your budget whenever there is a change in your personal financial situation


Budgeting is a lot like an exercise or diet program: difficult to get started, but eventually you will form the good habits and you will start to reach your financial goals and benefit from them. 

Here is a Comprehensive List of Helpful tips to Keep in Mind as You Prepare Your Budget:

  • Keep your chequebook / bankbook current and accurate.
  • Record every expenditure either in a notebook, chequebook or on your calendar as you spend.
  • Sort expenses into categories and total them every week.
  • Compare the actual expenditures to your budgeted amount and adjust your spending if required.
  • Don’t wait until the end of the month to see if you are on or off budget.
  • Take advantage of equal payment options for utility accounts to avoid seasonal fluctuations.
  • Review your bank statements every month.
  • Use a debit card instead of a credit card and limit the cash you carry.
  • Arrange for automatic withdrawals so you don’t miss payments.
  • Use phone and internet banking transfers to save time and energy.
  • Clip coupons.
  • Pack a lunch.
  • Set up monthly payments for property taxes and insurance so you aren’t caught with a large bill at the end of the year.
  • Use the internet at your local library and cancel your internet subscription.
  • Check that you are using all internet / phone / cable / cell phone services – consider bundling services or changing service providers to save money.
  • Borrow movies, CD’s, books and magazines from the library instead of purchasing them.
  • Buy no-name products and generic medications.
  • Do not use credit cards with annual fees or memberships.
  • Car pool.
  • Invite friends to share a meal instead of going to a restaurant.
  • Buy bulk for non-perishable items.
  • Avoid convenience and pre-packaged foods.
  • Make a list and stick to it.
  • Consider buying produce from farmer’s markets.

Often by time people realize they are in financial trouble, they have already done significant damage to their credit rating. This means a big question weighing on a lot of people’s minds is:

 How do I rebuild my credit when I have a poor credit rating?

  • Avoid companies that promise to help with ‘Credit Repair’; they cannot do anything for you that you cannot do for yourself.
  • Obtain a copy of your credit report and ensure your credit score is reported correctly.
  • Make regular deposits in a savings account and don’t overdraw your chequing account.
  • Contribute to an RRSP.
  • Pay your mortgage / rent and utility bills when they are due.
  • Apply for a secured credit card with a minimum credit limit and pay the balance each month prior to the payment due date.
  • Take out a small loan and pay it back quickly.

Financial stress can be overwhelming. A licensed Trustee will be able to help you evaluate your situation and come up with a customized strategy that helps you get back on track to achieving financial freedom.

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