Where are you at?

My name is Douglas Hoyes, and I am a bankruptcy trustee. My job is to help people deal with their debts. The first step in solving your money problems is to figure out where you are at: you need to make a list of what comes in and what goes out every month.

Many people I meet with get a scared look on their face when I suggest making a household budget. They may not be good at math, or they may be afraid to “do it wrong”. Don’t worry; there is no right or wrong way to make a budget. Make a list of what you spend; that’s all there is to it.

Why is a budget important? Simple: if you don’t know where your money is going, it’s impossible to make changes to improve your financial situation. When I meet with people in financial trouble I explain all of their options for dealing with debt, but without knowing how much money they have to work with each month it’s very difficult to work out a plan.

For example, if your budget shows that you have lots of extra cash each month, you can probably repay your debts on your own. With a little less cash you may still be able to afford a debt consolidation loan. If you can afford to repay your debts but you can’t afford the interest, a debt management plan may be the answer. If you can only afford to repay a portion of your debts, perhaps you need to consider a consumer proposal. If cash is very tight, and your debts are very large, your only option may be personal bankruptcy. The point is this: without a budget, it’s almost impossible to determine with option is right for you.

If you have more debt than you think you can handle on your own, contact a debt advisor today. Let us explain all your options and help you become debt free.

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