When money is tight or debt is piling up, it’s not always clear where to start.
Before you consider a more structured solution, a few simple steps can help you find your footing. Here are three concrete options to explore at your own pace.
Lay the foundation for a realistic budget
A budget is a tool that helps you paint a clear picture of your finances, and above all, regain a little control. If your situation isn’t too complex, you can try making one yourself.
Start by calculating your:
- Total income (salary, benefits, pension)
- Fixed expenses (rent, mortgage, utilities, phone, insurance, savings)
- Variable expenses (groceries, gas, going out, online purchases)
- Debt payments (credit cards, loans, lines of credit)
Then, add:
- Seasonal expenses (back-to-school expenses, gifts, car maintenance)
- Subscriptions, which we often forget about (platforms, apps, gym, etc.)
The goal isn’t to create a “perfect” budget – it’s to get an accurate overview of your financial situation. Sometimes, seeing the numbers laid out in front of you is enough to determine what’s going wrong.
The easiest way is to start with conservative spending estimates, then adjust as you go. You can maintain a small margin for unforeseen events (10-15% if possible) to avoid having to adjust your entire budget for the slightest unexpected bill.
Every month, sit down and take a look at how you did. Which categories fell in line with expectations? Which ones went over? It’s an opportunity to understand your habits – then adjust them without self-judgment.
Get the family involved: turning limitations into an all-hands challenge
When you’re working with a tight budget, why should all the pressure fall on a single person? Getting other members of your family involved – whether it’s your partner, kids, or roommates – can transform a tough situation into a shared effort.
It all starts with an honest conversation: explaining your situation, laying out your priorities, and acknowledging that some changes will have to be made to get through these challenging times.
- As a team, choose which budget goal you’re trying to meet this month (outings, groceries, delivery)
- Pick a simple and accessible reward to enjoy if you succeed (free activity, at-home movie night, special dessert)
- Get the kids involved with goals that are adapted to their age and encourage them to participate in their own way
This approach won’t make the challenge at hand disappear, but it will help create a collaborative environment and reduce individual stress. Sometimes, it can even be the start of a lasting habit!
Structure your payments: moving forward strategically
When you have multiple debtors, it’s important to outline a proper repayment strategy. A structured plan can help you see more clearly, stay motivated, and reduce your expenses long-term.
One of the most popular approaches is to tackle the highest interest rate and work your way down. The concept is simple: start by paying off your most expensive debt – for most people, it’s credit cards – while meeting the minimum payment terms for all other types. Once you’ve paid off the highest-interest debt, move on to the next-highest. Then the next.
This method reduces the total amount of interest you have to pay; it’s particularly useful if you have several debts with very different interest rates.
But it’s not the only way.
Some people prefer the “smallest amount first” method (the snowball effect). This approach starts by settling the smallest balance first, which feels like quick progress. With each subsequent debt that’s settled, the total amount repaid grows and grows. It’s a very motivating framework, especially when morale is low.
Finally, some people choose a more personal approach: for example, paying off a family debt first or a loan that’s causing significant stress (like a formal notice or one that’s gone to collections). It’s not always the most profitable choice, but it can certainly provide peace of mind.
No matter the strategy you choose, the most important thing is to be consistent, go at your own pace, and reevaluate as needed. And even if – despite your best efforts – your debt just isn’t going down, that doesn’t mean you’ve failed. It just means you might need professional help.
If you can’t do it alone, there’s help out there
Sometimes, all of the good will and effort in the world isn’t enough.
It’s all well and good to make lists, review your expenses, and establish a plan…but what if your debt continues to pile up? What if you don’t know where to start?
At that point, professional help can make all the difference.
A licensed insolvency trustee can help you take stock, understand your options, and guide you towards realistic solutions – whether it’s consolidation, a proposal, or simply a better budget structure.
And no – you don’t have to be at the end of your rope to seek help. Meeting with us is free, confidential, and no-obligation.