Managing your money in challenging times

How to handle financially challenging times

A recession, a rise in interest rates, a loss of income or the recent pandemic are examples of unexpected situations that may lead to financial hardship. Managing your money will help you prepare for these types of situations and limit financial difficulties.

For example, a rise in interest rates often means that it will cost you more to borrow money. Plan to pay down your debt as much as possible. Start with the highest interest rate first so you pay less money towards interest.

Learn how to manage your money when interest rates rise.

The Financial Consumer Agency of Canada (FCAC) has educational resources on budgeting, credit, savings, managing debt and more. FCAC’s interactive tools and calculators can help you manage your money during difficult times.

Learn more about the Financial Consumer Agency of Canada’s online resources.

What to do to help avoid financial difficulties

Create a budget

Making a budget will help you manage your money. It will allow you to identify your income and expenses and prepare for unexpected situations.

Learn how to make a budget.

Make a plan to pay off your debt

Making a plan to manage your debt will help you achieve your financial goals. Decide on a strategy based on the types of debt and the amount you owe.

Learn how to make a plan to manage your debt.

Avoid taking on more debt

Having debt during difficult times may add stress to an already stressful situation. Consider all your options before borrowing more money.

If you must borrow money, make sure you understand the costs before you make a decision. Certain credit products are more expensive than others because of their high interest rates and fees. You should also only borrow the amount you need.

Learn more about what to consider before borrowing money.

Reduce your expenses

Reducing your expenses may help you limit financial difficulties. This will allow you to increase your savings and plan for your financial goals.

Find ways to save money before shopping.

Set up an emergency fund

An emergency fund is money you set aside to pay for unexpected expenses. If you don’t have an emergency fund, try putting some money aside if possible. You never know when an emergency may happen. You may need to rely on an emergency fund sooner than expected.

Learn how to set up and manage an emergency fund.

Increase your income

Identifying ways you can increase your income may help reduce stress and help you meet your financial goals. Make sure you manage this extra income wisely. Make a budget and put the extra money in your savings or use it to pay down your debts.

The Financial Consumer Agency of Canada (FCAC) has expectations for federally regulated financial institutions. FCAC expects them to help you if you're struggling to pay your mortgage due to exceptional circumstances.

Learn more about paying your mortgage when experiencing financial difficulties.

How to get through a financial emergency

Financial emergencies may happen to anyone at any time. They may be the result of family illness, job loss, urgent home repairs, or a natural disaster to name a few. Whatever the source, financial emergencies can be stressful for you and your family.

Emotional situations can lead to poor financial decisions. Be sure to get the help you need during an emergency. Take the time to get the right information and advice to help you make the best decisions for your needs.

If you’re having financial issues, try the following tips to help improve your situation:

Contact your financial institution

You may have questions or concerns about the impact of difficult times on your financial products.

Your financial institution might be able to help you. Contact your financial institution to find out what options are available to you.

Mortgage relief options

If you’re experiencing financial stress due to exceptional circumstances, consider your options now.

Read your mortgage contract and speak to your financial institution about your options. FCAC expects financial institutions to offer relief measures that are appropriate for you. You may be eligible for one, or a combination of the options they offer. The earlier they understand your situation, the more options could be available to you. Keep in mind that if you make changes to your mortgage contract, you may have to pay fees.

Find out more about mortgage relief options.

Consider payment holidays on your credit card

Your credit card issuer may offer you a payment holiday. This means they will let you skip a payment. However, you'll still pay interest. Payment holidays should not negatively affect your credit score.

Learn more about payment holidays.

Ask to lower your credit card interest rate

Your financial institution may be able to temporarily reduce the interest rate on your credit card.

Terms and conditions may vary depending on the financial institution. Contact your financial institution to see if this option is available to you.

Get help

Seek advice from reliable and trusted sources to explore your financial options. Contact a financial professional, such as a licensed financial advisor or an accredited credit counsellor, to discuss a plan.

Find out what you should know before choosing a financial advisor.

Be cautious when searching for the right professional to help you. Some companies offering to help to pay off debt or fix bad credit may be providing misleading information.

Find out what you should know before getting help from a credit counsellor.

Making a complaint about your financial institution

FCAC investigates complaints about financial institutions that relate to possible breaches of market conduct obligations. This can be a breach of a law, regulation, code of conduct or public commitment. Any consumer can file a complaint about a federally regulated financial institution with FCAC at no cost.

Keep in mind that FCAC doesn’t resolve individual disputes and doesn’t provide redress or compensation.

Learn more about how FCAC handles your complaint.

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