127 – More Canadians Are Living Paycheque-To-Paycheque

Wayne Kay 00:04
More and more Canadians are living Paycheck to paycheck. That’s our topic today on the Debt Matters podcast, where we help Canadians find solutions to their debt with licensed insolvency trustees from across Canada. I’m Wayne Kay, and we’re going to be talking about this paycheck to Paycheck cycle that so many Canadians are in. You know, what can you do about it is they’re a way to maybe save some money, even though there may not be enough paycheck to go around to help us with this. My guest today is Mark Marshall with Allan Marshall & Associates, Licensed Insolvency Trustee from New Brunswick.

They’ve got offices in St. John and Moncton. Hi there, Mark.

Mark Marshall 00:43
Hi. How you doing, Wayne?

Wayne Kay 00:44
Doing great. How are you doing?

Mark Marshall 00:46
I’m good. Can’t complain.

Wayne Kay 00:48
Good. Well, we’re one of the lucky ones, then, because it seems that right across the country, this is going to be our big topic today is paycheck to Paycheck is a dream for some people.

Mark Marshall 00:59
Yeah, it seems to be. And it’s unfortunate, but, yeah, it seems to be a little bit more of the norm lately than it has been ever, really.

Wayne Kay 01:10
Yeah, I know. It’s been wild now. So you look at some of the research. What do you think is going on? Why Canadians are having such a tough time?

Mark Marshall 01:21
Obviously, everybody is feeling the pinch with inflation. So the price of borrowing money is up, the price of goods are up. Everything seems to be just a little bit more expensive. And it used to be things like travel or entertainment where luxuries and people would save up and spend some money on that. Those are very expensive.

But now everything from food to housing to gasoline, all those things seem to be high as well. So, I mean, dealing with your day to day fixed costs, the expenses that you have to incur are higher than ever.

Wayne Kay 02:04
And young people starting out, it’s got to be dreadful for them. Trying to find rentals in our country is so hard and so expensive. I just shake my head when I’m seeing what the price of people’s rents are these days.

Mark Marshall 02:20
Yeah, rents are kind of getting to that point where it’s almost becoming out of reach for people, which. It’s just mind blowing. But I mean, all that stuff, it’s supply and demand. There seems to be more demand than ever for housing. And so that, of course, allows the people that are in charge to then kind of charge what the market is demanding.

It makes things difficult for the average person or the average. You know, you’re looking at rents or even trying to be a first time home buyer in this country is starting to become unattainable, and it’s a little scary.

Wayne Kay 03:03
Right. And New Brunswick, is it okay for housing there, or is it really jumped?

Mark Marshall 03:09
Yeah, the price of housing has jumped. Like COVID drove the market. There was a lot of people from some of the bigger centers in Canada, in Ontario, that made their way to the East coast, and they made their way, one, for the space, and two, because of the price of the market. I mean, obviously, things were a little bit more affordable than they would be in downtown Toronto. But of course, it’s had a bit of a cascading effect, because with supply and demand, there’s less supply and there’s more demand, and so the prices are. So we’re feeling the same as you guys would be in the West Coast.

Is that the average rental unit in New Brunswick, probably pre COVID, would have been for a single apartment in the range of 850 to 900. And now it’s pushing probably closer to $1,400 a month.

Wayne Kay 04:02
Wow. Yeah. That’s big difference in a lot of people’s paychecks. So do you have some kind of tips for us on how to eliminate this or help with this paycheck to paycheck cycle?

Mark Marshall 04:13
Yeah. Well, I mean, the first key is just. I know that I’ve said this on your program before, but you got to just track and know what you’re doing with your money, and that’s the first thing. So you track, and then based on your tracking efforts, you can see whether or not you’re wasting money.

And then what you try to do is then eliminate the waste. And so the waste can come in the form of eating out too much, which would then mean you want to start to look at bagging a lunch. Or it could mean that you go for coffee two or three times a day, that you might want to look at going to coffee once or looking at bringing your own coffee from home, if you can. Carpooling is an option for people. If the price of gas is getting out of this world, carpooling is a possibility. It may not be a possibility, but if it’s something that you can explore with a coworker or someone that lives in your vicinity, that you’re traveling to the same place, you kind of maintain the same schedule is if you can share that cost, that would be the way to go.

This would not necessarily be easy for families, but some people, if they’re living kind of a single working lifestyle, does it make sense to share the housing expenses with somebody and partner up and maybe find a roommate to kind of help with the utility costs and maybe split the rent. So those types of things will help you overall in terms of trying to stretch the dollar a little bit further. And then the other thing you could look at is if maybe if you are a homeowner, if you’re in your retirement years or you’re kind of near the end of your career, your family’s gone, if you’ve got a big house, selling that house and downsizing, is that something that you can do that’s going to save some money on a month to month basis, whether it’s for property taxes or the heating costs or reducing the mortgage payment and getting yourself into something that’s a little bit more affordable. If you can downsize, if that’s a possibility, that’s another kind of option you can look at to see whether or not that would help you on a month to month basis.

Wayne Kay 06:10
I know a few people have actually done that where they’renting right now. They sold their house because they figured it was perfect time to sell. And they’re going to rent for a little while and wait for things to hopefully calm down, which I think they will.

Mark Marshall 06:24
They will. Yeah, I think they will, too. But again, that is the thing.

If you’re getting out of the market, you potentially have to get back into the market. So it’s the devil you know or the devil you don’t. Right. Sometimes you got to take those things into consideration. Duration, because you might make good money on selling your home, but then all of a sudden you take that good money and you’re no further ahead. And you got to buy something that’s going to be smaller, but it’s going to cost you the same amount.

Wayne Kay 06:48
Right, exactly. It’s funny, though, I’ve got a friend who’s looking at moving over, and it’s a lot more expensive living here than where he lives. And he’s got a family, but he is somebody who’s used to being a landlord and he won’t even look at a place that doesn’t have something that he can rent in it, like a basement suite. So he’s just got that mindset.

And a lot of us don’t have that mindset. I don’t think of sharing my house or renting the basement out, but that is something many of us might have to start doing.

Mark Marshall 07:20
It could be, yeah. Because, I mean, again, if the demand is out there, it’s a way that you can supplement your income a bit. Right.

One, you’re going to be giving up some of your space, but turn some of that extra space you have to a little bit of cash flow on a month to month basis. It’s not a bad maneuver.

Wayne Kay 07:39
Right. Okay. What about maybe discussing wage increases with employers?

We’re seeing a lot of strikes that are going on in our country these days. If you don’t have a union, do you reach out to the employer? Is that a good thing to do?

Mark Marshall 07:54
Yeah, I don’t think it’s a bad thing to do, the way the market’s been. And you’ll find that everybody, most employers are short staffed or they’re looking for somebody.

And so I think some of the bigger organizations, they’re seeing a bit of turnover, like the post COVID, there’s been turnover. And because one is that people are receiving offers to make a few more dollars somewhere else and they’re recognizing that there might be a little bit of a demand for their services or what they can provide to an organization. So it’s never a bad thing, I don’t think, because one, you want to know what your value is or what your market would dEmand, but I don’t think you can go wrong with having that conversation to see whether or not, especially if you’ve been with the organization, you think or you recognize you provide some value to it. It may not hurt to have that discussion about a wage increase as a possibility to keep you there. But again, you’re going to want to know the market.

You’re going to want to have some options available to you so that if the answer is no, is that, one, you either live with that answer, or two, you look for an alternative employment or alternative income source. Again, you want to know your value before you make that request. But I don’t think what’s the worst that can happen is the employer is going to say no. But if you’re fourth rate and explain, look here, my day to day costs are going up. I can’t afford to continue to work here at this salary. My housing expenses are going up.

The costs of getting the work are going up. I guess it’s not something that’s out of the realm of having that discussion with your employer, especially if you have a good relationship with them and you can provide some value.

Wayne Kay 09:40
Right. And it’s funny, because I’m old school, I’ve had the same job for work for the same company for 23 years, and before that I’m very loyal. It’s just that’s kind of, maybe I called it old school, but it’s funny. My son, he’s now into his working career and he’s being told, well, you don’t have to be loyal to a company because as soon as you find a job somewhere else, that company might offer you more money to stay or you go up. And he said, so things have really changed in that whole world for him, is that he said, it’s like you keep moving to different jobs to increase your income.

Mark Marshall 10:23
Yeah. And I think we’re seeing that more and more today than we did in the past because you and I would be probably of the same era. And you land a job and you find yourself working and you work your way up through, and your expectation is that you’re going to be paid for what you provide and you’re hopeful that your income will increase. But yeah, I think nowadays, especially younger generation, they’re a little quicker to kind of make the jump and explore more opportunities or different opportunities.

And that’s not necessarily a bad thing. And I think especially the people that are older or kind of locked into a job, sometimes they don’t recognize is that they may demand a little bit more money in the marketplace. Again, making that request or considering that option with your current employer having that discussion, I don’t think it’s a bad thing.

Wayne Kay 11:17
So saving money is always something that we talk about on this show. To save money, we want to put away money. Do you have some ideas or tips on how we can go about saving money when we’re stuck in this horrible paycheck to paycheck life?

Mark Marshall 11:32
Well, it’s not easy to do, but what you got to do track know what you’re doing with your money. So you can try to eliminate the waste and then from there turn the waste into savings and doing things like trying to pay yourself first. And it’s the old expression of pay yourself first. How do you do it?

Well, you want to set aside some money for yourself. And so every time you’re paid, you might kind of consider saying, look, I’m going to take $100 or $200 of this pay and I’m going to set it aside in either a savings account or a tax free savings account or into an RSP an account or something that’s not easy for you to access. I mean, the funds are there if you need them, but it’s not something that you slide that $100 or you’re paying yourself 1st $100 or $200 and then you’re saying, okay, I want to spend that this weekend, and you’re just going to go to that account, take the money if you can kind of out of sight, out of mind, if you can put it off into an account that’s going to require you to sign some papers or make an appointment or get into access those funds, it’s not as easy to get after. And the other thing that some people will do, and these are new programs you’ll see with the banks, but any purchase you make is that a lot of the banks now will round that purchase up to the next dollar, and they’ll take the change or whatever it is that’s rounding that up, and they’ll take that money and they’ll set it aside into another account. So it’s like you’re saving almost like pennies in the jar.

And that’s another way or another tip that you can try to kind of generate a bit of savings for yourself. But again, I know it’s hard for people to consider saving money when they’re finding that all the money is going out the door. And again, the number one way to find savings in your budget is track and know what you’re doing and recognize if you’re wasting money, because a lot of people won’t know that they’re wasting money until they actually write it down and recognize that there is a bit of waste there. And we all do it. We all waste a little bit of money.

It’s hard not to do it. But instead of getting to the end of the month and saying, I have no money left over, if you can track it, you can see where that waste might be and then try to turn that waste into a little bit of savings for yourself.

Wayne Kay 13:42
It’s amazing. That is such great advice. And you have so many people that come in to see you, and that’s probably one of your first questions.

So have you been tracking, do you know where your money is going? And they probably almost always say, no, I have no idea.

Mark Marshall 13:58
Most people don’t. Most people don’t track it.

Wayne Kay 14:01
Yeah. And I’ve watched a lot of the used to have a lot of financial shows on TV, and I loved watching those. And that’s what they would always say is, yeah, well, I have no idea. They would say, well, okay, I spent $3,000, but you only brought in $2,500. And it’s like, I’m no math wizard, but you’re going in the hole every month.

Mark Marshall 14:22
Yeah. And so you’re going into that hole by subsidizing yourself by a credit card or a loan, or you’re taking it from another pot, right. Where you’re getting that money. From. But it’s hard to unless you track. And you know, if you’re going backwards, it’s going to be difficult to save any money. And it’s not going to be long before, if you are going backwards or spending more money every month than what you’re making, that you’re going to find yourself to be kind of insolvent to the point where you’re unable to maintain the payments that you have.

Wayne Kay 14:57
Right. Great information. Do you have any final thoughts you want to share with us?

Mark Marshall 15:02
No. The only thing I’d say is if anyone’s struggling, and I know people are struggling, but if you’re struggling is know consult a know talk to a professional. You can talk to a licensed insolvency trustee, any licensed insolvency trustee across the country, I mean, preferably someone at our firm. If you need to reach out, we have offices in British Columbia and Alberta and all over the Maritimes. But your first consultation with a licensed insolvency trustee should always be free. And if anything, you’re just arming yourself with information. So if you’re struggling, there’s no harm in gathering more information to see what options are available to you to kind of write the ship if you need to.

Wayne Kay 15:41
Right on. Mark, always a pleasure. Thank you very much for being on the show.

Mark Marshall 15:45
Okay, Wayne, thank you very much.

Wayne Kay 15:47
Well, once again, my guest today was Mark Marshall. And you can learn more or schedule that free consultation with Allan Marshall & Associates Licensed Insolvency Trustee by going to the website wecanhelp.ca. And that’s it for today’s Debt Matters podcast. Now, make sure you subscribe wherever you get your favorite podcast from. And of course, for more information, you can always check out debtmatters.ca. Thanks for listening.