Economic situation putting pressure on family finances

Credit card balances, mortgage payments, car loans and many other bills are on the minds of people affected by layoffs at Tenaris Algoma Tubes, and, more recently, Essar Steel Algoma.

With that, the number of people visiting Credit Counselling Service of Sault Ste. Marie and District is on the rise.

Those people are in an anxious state of 'how do I meet those payments?' while laid off. 

"It's starting to pick up, people are getting more worried," said Greg Elsby, Credit Counselling Service of Sault Ste. Marie and District executive director.

Free and confidential advice as to how to meet those bill payments and adjust to life while waiting to be called back to work is available from Credit Counselling Service.

The agency can, in some cases, arrange for lower payments to creditors for their clients.

"We encourage people to come in right away, often people will wait until they're getting into a crisis, like missing a payment," Elsby told SooToday.

"Financial stress is hard on families, it eats at people and it starts to manifest itself often with health issues, we see a lot of pressures on marriages because of financial pressures."

"We have a lot of in-house solutions where we can help people, and it's free."

The first thing to do is be prepared for a financial emergency, Elsby said.

"They should have a written plan, and that's in the form of a budget."

"If they think they're going to get laid off, they should estimate what their new income is going to be, they have to look at the delay until their Employment Insurance comes in, and write down what their expenses are."

It's surprising, Elsby said, how many people don't know what their expenses add up to because they do not budget.

"Write down the big things like mortgage and utilities, certainly groceries, and also medications, internet, cell phone bills and also the smaller things like haircuts, add them all up and ask 'do I have enough money with what's going to be coming in to cover my basics?'"

If not, Elsby said unpleasant cuts have to be made.

Those cuts, Elsby said, could include cutting such things as music or dance lessons for children.

Nevertheless, Elsby said a person must keep a positive mindset and look at those cuts as temporary (until being called back to work, hopefully).

"(Affected people should) think of it as a short-term setback and things will get better…nobody knows how long it will last, but people have to make a good responsible plan to live on a reduced income for a while."

A danger to avoid is not making those cuts and paying for those items through a credit card or a line of credit while hoping to be called back to work.

"We find people really quickly get deep into debt in a layoff situation," Elsby said.

Paying back the interest on credit card debt is long and tough, and even moreso with payday loans, Elsby warned.

Talking to creditors and refinancing a mortgage and other debts is sometimes possible in tough times, Elsby said, and it could also be necessary to sell off assets (such as a recreational vehicle or other luxury, and buy another such luxury item when times improve).

Credit Counselling Service of Sault Ste. Marie and District, a not-for-profit agency affiliated with the United Way, may be contacted at 705 254-1424 or online.