By Jasmin Brown, BDO First Call Debt Solutions

BDO First Call Debt Solutions

How working from home can help you pay down debt

May 29, 2020 | 9:46 AM

Are you one of the millions of Canadians who have adapted to working from home in the last few months?

Change in your work routine can be difficult. When you add concerns about family, health and personal finances, it’s not surprising that so many continue to feel stressed.

The good news: working from home might be an opportune time to focus on relieving one of your sources of financial stress: debt.

If you have been able to maintain your household income and job security while working from home, now is a good time to plan ahead. Whether you are carrying a lot of personal debt or a manageable amount, there are solid strategies that can help you avoid additional debt, and even reduce your debt during this stressful time.

First, it is important to avoid additional debt

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Social distancing and self-isolation can result in a range of emotions, including anxiety, boredom, irritability and fear. Adjusting to new situations, like working remotely, can increase feelings of anxiety.

Worries about the future can lead to panic buying in larger quantities than your regular budget will allow. Boredom or depression can lead to impulse purchases that might trigger short-term happiness, but can also result in additional debt. Try to be mindful of your spending triggers and keep track of how much you are spending. Overspending can lead to debt, which can accumulate quicker than you anticipated.

Your change in work routine might help you pay down debt

If your pre-COVID-19 routine included commuting to work every day, you may have noticed that the last few weeks or months of working remotely has had a positive effect on your budget. Perhaps you are spending less on fuel, vehicle maintenance, insurance or transit costs. Lunches at a restaurant near your workplace and quick coffee runs are off the table. You may even be saving on dry cleaning bills or clothing costs.

This is all helpful when it comes to your debt repayment goals. If your household income has not changed and your monthly costs are lower, consider taking this opportunity to be proactive. Reallocate any money you’re saving now to debt repayment. Add to your emergency fund if you can.

Think of it as a chance to safeguard your finances. If you face reduced hours or a layoff in the coming months, you won’t have the additional stress of managing debt. And any money you can put aside for emergency savings now will help you avoid debt if you are faced with unexpected expenses in the future.

Look for online financial tools and resources

You can create your own debt repayment strategy by using our online debt repayment calculator to help you determine how payments will affect your interest charges. Financial assistance may also be available. If you decide you want or need to defer your mortgage or credit payments, speak to your lender or credit card provider. Just remember that not everyone will qualify for a deferral, and a deferred payment is not the same as payment forgiveness. Make sure you fully understand what effect deferring payments will have on your total amount owing.

If you are unsure of how to deal with your debt on your own, reach out to a professional. A Licensed Insolvency Trustee (LIT) can explain how to streamline your existing household budget. An LIT will also help you compare different debt relief options, including a debt consolidation loan, debt management plan, consumer proposal and bankruptcy.

During this period of time, when many things still seem uncertain, it might seem counterintuitive to pivot and begin a new financial strategy. However, if you are experiencing savings by working from home and your household income is sufficient, now is the time to take the necessary steps to safeguard your finances.

During this COVID-19 crisis, nothing is more important than ensuring the health and safety of our people, clients and communities. Currently the BDO Debt Solutions offices are temporarily closed, but we remain open. Our employees are working from home for the foreseeable future.

We will conduct consultations, sign-ups and counselling by phone or videoconferencing on whichever platform you are most comfortable with, including FaceTime, WhatsApp, Zoom and more. We will be as flexible as possible with appointment times. For documents such as income and expense reports, and tax information that must be sent by email or fax, we offer free scanning apps like Adobe Scan. We are also accepting pre-authorized debit (PAD) to make payments.

Call us at 1-855-BDO-DEBT and let us know how best we can serve you

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