How to pay your mortgage and avoid cutting back on food


Tips and tricks to keep your mortgage payments and other homeownership costs in line

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Inflation is on the rise, so many homeowners are understandably expressing concern over keeping up with their mortgage payments and other homeownership costs.

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As a credit counsellor, it’s time for a serious conversation when people start telling me that they are spending less on groceries so that they can keep up with their mortgage payments. Yes, living costs seem to be going up day by day. But not keeping ourselves adequately nourished and taken care of can have worse consequences than defaulting on a mortgage.

To help keep your homeownership affordable, here are some of the ideas I share with my clients.

Put your house to work

You might like the use of your whole house, but temporarily — just to get by right now — get out of your comfort zone and consider how you can make some money from it: short-term vacation rentals, take in a border or student, organize room for a renter, rent the garage, allow someone to use part of your yard for storage, or rent space in your yard to someone who wants to plant a garden. Get creative and figure out how you can generate even a few extra hundred dollars a month. Check your city’s zoning/bylaw rules and give your insurance agent a call about your plans as well.

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Turn a hobby or enjoyable task into extra cash

Think about offering a small dog-walking service if you like to walk. This benefits you as well as the dog and their owner. If you work from home, you could provide doggie daycare. Many people who are returning to their workplaces don’t want to leave their trusted pet at home alone. If four-legged family members aren’t your thing, offer services for the two-legged tykes. Out-of-school care or babysitting by a mature person who can accommodate odd hours is worth gold.

Earn extra income

Get a second job, take on additional shifts/hours at your current job, or sign up with a freelance marketplace to earn a little cash doing odd jobs. It could be something as simple as getting paid to assemble Ikea furniture, do yard work that’s too much for a senior, proofread a resumé or help students learn English. It’s easy cash when matched with your skills and abilities. Just be sure that your side hustle doesn’t jeopardize your primary source of income.

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Finding ways to generate more income is great, but it’s important that the extra you’re earning is over and above any related expenses. For example, taking someone into your home will mean higher electricity, water, gas and even food bills. You might have additional insurance costs at home or even for your car if you drive for a gig (for example, meal delivery or ride hailing).

If earning more seems like too much of a chore, look around to see how you can generate a lump sum of money. Start with the big things, such as selling a second car that you don’t really need. You can always buy another car if you need it.

Then look around your home to see what you can do without. For example, supplies and tools for a craft or hobby you’re no longer doing. Go through your closets, the garage and storage areas. Collect what you don’t need and have a garage sale. Bonus points if you sell something that also has payments attached, such as a car or recreational vehicle. Just be sure to sell it for more than what is owed on the loan before counting your cash.

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If you do come up with a lump sum, be sure to set it aside in a separate savings account so that you can plan how best to use it. For some, it might become an emergency fund. For others, it might eliminate a bill or two entirely. The savings could also be used to top up your paycheques for the months you fall a little short on your expenses.

To make the savings last as long as possible, track your spending to see where your money is really going. This is always an eye-opening experience for my clients, even the ones who think they already know. Analyze every bill to see if it’s needed and if it can be reduced. Call your service providers to ask about better plans. Four or five streaming services? Pick your top two. Talk to your lender to see if your mortgage payment can be reduced so that you can get back on track.

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Keep in mind you don’t have to go it alone. A non-profit credit counsellor in your area will be happy to help you create a budget that aligns with your goals and is based on your current circumstances.

By now, you might be thinking that doing a little of each — increasing your income and decreasing your expenses — might work best, and you’d be right. A balanced approach is best for most people. The mortgage payment isn’t always the real culprit when we think we can’t afford our house. Become mindful of your spending choices and really watch your expenses. Check in with an accountant or tax professional about what to expect come tax time with extra income and/or expenses.

And, who knows, when inflation is back under control and our spending can return to “normal,” your new normal might include topping up your savings rather than wasting money on stuff you don’t need or want.

Sandra Fry is a Winnipeg-based credit counsellor at Credit Counselling Society, a non-profit organization that has helped Canadians manage debt for more than 25 years.

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