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How to Overcome 8 Sources of Financial Problems & Difficulties

How to overcome financial difficulties and problems in Canada.Protect Yourself from a Financial Crisis or Emergency

Financial problems and challenges happen to everyone at some point, and the stress and worry can get to you. However, realizing that there is almost always a way out can help you not feel so depressed. You may be able to find the way out yourself, or you may need someone else's perspective to help you find a solution. Below we’ll show you how to overcome financial problems and difficulties and ease your stress. But, one size does not fit all. If your situation is beyond the general help provided here, we’ll also let you know who you can go to for more in-depth help.

1. Identify the Underlying Problem That's Causing the Difficulties

The first step to overcoming financial problems is to identify the underlying issue that’s causing the financial difficulties. Financial problems are usually a symptom of a bigger issue. To come up with solutions that work in the long run, take the time to identify the real source of your financial troubles. Here are some common things to think about: 

Source of Financial Problem Reason Why Difficulties Often Occur Solution
Unemployment or lower than usual income Using credit for living expenses on reduced income Re-evaluate your lifestyle, create a budget and follow it. If employed, see if you can get a 2nd job or more overtime
Unexpected illness or accident  Increased medical expenses and low/no income Simplify your lifestyle. Get all the help you can. Make sure you're getting everything you're entitled to: check with your province & reach out to agencies that can help
Moving out on your own Used to a high standard of living that took your parents decades to achieve Adjust expectations and learn to live on what you earn rather than what you're used to; use cash, not credit
First baby is born Parents didn't budget for the increased expenses and the drop in income during maternity leave Adjust your budget and your lifestyle to fit the reduced income and increased expenses
Divorce Got the house but can't afford the ongoing expenses on only one income; left over bills Sell the house and downsize to something you can afford or generate revenue with the house
Retirement You're now asset rich and cash poor. You can no longer afford to live life plus pay the house upkeep on your reduced income Sell the house, move into something you can afford, invest extra proceeds from the sale, and enjoy life more
Emotional attachment to something You are not willing to part with something you can no longer afford: could be a home, business, vehicle or toy Set emotions aside and look at the situation from a financial perspective; picture life 5 years from now & what bills will be then
An addiction Spending more than you earn trying to satisfy the addiction Get professional help and counselling to deal with the addiction. If you don't, you'll never overcome your financial problems

Your problem may not be listed above or it may be more complex. However, the concept of identifying a specific problem is important because it is more likely to result in a lasting solution. Just like with a leaky faucet; placing a bucket below is temporary. Fix the tap and the leak will stop. Focus on solving the problem that’s causing your money troubles, rather than dwelling on your stress.

2. Create a Budget - Spend Money in a Way That Helps Solve the Problem 

One of the best weapons for combating financial problems is a budget. A budget is a monthly spending plan for your money. Creating a budget is like turning the lights on to find your way around a dark room. You no longer need to wander in the dark; banging your shins, tripping over the furniture, and stepping on the dog. Instead, with the lights on, you can see what’s going on and prevent problems before they happen. A budget works much the same way; it guides your spending decisions so that you're spending money on what's really important to you. In this case, you'll spend your money in a way that helps solve your financial problem.

Click here to learn more about creating a budget, or try out our budget calculator that guides you through the budgeting process, points out common problems, and offers suggestions to improve your budget.

Track Your Expenses to Build a Budget That Works

As you create your budget, it’s important that your expenses aren’t just guesses – they need to reflect reality. You may want to ​track your expenses for at least a couple of weeks (a month is best) to objectively see where you are spending your money and how much you’re spending. Although you may think you know where your money is going, when most people tally up all their purchases for a month, they are usually quite surprised to notice that their spending doesn’t always match up with what they thought their priorities were.

Once you’re confident the numbers in your budget are realistic, you can look at your budget critically and search for areas where you can save money. You’ll want to ask yourself things like: Do I need to eat out this much? Do I need to spend on entertainment or hobbies this month? Could I pack a lunch for work rather than buy one?” Asking yourself these questions doesn’t mean you’re cheap or restricted by your budget. It means that you’ve got bigger things to accomplish or worry about, things that can be solved by making some small changes.

3. Determine Financial Priorities to Guide Your Spending Choices

To overcome financial problems and solve your difficulties for good, you need to determine what your priorities are. Some might be clear-cut financial priorities, e.g. to pay off your credit cards. Others might be lifestyle-goals, based on your values, e.g. save up for house repairs so that your family has a nice place to call home.Steps to overcoming financial problems and difficulties.
Setting clear priorities for yourself makes it easier to make tough financial decisions. Turning priorities (=what’s important to you) into actionable and achievable goals (=what you do with your money, aka spending choices) will help you solve your money troubles and get back on track.
Your first goal may be to create a budget to get a specific problem under control. For instance, one of your short term goals may be to reduce your expenses and pay off your smallest credit card balance. A medium term goal could be to pay off your credit card debt.

4. Identify Small Steps You Can Take to Address the Problem & Achieve Your Goals

The solution to financial problems is often to reduce expenses, increase income, or do some combination of both. This might not be something you want to do, and you’re not alone. Most people don’t want to make changes to their lifestyle, but faced with the choice of ongoing money troubles, or making several small changes to ease up on the financial stress - most people are game to try.
Big changes are always much harder than small changes so to accomplish your goals, identify small steps you can take to achieve them. If you keep running into money problems because you’re $50 short every month, then maybe one of your first short term goals could be to pay off a small credit card balance that requires a $50 minimum payment each month. 

Look here to get ideas of where find some extra money each month, get the card paid off, and then permanently have $50 extra to use in your budget every month. However, if by the time you reach this goal you’ve learned to get by without this $50, then use it to accelerate the payment of another debt each month, and get all of your debts paid off more quickly. 

There is actually a name for this, it is called the “snowball effect” - maintaining minimum payments on all debts but putting all extra money towards one debt to get it paid off faster. Once that one debt is paid off, you put all of the extra funds towards eliminating the next debt. It’s one powerful method of paying debts off faster.


Look for Things You Can Do, Even Temporarily, to Improve Your Situation

Here are more ideas or steps you can consider taking to improve your financial situation and alleviate difficulties:

While doing any of these can be an unappealing thought, don’t just dismiss them because they’ll move you out of your comfort zone. Keep thinking about them and give them some consideration. Come back to these ideas from time to time to see if you can come up with a new angle on decreasing your expenses or increasing your income that might just work for you. Remember, you’re trying to get through a tough a time; you don’t need to do this forever, just to get back on track. If you’re really struggling, an experienced Credit Counsellor can be a great, free source of suggestions.

5. Develop Your Plan to Overcome Financial Problems for Good

Once you’ve come up with some ideas for how to begin tackling your financial problems and difficulties, you can put together a realistic plan to accomplish your goals. Some goals will have a timeline of a few months; others will need a longer timeline, like 24 - 36 months. Write your goals down, but also write down where you’re at now in relation to each goal. For example, if one of your goals is to pay off a $4,000 debt, make sure to write down the current debt balance and your future goal of paying this down to $0. You’ll want to include in your plan the amount of money you’re going to pay on this debt every month so that you can pay it off within your desired time frame. For more help on setting goals, have a look at this. Here are also some tips on setting financial goals with your spouse.

If you’re really feeling overwhelmed and stressed by your situation, you can also reach out to a non-profit credit counselling agency for help. They have professionally trained Credit & Debt Counsellors who can review your situation with you, help you put together a realistic budget, and help you come up with a plan to solve your current challenges and get your finances back on track. Their help is usually free and is always confidential.

6. Review How Things are Going

The last step takes place once you are a few months into working on your plan. Every once-in-a-while, take a few minutes to review how things are going. Is your plan working? Are you making progress toward your goals? If not, you’ll need to take a closer look to figure out why not and adjust your plan. Your plan needs to be realistic, or it’s not going to work. It should also contain some things you weren’t doing before you put the plan in place.

If you keep doing what you were doing before, then you’ll continue to get the same result as before – problems. You’ve got to do something different to get a different outcome.

As you follow your plan and see improvements in your situation, be open to the possibility of fine-tuning the plan. Once you start making some progress, you may find you’re doing better than you thought, or you may come up with some new insights. Improving your plan so that you accomplish your goals more quickly is good as long as your budget can afford the changes and everyone who relies on your budget is okay with the more aggressive approach.

Preventing Future Financial Challenges

Unexpected financial challenges are bound to arise in the future - in fact, research shows that 6 in 10 Canadians will experience major life events that will challenge their prior financial plans. The key to tackling these challenges is to be flexible. Review your budget occasionally and make necessary changes. Build up savings so that you can handle unanticipated expenses without going into debt and putting yourself in a difficult situation.

Overcoming financial problems and difficulties isn’t easy, but by setting some clear priorities for yourself, identifying ways to achieve these goals, and persevering with your plan, you can overcome the challenges and at the same time, put an end to the financial stress.




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I have more loan for I faraway to my family.I am not known how I cleared to my loan then reached to my family.

Hi, When it comes to loans, you'll need help from someone who knows the lending rules in your country. If you live in Canada and are looking for help, contact the Credit Counselling Society at 1-888-527-8999 or chat with them on their website at If you live in another country, try searching for help in your country.

I am unable to repay the loan amount due to less salary kids and their education depends upon me.. Every month I am struggling to manage situations.. any help or any work I am expecting

Hi, As we mentioned before, if you live in Canada, give the Credit Counselling Society a call at 1-888-527-8999 and they can either help you or refer you to someone who can. If you live outside of Canada, search for a credit counselling or similar organization that serves your country.

My name is Pushkaraj S Sawant I am unable to repay the loan amount due to less income kids and their education depends upon me.. Every month I am struggling to manage money problem. .. any help or any work I am expecting

Hi Pushkaraj, If you live in Canada, we would suggest that you speak with a non-profit credit counsellor. They can help you take a look at your full financial situation and make a realistic plan to move forward. If you don't live in Canada, see if your country has any credit counsellors who may be able to help (try searching on Google).

I am a 49 yrs old. I resigned my job in 2016 and started livestock business of my own. Initially I run the farm with enthusiasm and comfortably, also was in profit. But due to some mistake as well adverse situation like covid'19 recently, my financial position detoriated very badly. Now, I am in big financial crisis. To come up from the worst situation I am in search of a good and proven work plan. Please suggest and guide me.

Hi Diganta, If you live in Canada, we would also suggest that you speak with a non-profit credit counsellor. If there is anything that can be done to help you, they will be able to point you in the right direction. If you don't live in Canada, see if your country has any credit counsellors who may be able to help (try searching on Google), or see if your government has any programs to help people in the agriculture industry.

Hi, My life is very complicated due to choices I've made when younger. Right now I live in Canada, divorced, two adult sons living in two different European countries and my family lives in a South American country. I have some savings from the selling of a condo which gives me dividends that together with a low paid job with NO retirement plan, allow me a quite decent life. I get OAS since last year, a very small amount because of the few years a have lived in Canada. If I move I'll loose that. My investment cannot be taken to the South American country because of they will convert the money into the country's currency which is not worth anything. If I quit my job my investment dividends alone will not cover for my living costs and will need to eat up the money invested. If I move out of Canada to be with my sons I'll also loose my OAS income. Although I don't have debts, I feel trapped, my money is not enough and I'm working at a place where there is no chances of promotions or getting a retirement plan. At my age I'd like to be close to my sons, but its very expensive to live in Europe, specially if I'll only have my dividends and will be using the amount invested, which will last maximum, 10-11 years if I use 35.000 $ CAD per year. From a financial coach opinion what can I do to improve my situation? Is there a solution? (I'm very frugal, I save money every month into a savings account, but the international trips are my biggest spendings). Thank you very much for your advise.

Hi Nina, Thanks for asking your question. Our best suggestion would be for you to find a local financial planner to help you with your decision. A certified financial planner can help you crunch the numbers, compare your different options, and make an informed decision. In the end, the decision may not be easy but getting input from a trained professional may be helpful and help give you a little more peace of mind with whatever you decide to do.