After Amélie lost her job, the couple paid for practically everything by credit card.
After Amélie lost her job, the couple paid for practically everything by credit card. Most of the time, however, they were able to make only the minimum payment on their card. They felt like it would take an eternity to reimburse the full balance. And they weren’t really that far from the truth.
Because of the interest charged, the amounts due on a credit card can skyrocket if you can’t pay the full balance owed at the end of each month. Do you know how much time it would take to pay back a balance owing of $1,000 on a credit card that charges an average interest rate (20%) if you only make the minimum payment each month? About 26 years! This is why credit cards can quickly lead you into debt.
After her separation, Geneviève, a mother of 4, had to take control of her situation so as not to face financial ruin. “It took me a good 6 months to set up my new budget and to learn to stick to it,” she says.
Among her sources of income, she receives child support payments from her ex, which are based on her having full custody of their children. Federal and provincial child benefits are also an integral part of her budget since, as a single mom of 4, she had to postpone her return to work by taking a 1-year sabbatical. She took advantage of this “forced leave” to go back to school and is following university correspondence courses. She is therefore entitled to a loan and a bursary, which are in addition to her other sources of income.
To be able to stick to her budget, she sets an amount that covers all her day-to-day expenses, with a little extra in case something unexpected comes up. “Everything is determined according to need and not according to want,” adds Geneviève.