When every cent counts
Living on a reduced income can mean drastic lifestyle changes

Diane Pageau never thought it would get this bad. Three months ago she had a dream job as an office worker for the Sureté du Québec. Then at the end of February she got the bad news: the department was cutting back, and her position was being eliminated.

"I was very surprised. I loved my job and did not want to leave," Pageau said. "I knew that as a contract worker that they could let me go any time they wanted to. But I still felt secure and even bought a car that I now have to make payments on."

The loss was tougher for Pageau than most. She is a single mom who faced years of hardship raising her son while working and completing her university degree in administration.

After three years with the Sureté du Québec, she was just starting to get on her feet again and now she is back to counting pennies.

"With Employment Insurance I only get about 60 per cent of what I was earning before. That barely covers my car and rent payments," Pageau said. "What I do I do for food, clothes and other expenses?"

Pageau's problem presents a unique challenge for financial planners, many of whom cater to middle and upper income folk, whose biggest dilemma involves such challenges as to whether to invest in a RRSP or to go on a cruise.

But for the 713,000 Quebecers who are collecting Employment Insurance or are on welfare, financial theories such as "pay yourself first and "dollar cost averaging," don't mean much.

Many are forced to turn to social service organizations just to meet their basic needs. Tommy Kulczyk, director of emergency services at Sun Youth, which runs an emergency food bank that services about 700 clients a week sees people like Pageau every day.

"When you are poor, it's hard to think long term. Financial planning often means dealing with one crisis at a time," Kulczyk said. "You have to juggle rent, electricity and phone payments. And you end up paying whichever bill collector screams loudest."

According to Kulczyk the first thing to remember if your income is suddenly cut is that you are not alone.

"The biggest and most important problem is a psychological one. People feel embarrassed that they can't make ends meet," said Kulczyk. "But they need to remember that they are not alone. There are lots of people in the same position. The CBC is on strike, and we have already had phone calls from people requesting information."

For Pageau, the hardest part about not being able to make ends meet is the effect her poor financial position might have on her son Adam, a handsome, thoughtful boy, who likes sports and model building.

"Adam did very well this semester. His marks really improved, and he just got his red belt in Tae Kwon Do," said Pageau. "But the school year is over and he needs new shoes and summer clothes. And he wants to play in a basketball camp. But that costs $35, and I don't have $35."

Despite the difficulties Pageau maintains a stiff upper lip and refuses to be discouraged.

"I know that there are women a lot worse off than I am," she shrugs. "At least I have a certain education. If I can get into a job retraining program I am sure that my situation will be only temporary."

But for now times are tough. To make ends meet while waiting the eight weeks for her first EI check, Pageau had to pawn her computer. Although she paid $2,000 for the Pentium 3 machine two years ago, the pawn shop manager gave her only $150. And if Pageau does not come up with $183 by the end of the month, she loses the computer.

"That works out to 30 per cent interest, for a one month loan," Pageau said. "It's a lot of money. But I had no choice."

Pageau's advice to others in her predicament is simple: "don't be afraid to ask for help," she said. "There are many organizations such as soup kitchens, churches and social organizations that people can go to."

Pageau also counsels basic money saving tips such as staying away from buying brand name grocery products and instead opting for the generic equivalents. And that applies to prescription drugs as well.

She also advises getting out of the house often to keep spirits up, and doing activities to meet other people, such as going to Canada manpower centers regularly.

She counsels eliminating newspaper subscriptions by reading the paper at the library. "I save $30 a month that way," she said. Her final piece of advice: "Stay away from pawn shops," she grumbles.

Photo: Diane Pageau is so short of money after losing her office worker job, that she can't find the $35 she needs to get her son Adam into a summer basketball camp.


Diekmeyer can be reached at: Peter@peterdiekmeyer.com


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