Tough financial times requires radical surgery

In case you missed the memo, life doesn't always flow as smoothly as we expect.

As a financial advisor, I've seen crisis rear its ugly head in many different ways.

Typical examples include extended illness, injury or other personal tragedy, out of control credit card debt, poor investment practise, gambling and substance addictions. I think you get the idea.

The great tragedy is in the lack of intelligent response to the financial consequence of these problems.

Here are my top 10 ways to deal with financial calamity.

1. Begin with this time-tried philosophy: Spend less than you earn - a simple but rare habit.

2. Secure the foundation. You think things are bad now? It can get much worse without a proper will, power of attorney or properly structured insurance plan. Do it now.

3. Determine the true needs in your life. Isolate all the "want" expenses such as: dining out, convenience foods, cable TV, wireless plans, subscriptions, vacations away, tobacco, alcohol, new toys, etc.

If you want to emerge out of your crisis quickly, eliminate or trim as many of the "wants" as possible.

4. Buy used. Ignore your bruised ego and become a regular on Craigslist and at consignment stores.

5. Be a rebel against the societal and media-driven consumerism that will always try to convince you that a want is a need.

6. Transportation is a budget killer. If you can take transit, bicycle, or carpool, you'll be miles ahead (pardon the pun).

Consider becoming a one-car family and definitely hang onto the car you have for as long as you can, unless it's a gas hog.

7. How about changing up your housing? If the debt load of your monster mortgage is too much to handle, consider downsizing or renting for a few years until you build your reserves.

8. Invest more into groceries instead of dining out, but within reason. You'll need your energy, so keep it all healthy and stay away from the expensive convenience foods.

Watch for sales and, it bears repeating, buy generic.

9. Vacations to exotic places will suck thousands off of your bottom line. British Columbia is a world class destination and it's time we all discover why.

10. How about increasing your income? Consider upgrading your job skills and prepare for a promotion. Why not turn a hobby into a business? Perhaps rent out a part of your home or take in a home stay student or two.

Let your imagination go and reap the rewards.

We underestimate how fortunate we are to be living in Canada. With very few exceptions, everyone has the ability to succeed, despite the circumstances. Believe it or not, even financial planners go through crises. Most of these tips have been tested in the trenches and I can confidently tell you that they work.

The opinions expressed are those of Richard Vetter, BA, CFP, CLU, ChFC. Vetter is a certified financial planner and owner of WealthSmart Financial Group in Richmond (www.wealthsmart.ca).