Monday, May 3, 2010

Budgetting for pension cut

There are 5 more months of full Nortel Canadian pension payments remaining before October when the plan winds down, and our payments will be cut somewhere between 30 and 40 percent.

That's a lot of money lost on an annual and monthly basis. If you haven't already done so, now is the time to work out how to survive with that reduced income.

For some people it may not be a big deal since they have other sources of income and support, but for many it is a nightmare that they are facing, and it is best to be prepared than to waken up on October 1st and start trying to put your life back together with a huge income cut.

My family and I have always used a budget method to keep track of our income, our expenses, and our savings. It has helped us live within our means and still have a very good life. Over the next few days I will post some basic details of how we manage our budget and maybe it will help some people realign their expenses with their new income.

There is no magic formula or silver bullet. But information is power, and knowing how to use it to manage with less will help improve peace of mind. The best approach is to be optimistic, but pragmatic, and to learn to live within your means whatever they may be.

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