COVID-19 continues to spread around the world and across Canada. When it comes to a threat so unpredictable and seemingly near, health should be everyone’s priority. This pandemic is an unprecedented time of pressure to effectively manage our lives in every single aspect—helping our neighbors, taking care of family, and making ends meet with little budgets we have left.
Experts continue to warn about the economic impacts of COVID-19, which is posing much threat. No matter who you are, this crisis is inescapable. With that said, you’re likely struggling with finances, along with 3.1 million Canadians across the country. These people have already filed for unemployment, coming from different industries such as retail, food (restaurants), and other businesses. Over 50% of Canadians lived paycheck to paycheck before the onset of the COVID-19, which means many are left with little-to-no savings to cover their current costs of living.
Although far from any semblance of good circumstances, effectively managing your personal finances means budgeting wisely. Cutting back on expenses is an ideal way, as with reviewing your budget to turn it into a response strategy. To help you cope with the financial crisis, here are four tips you can do right now as you await the return of the feeling of normalcy:
1 - Assess your spending habits
Due to the pandemic, you’re likely experiencing a change in income. To overcome this, a change in spending patterns is necessary. Analyze your current spending habits and adjust them accordingly.
● Stocking up prepares your household for the worst, but overbuying will only strain your budget. Prioritize your needs over wants—those boxes of candy bars can wait, as can that new set of towels.
● Let go of streaming services, magazine subscriptions, and gym memberships. You don’t need them at the moment.
● Do not shop online. “Retail therapy” may very well be how the modern world copes with stress, but it will leave you with unprecedented credit card debt.
2 - Contact your creditors
Chances are you’re paying for credit card bills, so before you begin getting behind, contact your creditors. Reaching out to them will allow them to assess your situation better and craft a plan to help you keep up.
You may be offered revised terms, reduced interest rates, and even skipped payments. Contact your banking provider to learn more about deferring mortgage payments.
3 - Identify and list down your budget expenses
As soon as you’ve pondered spending habits and got a hold of your creditors, it’s time to begin identifying where the rest of your money should go. Sacrificing on costs may seem overwhelming, but this is a sure way to making your current financial situation less stressful. You already know about your spending habits, and now’s the time to identify all the necessities. Refer to the list below to get an idea of what you should be prioritizing:
Priority: Your fixed expenses (Basic standard of living)
● Housing (Rent or mortgage)
● Utilities (Electricity, water, internet)
● Food (Groceries)
● Insurance policies (Health, motor, house, etc.)
● Debt repayment (Student loans, credit card bills)
Non-priority: Variable expenses
● Cancel Gym/Recreation Memberships
● Unnecessary spending on expensive personal care or self-care products (Clothes, makeup)
● Limit dining out (Includes takeouts and deliveries)
● Avoid "Retail Therapy" Shopping
4 - Apply for any help you’re eligible for
The prospect of losing a part of your income is enough to send you into a stressful whirlpool. It’s completely understandable that losing half of it is near unthinkable. You may be facing the very same situation now, but instead of wallowing in self-isolation, turn your worry into action. Both the national and local governments continue to provide financial assistance, so research on what you qualify for and submit your application with due diligence. Keep in mind, however, that thousands of other applicants are hoping for the same thing. You will need to be patient about receiving any form of aid.
Apply for Employment Insurance (EI) here.
Apply for Canadian Emergency Response Benefit here.
Apply for Student Emergency Response Benefit here.
The Bottomline: Dealing with your financial crisis
COVID-19 invoked a huge crisis—one that most of the world has not dealt with for a very long time. Every aspect of the world is affected—individuals, families, communities, businesses, healthcare systems, and even governments. It’s a time of collective trauma we need to overcome together, and as such, there is no shame in asking for help.
If you want to learn more about the different benefits, how to budget better or what we do, check out our website or send us a message on Instagram or Facebook.