Aug 26, 2020
Pattie Lovett-Reid: How to weather a looming financial storm
Chief Financial Commentator, CTV
A financial storm is brewing.
The emergency response programs offered up by the government and changes made to Employment Insurance (EI) have some Canadians breathing a collective sigh of relief. But that feeling of calm may be short-lived. If you were to fast-forward to when those benefits run out, creditors come calling, and mortgage deferrals become a thing of the past, the focus will shift very quickly to how Canadians are going to figure out their next financial steps.
Let's get the doom and gloom out of the way.
With fall around the corner, fear is mounting that a potential second wave of COVID-19 could hit and that job losses will pick up as companies adjust their balance sheets and cut costs.
However, you don't have to be a victim of financial unpreparedness. Now is the time to first breathe, and then kick into gear to get your finances in order.
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Stacy Yanchuk Oleksy, director of education and community awareness at The Credit Counselling Society, recommends first taking stock of your actual financial situation (not the one you hope for).
This includes: figuring out your income if your Canada Emergency Response Benefit (CERB) is ending, determining your actual fixed cash and seasonal expenses, and laying out debt responsibilities, she said in an email.
Unless you know your actual numbers it is hard to make specific changes.
Here are three tips on how to take charge financially right now.
1. Tuck a little money aside from your benefit payment, or if still employed your pay, and put it directly into savings.
2. Now more than ever an emergency fund will provide you with a lifeline should you need it.
3. Find a job – any job – to help pay the bills. This doesn't have to be your passion or forever job. Just a job to bridge a financial gap. Even if you have a job, consider supplementing your income with a side hustle.
With government benefits still in place, it might be easy to become complacent or paralyzed by fear of the unknown. Choose instead to take things as they come; day by day. I would argue taking charge now and reaching out for help if you need it is the bold decision that could get you through a potentially difficult situation in the fall.