Canadian families are being hit hard in the pocket right now. Many of those impacts are out of our control, but some of them aren’t. These 10 steps can help you navigate your way through these changes with confidence.
1. New Budget!
If you had a budget before, it’s probably no longer realistic and needs to be re-worked, considering each of the below factors. If you’ve never budgeted before, now is the time—having a plan is a must right now! Keep it simple with this free template prettymoneyclub.com/budgetsignup.
2. Use your emergency fund
Your emergency fund is for times like this. Use savings before taking from your RRSP, TFSA, or credit card.
3. Reduce Your Spending
You would think this one goes without saying, but in times like these and with online shopping at our fingertips, it’s important that we remember to stick to our budget.
4. Apply for EI Benefits
Both the federal and provincial governments have offered benefits to employees, self-employed people, those who are caring for children or family. To see what you qualify for, check https://www.prettymoneyclub.com/covidkit.
5. Defer Your Payments*
Hydro, gas, debt, and mortgages (among other bills) can all be deferred for up to 6 months for those who qualify. These dollars can go into an emergency fund for now if you aren’t sure if you can afford them or not. If you have any access at the end of the six months, put them right on the principle of your mortgage or towards the balance of your accounts. *Do not “miss” a payment. If you call to defer, ask for the name and extension of the representative you speak to and confirmation in writing that this will not be reported as a missed payment. This isn’t free money, expect your mortgage payment to go up slightly after the deferral period to repay.
6. File your taxes
Parents will see an increase in their monthly Canada Child Benefit starting in May. However, this amount is recalculated each year based on your income so having your taxes filed could hinder your ability to receive these funds after June.
7. Call your financial advisor
Investments are down, a lot. If this gives you anxiety, a call with your advisor to discuss your portfolio and your goals will leave you feeling a whole lot better. You might even decide this is a good opportunity to invest.
8. Pay your Life (and other) Insurance
This is not a time that you want your life, or other, insurance policies to lapse on you. Most policies have a 30 day grace period, after which your coverage could terminate.
9. Pause Your Goals
Instead of saving for your goals, put that money in your emergency account.
10. Donate to charity
If you are one of the lucky ones who have retained all, or most, of your income, please consider adding charity to your budget. Many organizations can get the money to those in need quickly and also provide a tax receipt.