The world as we know it has drastically changed. Most of us are staying home – not by choice, but through necessity. The financial and emotional strain associated with COVID-19 is very real – coping with the unnerving situation, trying to stay positive and finding ways to safely keep busy has become our new normal.
Non-essential businesses have been ordered to shut down and many people have been laid off or sent home without pay, which is only adding to the stress of trying to make ends meet.
So what to do? With the extra time on your hands, why not work on a new budget to help you ride out the storm? Set up a spreadsheet to manage and track your expenses to ensure there are no surprises. Let’s face it, there isn’t as much to spend money on right now and you may be surprised to see where you can cut back.
Tips for maintaining financial stability
Use your ‘down time’ to complete your taxes and determine whether you’re going to be receiving a refund. The federal government announced an extension for personal tax filing to June 1st, 2020, but if you know that you’re getting money back, why wait?
Don’t buy too much food and don’t be hoarding paper products either – that isn’t healthy behaviour. Instead, buy what you need and consider no-name or less extravagant products than you normally would buy. Try and forgo the filet mignon and opt for the more inexpensive options such as chicken, fish and pasta for now. Buying based on your current needs will also help you stay on budget.
Avoid using credit cards for any purchase as the interest rates may not allow you to pay them down if money is tight. Budget based on your needs and use cash (where accepted) or your debit card so you always know where you stand.
You’ll be cutting back on dry cleaning expenses as you temporarily retire your work wardrobe, but make sure you take advantage of your washing machine’s energy efficiency settings if possible. Watching a movie in the evening? Why not save on electricity and light some candles instead, then turn down the heat and grab some blankets!
There are a lot of things you won’t be doing simply because you can’t. You may be surprised at the amount of savings that add up when you’re forced to stay away from your regular routine. You can’t go to the gym, or the movies or even dine out, and there will be no more trips to the nail salon or mall. Take some of the money you would be spending on these items and put it aside.
While gas prices have plummeted and it’s a good time to fill up, let’s face it, you’re not using your car much right now so set aside your monthly gas savings as well. You may even be able to save on auto insurance since you’re staying home. It’s worth a call to your provider.
With interest rates at an all-time low, you may want to consider refinancing and rolling your high-interest debt into your mortgage. This could help you save money over the long term and reduce your payments. There are usually fees associated with refinancing, but your mortgage agent can help you decide if this is the right option for you.
Life is forcing us into an uncomfortable place right now and, while the future remains a little uncertain, we Canadians are a resilient bunch and we’ll come out on the other side a little bit wiser and a whole lot stronger.
Have questions about your mortgage or cashflow options? Answers are a call or email away!