In our former blog, 4 Steps to Survive Uncertain Economic Times, we discussed some of the darker financial predictions forecast by economists. We also included some proactive steps to help mitigate those predictions and work to lessen the potential financial fallout. To recap these steps were:
- Know Your Situation
- Ease Into A Hardline Budget
- Minimize Your Debt
- Build That Emergency Fund
However, since we originally wrote this blog, our global environment has drastically shifted. As such, we would like to revisit and revise these tips with some of the latest information we have on hand regarding the COVID-19 crisis.
As people from around the world struggle to come to terms with the extensive and far-reaching impacts of this pandemic, we would like to highlight the various government benefits available to help ease the corresponding financial burden. There are also steps we as individuals can take to help navigate this crisis, build our resiliency and work towards financial recovery.
1 – Know your Situation And Your Available Benefits
In our previous blog, step one was “Know Your Situation” and we discussed such things as keeping on top of mortgage renewal dates, educating yourself on how changing interest rates will impact your budget and learning what different options are available to you. Click here for a refresher.
To revise this tip for the world we’re living in today, we’re amending it to read “Know Your Situation And Your Available Benefits.” There are many new funding and supportive measures in place to help those struggling financially. To lessen any monetary challenges you might be experiencing, it’s important to stay informed and understand what you’re entitled to. Here’s a quick list of some of the benefits that are available:
- Mortgage and loan deferrals to eligible applicants
- Utility bill deferrals
- Student loan deferrals
- Employment insurance to those who qualify
- Canada Emergency Response Benefit to those who qualify
- Canada Child Benefit (an increase in $300 to eligible applicants)
- GST rebate increase
- Eased rules for Registered Retirement Income Funds
2 – Ease into a hardline budget
Our previous blog discussed the benefits of a budget. It mentioned keeping track of your spending, analyzing your habits and determining where you can make cutbacks. This step is always a critical one. We do recommend that you start a budget, if you haven’t already. Here are some tips to help you get started.
Budgeting during a pandemic certainly is not easy but here are some steps you can follow:
- Look at your essential expenses and compare it to the income or benefits you are currently incurring or expect to receive.
- Review your nonessential purchases and see what can be reduced or cancelled.
- If necessary, look at the bills that can be deferred and explore the options that are available to you.
- If you continue to experience budgetary shortfalls, contact us for information on your best next steps.
- If you have available dollars left in your budget, you might want to consider building your Emergency Fund. See step 4 below.
3 – Minimize your debt
The third tip in our original blog encouraged people to minimize debt. Generally this is done by:
- Creating a budget to stop incurring new debt and to better understand where you money is going.
- Forming a plan and allocating a specific portion of your household income towards debt repayment.
- Making the most viable choices for your situation, which might include such things as debt consolidation for example.
In today’s world, many people have experienced a drastic reduction to their household income. Debt minimization may feel out of reach. If you are in this situation and unsure how to proceed, our team of experts and debt restructuring professionals can help. Contact us for information and tailored solutions for your unique financial situation.
4 – Build that emergency fund
An emergency fund is a reserve fund that is designed to handle your living expenses and other financial obligations for three to six months in case of any unforeseen financial circumstances. If you are able to do so, you may want to continue dedicating money towards an emergency fund to prepare for the impacts of this pandemic.
Understand Your Options
If you have concerns regarding your financial future, know there are various debt-restructuring strategies that can help. As Licensed Insolvency Trustees, the team at Faber can work with you to design a plan for your financial future. While we continue social isolation, we remind you that you are not alone. Our experts are here to help. Contact us today.