Six Ways to Financially Cope with COVID-19
By all accounts, it looks like COVID-19 is here to stay for a bit. The situation is in a constant state of flux, especially as we hit what appears to be the second wave and more restrictions are being put in place in Manitoba. The best things we can do to protect our health are to socially distance, wear masks, and wash our hands frequently.
From a financial perspective, we know this is a very difficult time for individuals and families. Many are financially maxed-out and really feeling the strain. While some Manitobans are finally returning to work after the first phase, unemployment remains an issue for many. This is a major source of financial stress, especially since the bills we pay really haven’t changed.
So, what can you do at a time like this to alleviate some of the financial burden you’re carrying? Psychologists are telling us to focus on what we can control.
Some things to keep in mind:
1. Saving just may not be a priority.
Saving for the future right now is difficult for many people and impossible for some, and that’s ok. Focus on your immediate needs for the time being, food, shelter and clothing. This may also include slowing down or temporarily discontinuing regular deposits to an RRSP, RESP or TFSA.
2. You may have to tap into your savings.
Conversely, experts advise setting up an emergency account for situations just like this. Not everyone has a rainy-day fund or emergency account, but for those that do, now is the time to consider it if it means paying for necessities.
3. Stick to your budget
Continue to set and follow your usual budget, with a focus on the critically important items. If you don’t have a budget, this is a good time to get started.
4. Cash is still king
Paying with cash is being discouraged by vendors due to contamination fears, but paying with a credit card can be too easy and result in an unexpectedly large bill at the end of the month. Consider a debit card linked to a chequing account to avoid dependency on credit for convenience.
5. Keep it simple for now
Don’t make unnecessary large financial decisions at a time like this–furniture and car buying should take a back seat.
6. Cut your costs
Closely examine ways you can cut costs. Perhaps you don’t need the full TV entertainment package that you have been subscribing to or no longer need your monthly parking spot for work. Eating out less or reducing online shopping are other ways to cut spending. You can also contact your service providers to see if they are willing to reduce payments.
Know that this situation is temporary and that there are things that you can control within your finances. Talk with your family to come up with some creative ways to stretch a dollar.
– Ainsley Cunningham
Founder and Project Coordinator, MoneySmart Manitoba
Manager, Education & Communications, Manitoba Financial Services Agency