How To Deal With Your Finances During A COVID-19 Crisis You Can’t Control
This is an unprecedented time of trying to manage our lives, take care of our loved ones, help neighbours and strangers, and somehow make ends meet with the income we have left. Concerns over the economic impact of COVID-19 are very real; no matter who you are or where you live, this is one crisis no one can escape. The good news is that those in positions of authority, influence or capability are doing what they can to help.
Part of managing through the crisis financially is to ensure we’re looking after ourselves in other ways too. Our physical, psychological and emotional health will play a role in our financial health, and vice versa. There are also a few different ways to approach getting the help we need. From income support to reduced spending and creditors adjusting payment requirements to give us some breathing room, the combined effect of all three will have the greatest positive effect on our overall situation.
With that in mind, here are things you can do to navigate the ever-changing coronavirus crisis and make things easier for your family right now.
Stay on top of reliable information
It seems that each day right now brings a wave of new information. Before you turn to social media and post after post of something coronavirus-related, turn to reliable news sources and keep up to date on what the provincial and federal governments are doing to help.
Be wary of information fatigue
Stay informed, but take breaks. There is only so much you can digest at any given time. During times of crisis, it is important not to get to a point where you tune out all of the news and miss things you need to know about. Avoid social media if you have to and look for good news stories to balance out the bad.
Apply for any help you’re eligible for
Losing any part of your income is frightening; losing half or more can be downright terrifying. However, turn your worry into action. Research what you qualify for and submit your applications promptly. Processing times may become longer than normal due to an overwhelming number of assistance applications combined with potentially reduced staff due to the virus.
Build an emergency budget
An emergency budget is different than emergency savings. While it’s too late to save for this emergency, it is not too late to create an emergency budget based on your reduced level of income. Download a budgeting spreadsheet or budget workbook, skip over the income section if you aren’t sure how much you’ll actually have, and start outlining all of your expenses.
Start with the most important expenses, which include your housing, medical costs, and reasonable and customary amounts for food and transportation.
Keep in mind that due to self isolation, many of your expenses will be less or different than before the crisis hit. Expenses that will likely be significantly less than before include entertainment, recreation, daycare, eating out, extra vehicle insurance, parking, fuel, transit passes and personal expenses. Any that come with monthly dues, e.g., a pass for the parking lot near work or gym membership, contact those companies and ask them to put your monthly fees on hold. Save on groceries by cleaning out your fridge, freezer and pantry before shopping for more.
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Include all of your family members in the discussion about how to reduce costs. You and your kids and teens may not fully appreciate how much your household is spending on buying in-app items, downloading games, music or pay-per-view movies, or shopping online.
As you review all of your bills and obligations, contact each service provider to see how you can reduce what you need to pay by at least 10 per cent. Many internet and communication providers have announced that they will waive certain fees; however, there may be more ways they can assist when you review your services with them line by line. Don’t be afraid to scale back your service plans temporarily. Saving a little on each bill will add up to a lot in the long run.
Avoid the temptation of cheap credit
While it’s true that some interest rates are once again near historic lows, avoid the temptation of borrowing during a time of huge transition. Instead of committing to payments, set the money that you would have been using to make those payments aside in a saving account until you know how you’ve weathered this storm. There is every chance that interest rates will stay low until well after the coronavirus has passed to help the economy recover more quickly.
Protect your mental and physical well-being
When it feels like the world is spinning out of control, stop yourself. Focus on what you can control and what you can do, rather than on what you can’t control or what isn’t possible to do right now. Spend time preparing healthy food and getting exercise outside. Avoid excess alcohol, sugary food and drinks, and a steady stream of caffeine because they can cause agitation.
Connect with friends and loved ones by video chat to keep everyone feeling connected. Social distancing shouldn’t lead to social isolation and loneliness. Check in with elderly parents or neighbours who may have trouble getting the basics they need. They are also particularly vulnerable to scams, so learn how to stay vigilant and protect yourself and others.
If you’re feeling well while in self isolation, look around your home and tackle sorting or clean-up projects you normally don’t have time for. Sit with your kids and enjoy looking at digital photos on all of your devices as you sort them into a central file for safekeeping. If you’ve always wanted to make Christmas and holiday gifts for your family, now might be the time to start. Fix broken items, take a free online course, camp in your living room, and just enjoy hanging out with those you love most.
The bottom line on managing through a financial crisis like COVID-19
When it comes to surviving a financial crisis, there is no shame in asking for help, leaning on those you trust, and helping others as best you can. And the coronavirus (COVID-19) is a bigger crisis than most of the world has dealt with in a very long time. We are all in this together — individuals, families, communities, businesses big and small, and all levels of the health-care system and government. Sticking together and helping each other out is really the only way we’ll overcome it successfully.
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