Coping with financial health in the middle of a health crisis

Coping with financial health in the middle of a crisis

The COVID-19 pandemic is impacting Canadian households, just like the rest of the world. While we’re all trying to stay healthy and safe, many of us have also been impacted financially. In this new reality, even paying for essentials such as groceries, gas and incidentals has become challenging for some. To help Canadians navigate these uncertain times the federal government has announced an $82 billion relief package to help families.

If you are experiencing financial stress, The Government of Canada has introduced initiatives to support you.

New and improved government benefits are in effect.

The new Canada Emergency Response Benefit provides a taxable benefit of $2000/month for up to 4 months if you are unable to work.  Even if you don’t qualify for Employment Insurance, you may still be eligible to receive this.

• Increased Canada Child Benefits will provide an extra $300 per child.

• Waiving the requirement to provide medical certificates to access Employment Insurance sickness benefits.

The tax deadline has been extended until June 1, 2020.

The Canada Revenue Agency has deferred the filing and payment due dates for 2019 income taxes, as a way of helping to provide more flexibility for financially strapped Canadians. Those who are self-employed or who have spouses who are self-employed now have until September 30 to file their income tax and benefits. So if you think you have a tax refund coming to you, file as per the usual April 30th deadline; if you think you will owe money, it may be wiser to wait.

Many financial institutions are offering flexible financial solutions.

With so many Canadians facing salary cuts coupled with ongoing expenses, banks have had to come up with creative solutions. Many lenders are offering mortgage payment deferrals up to 6 months, extra consideration for credit card payments, or are waiving certain fees. Cases are being evaluated individually, so if you are experiencing short term financial issues, contact your financial institution to see what solution they can offer you.

Try to consolidate debt.

Many of us have debt spread out across many lenders. Consolidating your outstanding high interest credit card balances onto one credit card, a line of credit or a loan at a lower interest rate could help you pay down debt faster and save a lot of money in interest costs. Talk to someone at your bank about your options.

Create an emergency fund going forward.

Since it is uncertain how long the COVID-19 crisis may last, it’s wise to start putting money aside for the future (if you can), just in case. While putting the recommended 3 to 6 month spending amount may seem like an impossible feat while money is tight, there may be solutions within reach. Hunker down and try and use up what’s at home before visiting the grocery store; put magazine and music subscriptions on hold; only buy necessities for the next little while; keep the car parked in the driveway and walk instead; and stay away from indulgent online shopping.

Facing financial hardship? We are here to help you in this challenging time.

In the face of this public health crisis and resulting extraordinary circumstances, we understand that some of our customers may be facing financial hardship. If you require a break from your RESP contributions, we can help. Talk to us about customizing a solution to meet your needs. You’ll also find answers to most commonly asked questions here.

While we may not know when we will be able to return to our former financial “reality”, there are some valuable lessons to be learned by us all: build an emergency nest egg, spend more mindfully, and don’t take anything for granted. In the meantime, please stay safe.