Do you know what your post-CERB life looks like?
by Tim St Vincent
Over 8.5 million people have applied for CERB, the program has paid out over $64 billion. Lots of people needed help then and still do now, but those benefits will be ending soon. Do you have a plan of action? If not, there is still time.
Fifty per cent of Canadians were living close to the edge and barely managing pre-COVID on a cheque to cheque basis. Post-COVID will have pushed them closer to that edge. Putting together a plan of action can help keep you from going over that edge – but where to start?
Maybe start by tracking your expenses and getting a grip on where your money is really going, not where you think it is going. There are a lot of great apps out there that you can download from the web or from your financial institution. There is always good old-fashioned pen and paper. It doesn’t really matter how you track; the important thing is that you track. Once you know where your money is going, you can start to figure out where you really need for it to go and to start cutting back.
Last month we talked about how to save on groceries, so we won’t cover that again. Let’s look at what some people are calling “subscription creep.” That is where you start picking up subscriptions to services that you didn’t have before. I mean you are at home and bored so maybe get NetFlix, I mean why not, it’s only about $15. Maybe you could add another one or two while you are at. I mean, they are cheap and you are home a lot. That is called subscription creep, and it could be a good place to trim those expenses a bit. Cut down to one or (gasp!) get rid of them all! Or maybe keep one and get rid of cable? Either way, it is a good place to start looking.
If things are really tough, maybe you could look at reducing savings a bit. Keep in mind that is a last resort type of thing to look at. Reducing savings is something you should only really look at if you have already cut down on all other expenses. If you smoke and have thought many times about quitting, now could be a good time to give it some serious thought. For a regular smoker the cost is easily in the $150 to $200 a month range.
Also be wary of all the sales that are likely to pop up. As the economy reopens and retailers are eager to start ringing in sales, they are likely to tempt you with some great offers. This is a great time to remember the difference between things you need (to survive) and things you want (just because) and to understand that there is a dividing line between needs and want. It is called things we can afford. If you want it and can afford it, great, no problem. If you want it and can’t afford it and think “no problem, I will just put it on my credit card,” then you are forgetting part of this sentence. You can’t afford it. Putting it on a credit card only means that you can’t afford it 30 days later when you already have it and can’t return it! Putting something you can’t afford on a credit card does not make it affordable!
If there is nothing left to trim, if you have cut everything and you are down to the bare bones of expenses, then the other option is to increase your income. The gig economy has gotten really big and there may be options out there for you. Do you have a personal skill that you can market? Perhaps an upgrading of your skillset during this downtime could assist you. If there is nothing that you can think of, then there may be one final consideration for you and this is either a new job or going in for a career change.
No matter what path you choose, it will be a challenge. There is no way around that. Reach out for government supports; there are plenty out there. Use your support network, not only for emotional support but also for ideas for additional income and expense reduction. COVID won’t last forever. Do your best to be in a good position to move on when it has been beaten.
Tim St Vincent is a retired CFP and is a Certified Educator in Personal Finance with the Credit Counselling Society, a Non-Profit organization. If you wish to contact Tim for a free workshop or webinar, have a question, or would like to submit an article idea, please contact Tim at 1-888-527-8999 ext 1330. You can also contact the Credit Counselling Society for further information or assistance at 1-888-527-8999 or visit www.nomoredebts.org or www.mymoneycoach.ca.