September 23rd 2020 - written by Amanda Huinink & Betty Anne Flynn
It has been a long 7 months. Like many of you, we have transitioned to both working and staying at home while spending time with loved ones within our bubble. We have watched the country show signs of improvement in daily cases, but now watch as COVID-19 cases begin to rise again with autumn upon us. On a happier note, we are in a very different place then we were last March. We know the best ways to keep ourselves safe and healthy and what impacts this virus can have on jobs, childcare, schools, life plans and the economy. So, what will you be doing differently heading into a second wave of COVID-19?
CREATING AN EMERGENCY FUND
Thousands of Canadians who became unemployed during the beginning of the pandemic did not have an emergency savings plan in place. Although CERB has been helpful, for many it wasn’t enough to cover all of their bills and expenses and many people realized how much an emergency savings fund would have helped. Many of you are now committed to starting a new savings plan having had the chance to re-evaluate your spending habits and prioritize both needs and wants.
RE-EVALUATING SPENDING HABITS
With stores, restaurants, bars, fast food and coffee shops closed for 3 months, many people have told us they saved money and realized just how much they were spending on dining out, coffee shops, entertainment, and retail shopping. While most people’s grocery bills went up with few options other than cooking and eating at home, there was a noticeable savings on retail and fast-food spending. This created a real opportunity to see how much we could save; spending money on “needs” versus “wants”. In the next phase where things began opening up again, many people adjusted to a different lifestyle and are now cautiously spending money – having enjoyed seeing their savings grow and/or paying down debt. Another area of focus has been prioritizing support of local establishments during the pandemic, especially small local restaurants. Treating ourselves to a reasonably priced take-out meal from a neighbourhood restaurant on occasion still keeps spending down while achieving this goal.
ADAPTING TO WORKING FROM HOME
Many of us have had to adjust to working from home. Certainly, there have been challenges with trying to work surrounded by family, especially young children. We’ve all been cooped up, with nowhere to go and strict limitations on visitors. Along with the challenges have come a few wins including more time with family in lieu of commuting time, additional sleep in the morning and no reason to put on those formal work clothes. Possibly the biggest positive is the savings people have seen through no travel expenses, no purchased morning coffee, breakfast take-out or fast-food lunches. Again, this has been an opportunity to save money and possibly pay down debt. Still to come are the possible expenses you can claim on your income tax for working from home – watch out for our upcoming blog as we detail what you can claim.
Priorities have varied for different age groups, but the common denominator of re-evaluating everyday life has inflicted us all. I find that younger people are now focusing on re-evaluating career choices and/or planning a new career path. They may have changed their spending habits and are now setting goals such as buying their first home and/or starting a family. Middle age people have been more determined to save money and pay off debt. They have also prioritized getting their Will and Powers of Attorney drawn up, especially those that didn’t have this paperwork in place during the high point of the pandemic. Others have decided this is the right time to retire – not returning to work due to age and health, during a time when the threat of COVID-19 is still looming.
COVID-19 has been an eye-opening experience for all of us. We hope that you have taken away some positive learning experiences. As always, we are available Monday – Friday to assist you with any of your financial needs. Talk to us.