How do you manage your finances in a pandemic? Especially if you live in a rural area with limited financial services?
It’s something more British Columbians will be asking, as the unemployment rate jumped to 11.5 per cent in April — up from five per cent in February.
The North Island’s tourism industry has been at a stand still, not to mention that residents are still recovering from the eight-month long WFP forestry strike – and they aren’t the only ones facing tough financial times.
Finances are, safe to say, tight for many.
Karl Michael, an insolvency trustee from Grant Thornton, had this advice to give on the subject.
“Start with finding the support programs you qualify for, replenish your income, talk to your creditors, cut your unnecessary expenses — that is, focus on rent, utilities and food,” he said.
The first step is to review what support programs you qualify for. There is a lot of support available if you have lost your job.
Look at Employment Insurance, the Canada Emergency Response Benefit and a one-time GST credit, and provincial emergency support payments.
These programs can help temporarily replenish your income.
Next, examine your expenses and cut where you can, Michael advised.
“You just want to take stock of your current situation. Don’t panic. You want to look at your budget and cut where you can. Try to figure out how long you can last,” Michael said.
Ask the hard questions: what if I can’t get work? What if the these programs run out?
Third, talk to your creditors. Many banks are offering deferred payments on mortgages, credit cards and loans. The governments are offering student loan deferrals. Deferrals can help with cash flow in the short term.
“You have to remember that all these things are just deferrals,” Michael said. He worries about consumers who take advantage of deferrals, maybe even getting additional credit because there are favourable rates right now.
“But you have to remember that everything will come to a head eventually. You’ll have to be able to service that debt, the new and the deferred.”
Once you’ve assessed your current situation, it’s time to get creative, he said.
“If you’re still out of a job, people need to start being creative. A lot of small businesses have reinvented themselves. I think the same goes for individuals, we need to be strong, we need to be creative. If you have other skills or other things you’ve been interested in, you might need to be open to it.”
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