6 things to consider if you’re worried about your finances right now
Originally published: April 8, 2020
Because of COVID-19, many Canadians are facing a loss or interruption of income. It’s understandable that a lot of us are worried about money right now.
But in these uncertain times, there are some things you should consider:
We've been here beforeMany economists, including those at TD Economics, suggest that COVID-19 and the impact of mass self-isolation may tip us into a global recession in 2020. But here’s one thing to consider: History has shown that, for every major drop, a period of growth has followed. Whatever happens in the months to come, many Canadians are likely to feel a squeeze financially (especially those who may be temporarily laid off) – but if history is to repeat itself, there is potential for a period of recovery.
Some of us are likely spending lessAs Canadians focus on self-isolation and physical distancing, there are many things we’re not doing: dining at restaurants, going to shows, shopping at the mall or even paying for transit and gas for our daily commutes. What that means is that many of us are spending less than we normally would. One thing you may want to consider is calculating how much less you’re spending and redirect extra funds to a TD savings account. Bolder investors may even see the current market environment as an investing opportunity.
You may be able to defer some payments
For those who are facing temporary layoffs or lost income due to COVID-19, making mortgage payments and other loan payments can be a real concern. Each of the major banks has offered to work with personal and small business banking clients to defer some critical payments (including mortgage payments) for up to six months. This may provide some short-term relief for those worried they may not be able to meet their usual obligations.
If you think a deferral of payments may be right for you, you can find out more about TD’s relief offers.
Your tax refund may helpThe federal government announced that the new deadline to file a tax return is June 1, 2020. That means Canadians will have an extra month to file their tax returns. But here’s a reason you may not want to delay: If you expect to receive a refund, you may consider filing your return quickly to help get that money in your account sooner. As of March 9, 2020, the average tax refund was $1,820. For many of us, that’s real money we could use right now.
Your plan may be already built for a shock
When building an overall plan for your finances, it’s generally good practice to consider your financial outlook and how you will need funds, and plan accordingly. Ask yourself, will you need this money in the near future or not for a number of years?
This advance planning may also include contingencies for a loss of income, such as an emergency fund or plans for low-interest borrowing through a home equity line of credit. If retirement is still years or decades away, there may still be time for savings and investments to recoup their losses. For many Canadians, it may make sense to revisit their plans. For others it can be a time to take a deep breath, hold steady and take a little break from the market news.
You're not alone
Regardless of the time we spend apart from each other right now, there’s one thing worth remembering: We’re all in this together. In recent weeks, the Canadian government has announced several aid packages for Canadians to help with loss of income due to COVID-19, as well as a number of measures to lighten burdens on small and medium-sized businesses. The Bank of Canada has cut its interest rate, thereby lowering the cost of borrowing for millions of people. As the impacts of COVID-19 continue, it may be reasonable to expect governments around the world to continue to monitor the situation and provide additional measures of support.
If you’re feeling added anxiety about your finances, that‘s only natural. Hopefully we’ve given you some ideas to consider during this time.
DISCLAIMER: This content discusses current topics of interest in a general and informational manner only and may not be appropriate in all circumstances. Please ensure that you seek advice personalized for your situation from the appropriate professional, consultant or subject matter expert on the topic of interest to you.
Times of volatility can make potential victims even more vulnerable to fraud. Learn how to protect yourself from phishing, malware, and malicious email campaigns.
Find more tips on to help keep your finances in check should the unexpected come knocking at your door.
If you're experiencing financial hardship during the COVID-19 pandemic, a mortgage payment deferral may provide some relief.
Stay up to date on the latest here
We're committed to keeping you informed