You can plan and prepare for a lot of scenarios in life, but the first few months of 2020 have been an undeniable reminder and a sobering lesson of how quickly things can veer off course. During times of uncertainty, there are things you can do to anchor your finances, manage your anxiety, and prepare for what’s ahead – like having a plan.
Here are a few simple things you can do with your finances to relief stress and to feel in control of your finances.
1. SPEND SOME TIME REARRANGING YOUR BUDGET AND MAKE A NEW PLAN
One of the upsides of social isolation is your bills for expensive coffees, gas, meals out, travel are way down. This is a great time to make a spending plan (not a budget) because this will allow you to focus on things you can control and places you can save. Look at what you were spending (before social distancing was a thing) and put that money towards your savings or debts.
The money you never knew you had until…
2. GET YOUR EMERGENCY FUND TOGETHER
Given the situation, it is important that you have at least three months of emergency expenses set aside. Even if you probably won’t need it, it’s always good to be prepared. An emergency fund should be as liquid and accessible as possible – 3 months savings is ideal. But anything is better than nothing, so start small and work your way up.
Trust me, you will be thankful for it later and you will sleep better at night today!
3. GIVE THE CAR A REST
It is not everyone’s first choice, but if you’re a two-car household and working from home you’re not using your vehicle nearly as much. This might be a good opportunity to save on insurance and maintenance. Park your car in the garage and once physical distancing measures are lifted, reinsure. Better yet, sit down with your family members and see if you can get away with owing one vehicle only. You will be surprised how easy it can be once you work out a strategic plan around transportation.
Fun Fact: A $400.00 car payment will reduce your total mortgage qualification by $100,000! Ouch. What has more value?!
4. SHUT OUT ONLINE TEMPTATION
With all this time on screens, you’re likely already being targeted with sales more than ever. With nowhere to go, you may be enticed to browse Amazon, but now is a great time to cut out as much online shopping as possible. Do an aggressive unsubscribe to retailers and influences currently tempting you to spend. Spend less time online and instead spend more time outdoors with your loved ones.
This will serve you well not only for your wallet but for your mental well being.
5. EMBRACE LESS MEAT
One of the biggest costs on your grocery bill is meat. While a plant-based diet is all the rage for health, even cutting out meat three meals a week can save you $40-60 on your weekly grocery bill. Small things do add up especially if you keep track. With introducing more plant-based meals to your life can also increase your energy and better you’re over all health. For inspiration you might want to check out these documentaries on Netflix: The Game Changers (2018), What The Health (2017) and Forks Over Knives (2011).
Shift for the better, keep an open mind!
6. ANALYZE YOUR BIGGEST PAYMENT, MORTGAGE.
With the unpredictable COVID situation we do have a silver lining with current mortgage interest rates. We have never seen such LOW interest rates and Bank Of Canada is in no rush to raise their overnight lending rate. This is the time to sit down and re-evaluate your mortgage and what you can do to save. There are lenders who will cover the appraisal cost, legal fees and add up to $3,000 from your penalties to your mortgage amount when transferring your mortgage to a new lender. The first step is to call your bank/lender and find out your penalty amount. The second step is to call your trusted mortgage broker and have him/her do calculations for you to see how much you will save on your mortgage monthly payments if you switch right now. Let’s face it, mortgage payments are the biggest monthly expense for most of us and should be on the priority list just as much as saving on a fancy cut of coffee, if not more.
Put our mortgage broker to work, and if you don’t have one, I’ll be more than happy to do this work for you!