Given the economic uncertainty in the face of the COVID-19, it’s natural to worry about personal finances. Now is the time to take stock of your financial situation so you can develop a plan moving forward. ELMNT caught up with the award winning author of Happy Go Money, Melissa Leong, who offered up some first steps.
Get to know your financial situation
Leong says understanding your financial situation is the first step. “Although we have no control over world events, we have control over how we react and behave in the face of adversity and uncertainty,” says Leong. She suggests creating a spreadsheet so you can see all of your expenses in one place. Take a look at your credit and bank card statements so you can figure out where your money is going. You also need to determine how much money you and your family will need each month.
Reduce, reduce, reduce
Once you understand where all of your money is going, Leong says reducing your expenses is your next step. “No one has a crystal ball to say how long this tough period will last,” Leong says. But once you start reducing your expenses, you can put that money into an emergency fund to help get you through a time like this. She suggests figuring out what you can go without and start cancelling any memberships you don’t need. You can also look at things like your Internet or data to see if you can lower those bills.
What if we are worried about our incomes?
Leong says the first step is looking to the supports governments and banks are offering. “Take the time to understand the options available and how to access them,” she says. Leong points to options like EI for people who don’t typically qualify, the six-month interest free moratorium on Canada Student Loans and mortgage payment plans. She suggests taking the first step by calling up a helpline or your bank – you may need to brace yourself for long wait times!