“Always save for a rainy day.” There’s no doubt that we’ve all heard that one before, but how many of us actually followed through? Thanks to the coronavirus, our rainy day has come.
The Canadian economy is slowly falling and it is beyond our control. Don’t look back at what you could have saved, instead focus on responding well to the situation and preparing yourself for what is yet to come. Below are several tips on how to save during a crisis, but keep in mind that these tips will not help you accumulate the savings account that you have always wished for. These suggestions and recommendations will prepare and help you to save for after the crisis.
TIP #1: AVOID EATING OUT
Despite the shutdown of most businesses, essential services are still open. This includes restaurants for take-out. And while you might want to support local restaurants, if your finances are not in good standing you’re better off to dine at home. Such frivolous spending during a crisis can put you in a hole— one that will be difficult to climb out of.
Instead, stick to basic staple foods, since they can be stored easily and for longer. Moreover, now is not the time to start cooking extravagant food. A filet mignon steak might sound appetizing, but settling for a cheaper alternative is the right way to go. Prepare a meal plan with the items you already have and that will bail you out of expensive grocery bills.
TIP #2: SAVE ON ELECTRICITY
Another way to cut corners, is to turn down your heater or air conditioner. Try wearing a second layer of clothing to stay warm, or wearing fewer layers of clothing if you are too hot. These systems will make you count your pennies quickly if you are not careful.
TIP #3: USE ONLY ONE CAR
Draw in your horns by canceling your car insurance if you have more than one vehicle. You will likely be driving less for the next coming weeks. Take one off the road and just use one vehicle to do your essential shopping. If you don’t want to suspend your vehicle for whatever reason, why not change your vehicle classification? Call your insurance broker and discuss options to lower your annual kilometers on your policy.
TIP #4: PAY BIG THINGS FIRST
Lastly, pay the important things first. For instance, if you have a mortgage your best bet is to keep paying it as much as you can. Avoid mortgage foreclosure and consider all of your options first. Mortgage payment deferrals are not always the best way to go. Your lender will take your financial problems into account, however, this will affect you in the long run. The skipped payments will make you pay interest for years after.
On a side note, you may be making less income, but remember: you also have different expenses and many of them are out of the question now!
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