While Canada was facing a steady decline in unemployment, the adverse effects of the coronavirus on our economy has severely damaged our momentum. Canada saw a record low for unemployment rates, at just 5.4% in May of 2019 and 5.5% in January of 2020. Fast forward a few months, and even though things have been looking up as businesses reopen, and social distancing laws ease, unemployment rates continue to rise. In this statement, federal Employment Minister Carla Qualtrough touted the overall job numbers as proof that the government’s plan is working before mentioning that many Canadians still “face real challenges during this time.”
Long-term effects for companies like Starbucks, Aldo, Reitmans, and David’s Tea, which involved closing the bulk of their locations, continue to trickle down to hardworking individuals. Many independent companies are restructuring their assets and cutting staff where possible in hopes of creating financial stability. Where some have the option of returning to work, their childcare options remain limited or non-existent, and as a result, they are unable to return to their place of employment. Forbes lists the unfortunate effects of the downslide in our economy and its snowball effect:
- Unemployment rises because of new closings driven by virus spikes.
- Cuts in additional UI payments don’t act as a stick to push people into work because there aren’t nearly enough jobs for them.
- Inadequate money means, at best, highly reduced spending.
- At worst, people get evicted, lack money for food, and become homeless, needing even more support.
- With significantly less spending, businesses in highest-hit areas come under additional pressure, with many going out of business.
- The number of jobs drops and the number of unemployed increases.
- The economy falls even further as the mechanism becomes a self-reinforcing vicious circle.
While it may feel hopeless on a personal level, there are many things you can do to ensure a balanced and secure financial position.
FIND INEXPENSIVE ENTERTAINMENT
The word “frugal” has always denoted negative connotations, associating with terms like cheap, penny-pinching and scrooge. Really though, frugal is defined as prudently saving, not wasteful, and economical in use.
Thankfully, one positive of Covid, is that the distancing restrictions have helped the majority to embrace a more frugal lifestyle. Cinemas, retail shopping, eating out, and other average expenditures are significantly reduced, if not curbed altogether. However, as things start to reopen, it can be difficult not to feel a little giddy and try to catch up on all the lost fun, as it were. While entertainment therapy is vital to maintaining a positive, healthy lifestyle, you may want to explore your local area for free activities and events before reaching for your wallet. Many neighbourhoods and cities are providing fun, family-friendly opportunities, such as:
- Museums waiving their admission fees.
- Local pop-up drive-ins and movie screenings.
- Outdoor dance and exercise courses.
- Tours and tastings at local farms & factories.
Saving money doesn’t need to be painful, you can still take advantage of summer despite Covid. You can see significant changes in your spending by merely prioritizing free activities over paid ones. You can also try limiting your paid outings to once a week, or whatever suits your situation best.
If your family needs extra motivation to save on entertainment, try making it a game with one of these examples from The Motley Fool.
CURB YOUR RETAIL HABITS
One area that has not suffered from Covid is the world of online shopping with a surge of 99% in sales during the pandemic, anyone uncomfortable with the idea has had time to ease into shopping from the comfort of their home. Many have also received monthly financial support from the government that represented more than they would usually make, which increased their online spending habits. To avoid falling down the online shopping rabbit hole, try the following:
- Sleep on It | A good rule of thumb is to sleep on it, also known as the 24-hour rule. If you still really want it the following day, you’ll have the extra confidence, knowing it wasn’t an immediate impulse buy.
- Focus on Your Current Needs | Focus on what you need, rather than planning months ahead. For example, as parents, we are often in the habit of buying for the household far in advance. Summer is a time to start ordering clothes and outerwear for our children’s upcoming school year or seasonal activities. While some preparation is necessary, it is wise to hold back on the big-ticket items, especially as school routines and extracurriculars are still up in the air.
With so little social gatherings, you are most likely to get much more use of what you currently own. Take the time to sort and organize your family’s clothes, shoes, bags and other accessories. Donate your gently used items to a local shelter or donation box to help other families in need.
Whether you are employed or unemployed, we are all at increased risk of facing employment instability. The Financial Post suggests five different approaches, including:
- Keep Your Resumé Up to Date | Add any new certifications or assets. Take this time to think about updating the style of your resumé. Much has changed in the last few years; employers look for signs of your personality at first glance of your c.v. Check out Canva for fun, free resumé templates.
- Sharpen Your Skills | There are plenty of free certifications and tutorials available online. Explore webinars and downloadable content that can beef up your specialty. Hootsuite.com is a fantastic go-to for developing new skills and going straight to the source with Google, Microsoft, etc.
APPLY FOR GOVERNMENT AID
Avail yourself to the many current financial programs available in your region.
- Understand the Terms of the Aid | Put money away if it requires you to pay back a portion of the amount allotted or if you need to pay an amount on your taxes due in the following year.
- Use Your Earnings Wisely | Pay off your high-interest debts, saving what you can on the side. Do what you can to establish a healthy financial status.
Unsure of what benefits are available to you? Reference the Government of Canada website or your local, provincial and city websites for full details on financial aid associated with Covid-19.
FOCUS ON WHAT’S REALLY IMPORTANT
We are in uncharted waters these days. While it can be far too easy to dwell on the negative, do your best to focus on the positive. Are you employed? Embark on an open and honest line of communication with your employer, seeking ways to ensure success and prepare for fair terms if layoffs are inevitable. Are you currently unemployed? Take a minute to remember what matters to you most when it comes to your career. What kind of company do you want to work for? What skills would you like to hone? Take advantage of all the possibilities to put yourself in line for your dream job. Adopting the above suggestions can help you secure your future.
If you’re unable to rally despite all your best efforts, there’s help. 24Cash is a local business based in Canada that provides various lending options to hardworking Canadians. Click here to find the best loan that works for you and be sure to get the most out of your summer!