Many of us have read the news reports that some families are saving more than ever during COVID-19. But lockdown has also triggered its own set of financial pressures (hello, online shopping therapy) and it can be easy to lose track of spending when we’re stressed. So how do the “savers” do it?
While everyone’s situation is different and it’s certainly easier to save when you’ve been able to keep your work hours, there are always some things you can do to stay on budget.
The key to getting through these financial challenges is to return to three money management basics. Ryan Weiss, vice president, group customer product and experience at Canada Life, tells how:
1. Identify spending.
Take a hard look at your credit card and bank statements for the last six months. Do you see stress spending? Over-indulging? Too much take out? We each have our own triggers.
Weiss suggests downloading a money management app to help monitor in real-time. Canada Life offers a free, third-party money management platform companies can add to their employee benefits packages. It gives employees access to a no-fee spending account to auto-deposit paycheques, a cashback reloadable spending card and a money management app designed to simplify their personal finances.
2. Make a budget.
The next step is tougher. You have to budget for sensible spending targets and stick to them. Keep tabs every time you open your wallet. If your purchase will put you over budget, lock it down.
3. Create an emergency fund.
Weiss recognizes emergency expenses come up for all of us but cautions it’s easy to get in trouble with high interest credit cash advances or payday loans, so it’s best to plan ahead.
The insurer’s money management app benefit enables users to track their spending and round up purchases to transfer extra amounts to either their Canada Life tax-free savings account or registered retirement savings plan, or to a sub-account (a painless way to help build an emergency fund). They can even borrow up to $500 interest-free from themselves, with no additional charges, in the form of a three-day payday advance.
Life can’t always wait for payday, so be sure your short-term solution doesn’t create long-term problems down the road.
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