Plan Now for Your
Government Relief Cheque
Plan Now For Your Government Relief Cheque
The spread of the Coronavirus (COVID-19) pandemic that we are currently experiencing has put a tremendous strain on both individuals and businesses across Canada. Thankfully, last week, the Federal Government approved a relief package that will aim to put money in the hands of Canadian citizens and business owners who need it most.
As Canada.ca states, “This taxable benefit would provide $2,000 a month for up to four months for workers who lose their income as a result of the COVID-19 pandemic. The Canada Emergency Response Benefit (CERB) would be a simpler and more accessible combination of the previously announced Emergency Care Benefit and Emergency Support Benefit.”
This is great news for both people who have lost income in the recent weeks and people who have been temporarily laid off. Whatever your situation is, you will need a plan for the coming months. Now is the time to think through all your options.
Time to get prepared
This is the perfect time to review your current financial situation, and assess how prepared you are for the next three or four months.
Firstly, take stock of your savings, investments, and incoming money. This way, you will know exactly how much you have to budget for the near future, and you can plan accordingly. Unfortunately, nobody knows how long the current restrictions on work and businesses will be in effect, so it is important to determine how long you can stretch your money to cover the absolute necessities such as housing and food.
Secondly, this is the time to review your upcoming expenses in your budget. A detailed budget will allow you to feel more comfortable and, hopefully, reduce any anxiety you may be feeling when thinking about your finances. By listing all of your bills, payments and spending, you can assess your current situation and adjust, as needed. There are many great, free budgeting tools online and in the app store, so you should use these to help you. Determine how much money you are allocating to needs, wants, debt, and if any left over for savings. Since we are all social distancing and self-isolating, your spending may be down which also makes this a great time to put any available money aside into an emergency fund.
If you are waiting for the government relief cheque, you can expect it to be in your hands mid to late April. This still gives you at least two weeks without income, if you have lost your job or have been laid off. Use this time to take action and where possible reduce and manage your expenses.
Think about your absolutely necessary needs first and work your way down. Some companies are also offering deferrals on payments, if needed. Write down all of your monthly bills and call the various companies to see if you can reduce or defer these for the next three or four months. For instance, call your phone provider to see if you can switch to a less expensive phone plan. If possible, start using coupons when grocery shopping and, once again, only buy what you need. Take advantage of offers, as the money you will be saving can be used towards other essential items, paying down debt or saving in an emergency fund.
Plan it out
If you have been laid off and you know you will be receiving the $2000 every month for the next four months, you definitely need to make a detailed plan. Before you even have the money in your account, know exactly how you will be spending and using it, whether it be designated for rent or your mortgage, or other expenses such as phone and cable bills, weekly grocery shopping, or other essential items.
If there is any money left over, think about putting it in your savings. If possible, it is important that you have some savings in your pocket, both to set yourself up for after this pandemic and to have funds in the case of an emergency.
If you know that this government subsidy will not cover your monthly expenses, you need to take action now to plan what you will do. If you think that you will need to get a line of credit, contact your bank or local credit union to see what are your best options, and what are the lowest interest rates you can get. Do your very best to avoid running up your credit cards as the interest is often very high, and these should only be used if you know that you can pay the balance off at the end of the month. Loans from a bank or credit union to pay off credit cards will have much lower interest rates than credit cards, and they will be easier to pay off in the long-run.
If you are fully employed now, you should still make a plan for different less favorable scenarios that may occur in the coming months.
This is a time of financial uncertainty for everyone. Consequently, it is the time to be proactive and take action. If you are proactive and follow some of the steps above, you will be better prepared and put yourself in a better financial situation, and reduce unwanted stress. It is possible that you can come out of this pandemic in a better position than you currently face if you follow these steps and stick to your plan.
Retire on Time is here to support you and to give you helpful information, to try and make this uncertain time a little easier and less stressful.