We are living in very uncertain and challenging times when it’s hard to predict what is going to happen in the next hour. The whole world is currently struggling to overcome a new villain – coronavirus. This is the new terrible disease that has already spread across the countries and caused serious problems.
The new economic crisis is becoming more and more real and obvious while many people lose their jobs, close their small businesses, have their hours cut, or just face a monetary shortfall. Here are the necessary steps to take and things to consider in order to stay financially fit and manage your personal finances in times of crisis.
Significant Steps to Take During Coronavirus Pandemic
Many workers all over the world suffer from job losses and cut hours in times of COVID-19 pandemic these days. Thus, it’s essential to give each person an opportunity to know their rights and measures that can be implemented in order to manage their personal finances and avoid a monetary emergency.
- Mortgage Deferral in Canada
Six major banks in Canada have already announced mortgage deferral for a period of six months due to the coronavirus outbreak. This is a huge relief for so many low-income households that are left without work, have to self-isolate or stay home with small children. As a result of this announcement, homeowners will have the right to postpone their mortgage payments because of economic disruptions in the country. Generally, the government will spend $27 billion on monetary aid to those in need.
“We believe the Canadian government needs not just to put a temporary freeze on mortgage payments but also provide a rent deferral for low-income families and those who have to stay at home now,” says Marva Burnett, the president of the Canadian ACORN (Association of Community Organizations for Reform Now).
- Contact Your Creditors
If your working hours have been cut, you have to self-isolate or your employer has limited and/or closed service or production due to the economic crisis or public health concerns, you should contact your creditor as soon as possible. Various banks, as well as credit unions, offer their help to solve temporary emergency during challenging times of economic hardship. Do you have a student loan debt or a credit card debt? Make sure you contact your bank or service provider to avoid issues with repayments.
- Calculate the Damage
Before you start thinking about possible ways to improve your personal finances, you need to assess the losses and calculate the numbers. Are you still being able to work during quarantine? Did your recruiter allow to work from home? Were your working hours cut due to public health issues or economic situation? Now you need to determine your present financial status and whether you have enough means to stay financially afloat during a few weeks or even months.
- Separate Needs from Wants
Another thing to keep in mind is the necessity to prioritize your expenditures and think about costs that are urgent. For instance, you need to allocate some funds to pay for rent or housing, utilities, and groceries. This will help you and your family to have a roof over your head and something to eat while the situation gets better. If you can’t afford to pay the rent for a certain period, it pays to talk with the landlord and ask about the payment deferral until you get back to your full-time job.
Dealing With Monetary Hardship
It is important to keep calm during this uncertain situation and rely on reputable sources of information.
For instance, The Financial Consumer Agency of Canada (FCAC) offers a variety of free resources and materials connected with savings, budgeting, as well as debt management. Consumers may use an online calculator and special platforms to maintain their monetary wellbeing.
The good news is that the payment of income taxes was postponed by the Canada Revenue Agency for this year. Also, The Canadian Government provides income supports for employees across the country during the COVID-19 outbreak. Here are your options:
- If you are having COVID-19 or need to self-isolate, you can receive a temporary sick leaf from your recruiter and qualify for EI Sickness Benefits provided that you have worked over 600 hours during the previous year.
- If you are taking care of a family member with COVID-19, you can receive paid leave for the caring period.
- If you have to stay home from work to take care of small children who are out of school, you will be paid $450 per week for 15 weeks as an Emergency Care Benefit.
- If you are a worker whose recruiter has limited/closed production or service (during quarantine or permanently), you should check the collective contract for the required amount of compensation from your employer. Make sure you review CUPE local for any further details.
- If you are a full-time worker whose recruiter has lowered hours due to public health concerns or economic situation, you can qualify for compensation according to your collective agreement as it is considered as a layoff. The employer may join a Work-Sharing arrangement so that the workers continue working part-time and getting EI part-time benefits.
Personal Loans During COVID-19 Pandemic
Personal and payday loans are considered to be useful lending solutions in challenging times. If consumers can’t make ends meet or need extra monetary support, they may qualify for a small personal loan. The reasons for obtaining lending aid are various – you may take out some cash to cover urgent bills, finances an expensive purchase, or even survive through the current pandemic and economic crisis. Nowadays, nobody can predict what is going to happen and how the world economy will change in the nearest future.
Have your working hours been cut? Have you lost your full-time position permanently or temporarily? Do you need to stay home caring for young children who are out of school? Are you caring for a person with COVID-19? Thousands of people across Canada and all over the world suffer from the same losses and experience the same hardship. Fortunately, there is a way out. Acquiring a small loan can become your key to financial stability for the next few weeks or even months. A payday loan can save you until the next payday while a small personal loan may be given even for a few weeks.
While it is not recommended to go out in groups, you don’t need to endanger yourself or your family. Luckily, alternative online lenders are here to help you out during these hard times. A loan request can be easily submitted online from the comfort of one’s home, and the necessary amount of cash will be transferred to the checking account of the consumer. It is very safe and comfortable so that you can stay home and minimize the risks of getting the coronavirus.
The only thing to admit is that your credit history can affect your borrowing options. But you always can repair your credit score. Have you repaid the previous debt? If not, you may want to consolidate it first so that the new loan comes with lower interest rates and better conditions. It pays to shop around and search for the best lending decision as many alternative creditors provide special offers.
Small Business Loans During Pandemic
Small businesses are most likely to be affected by the coronavirus pandemic. Many small enterprises have already shut down due to public health issues and the economic situation in Canada and other countries. Also, consumption habits are already changing while people stockpile necessary groceries and things like protection masks, soap and hand sanitizers. Such expenditures like travelling, going out, entertainment, etc. are rapidly reducing and many have already closed for the period of quarantine.
Consumers are afraid to go out in groups or contact other people who may be ill and feel the consequences of coronavirus disease. Thus, the demand for many goods and services is reducing which causes small businesses to shut down for an uncertain period of time. Hopefully, the economic crisis will be overcome soon but we can’t predict that for sure. As for now, the Canadian government advises small businesses to go online in order not to lose their clients. The EDC and BDC were given $10 billion to increase small business loans for Canadians.
Moreover, entrepreneurs may use Canada Startup’s Funding Calculator Tool online to search for relevant funding and lending opportunities available these days. Also, you may avoid hassle and tedious paperwork by applying to online alternative lenders for a small business loan. It will not only help your venture to survive during monetary shortfall but also eliminate health risks connected with the virus.
In conclusion, here are the best ways to manage personal finances and avoid monetary disruptions during COVID-19 pandemic, as well as useful business options to eliminate risks in hard times of the new world economic crisis.