Credit Counselling Society Presents Managing Your Finances … · 2020. 5. 7. · Credit...

Credit Counselling SocietyPresents

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Managing Your Finances During the Pandemic and Afterwards

We Help. We Educate. We Give Hope.

1. Unemployment / Underemployment

2. Excessive use of Credit or Using Credit for Living Expenses

3. Injury / Illness

4. No Budget / Lack of Financial Education

5. Separation / Divorce and Family Expenses

6. Failed Business/Used Credit for Business Expenses

7. High Housing Costs

Top Reasons We See for Financial Trouble

Objectives

By the end of the session, you will be able to:

•Describe 2 ways to increase income

•List 2 ways to reduce expenses

•Create a course of action to move forward in face of reduced income

Agenda

o Dealing with reduced income

o Manage income

o Reduce expenses

o Manage impulse spending

o Manage credit

o Manage debt

Focus on What is in Your Control

•Your feelings

•Your behaviours

•Your spending

•Resources you access

Our Emotions

Some feelings you may be experiencing during this time:

• Stress, worry and/or anxiety

• Anger and resentment

• Depression

Remember To

•Apply for Employment Insurance immediately

•Apply for CERB

•Service Canada offices currently closed

• If you’re self-employed, go to bdc.ca

•Deal with your finances

5 Steps for Dealing with Reduced Income

•Find income

•Reduce expenses

•Manage impulse spending

•Manage credit

•Deal with debts immediately

01

Your Income

Step 1

Possible Sources of Income

•Employment Insurance

•CERB

•Emergency funds

• Investments (TFSA & RRSP’s)

•Pensions

• Increasing income

Income Protection

• Apply for Employment Insurance immediately to safeguard some income

• If EI is not available to you, consider provincial social assistance

• If you’re self-employed, go to www.bdc.ca

Other Options

• Your emergency savings (this is what it’s for!)

• Family & friends

• Retirement savings

o Remember: there are tax implications so choose this option carefully

Increasing Income

Find ways to increase your income – it’s temporary!

• Part-time work

• Temporary work

• Start a business

• Sell items on-line

02

Your Expenses

Step 2

Dealing with Reduced Income

•Budget, Budget, Budget

•Track your expenses to find out where your money is really going

•Cut your expenses NOW

What is a Budget?

• A written spending plan – spending now and saving to spend later

• It’s based on our own choices and priorities

A Budget Includes:

• Our take-home (net) pay

• Our monthly living expenses

• Money to be put aside for

• Irregular expenses

• Emergency expenses

• Savings goals

Expense Tracking

How is tracking your spending going to help you?

Expense Tracking

•Tracking makes a budget work!

• It tells us the truth

• It shows our habits

• It shows where we can make changes

• It gets us in control

Ways to Track Expenses

•Pencil & paper

•CCS tracking booklet

•Spreadsheet or other software

•Envelopes for receipts

•Smartphone app

o Start with a few categories

•Find the system that works for you!

Dealing with Reduced Income

• Identify specific areas to target

•Your tracking will show you where to start

•Give everything consideration

•Small changes add up

o $5 a day (coffee anyone?) = $1825 a year.

Housing

•Can you chat with your bank or landlord if you’re temporarily out of work?

•Could you get a roommate, tenant or student?

•Skip a Payment Calculator

Renter Information

Province Evictions Rent Support Rent Increases Pay April Rent Other Support

BC

Halted new and active evictions,

except for exceptional

circumstances

Temporary rent supplement of up to

$500/month Frozen

Yes: applications for rent subsidy

available mid-April

BC Emergency Benefit for

Workers

AB

Suspended for missed

payments before May 1st N/A

Frozen while State of Emergency

in effect

Yes: late fees can't be applied or

collected retroactively until June 30th

Emergency Isolation Support

SK

Non-urgent evictions

suspended as of Mar. 26th N/A N/A

Yes: Tenants who can't pay are

expected to pay in full once the

emergency is overSelf-Isolation

Support Program

MB

Non-Urgent Evictions

suspended until May 31st N/A

Suspended April 1st ro May 31st

Yes: Maximum late fee of $100

Residential Tenancies Branch

ON

No new eviction orders will be

issued until further notice.

Current eviction orders postponed. N/A N/A

Yes: landlord can collect compensation for each day;

Eviction is not enforced Ontario Works

Transportation

•This is a quick win if you’re stuck at home during the Covid-19 outbreak

•Avoid all public transportation

Food

•Create weekly meal plans

•Use up your pantry & freezer

•Bulk buys

Combining Savings

•Shop on discount days

•Price matching, rebates and coupons

•Look for sales

o Avg consumer can save 20%-25%, that equals 3 months of free food!

Eating Out

•Cut this one out immediately to get some budgetary relief

Utilities

• If you’re having difficulty paying your utility bill, contact the company

•Many companies are making special provisions for Covid-19

Entertainment

• Consider 1 streaming service instead of multiple

•Never forget the value of a good book

• Walks outside are still free

03

Manage Impulse Spending

Step 3

Why Do We Spend Impulsively?

• We spend money impulsively because:

o It makes us feel better (temporarily)

o We’re not paying attention

o We want to keep up with the Jones’

TEMPO

• Be aware of your triggers:

o Time

o Environment

o Mood

o Place

o Occasion

Time

•You now have access to A LOT of time

•Watch how you spend your time (i.e. not shopping)

Environment

• Is your home environment driving you to spend?

• Is there anything you can do in your environment to give you a sense of calm?

Mood

•Does this outbreak bring out your stress, anxiety, loneliness?

•How can you process these feelings without spending?

Place

• Is your place (and the people in it) making you itchy, like you have cabin fever?

•What can you do in your physical place to limit your spending?

Occasion

•Does this outbreak make you want to throw out your budget and comfort yourself with a purchase or two?

•Remember that this will pass.

You had a bad day because

of a bad sleepYour work didn’t get done which

makes you stressed

You go shopping to feel better

You spend impulsively

You feel guilty for

overspending & put yourself on

a debt diet

You’re worried about money & can’t sleep

Impulse Spending Cycle

TEMPO Action PlanPossible Triggers I tend to spend

impulsively when…Instead I can…

Time I’m tired, right after work. Go grocery shopping in the evening or weekend.

Environment It’s spring and everythingis turning green.

Save money separately for home & garden and shop seasonally.

Mood I’m bored. Go for a walk, bake, read a book.

Place I love the hardware store and the deals always get me.

Avoid going to the store or leave my credit card at home.

Occasion It’s Christmas! Make a list; shop year round; ask for help.

04

Manage Your Credit

Step 4

Don’t Add to Your Debt

•Stop using credit – use cash/debit!

OriginalBalance

InterestRate

MonthlyPayment

Time toPay Debt

InterestPaid

TotalRepaid

$3,000 19.9% $60 (2%)52 years

7 months$12,709 $15,709

$3,000 19.9%$60 + $40

($100)3.5 years $1,184 $4,184

Using Credit Cards Wisely

05

Deal With Your Debt

Step 5

Dealing with Debt

• If you’re worried about making payments on your products, call your creditors immediately

•You may be able to skip a payment, have your interest reduced or have access to another solution

• It’s easier to take steps when your finances are not in a crisis

Dealing with Debt

• If you’re worried about making payments on your products, call your creditors immediately

• It’s easier to take steps when your finances are not in a crisis

Protecting Ourselves & Each Other

•Your & your family’s health is the most important thing to focus on right now

•Call your creditors NOW if you’re worried

•Apply for Employment Insurance NOW if your income has been impacted

•Reach out to each other (virtually)

Conclusion

Now you are able to:

•Describe 2 ways to increase income

•List 2 ways to reduce expenses

•Create a course of action to move forward in face of reduced income

Money Tips

•Look at current spending habits and identify where you can make changes

•Create a realistic budget

•Get information, options, and help sooner rather than later

•Put your plan into place and stay positive – the benefits will outweigh the costs!

•Free tools and resources available at: www.mymoneycoach.ca

ADDITIONALRESOURCES

Some helpful resources for you

to get started

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https://www.nomoredebts.org/coronavirus

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