Are your dollars not stretching as far at the grocery checkout or on public transit in 2023 as they once did? You’re not alone. From the rising cost of food and transportation to fluctuations in employment, Canadians are experiencing unprecedented tension in their everyday finances. With murmurs of a potential recession upon us, adopting the right financial habits could help ease your financial stress in these precarious times and help you take charge of your financial future.
Here are a few helpful ways to remain budget conscious in financially turbulent times:
- Budget like a boss
Find yourself suddenly without a pay cheque, or is your paycheque simply failing to meet all your needs? If your finances are struggling to keep up with your bills, understanding your financial situation can help you get through these uncertain times unscathed. Evaluating your current financial savings and expenses over the past few months can help you understand where your money goes each month instead of wondering where it went. As your monthly expenses cost more today than in previous years (e.g., rent, phone bills, groceries), having a clear tally of your expenses, income, and investments will provide you with a holistic picture of your financial outlook. This way, you can stop poor financial habits in their tracks and avoid falling into serious financial hot water.
- Slash your spending
After an extensive review of your essential needs, the next step is looking for ways to reel in your spending. Do you often enjoy restaurant dinners with friends or shopping trips to the mall? Do you really use all of your subscription services regularly enough to warrant the expense? You might have to hit the pause button on these indulgences – at least for now. While nights out with friends and new clothing are welcome pleasures, as you experience changes to your financial circumstances, consider opting for inexpensive alternatives to help you continue making memories with your loved ones while staying within your financial means.
Consider swapping out nights on the town with a board game night at home with your squad or trading in trips to the mall for a “clothing swap” sesh with your closest friends. These minor adjustments might not seem like much, but they could help you save in a huge way. Reducing the expenses your budget needs to cover will also allow you to free up more money to pay for your essentials or contribute to your savings without racking up any more debt. Now, that’s a win-win! Plus, if you save more than you expect on a given month, you’ll be able to treat yourself every so often to a night out or that pair of jeans you’ve been eyeing while staying within your financial budget.
- File for unemployment benefits
Were you recently laid off? You’re not alone. As of January 2023, the unemployment rate among Canadians stands at 5%, according to Statistics Canada. If you’ve lost your job, unemployment benefits can help you supplement your income until you find new work. Employment insurance (EI) provides regular benefits to individuals who have lost their jobs through no fault of their own and who can work but cannot secure a job. EI benefits can provide much-needed financial support and help you manage your financial obligations during your job search. Do you make the cut for EI? If you’ve recently lost your job, have been without pay for at least 7 consecutive days in the last year, and are ready and actively looking for employment, the good news is that you are eligible to receive EI. Remember to apply for EI as soon as you stop working, as benefits can take a few weeks, if not months, to kick in. So, the sooner you apply, the better. With the help of EI, you can reduce your financial stress knowing that you have some cash flow to cover your expenses as you continue your job hunt.
- Dip into your emergency fund
With the cost of everyday items only continuing to rise, having an emergency fund can prevent you from getting into serious financial trouble. An emergency fund is a reserve to help you cover unexpected financial expenses. When building an emergency fund, a good rule of thumb is to earmark 3-6 months’ worth of living expenses which will help you navigate life’s unexpected moments – such as job loss or home repairs – while protecting your long-term financial health. Start by setting aside a small amount of money each month to help you prepare for emergencies that could be financially taxing so that you can minimize the financial stress of life’s toughest moments on your wallet. If you don’t have an emergency fund, start one now! Cutting back on expenses and saving a little money each month will help provide you with some extra financial cushion to adjust to the price tag of today’s economy.
- Find creative ways to earn additional income
In addition to reducing your expenses, you could also try to increase your cash flow by thinking of ways to monetize the hobbies you enjoy or items you no longer use into some extra cash in your pocket. If you’re looking for new or additional income streams to bridge the gap in your finances, assessing your skillset and schedule can help you determine the options available to rake in more cash and reach your financial goals. Do you have a blender that’s in decent shape that you no longer use? Sell it online for some cold hard cash. Do you love dogs? If the answer is yes, consider walking dogs for members of your neighbourhood. That’s an easy way to spend time with your favourite furry friends while also putting cash in your wallet.
- Build a holistic financial plan
If you’re feeling overwhelmed by your finances or have questions about the current financial landscape and are looking for personalized financial advice, Canada’s credit unions are here to help. Whether you’re currently unemployed or are in the workforce, developing healthy financial habits is vital to protecting your financial future. Consult with an financial planner or advisor at your local credit union and review your current financial statements, income sources, and debts (e.g. chequing account, investments, credit cards) to get a holistic picture of your financial situation. By working with a financial professional, you’ll be able to determine your wants versus your needs and build an updated financial plan to help you grow your savings, eliminate debt and reduce your expenses to keep your finances on the right foot.
Keep your finances in check during uncertain times with the help of a credit union
From the rising cost of goods to high-priced housing and job layoffs, current economic conditions are impacting every aspect of Canadians’ lives. However, with the proper financial planning, you can manage the impacts of a turbulent market and regain control of your finances. Credit unions are trusted financial institutions that care about your financial well-being and can help you adjust your finances for economic changes so you can still achieve your financial goals. Find your nearest credit union here