The COVID-19 pandemic means washing your hands, staying home, and skipping public events. Should it also mean skipping payments on some of your regular bills? Probably not. Even before COVID-19 closed businesses, forced lay-offs, and played havoc with the economy, more than half of Canadians were living from paycheck to paycheck. Families were living well beyond their means and unable to pay monthly bills. Many turned to credit cards and loans, taking on high levels of debt.
The global pandemic accelerated the problem, catching Canadians off guard...
The global pandemic accelerated the problem, catching Canadians off guard even though many experts had long been predicting an economic crisis. Total consumer debt in Canada is at a record high of $2.3 trillion and the average household is paying $170 on debt for every $100 they make.
“All this is fueled by a debt-inflamed financial system that consequently is causing a significant amount of money to be pumped into the economy by our government.”
These are debts that the government is taking on that we and the generations to come will ultimately be burdened with. With or without COVID-19, this debt bubble was inevitable and sadly the government will have to pump more money into the market again and lower interest rates even further. This will buy us a few years and if care is not taken Canadians will remain unprepared for the full grunt of this economic volcano when it erupts.
- The government has approved an $89 billion stimulus.
- The Bank of Canada has lowered interest rates from 1.75% to 0.25% and the big banks are increasing rates.
- Six big banks in Canada have promised relief for Canadians financially affected by COVID-19.
- The Bank of Montreal, CIBC, National Bank of Canada, RBC Royal Bank, Scotiabank, and TD Bank have all agreed to defer mortgage payments for as long as 6 months and other lenders are likely to follow suit.
Before you jump on board, though, educate yourself about all the options. The banks are offering deferrals, not canceling payments. If you accept the deferment, the bank tacks the interest onto the end of your mortgage. In the end, you’ll pay interest on your interest. If you can tap into your savings account to make payments, it may be a better choice.
Reality exists, and sometimes the glass really feels half empty. An entrepreneur, though, chooses not to focus only on the negative aspects of a thing, but to look for opportunities within the negative to create a win for themselves and for those around them. Purpose to not view daily challenges with frustration, but with anticipation of a positive outcome and an effective resolution.
Now that you have some mindsets in place that promote entrepreneurship, let’s talk about habits. Generally speaking, habits are tasks or actions that we do almost without thinking, that become second nature to us and really shape who we become. Here are two habits that seem to be common among countless entrepreneurs who have found their success in life.
Other options to consider include:
#1 - Objectively assess your financial situation
If you’re having trouble paying bills, is it really due to COVID-19? For years, CleveDoesMore has helped clients strategically organize their finances. In most cases, a good strategy reveals money people never knew they had. The need for a solid financial strategy has only increased. This outbreak puts us in uncharted territory and it is unwise to proceed without a winning strategy. Trial and failure is not acceptable.
#2 - Negotiate with your creditors
Before calling your bank or lender, make sure you’ve objectively assessed your situation. Remember, if they offer you a deferral, it doesn’t cancel your payment. The deferred interested will be accrued and you’ll pay interest on top of interest. Only take the deferment if it’s your only option. Finally, practice calmly making your case before you dial the phone. They are not there to hand out money. In fact, they will want to keep your feet to the fire as long as possible, so get the necessary help to prepare and negotiate you want to victory.
#3 - Apply for Employment Insurance
If you qualify for Employment Insurance, apply immediately. It takes time for the government to process your request.
#4 - Apply for a government subsidy
The Canadian government is offering subsidies of $2,000 a month for four months if you have lost income as a result of COVID-19. Small businesses and self-employed workers are eligible.
#5 - Look for a new job
Even though it might seem like this is the worst time to be out in the market looking for a new job, you may be surprised. With time on your hands, you may find a job you love that pays more than what you were making before the pandemic began. Additionally, if you’ve always wanted to work from home, this is the perfect time to consider a move.
#6 - Seek Financial Expertise
Getting through a financial storm can often be about making wise choices in the midst of it all. In order to do this effectively, it helps to have a financial expert in your corner. CleveDoesMore offers a comprehensive financial review process with a zero-risk guarantee. Called the “$500 Fix”, it helps people find money that they didn’t even know they had. In fact, if CleveDoesMore can’t locate $500 for you, then the entire process is free.