Planning for the Other Side of Economic Shutdown

It’s been over a month into this economic shutdown and I don’t know about you, but I’m going stir crazy! With warnings that a second wave of COVID-19 is coming and that it’s going to be worse than the first, we are stuck at home for the foreseeable future as our Provincial and Federal governments have yet to create a plan to open up the economy.
This is worrisome from a financial and economic standpoint!

Canada had a rough start to the year with the protests that shut down Canada and our country does not have the financial means to replace the private sector for 4 months, much less the 18 months till a vaccine comes out. Our private sector is what pays for the public sector and both sides of the employment gig are going to get hammered. It is officially cheaper to buy a barrel of oil than it is a cup of coffee and things are going to get bad fast because Canada as a whole, not just Alberta, rely on oil prices to pay for public services.

Things are bad, really bad, worse than you probably realize or are willing to admit. It’s human nature to ignore the bad and to think “it will never happen to me.” In saying that, things are also good too and there is more opportunity out there then ever before. While it may seem difficult to dole out financial advice while a significant portion of the population is in survival mode, there are a few things that are central to getting through this and for planning for the next few years. Yes, YEARS, not just months.

Here are a few things that you can do to plan better through the challenges that are coming:

You plant a garden. Hopefully summer comes this year because we didn’t get one last year. You have no where to go and nothing to do – so plant a garden. There is nothing quite like fresh veggies grown in your backyard and it gets you outside for some fresh air and exercise. The price of food is likely going to go up as food supply chains are likely to be interrupted, so grow your own.

You look for new ways to make money. This will be part of the new normal. Everything is being done online, existing businesses have had to change their business structures, and there are more opportunities out there than ever before to. Be creative. Be bold. Don’t wait for the opportunity to come to you, you go to it. Even in a depression there is still money in the economy. It will never dry up. It will just move differently and it’s up to you to get it.

You get your finances in order.

You take control.

You get your life insurance in order. If you don’t have it, you call me. If you have it, you call me to make sure that it is enough. Over 70% of people don’t have any or don’t have enough. You are probably one of them. The life insurance on your mortgage through your lender isn’t going to cut it. I’m not sure that it would pay out anyways because of the restrictions it has outside of coronavirus (which is in the fine print that no one reads) and because of what we know about COVID-19 deaths. You can’t hide in your house forever, coronavirus or not, because that is NOT LIVING. This won’t be the last virus. Apparently, this is only the first wave. There are other things lurking out there. Get it in order now because I know with the economic crash the premiums will be going up once we get through this.

You get your estate documents and will in order. There’s no excuse not to. Especially if you have kids. Especially if you own a business. Especially if you are over 18. Everyone needs one.

You make sure that you have no less than 3 months of living expenses saved in a HISA (high interest savings account). You call me to get set up with the best one’s, one’s that pay much higher than your bank ever will.

You should take a look at updating your mortgage to have a flexible mortgage. I know I’m sounding repetitive, but call me, I have some good one’s. You are going to need that flexibility because things are going to get rough. Do it now while you can because housing prices are more than likely to drop significantly and lenders are going to be less likely to write them.

You save money every month even if it’s only $50 a month. Everyone has $50 a month to save even if you have to collect pop cans on the side of the road to get it. You don’t have to tell anyone that is what you are doing, you just do it and you save it. You take this financial advice and you maximize it and realize that it is no longer enough to just save a little bit every paycheque for short periods of uncertainty. It is necessary to save for longer periods of uncertainty.

You prepare to not have CPP in retirement. You take control of your own retirement and you plan around that. Average retirement age in Canada is 72. I’m sure you want to retire before then. Business owners should only be paying into CPP in very specific circumstances. You take the time to review this.

You plan now for how you will get through a drop in the markets in retirement. There are a few different strategies to do this and you call me to go through your options so that a drop in the investment market won’t push your retirement back longer than you want.

You get your financial plan in place because that will reduce your stress and improve the quality of your life because you don’t have to walk around afraid and stressed anymore.
You start to evaluate what is important in your life. Some of the things you were spending money on before has been completely unnecessary and you create a goal to have 3 months of living expenses saved before you go back to spending that money again. You can’t spend it right now, so save it.

You start to create good life habits. You get up in the morning and work out. Yes, you can workout at home. There are so many online workouts available. You watch less TV and pick up a book instead or go for a walk. You find a hobby that you can turn into a business. You plan for what you are going to do once this is all over. Just because the government doesn’t have a plan yet, doesn’t mean you shouldn’t.

You stop living in fear because you have your life in control.

You realize that the worst that can happen is that you are financially in control and prepared. If nothing bad happens, you are so much further ahead. It is so much better to have 20/20 vison than have hindsight be 20/20.

You have time to call and review what you need to do financially. There’s no better time to do it than now. Zoom has been working wonderfully for me to review your financial plan with you and I know you have time. Let’s create clear 20/20 vision!

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