How to manage your debt and finances during COVID-19

During these increasingly difficult and uncertain times, the financial impact of COVID-19 on Canadians has been overwhelming with no clear end in sight. Ongoing layoffs and the shutdown of non-essential services has caused many in Kelowna to lose their jobs or experience reduced incomes while essential expenses, including servicing debt, remain the same. 

These circumstances are dire for many, causing stress and uncertainty about their financial future. It’s no wonder why the majority of Canadians are more concerned about their financial health over their physical wellbeing. 

Here are five ways Canadians can help manage debt during the COVID-19 pandemic:

Build an emergency budget

While it might be too late to save for this emergency, it’s not too late to create a new budget based on a reduced level of income and existing monthly expenses. Talk to your family about where it would make sense to reduce spending and monthly costs. Consider cancelling or temporarily cancelling non-essential monthly fees like subscription services as these expenses can add up. 

While self-isolating, you will not be able to use your parking passes or gym memberships, so consider eliminating these monthly expenses for the time being as well. 

Apply for the help you’re eligible for

Losing any amount of your income can be frightening. Not knowing when you will be able to earn an income again is even worse. As the COVID-19 crisis continues to evolve, there are several resources available to eligible Canadians to help relieve some financial burden. Financial assistance can come from traditional Employment Insurance, municipal and provincial rental assistance programs for tenants, the Emergency Care Benefit program, or extended benefits at work, if available.

Submit any applications promptly as processing times may be longer due to the sheer number of applications submitted, reduced staff numbers and reduced hours of operations during the pandemic.

Look to your bank for assistance

Most of Canada’s major banks have implemented changes to lending rules in response to COVID-19 to help lessen the financial burden Canadians are facing. These changes are designed for people experiencing loss of income and businesses experiencing profit loss.

Mortgage payment deferrals, skipping payments, loan extensions, revised terms or even reduced interest rates are all things your lenders can consider. 

Contact your bank, financial advisor or credit union for further information and assistance. 

If you can, use deferred payments to create or deepen your emergency savings for the future. 

Consider a personal loan in an emergency

Personal loans don’t require any security and can be used for any expenses, making them an ideal financial resource in the face of an emergency. A personal loan is a flexible form of financing that allows you to access a lump sum of money with a fixed repayment schedule. This type of loan can be obtained quickly, especially through a licensed online lender. 

Seek Advice

If you are uncertain about your financial options, there’s no shame in asking for help. If you’re experiencing looming debt issues as a result of COVID-19 or other circumstances, consider seeking the advice of a credit counselling service. Credit counsellors can offer tailored advice or enrol you (if you qualify) in a Debt Management Program (DMP) to consolidate unsecured debts into one, affordable, monthly payment that many find easier to manage. Creditors are more likely to accept a DMP in a financial crisis because some payment will be collected.

“Times are really tough right now, and what we are seeing with the COVID-19 pandemic is completely unprecedented”, explains Loans Canada Chief Technology Officer, Cris Ravazzano.

“We are seeing a lot of volatility in the lending space, with some lenders slowing or even temporarily stopping their operations. On the other hand, many lending institutions are designated as essential services and are choosing to keep their doors open. As Canada's first and largest loan comparison website, our close relationship with these institutions enables us to continue to provide Canadians with the emergency financial solutions they need. We have also made it a priority to maintain up-to-date information on COVID-19's effect on the credit industry and invite Canadians to visit www.loanscanada.ca for the latest information.”

While the impacts of COVID-19 are widespread and affecting all Canadians, it does not have to mean financial ruin. If you’re experiencing financial hardship and are coping with debt during these unprecedented times, utilize the tools and forms of relief are available to manage your circumstances. Although this is undoubtedly an overwhelming and uncertain time, the first step to addressing financial debt is to come up with a plan that will help put your mind at ease.