By Guest Blogger Doug Rowat
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COVID-19 has taken much from us.
Most of the control that we had over our daily lives is gone. We can no longer touch or be near many of the family members and friends who we love. We cross the street when others come near us. We can’t visit most of the stores that we used to. Same with restaurants. We certainly can’t vacation. And live sports? Concerts? All gone.
For those of us with children, we’ve been forced to become amateur teachers, or more often, amateur entertainers. For some, it’s negatively affected our health, or the health of those close to us. As we gaze at the rising infection rates, it seems at times too that we have no control over the virus’s spread. In short, we inhabit an anxiety-filled and frustratingly restrictive world at the moment.
However, this week I offer some simple ideas to take back some of the control that you may have lost over the past four months. Because I’m a financial guy, I’ll stick to ideas that can generate or save you a few dollars. All the ideas for relieving boredom and cabin fever I’ll leave to the YouTubers (though I will highly recommend Roger Federer’s volley challenge). My specific purpose here is to allow you to gain a bit more control over your finances.
10 ways you can take back control
So, 10 ideas that may be helpful to you and, in some instances, those in your community:
- Read about the available government benefits (both provincial and federal) and claim what you’re entitled to. This is the obvious first step, and sufficient media and government attention has already been given to these programs, so I won’t belabour the details. Though, if nothing else, at least regularly check in here: www.canada.ca/coronavirus. Our clients have reported to me that, thus far, the government has been true to its word in delivering the CERB benefits within the three business days promised
- Consider refinancing mortgages or lines of credit. There are a myriad of different mortgage types with varying durations and break penalties, so this won’t make sense for everyone, but it’s worth investigating. The prime lending rate in Canada has fallen from 4.00% near the start of the year to only 2.45% currently. With interest rates likely to remain at rock-bottom levels for the foreseeable future, there’s at least the potential to lock in a more favourable interest rate.
- And after you’re talked to your financial institution, give your auto insurer a call. No one drives anywhere now; see if your insurer is willing to reduce your premiums. TD Insurance, for example, is already “temporarily adjust[ing] premiums to reflect changes in personal vehicle usage.” Many other insurers are following suit. If your insurer isn’t already offering to adjust premiums, a bluntly worded email or phone call threatening to switch to another insurer should do the trick.
- If you have a full-service financial advisor, seek their advice. You hired your advisor to oversee and manage your investments, but you also hired them for long-term financial planning, risk management, tax strategies and so on. The advice offered might be as simple as optimizing the amount of this year’s RRSP contribution or it may involve a more detailed long-term wealth forecast. But regardless, now is the time to lean on them for their guidance and expertise. Those of you at a discount broker or roboadvisor? Well, best of luck.
- Review your subscriptions and memberships. Are there are any that no longer have value? For example, most sports leagues and sporting events have been cancelled this year (or are at serious risk of being cancelled). Therefore my DAZN sports-streaming subscription at $150/year is looking pointless. Similarly, is there a gym or club membership that no longer has relevance and could be cancelled? Many readers can probably find similar savings that will only take a quick phone call or click of the mouse to realize.
- Support your local businesses. This can be done with an outright donation or by continuing to use their services (takeout food, for instance). For those who are transaction oriented (e.g., I expect a good or service in return for any money I spend), a gift certificate is a great option. This way you can give local businesses the cash flow that they desperately need now, but you’ll still get something for yourself in return down the road. I did both the donation and gift certificate route with our local independent movie theatre, the Fox Theatre, which has been a wonderful source of both personal family and client entertainment in the past—therefore I want this neighbourhood business to survive long into the future.
- Assess your skill set. Is there gig or part-time work that you could pick up? My daughter now takes music lessons remotely, for example, so if you can tutor (in whatever area of specialty that you may have) offer these services up to your community.
- Examine your household budget. Obviously, the coronavirus has dramatically cut all our spending, but now is a good time to look at the expenses that you probably could permanently do without, or at least significantly cut back on, once things return to normal. I outlined the average expenses for Canadians in this blog post. When we’re finally let out of our cages, do you truly still need to spend a full $86,000 a year on household expenditures?
- Obviously, a big community garage sale is not an option at the moment, but selling individual items online is certainly possible. Look carefully around your home—what would sell easily that you no longer want? For instance, it recently occurred to me that many Steve McQueen movies are overrated. (During the coronavirus isolation, for example, I re-watched The Magnificent Seven and it does NOT hold up well—watch Kurosawa’s The Seven Samurai instead.) Therefore I sold an old McQueen autograph and got a lot more for it than I expected. Look around, I bet there are many old treasures gathering dust that you could monetize—and you now definitely have the time to look. Canada Post remains open: but remember, the first hour of business is for those at higher risk (the elderly and those with compromised immune systems).
- Take out loans from friends or family members. Obviously, this is a highly personal decision fraught with many complicated family dynamics, but for many, these are desperate times and there’s at least the potential to have a more flexible payback schedule than a loan from a financial institution as well as a lower (or even non-existent) interest rate. You know your family best, but I present this as an option of last resort that may be more appealing than an outright default, which would damage your credit rating.
Now, this is where I turn the blog over to you—the commenters. Traditionally, this has been where you tell us that the global economy is doomed (or will be saved), tell us that Trump is the greatest president ever (or the worst), or explain that the market is certain to move lower (or higher). And this is usually also where you attack crowdedelevatorfartz mercilessly (or defend them with equal enthusiasm).
However, in this instance, I ask you to set aside your normal blog-comment impulses and simply present your best ideas for saving (or earning) your fellow Canadians a loonie or two. In a time of crisis, every little bit helps.
I know you have it in you blog dogs. Impress me.
Doug Rowat, FCSI® is Portfolio Manager with Turner Investments and Senior Vice President, Private Client Group, Raymond James Ltd.