How to stay on top of your finances through another possible lockdown


If you’ve been frustration spending, you’re not alone. But there are other ways to break out of the pandemic doldrums

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Staying on top of our finances through another possible lockdown is likely the last thing the vast majority of us want to think about, but welcome to 2022, or should I say 2020-too.

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Even though we’d like to think we’re at the start of a fresh new year full of possibilities, it would appear, thanks to Omicron, we’re not quite there yet. So if your spending has returned to pre-pandemic levels, you might find yourself ill-equipped to handle another lockdown.

At the beginning of the pandemic, you may have been able to put more money into savings because you were spending less on transportation, eating out, entertainment or travel. The reopening of the economy and access to goods and services that had been unavailable could mean your savings level has tapered off.

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But countless Canadians may have already used their existing savings to cover previous income shortfalls caused by layoffs or the time off required to care for sick family members or even themselves. Most creditors are no longer offering payment deferrals, many hardship programs have ended, and government supports are now more limited. Another lockdown could stretch your finances to the breaking point.

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There are also those who decided to return to school or change careers in favour of employment not negatively impacted by COVID-19. Others may have sold their homes and moved closer to family or just had a desire for change. Whatever the motivation, those who opted for a major life transition may still be dealing with the related outcomes of those decisions and are not ready to go back into lockdown mode.

Some measures, such as work-from-home or home-schooling orders, have put further strain on families. Many parents are in serious danger of burnout as they attempt to be a teacher, parent and employee. If they can still manage to earn a paycheque through all the upheaval, they may just end up spending more on take-out or ordering in due to a lack of energy or desire to cook.

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Even if you’re among the lucky ones who did not have to face layoffs or lost wages, the fatigue associated with dealing with this ongoing crisis may cause some less-than-desirable spending to emerge. Although this “retail therapy” may not have an immediate impact on your overall health, the longer-term impacts on your finances could have serious ramifications on your future well-being.

Consider this your heads up, then. It was for me when I realized that after having to isolate and wait longer than normal for COVID-19 test results, I was tempted to spend money to make up for it. Postponed events during the holiday season had a negative impact on my emotional health. Once I was free to leave the house again, there was a huge temptation to go a bit wild and spend money to experience all those things I had missed out on.

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Frustration spending is an understandable side effect of overall pandemic fatigue, but don’t feel bad if you’ve fallen victim. Doing something within our control, such as spending, when so much feels out of our control can provide great, if often temporary, feelings of satisfaction.

Pets can be an excellent source of emotional support, but it is important to plan for all their related costs into your budget before you face a serious drain on your monthly cash flow.
Pets can be an excellent source of emotional support, but it is important to plan for all their related costs into your budget before you face a serious drain on your monthly cash flow. Photo by Getty Images/iStockphoto

One source of frustration spending has been in the area of pet ownership. From kittens and puppies to the more exotic, there has been a marked increase in the number of people who have welcomed a pet into their homes during the past two years. Pets can be an excellent source of emotional support, but it is important to plan for all their related costs into your budget before you face a serious drain on your monthly cash flow.

Aside from the expenses to acquire the pet, you have to house and feed it, take care of its medical expenses and look after its longer-term needs. A more affordable solution may be to look at fostering a pet instead. This can allow you to enjoy all the benefits of having a pet without any of the financial obligations since they are usually covered by the animal agency. At the very least, do your research before making the long-term financial commitment to adopt a pet.

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Another area of frustration spending is apparent in the significant rise of home renovations. Spending time at home has caused many homeowners to fast-track upgrades, repairs and renovations. But taking on a big and expensive project requires a serious commitment of time and resources. Before my husband and I upgraded our kitchen, we spent more than a year researching, designing and planning out what we wanted to achieve. Then we had to decide what we could afford to do.

As is often the case, our kitchen reno cost more than we anticipated, but along with extensive research came the planning required to stay out of debt we could not afford to repay. Part of our preparation also included how we would cook for eight weeks while we did much of the work ourselves. It turned out that cooking was the easier part. We also had to pull straws to see who would do the dishes in the bathtub. Ultimately, all the time spent researching and planning helped us improve our home’s value by more than the cost of the renovations.

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Whether for a pet or home improvement project, save yourself a lot of financial and emotional stress by pausing to research and understand the significant investment of time and resources required for any big expense.

Despite the appeal of finding temporary relief from COVID-19 fatigue by increasing your spending, now may not be the best time to do so. Instead, consider other ways to break out of the winter or pandemic doldrums.

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One cost-effective option is getting out to enjoy some fresh air and exercise. Nothing clears the mental cobwebs like exercise, and the endorphins from a good workout will help reduce feelings of fatigue. Then, with a clear mind, if you’re determined to make some big financial commitments in 2022, work them through carefully. Figure out what is involved and ensure your plans are truly affordable. This year is off to a rough start for many Canadians. Don’t make it worse with bills you can’t repay.

Financial Post

Sandra Fry is a Winnipeg-based credit counsellor at Credit Counselling Society, a non-profit organization that has helped Canadians manage debt for almost 25 years.

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