COVID-19: Pandemic pushes many Canadians to a financial brink
Already living paycheque to paycheque and now having to deal with a health crisis, many Canadian have been heavily impacted by the COVID-19 pandemic.
In a survey by Refresh Financial, nearly half of the Canadian respondents admitted to not having any savings set aside for an emergency, while about 53 per cent were always anticipating the next payday. Now, throwing a pandemic into the mix, it is easy to imagine just how difficult the situation can be on many people’s finances.
Unsurprisingly, unemployment rates are growing across the country with many people left out of jobs due to lockdown measures and closures. While the past few months have seen some good improvements, the recent rate is still at almost 7.5 per cent. Today, almost 28 million Canadians are receiving private, or government-sponsored COVID-19 employment benefits, especially with the most affected citizens already earning low wages to start with.
Many couples have had to struggle with not being able to spend time together due to social distancing and lockdown measures, but as for John Malcolm and Adrian Rebucas, they were already used to spending quality time together.
The couples have been together for a long time and both worked as actors and waiters—serving in the same restaurant and appearing in the same advertising campaign in 2019. They literally do everything together, said Malcolm.
Unfortunately, like many Canadians, the pandemic has not been fair on them as they’re now unemployed and struggling to pay their bills.
35-year-old Malcolm and his 33-year-old partner, Rebucas, were both laid off from work when the restaurant they were employed at was forced to shut down to curb the spread of the coronavirus. Even their acting gigs, which in all fairness was quite sporadic, equally dried up leaving them both with no savings and a debt of about $12,000.
Like many Canadians, Rebucas and his partner were basically living from paycheque to paycheque. In fact, according to research conducted by the Canadian Centre for Policy Alternatives, about 46 per cent of the 3.4 million Canadians who live in rented homes—and have their primary income source as either salaries, wages or self-employed income—have less than one month’s income in savings. By using a biweekly paycheque calculator, Canadians can easily see just how above or below the poverty line they are.
Another survey by the Canadian Payroll Association revealed that nearly half of all employed Canadians are living from paycheque to paycheque. Ricardo Trranjan, a senior researcher and political economist said that most people who had difficulties paying certain bills such as rent will definitely struggle and would require assistance now more than ever.
Just like millions of other Canadians, Malcolm and Rebucas are anxiously hoping for the Canadian government to provide them with much-needed assistance. They have been missing their nearly $2,000 monthly rent for their downtown apartment and are way behind on other essential bills.
“I’m trying to keep a calm and cool attitude about it, but inside I’m definitely freaking out,” Rebucas said.
The government’s income support procedure has equally been confusing to the couple. Based on instructions from their previous employer after they were laid off, they instantly applied for Canada’s Employment Insurance (EI). However, the federal government later introduced a $2,000 COVID-19 relief fund through the Canada Emergency Response Benefit (CERB) for those who had been made redundant due to the effects of the coronavirus.
It has become necessary to adequately prepare yourself financially for any sudden market condition and the most important step towards achieving better financial stability is creating a monthly budget that covers all your expenditure. With a central location for tracking both your income and spending, you can easily reduce every unnecessary expense.
If you find yourself living from paycheque to paycheque like Malcolm and Rebucas, creating and sticking to a budget would be the best decision you can make. There’s also the option of applying the 50/30/20 rule during budgeting. This rule simply states that you apportion 50 per cent of your income towards funding your essential needs like rent, while 30 per cent should cater for your personal needs and lastly, the remaining 20 per cent should go towards your savings plan.
While everyone hopes the pandemic blows over and the economy returns to normalcy, finding better ways to manage your finances and not incur more debt is the best thing to do.