Firstly, and arguably most important: The major Bell sponsorship of Mental Health day in January isn’t just a one-day and one-off. It’s just as important today as next week and every day. Taking care of yourself is not an occasion – it’s a process. So, go to letstalk.bell.ca for a lot of tips, insights and practical tools. In addition to that, talk to someone. Being able to talk it through is an incredible tool that doesn’t cost anything, but pays off in measurable ways, because you’re not alone.
When it comes to your finances, there are two different issues: The today actions and the down the road issues that we can talk about another day.
Psychologically we tend to think the good times, good incomes, or investment returns go on forever. They don’t. We also tend to think that, in bad times, they’ll never end – they do. You decide how long this storm is going to last – then make a financial game plan of how to get from here to there with a lot less income and the same bills you’ve always had.
1.. Your entire family has to be involved, in the know, and on board. Your partner is a given, but I would also explain what’s happening in financial terms to your kids in language and information that’s age and maturity appropriate. If you can explain why grandma can’t visit you can certainly explain some basic financial realities in the same way.
2..Stop anything that takes away money on a monthly basis that is optional: Stop your RRSP contributions, children’s education savings, any amount auto transferred to your savings, payroll deductions for investments or retirement plans – everything. For the next few months, you need cash and not a long-term wealth building plan which takes money away from the today storm. Every one of these money-savers are far preferable to any deferrals of your bills – period.
3..Write down your financial priorities: They will be the same for every person: Prescriptions, food, shelter, utilities, basic clothing and transportation. You can look at financial books from the 1950s to someone like Dave Ramsey on about 400 radio stations in the US, and others that’ll all be the same. (I added the prescriptions for obvious reasons). Those are the order of your priorities. Besides these first priorities, write down what those cost you each month. Does whatever income you have now cover these basics? If so, you’re doing well and should give yourself permission to breathe!
Reality stinks right now, but reality is that less income means less money can go towards non-priority payments. You cannot print money, and you are not exempt from the law of gravity or math: $2,00 of income will not cover $4,000 of monthly bills.
4..When the first priorities are paid, if there’s money left over, the decision of what other bills to pay is yours. That’s very subjective and everyone will make very different decisions.