With a vaccine estimated to be 12 to 18 months away, I see 18 months as the furthest timeline before we are back to ‘normal’. Having a plan to manage unexpected events should ease any anxiety you might be having about your health or finances. Here are some helpful hints on what you can do to manage any changes to your income stream over over the next 18 months.

First and foremost, have a health plan for you and your family. Your health and your family are your number one priority.

1. Create a plan that ensures you have the necessary support network if you fall ill.
2. Stay connected socially, isolation is also bad for your health.

Second Priority should be Access to Cash: Evaluate how much cash you will need for the next year. Go through your budget and look at the impact of your new living situation on your monthly budget. Reduce unnecessary expenses where possible like:

1. Car insurance may be reduced if not going to work.
2. Put monthly memberships on hold where possible.
3. Defer payments if available

Ensure you have access to one years’ cash flow to pay your expenses. Consider your income sources and how they might be effected:

1. Income from employment (will this be reduced)
2. Income from investment assets
3. Rental income (will this be affected)
4. Access to a low interest line of credit
5. Savings account
6. Loan from a family member
7. Government sources
8. Whole Life insurance

3) Your family network: Who in your family is vulnerable, health or financially? How can you include them in your plan? Do you need to lend money to support family members, if so where will this come from?
a. Co-sign a loan.
b. Use funds from your Line of credit (be sure to paper a loan agreement)
c. Access funds to support family from one of your cash sources.

4) Increase your credit:

The banks are offering credit for prime rate of 2.95%. Apply to your bank for a loan. You don’t have to use it! Using a line of credit to get through any cash flow crunch is better then selling long term investment assets. Once this is crisis is over, you can make a plan to pay it back.

Your home, your investment assets, whole life insurance are all available as security on a line of credit with your bank.

5) Reduce Withdrawals:
a. If you are living off retirement income, reduce your withdrawals to meet your new budget.
b. Where possible take advantage of the lower RRIF minimums.

6) Defer payments

• Where you have been offered a deferral, take advantage of it
• Tax deadline has been extended
• Property tax, deferral for over age 55.
• Any other low interest penalties or offerings from service providers to delay payments or spread over time.
• Phone service providers or suppliers and ask for a payment plan if necessary.

7) Check your Will, Health Agreement and Power of Attorney
a. Be sure that your Will, Health Care agreement and Power of Attorney are up to date and accessible.
b. Read through these agreements to ensure that all the parties listed on the agreement can function in their duties. Ie, residence, location, accessibility and health risk.
c. If you are unsure, book an appointment with a lawyer. Referrals available.

8) Access Government Benefits

9) Landlords and Revenue Property: Loan defaults or missed payments:
a. Save all your receipts and keep good records if you are having to reduce rents for the short term.
b. The government has offered programs to people who are out of work, be sure to refer your tenants to these resources.
c. Is there an opportunity to refinance your property to reduce payments. d. Defer property tax

10) What not to do:
a. Do not sell your equity assets: You would not sell your house if the market fell by 30%, you would wait until the market came back unless you had no other choice.
b. Do not loan money to friends. If you must have a lawyer put together a loan agreement with collateral.
c. Do not rack up credit card debt.
d. Do not fall for any scams, watch out for people taking advantage during this vulnerable time. If you want to help, use a registered charity like the Red Cross, Food Bank, Covenant House or Salvation Army.

Please remember that this is a short term crisis, and the tips above are designed to help you through the short term. There are many resources available to get you and your family through a cash crunch if your income stream is going to be affected by this Pandemic.

Stay tuned for more information to come….

Jennie