Getting Your Finances in Order Before Re-entering the Workforce
With more than a year of being closed for business, several self-employed Canadians relied on the Canada Response Benefit for financial assistance during COVID-19. Now as they re-enter the workforce, regaining financial stability will be an important part of their transition.
If you are returning to work, here are some best practices to get your finances in order.
For many of us, what was once a normal part of our day, the commute became nearly obsolete during the pandemic. Now as workplaces resume regular operations, we will once again have to budget for commuting costs.
According to Statistics Canada, the average Canadian spends at least 1 hour commuting to work. What does this look like in terms of cost? An estimated $273 a week to add to the budget. We recommend calculating the average cost of commuting and determining how this will impact the health of your finances. You may also want to explore alternative or temporary commuting options, such as public transit, to help lower your costs as you transition back to work.
Amid uncertainty with COVID-19, the Canadian Response Benefit was a welcomed relief; however, this reduced income meant changing our spending habits. Gone were the takeout work lunches as we stayed in lockdown and prepared more meals at home.
If purchasing meals at work was one of your habits pre-pandemic, how does this expense affect your budget now? As you transition towards a more stable income, bringing meals from home can help reduce any outstanding debts quicker. We suggest setting a weekly or monthly limit for what you can afford to spend for work meals. While it’s important to treat yourself (and support our local restaurants), being conscious of your extra spending can make a big difference for your finances.
If you have young children, returning to work will likely add childcare expenses to your budget. You may find yourself spending more on daycare fees due to the pandemic. Many childcare centres experienced a drop in enrollment when they reopened, causing many to close and others to raise their fees. According to the Canadian Centre for Policy Alternatives, the annual increase ranged from 1 percent up to 21 percent. We suggest you review the more flexible areas of your budget that can provide a buffer if you are affected by these increases.
Sanitation Products and Personal Protective Equipment (PPE)
With several COVID measures still in place in Ontario, including masks and sanitation stations, small businesses have had to incur additional expenses to ensure the safety of their employees and customers. Though the Ontario government offered financial assistance to small businesses to help with PPE costs, these grants are now closed. Businesses will need to cover these costs for the foreseeable future.
This year taught us just how important it is to set aside money for uncertain times. Now is an important time to replenish your emergency funds to ensure you have savings for the future. But if you are unable to manage your debt, let alone save for an emergency fund, we encourage you to speak to a Licensed Insolvency Trustee. Our trustee can assess your situation and review debt relief options such as personal bankruptcy or consumer proposals.
Contact us to learn more about how you can move towards a better financial future.