COVID-19 has been a financial reckoning for many. Here’s why.

Photo by Micheile Henderson on Unsplash

The pandemic has changed personal finance, and there are habits we should keep. No one knew the pandemic was going to take this long.

Starting off seemingly harmless, the COVID-19 virus soon became a global emergency. Countries closed their borders, many lost their jobs and several businesses shut down, leading us all into a time of deep reflection.

As a professional financial planner who has lived and worked in Sault Ste. Marie for the last 14 years, I have yet to see such a substantial shift in attitude toward personal finance. The pandemic has encouraged many people to pay more attention to their financial decision-making and start planning for the long-term.

With more time on their hands, people who may not have previously thought too deeply about checking their financial statements or consulted their financial institutions for advice are doing so more often. People who previously would have preferred face to face transactions are now shifting online and banking over the phone. As our community re-opens, we are emerging with an increased awareness of how we spend our money and perhaps have surprised ourselves with how much we’ve saved.

With Toronto-based jobs going remote, you may have also noticed an influx of newcomers to the Sault. Those who were previously on the fence about selling their homes in major urban centres are now revisiting the idea, taking the profit and moving into less expensive communities, such as Sault Ste. Marie. We have also seen an increase in home improvements and the purchasing of second properties as people become more investment-minded, while others have taken advantage of their savings to pay down debt or remortgage their homes.

I truly think the pandemic has been a time of deep reflection for us. It has allowed us to take a look at our situations, our careers, how we earn and spend money and where we direct our income. If the pandemic had not happened, I predict many of us would have continued on as we did before. Having this odd opportunity to save (or at least not spend like we normally would) really showed us what we can accomplish by making slight lifestyle changes … no coffee on the way to work, no happy hour on Friday, no snacks at hockey games, annual vacations or weekend getaways.

So, reflecting on our experiences so far, are there permanent adjustments or compromises we can make right now, in order to get us a little further ahead in the long run? What should our disposition to our finances be moving forward? I would say:

  • Assess your current financial situation: Understand what you can control and what you
    can’t. What is sustainable? What is the variable? Am I doing the best job with my money?
    Now that I’ve got a chance to see what life is like, could I be doing better? Can I make
    more and work less? Am I paying too much tax? Take a moment to sit and evaluate where you stand financially.
  • Set up a retirement plan: A retirement plan may sound unnecessary to some at this point
    in their lives. But the truth is, everyone, especially young people, need to start planning
    ahead. Can I retire sooner? Can I work less hours and still live a comfortable and financially
    stable life by giving up a little but gaining more balance? I think this is a big one.
  • Invest: Investments are one of the tools you can adopt to ensure you are prepared for a
    rainy day. If you are already investing, you should ask yourself, “Am I investing in the right
    areas?” “What are the best and most profitable investment opportunities I should be taking advantage of? You want to ensure you are maximizing what you earn.
  • Talk to a Certified Financial Planner or Financial Advisor: Whatever financial institution
    you work with, it is important to carry on with the good practices we picked up during the
    pandemic, such as checking our financial statements and reaching out to our financial
    institutions for help where needed.

Although the pandemic came with its hurdles, there have definitely been positive aspects that have changed our lives for the better. We want to ensure that our finances, which have such potential to shape our futures, are well thought out and planned, as we move into the future.

Disclaimer: Mutual funds, other securities and securities-related financial planning services are offered through Credential Securities, a division of Credential QTrade Securities Inc. Credential Securities is a registered mark owned by Aviso Wealth Inc.