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The coronavirus crisis has hurled many Canadian households into financial distress. From government aid programs to bill negotiation tips to deferral programs, we've rounded up our expert tips on how to survive a financial crisis during the COVID-19 pandemic.

The ripple effects of COVID-19 spreading around the world are leaving financial chaos in its wake — Canadians included. Many are wondering how to cover the basics of living, like rent and food. It’s a worrisome time, but it isn’t all gloom and doom.

While vaccine roll-out starts, governments, corporations, service providers and financial institutions are offering solutions to help address the money troubles of Canadians. Highlights of those new measures are listed below, along with smart advice on how to keep more dollars in your pocket, negotiate better rates and ask for payment deferrals, plus essential information about where to get personals loans and apply for financial aid. Here’s a look at the resources available to help and stay afloat during the COVID-19 crisis. 

Apply for Government Benefits

With many Canadians ineligible for employment insurance, the federal government has launched the Canada Recovery Benefit–  a flat-payment benefit of $2,000 per month for a maximum of 13 two-week periods. You can apply online for the CRB. Read more about the CRB in our Guide to COVID-19 Emergency Benefits and Financial Relief.

You may also be eligible for Employment Insurance (EI) regular benefits – a program that provides temporary income support to unemployed Canadian workers while they look for employment or to upgrade their skills. However, you must meet some stringent eligibility requirements in order to qualify. You can apply on the Government of Canada’s Employment Insurance website.

There’s also the Canada Recovery Sickness Benefit (CRSB) – a benefit for Canadians who can’t work because of sickness or quarantine and need time to recuperate before going back to their jobs. This benefit provides $500 per 1-week application period.

Ask for a Mortgage Payment Deferral or Rent Relief

Call your lender ASAP if you are struggling to pay your mortgage. Many financial institutions right now are giving cash-strapped customers in good-standing a temporary break from mortgage payments. It’s available for an indefinite period of time and there is no deadline for applications. For more details, read our Guide to Mortgage Payment Deferrals.

For many Canadians, a short break from paying a mortgage can be a lifesaver and frees up money for other important things (like hydro and groceries!). However, note that a mortgage deferral is not the same as mortgage forgiveness. You’ll still need to pay your mortgage in full once regular payments resume, including interest for those skipped payments.

If you need just a one-month mortgage deferral, most banks will allow you to request this online. For deferrals of up to six months, call your bank directly, or book a time through online booking tools so a customer service rep will call you.

Renters are in a more difficult spot than mortgage holders. The feds are saying that CERB will help renters take care of their payments. Meanwhile, some provincial governments are stepping forward with some relief. For example,  British Columbia has put moratoriums on evictions, giving renters some much-needed breathing space if they can’t make their rent payments. These programs are not in place indefinitely, however, and you will need to repay all unpaid rent when you can.

While provinces are figuring what to do, you can attempt to speak to your landlord about a rent deferral or making rent payments in smaller amounts over the month. Some large property management companies have stated that they will work with tenants on a case-by-case basis.

Defer Car, Credit Card or Loan Payments

Mortgages aren’t the only thing that can be deferred. If you need some breathing room from making payments on a car loan, credit card, or personal loan, speak to your lender about what they’re willing to do for you. This is when a good relationship with your financial institution really pays off.

For instance, with the coronavirus crisis, many financial institutions are giving credit card payment deferrals to Canadians – you just have to call your credit card and ask! Read our Guide to Credit Card Payment Deferrals.

File Your Income Taxes Before the Tax Deadline

The tax deadline may have moved to June 1 last year, but don’t expect the same special treatment in 2021. Tax-filing deadlines have returned to normal this year, so don’t wait to file if you’re expecting a tax refund. It’s one way to put some cash in your pocket ASAP!  Try TurboTax, online tax preparation software that walks you through each line of the return step-by-step. It asks key questions to help you get more money back on your tax return. TurboTax is NETFILE compatible so you’ll get an instant Express Notice of Assessment and your tax refund will be deposited directly into your bank account. As a bonus, Young and Thrifty readers currently save 15% off any paid TurboTax package.

If you owe money, you probably enjoyed last year’s deadline extension to August 31, 2020. Unfortunately, the deadlines have returned to normal this year, so you’ll need to have cash on hand to pay up sooner rather than later. You can stash that cash in one of the best high interest-savings accounts or a short-term GIC, and let it earn some interest. Our top choice is EQ Bank because the Savings Plus Account offers an everyday interest rate of 1.25%* – one of the highest rates in Canada.

*Interest is calculated daily on the total closing balance and paid monthly. Rates are per annum and subject to change without notice.

Start saving with EQ Bank

Apply For a Balance Transfer Credit Card

If you’re unhappy with the current rate of your credit card and are carrying debt, look to a 0% balance transfer credit card. The idea is to move an existing balance from one credit card with high interest to a new balance transfer credit card with a much lower interest rate or even none at all. Some issuers tie their interest rate to Canada’s prime rate, while others use low (or no!) interest rates to attract new customers keen on saving money during a set promotional period. Look for a 0% introductory interest rate with a long promotional period (9-12 months is ideal). Read more about How to Transfer a Credit Card Balance Wisely.

Ask Your Credit Card For a Lower Interest Rate

The competition between credit card companies is fierce – a reality that you can use to your advantage. Don’t be afraid to call your credit card company and ask for a payment deferral or a lower interest rate. Remember, they don’t want to lose you as a customer, and you hold some clout.

However, if your current credit card issuer isn’t flexible, consider applying for a low interest rate credit card. It is a practical option for Canadians trying to manage debt or forced to carry a balance during the coronavirus crisis.

Get a Personal Loan

Cash is often the answer to plug any financial gaps. A personal loan is a good option for many Canadians since interest rates for borrowers are at historical lows. It’s surprisingly easy to apply for a personal loan online. For instance, Loans Canada is a handy resource. It doesn’t offer loans itself, but it serves as a comprehensive directory so that you can find the best loan and the best rate.

Even if you have bad credit and you don’t think you’ll qualify for a loan, still apply for one. Companies like LendingMate welcome applicants with a checkered financial history. Your interest rate will be much higher, naturally, but you can get much-needed funds flowing within a short period of time.

Whatever route you go, compare lenders carefully and consider key factors like interest rate, APR (the annual percentage rate of a loan based on interest paid each year), maximum loan amounts and terms and conditions.

Negotiate A Better Deal

You’ve been a loyal customer for many years, dutifully paying your bills each month. That gives you clout – so don’t be shy about negotiating with your service providers to get a better rate. That includes your cell phone, internet, car insurance, satellite/cable, home insurance – anything goes!

Start the conversation with a reminder of how long you’ve been a client, and then ask, “What’s the very best rate you can give me?” Whatever number you’re quoted in return, ask for a bit more savings. There’s likely wiggle room. If the representative won’t budge, ask to be transferred to “customer retention” – an indicator to the company that you’re about to call it quits with them. These guys will do whatever it takes to keep you as a customer and can authorize deep discounts.

Get Creative

If you’re struggling financially right now, think of creative ways to add cash to your wallet. For instance, there are easy ways to make money online, and a plethora of apps that will give you rewards or cash back on your everyday spends. For instance, KOHO is a free pre-paid, reloadable card and integrated app that lets you instantly earn up to 0.5% cash back on all your purchases.

Also, tap into your talents and sell your skills on the side. Set up an Etsy store and sell your paintings. Start dog-walking, teach English online, or give a go at freelance writing. Just find ways to earn a few extra bucks!

Cut Costs

It’s not fun, but you may need to temporarily cut costs to the bare bone. That means eliminating unnecessary expenses and tracking your cash flow like an RCMP forensic accountant. Sell your car and take public transit instead. Download a budgeting app or start following the 50/30/20 budget. Cut the cable and stick with watching Netflix instead. Whatever it takes to get the bills paid!

Ironically, the coronavirus crisis has also helped cut costs, since most stores, gyms, bars, entertainment venues, and restaurants are closed until further notice. Plus, since most of us are working from home, you’ll save on the cost of commuting. Instead of blowing that extra dough on a splurge, funnel it into an emergency fund and save it for any unexpected “911” financial hurdles.

The Final Word

These are challenging times with three out of four Canadians already experiencing financial stress due to COVID-19, according to one recent survey. The good news is everyone understands the gravity of the situation and are trying to help. You can do your part by advocating for yourself. Ask for lower interest rates on credit cards, more time to pay bills and apply for government financial relief programs to help you weather the storm.

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