Making a family budget in lean times

How has your family budget fared during the pandemic? Are you among the many people who have lost income due to job cuts? Have you had to seriously cut your expenses to get by? You’re not alone! According to the Government of Quebec, aggressive measures to slow the spread of COVID-19 have led to the loss of more than 820,000 jobs, with the unemployment rate rising sharply from 4.5% in February 2020 to 17% by April of the same year. And that’s not including people who didn’t lose their job but saw their hours cut significantly. 

But Quebec families have been both imaginative and disciplined in the way they’ve balanced their budgets. We touched on a few solutions in a previous article, but here are a few tips that could help you save up to hundreds of dollars each month! 

1. Make a budget

The experts agree: It’s crucial to know where your money is going, especially when times are tough. For many families, managing their budget got much simpler during lockdown—no more restaurants, evenings out, dance classes, or gym memberships! But plenty of expenses were not affected by the pandemic, and your financial planning for the coming months will have to take that into account. Making a detailed list of your household income and expenses will help you create a budget that highlights unnecessary spending.

2. Cut down on your everyday expenses

Take a moment to look at where your money is going and you’re bound to find some simple ways to reduce your spending, like cutting (or cancelling!) your cable or cell phone plans, cancelling subscriptions you’re not using, and making better use of coupons at the grocery store. 

Of course, when money is tight, you might want to review your TFSA, RRSP, or RESP contributions. Your RRSP and TFSA are subject to different tax treatments, and an RESP entitles you to generous government grants. Contact your representative to learn more. They’re here to advise you, no matter how your finances are doing. 

3. Get your insurance in order

If you haven’t shopped for home or auto insurance recently, you may want to contact your insurer or broker to see if you still have the right coverage. If you haven’t made a claim in a few years, ask for quotes from other insurers. Who knows, you might be able to save some money. 

4. Reduce your debt load

The burden of debt can become overwhelming when your income dips. During the first few weeks of the pandemic, many financial institutions began offering their clients relief measures, like deferring mortgage payments for three or six months. Do a bit of research. You may still be able to take advantage of measures like these, even if they’re only temporary. 

If you have high-interest debt, like an outstanding balance on your credit card, consolidating your debts could significantly reduce your monthly interest payments and ease the burden on your budget. 

5. Learn to say no!

Everything is easier when you know a pay cheque will be automatically deposited in your account every week. If that’s no longer the case for you and you need to tighten your belt, you’ve probably already started changing some of your habits and maybe reluctantly giving up certain expenses. Cutting down on gas consumption and skipping Friday pizza night and your morning latte can easily save you at least $20 a week. The hard part is resisting the urge to spend. 

How have you adjusted your family budget during the pandemic? We want to hear your tips!