COVID-19: Managing financial health in challenging times

Getting through a financial emergency

Financial emergencies can happen to anyone and come at any time. They can be the result of family illness, job loss, urgent home repairs, or a weather event like a major flood. Some events could even shut down your community for an extended period.

You may be worried about the impact of the current COVID-19 pandemic on your finances. Whatever the source, financial emergencies can be stressful and cause considerable hardships for you and your family.

See how the Government of Canada is taking action on COVID-19.

When sudden events occur, it may not always be immediately noticeable that you are heading towards financial hardship. A long-term assessment of your capacity to maintain your current lifestyle is important. Consider any impacts on your income, grocery bills, housing, utilities and other necessities that still need to be paid.

Emotional situations can lead to poor financial decisions. Be sure to get the help you need with financial decisions during an emergency. Take the time to get advice and information on what you would like to do.

The Financial Consumer Agency of Canada (FCAC) has many educational resources on budgeting, credit, savings, debt management and more. Interactive tools and calculators can also help you maintain good financial health during these challenging times.

Learn more about FCAC’s online resources.

Be prepared. If you think the current pandemic may put you in financial hardship, here are some steps you can take.

What is the Government of Canada doing to help

The Government of Canada is taking action to help Canadians manage their finances during this exceptional period.

Your taxes

The Canada Revenue Agency (CRA) deferred the filing and payment due dates for the 2019 income taxes of individuals. This will provide flexibility to Canadians who may be experiencing hardships during the COVID-19.

Learn more about the fiscal measures taken by CRA to help Canadians manage their tax and benefit affairs.

Your income

Changes were made to the process of claiming Employment Insurance (EI) sickness benefits. These may help you if you have to self-isolate or are in quarantine.

Learn more about Canada’s COVID-19 Economic Response Plan to support Canadians and businesses.

To see how your province or territory is helping citizens during these difficult times, please visit your provincial or territorial government's website.

What to do if you’re facing financial hardship

You may be facing financial hardship as a result of the COVID-19 outbreak.

Your expenses

If you're having trouble paying for your ongoing expenses or foresee challenges in keeping up with your regular payments, visit your bank’s website. Be proactive and look at the options that your bank is proposing.

See the web pages developed by the six largest banks in response to Covid-19.

Banks in Canada are closely monitoring developments related to COVID-19. If you’re facing short-term financial issues, your bank might be able to help. Some banks have announced measures that include the opportunity for relief on certain credit products. Other banks might be open to waive certain fees or delay payments.

Note that some banks have additional measures in place to support seniors and people with disabilities. These measures may include flexible hours of operation, prioritization in the queue and assistance with certain transactions

See the latest news on how banks in Canada are taking action.

Your mortgage payments

If you’re having problems making your mortgage payments because of the COVID-19 situation, you might be eligible for a mortgage deferral.

Mortgage deferral

A mortgage deferral allows you to skip payments for a defined period of time. Interest will continue to be charged on the amount you owe and will be added to your balance.

When the deferral period ends, you’ll have to pay your deferred payments and added interest into your monthly payments. This could be either when your payments resume at the end of your deferral or upon renewal at the end of your mortgage’s term. If you have emergency savings, you may want to consider using them before considering a mortgage deferral.

Note that mortgage payment deferrals focus solely on your mortgage. It won’t affect other payments regularly withdrawn, like property taxes.

Understand mortgage payment deferral on the Canada Mortgage and Housing Corporation website (CMHC).

How to apply for a mortgage deferral

Visit your bank’s website for the latest information on mortgage deferrals.

Note that Covid-19-related mortgage deferral is available for an indefinite period. This means that you do not face a deadline for having to seek relief. You can approach your bank as the need arises.

If your mortgage is insured with the CMHC, you can contact a mortgage professional for assistance. They can determine what options you have and help you find a solution for your specific situation.

Avoiding more debt

During this uncertain period, try to avoid borrowing additional money as much as possible. Research shows those who often use credit to pay for daily expenses because they have run short of money have lower levels of financial well-being.

If you must borrow money, make sure you understand the cost of different credit products before you make a decision, and borrow only what you need.

Certain credit products are more expensive than others due to their high interest rates and fees. For example, a payday loan should be your absolute last resort, as they often carry very high fees.

A home equity line of credit (HELOC), on the other hand, could potentially be a good replacement for emergency savings, under certain circumstances.

Make sure you compare all borrowing options and their fees, interest rates and repayment terms before choosing a credit product. Otherwise, contracting new expensive credit now could create more financial problems for you in the future.

Learn about what to consider before borrowing money.

Find out more about HELOCs.

See why payday loans are a very expensive way to borrow.

Getting help

If you are having trouble making ends meet, seek advice from reputable sources to explore the financial options that are available to you. You can contact a financial professional, such as a licensed financial advisor or an accredited credit counsellor, to discuss a plan. If you choose a financial advisor, make sure they are licensed.

See what you should know before choosing a financial advisor.

Be cautious when searching for the right professional who can help you. Some companies offering to help to pay off debt or repair credit are misleading consumers.

See what you should know before getting help from a credit counsellor.

Budgeting to know what to expect

Having a budget is key, especially when an emergency occurs. In order to manage your budget, you will need to identify your income and your expenses. It’s also important to identify your needs versus your wants during a specific period.

The Budget Planner is an interactive tool that provides you with tips, suggestions, guidelines and alerts. It can help you determine whether you will have the funds to meet your ongoing financial commitments and where you could cut expenses.

Use the Budget Planner to create and manage your budget.

Having and maintaining an emergency fund

An emergency fund is money you set aside to pay for unexpected expenses. In general, it’s recommended that you save the equivalent of 3 to 6 months of your regular expenses.

If you don’t currently have an emergency fund, consider putting some money aside right now if you can afford it. Depending on how the situation evolves, you may need to rely on an emergency fund sooner than expected.

If you’re already experiencing financial hardship and can’t afford to start or maintain an emergency fund, contact your bank. They could recommend specific products or services, like a HELOC, a debt management plan or accessing funds in your registered retirement savings plan (RRSP), to help you get through these difficult times.

Learn how to set up and manage an emergency fund.

Where to ask questions or voice concerns

If you have questions or concerns about the impact of these difficult times on your bank account, your savings or your credit products, contact your financial institution. Make sure you have the contact information to get in touch with your bank.

Find the contact information for your financial institution.

FCAC welcomes your inquiries. You can communicate with us by email, mail or telephone. You can also contact us if you have a complaint about a federally regulated financial institution.

Contact FCAC.

What to do if your branch closes

Your financial institution might have to close branches temporarily. Online, mobile, ATM or telephone banking may become necessary for making financial transactions. Make sure you have your login information and passwords or bank’s phone number handy.

Learn more about online banking.

Depositing a cheque with your mobile device.

You might notice that some consumers and businesses have stopped using cash to limit potential exposure to COVID-19. However, the Bank of Canada strongly advocates that retailers continue to accept cash. This will ensure that all consumers have access to the goods and services they need.

Protect yourself from financial fraud

You should always protect yourself from financial fraud, especially during a period of uncertainty. Unfortunately, fraudsters will prey on consumers' fears and misinformation over the COVID-19 pandemic. You may get phone calls, emails and texts regarding the COVID-19. Be very cautious when receiving them.

Here are a few things to consider in order to protect yourself from financial fraud:

Remember that if you didn’t initiate contact with a person or a business, you don’t know who you are dealing with.

The Canadian Anti-fraud Centre has more information on scams and tips related to COVID-19 to help protect yourself from fraud.

Find out about the current reported scams related to COVID-19.

Learn how to protect yourself when banking online.

Know what to do if you’re a victim of fraud.

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