What’s My Priority? Managing Money in a Dangerous Time When You’re Buying a New Car or Buying a House
Are you wondering how to manage your finances, meet your personal goals and secure your future when you’re buying a car or buying a house in light of the recent pandemic? World events that directly impact your daily life and income might make it tricky to identify the best financial path to get you to your goals.
The simple truth is that now could be the time to revisit your financial goals and make new decisions about what to prioritize right now. Use these tips to keep your financial momentum going through dark financial times.
I’m buying a new car
Priority: Re-evaluate your need for a new vehicle
If you’ve been working for a while, you might have been looking forward to buying a new vehicle. Yet a big purchase like this might not be the right choice in times of economic instability.
Does buying this vehicle right now keep you on track to where you want to get financially? And given the current widespread stay-at-home restrictions, does it make sense for you to take on loan payments when you won’t drive anywhere anytime soon – especially if you could be laid off?
Instead, postpone your purchase. Or choose a cheaper vehicle to minimize or avoid a vehicle loan. And save your money until the crisis settles down.
I’m buying a house
Priority: Build emergency savings
If you’ve already legally committed to buying a home, consider postponing any planned renovations or upgrades. After all, you now have the responsibility of a new mortgage. And as most homeowners will tell you, houses often come with unexpected expenses. So, it might make more sense to focus on building your emergency savings.
If you haven’t yet signed on the dotted line, think about downsizing – before you purchase. Instead of buying the biggest home you can afford, buy the smallest comfortable home for you and your family. This way, you’ll have smaller mortgage payments to handle if you experience financial aftershocks after this crisis – such as losing a job or getting your hours cut back down the road.
All Canadians
Regardless of your life stage, think about revisiting or starting your household budget to track spending and find places to save money. Make sure to include regular contributions to emergency savings.
If you’re self-employed or a business owner and your income has taken a hit due to the recently mandated restrictions and resulting economic climate, you could be eligible for the federal Canada Emergency Wage Subsidy Program announced on April 1, 2020.
The world has changed dramatically in the past few weeks. Those changes impact you directly, yet no one knows just what the post-pandemic financial landscape will look like.
So no matter which life stage you’re in, take a good look at your previous financial plan and priorities. Are they still relevant? Are they still attainable?
What is the most pressing immediate financial need that will help you weather this storm financially? Act on it today. Doing so improves your chances of coming through the storm steadily and still moving towards your own financial goals.
