5 Ways to Optimize Your Finances While Physical Distancing at Home
If you find yourself with extra time on your hands being at home, now is your chance to get creative and strengthen your family’s financial situation. Yes, you can take action to make the best of a challenging situation and get somewhere with your finances without even leaving home.
Use this time and these tips to optimize your finances when you’re at home.
#1: Organize your financial records
When was the last time you organized your savings and investment statements, reviewed your credit and debt documents, organized your tax information, or updated your budget?
Chances are it’s been a while. Yet it’s important to know exactly where you stand regarding how you are meeting your current financial goals whether they include growing your savings, paying down debt, or just staying within your monthly budget. So now is the perfect time to roll up your sleeves and get to work.
As the financial markets adjust to the new reality of the current pandemic restrictions, knowing exactly how much you have, how much you owe, how much money comes in and how much money goes out each month will leave you better equipped to make the right financial decisions for you and your family.
#2: Learn more about finances
According to the Financial Consumer Agency of Canada’s 2019 Financial Capability Survey, over the past five years, 44% of Canadians took part in some form of financial education to gain more financial knowledge. And choosing to learn more about personal finance while you’re confined to your home is a productive, practical alternative to binge-watching the news or Netflix.
While you’ll find thousands of free and paid online courses, posts, and other personal finance resources, choose your sources carefully.
Free online personal finance resources for Canadians
These free resources could help you improve your personal financial knowledge.
- Financial Consumer Agency of Canada: The basics of Investing A brief overview of investing basics for Canadians. Includes definitions of common investment terms and phrases, risk levels, taxation of investments, as well as links to other useful Canadian government investment pages.
- McGill University: McGill Personal Finance Essentials This free, 8-module online course offered in collaboration with The Globe & Mail has two sessions available for signup in 2020 – one beginning May 1 and one starting on August 1. Modules include Debt & Borrowing, Strategic Budget Building, The Art of Investing 1 & 2, and Behavioural Finance.
- Practical Money Skills Canada: Financial Literacy for Everyone Encourage your whole family to join you and learn practical financial skills with the fun games and activities on this site. Include a variety of resources for children aged 5+ as well as adult-focused calculators, digital downloads and hands-on financial learning activities.
- Financial Consumer Agency of Canada: Your Financial Toolkit – If you’re looking for more advanced knowledge, this comprehensive 12-module resource includes topics such as Retirement & Pensions, Financial Planning, and Insurance.
#3: Funnel your savings to an emergency fund
The 2019 Financial Capability Survey found that 64% of Canadians say they have enough money in their emergency fund to cover three months of living expenses. Yet the Financial Consumer Agency of Canada suggests an emergency fund to cover at least three to six months of your regular expenses.
If you already have an emergency savings fund, good work. Yet now could be a good opportunity to add to it. As more Ontario businesses either cut back hours, lay workers off temporarily or close their doors for good, emergency savings are more important than ever. And yes, there are indeed ways to still build your emergency fund even when you’re stuck at home.
First, list all the work-related expenses you no longer have. Some common examples might include
- Morning coffee and snack at the coffee shop
- Public transit fee
- Gas for your vehicle
- Parking fees
- Car washes
- Lunches
If you are a parent, you might include the additional costs of before and after-school care or daycare for preschoolers and toddlers.
Tally the total weekly savings and start funneling this amount to your emergency fund immediately to boost your emergency savings even more.
#4: Find ways to cut your costs further
Work-related expenses aren’t the only way to save money when you’re stuck at home. If you’re saving commuting time by working from home, working reduced hours, or not working at all, you finally have more of what many money-saving activities require: time.
Vegetable gardening, whether in pots on your windowsill, balcony containers, or in a bed in your backyard, could help lower your grocery bill. Try ordering seeds and potting soil online for home delivery.
If you can’t get your hands-on vegetable seeds, try growing new plants from the seeds or bulbs of your current fresh produce. Some examples include
- Seeds from tomatoes, squash, pumpkin, zucchinis and cucumbers
- Kidney, chili, or black beans from your dried beans
- Green onions, chives, and garlic sprouts from bulbs and cloves
You can also grow sprouts or microgreens easily with just seeds, water, a glass jar, and a damp paper towel.
Reduce your food costs further by reducing your food waste. Experiment with recipes and turn those leftovers into a new meal instead of emptying them into the garbage pail. Replace some of your regular weekly meat-based meals with beans, lentils or chickpeas for additional meal savings.
In addition to helping you save money, these money-saving activities to try at home have some pretty great side benefits. They can reduce stress, help you learn a new skill, and foster family time.
Other cost-saving activities to consider include
- Reach out to your financial institution to review your bank account charges and switch to an account with lower service charges if needed
- Contact your utility companies, phone and internet service providers to ask about bundling options to cut costs even more
- Lower your electricity consumption by foregoing running your dishwasher and dryer. Instead, hand-wash and hang-dry
#5: Start a moneymaking work-from-home business
In this time of economic uncertainty, instead of worrying about whether your job will be there once the crisis has passed, use this time to launch your own home-based business. Either build on skills and knowledge you’ve gained during your career, turn your hobby or crafting pastime into a money-making venture, or apply to teach a subject online.
Offering consulting services or freelance writing could help you boost your income now and set the foundation for a post-crisis career. Consider setting up an Etsy shop or selling your handcrafts or artisan products online. If you’re comfortable teaching, look into the requirements for teaching online courses either through a post-secondary institution, a site such as Udemy, or by creating your own course through a platform such as Teachable.
Not many people enjoy being confined to their homes for lengthy periods of time but viewed as an opportunity instead of a drag can help change your perspective. Consider this time at home an unexpected way to help you gain the strongest financial foothold you can. Through organizing your finances, saving money, cutting costs, learning new personal finance skills, and generating a new income stream, you’ll be better positioned to live well in the post-crisis world.