You may be feeling like the rest of us and just waiting for this very long year to be over, but it’s only halfway through. Barring giant zombie cockroaches or alien invasion, 2020 can only get better, right? Woof, kiss of death. Regardless of what has happened with COVID-19 and all the economic issues in Alberta, the majority of people are getting by.
Those that are struggling to pay the rent and put food on the table, this may seem a bit tone deaf, but seek out any and all financial relief programs and manage your spending carefully to get through this uncertain time. If you’re still pulling in your regular paycheque you need not throw away this opportunity. Sounds a bit counter-intuitive to talk about this pandemic as an opportunity. But it is.
If you think about how COVID-19 has made nearly everyone rethink their plans for 2020. Trips, vacations, maybe even major purchases have either been put on hold or just dropped for now. Those who have been fortunate to have stable employment, you need to try and still to achieve your financial goals. Your spending might be seriously down due the pandemic, so it’s time to sock it away.
You have multiple short-term or long-term financial goals, like most people do. Maybe it’s saving for a major purchase, like the down payment on a home or vehicle. Maybe it’s putting money away for a vacation or your children’s education, or your property taxes. Or all of the above. One way to manage all these competing priorities for your savings dollar is to open multiple savings accounts. Encompass savings accounts have no monthly fees, so you can open different accounts for different projects or saving goals. You can ‘nickname’ those accounts, so you can put money in them based on your priorities. It might seem like a slow slog, but putting something in there is better than nothing, and it all adds up. You can set automatic funds transfers to come off the top after you get paid, which is a much better saving strategy than just waiting to see what’s left over to put in the rainy-day fund. Hopefully it’s not pouring on you.
Since we’re talking about rain, or floods, or deluges, it’s a good idea to have an emergency fund set up to protect yourself and your family from emergencies, like we’ve seen, that can change your financial stability in a hurry. Pandemics aside, that hot water tank will likely go, your fence might blow down and shingles fly off in a plow wind, or your vehicle might need a major repair. It’s part of life.
The different savings accounts can differ on what they offer in the way of interest. But, if you’re not going to need that money for little Junior’s education for a couple of years, take what you have and lock it into a term deposit that’s going to pay you guaranteed interest, more than a savings account. If you’re looking for long-term interest, talk to your financial advisor at PlanWright to put your money into funds that will give you the best long-term strategy to build those funds.
Lots of people use credit card rewards programs as ways to actually save money, but it is true. There are cashback options, or rewards points that if you use the card for lots of stuff and pay it off each month to save the interest charges, you can be well on your way to have those points for gift cards, product purchasing or future travel points. Keep in mind good rewards points cards will have annual fees, so you’ll have to take that into consideration depending on what your strategy is with points and rewards. If you’re only using it for gas, then there are some low fee options, but if all your day-to-day spending is going on the rewards credit card, then one with a higher annual fee, and therefore better point options or services, might be totally worth it for you.
Keep your chin up, we’re going to get through this together. Check out all our savings account, credit card and investment options at www.encompasscu.ca