It’s the nightmare everyone imagines but thinks will never happen to them: Your boss taps you on the shoulder and calls you into their office. They close the door and you both sit down. They’re very sorry. They wish it hadn’t come this. Then they drop the hammer: “We’re letting you go.”
Sadly, a lot of people are going to experience something like this in the coming days, weeks, and months due to the economic turmoil caused by the COVID-19 pandemic. If you’re one of them, the first thing you need to remember is to not take it personally. The United Nations estimates up to 25 million jobs and $1 trillion could be lost because of the virus in 2020 alone. If you’re let go in the coming days or weeks, take some solace in the fact you’re one of many facing the same nightmare.
If you find yourself in this position, here’s what you need to do to stay financially afloat.
Apply for EI (even if you think you don’t qualify)
Fortunately, the Canadian government has recognized the magnitude of this problem. They’ve responded with an $82 billion aid package that includes a variety of items to help individuals, families, and businesses.
Most notably, the government has revamped EI (Employment Insurance). Now more people qualify, thanks to the introduction of an Emergency Support Benefit. As of this writing full details of the benefit haven’t been released, but the government has stated it’s intended for those who are ineligible for EI who face unemployment. This would include self-employed workers.
Take advantage of other government changes
Beyond revamping EI, the government has also announced a series of other changes that will help all Canadians make their money go further.
For starters, the income tax filing deadline has been extended to June 1 and income tax payments can now be deferred until after August 31. Additionally, the government has boosted Canada Child Benefit payments, increased the GST credit for low-income families, and introduced a six-month interest-free reprieve on all federal student loan payments.
If you find yourself out of a job, the above changes will help your dollars go much further.
If you’re infected, apply for EI sickness benefits
EI sickness benefits may also be an option for you. They’re intended to cover anyone who can’t work because of illness, but they’ve been modified by the federal government due to the pandemic. They now also cover anyone under quarantine, either because they have COVID-19, are showing flu-like symptoms, or because they recently returned from another country.
If you’ve been laid off and are now also under quarantine for one of the above reasons, you might be able to apply for EI sickness benefits.
Call your creditors to discuss deferrals
If it wasn’t already abundantly clear we’re living through an unprecedented crisis, look no further than what banks and other financial institutions are starting to do: Let their borrowers defer payments on debts big and small.
The six biggest banks in the country already announced they’ll let customers facing economic hardship defer their mortgage payments for up to six months. In a joint statement, they asked that any customers facing hardship to contact them to explore options on a case by case basis.
Whether you have a mortgage or other debts, call your creditors to discuss the possibility of deferring payments for the immediate future.
Try to find another job
Don’t be overly discouraged by all of the economic doom and gloom, which seems to be everywhere. Despite the COVID-19 pandemic, some businesses and industries are still hiring. In many cases, interviews may simply be done over the phone or over Skype.
Don’t hesitate to immediately jump back into the job hunt. In fact, the sooner you do the better. A lot of people are going to find themselves out of work in the coming weeks and maybe even months. So, get a jump on the competition while you can.
Start (or ramp up) your side hustle
Side hustles are all the rage these days. If you’re lucky enough to already have one, and if it also hasn’t been stopped in its tracks because of the pandemic, take it into high gear and try to bring in some extra cash.
If you don’t have a side hustle, or your current side hustle has been impacted by the pandemic, there are lots of fun and creative ways to make some extra money online. You might even want to consider pursuing several side hustles at the same time.
Cut costs where you can
Any time you find yourself out of work it’s a good idea to review your spending habits and cut costs where you can. To make it super easy, download a budgeting app for your smartphone.
Fortunately, it will be easier to live more modestly at a time like this, when everyone is being asked to stay home as much as possible and avoid crowds. You can easily avoid the usual places that can quickly empty your wallet, such as restaurants, bars, concerts, malls, and so on.
Now might be a good time to determine the things that truly contribute to your health, wealth, and happiness and cut out whatever doesn't add value.
Above all else, stay positive
There’s no question this is an anxious and uncertain time. Even more so if you’ve also been let go. Just remember you’re one of many in the same situation. Unfortunately, the number of people who will be out of work because of this pandemic will likely grow and grow and grow.
The good news is our country and other countries have recognized how serious this problem is and they’re already responding in unprecedented ways. So try to stay positive and just focus on keeping yourself and your family safe. Follow the tips in this article and you’ll be able to weather this storm along with everyone else.
Fresh Start Finance serves Canadians with practical advice on personal finance and credit-building solutions. Whether you have bad credit or no credit, we know how to help make your financial future brighter. Bookmark and subscribe to our blog for more useful tips, or speak to one of our consultants today to see how we can help!