Don’t have a Post-CERB game plan? Here’s where to start

Closeup on medical mask and hand disinfectant and stressed woman in background in temporary home office during the coronavirus epidemic in the house in sunny day.
Closeup on medical mask and hand disinfectant and stressed woman in background in temporary home office during the coronavirus epidemic in the house in sunny day.
·Financial Journalist

If you’re concerned about your finances after the Canadian Emergency Response Benefit (CERB) runs out, you’re not alone. By mid-July, the Government of Canada received 8.4 million unique applications from unemployed Canadians, all of whom will find themselves cut off from the $2,000 a month benefit in September. Many Canadians are living close to the edge. The Canadian Payroll Association found that 47 per cent of people were living paycheque to paycheque in 2017, which means that people without a plan can have a financial catastrophe on their hands.

“You’ve got to start slashing your expenses,” Barry Choi, a personal finance expert, told Yahoo Finance Canada. “Some people haven't necessarily made the adjustments yet, but this is the perfect opportunity to look at your finances.” Choi pointed to discretionary costs like streaming subscriptions, saying it’s easy to get caught in ‘subscription creep’ where you could be paying for Netflix, Disney+, HBO, and many others without keeping an eye on the total cost.

For CERB recipients, tax season is another cost further down the road. What you can expect to pay in taxes next year depends on your 2020 earnings and your provincial tax rate, so calculate how much you expect to owe and set that aside.

The lockdown could give CERB recipients the downtime they need to go over their monthly expenses and implement some austerity measures, or shop around for better rates on services like internet and insurance.

Cutting expenses can also mean temporarily reducing contributions to future savings to weather today’s economic storm, explained Choi.

“When you're on a lower income, don't worry about the big picture, you've got to be in survival mode right now.”

Cutting back expenses also means delaying large purchases and not being tempted by deep discounts from retailers looking to get business going again. “A lot of people are being enticed to spend, but this is the time to really just hold on to your cash and delay any purchase possible,” Choi said, “To me right now, major purchases are anything over $100 for people who are on fixed income.”

If you’re already living leanly, Choi advises those unable to immediately jump back into the workforce to find an alternative source of income. Gig work has become a popular option in recent years, with almost half of surveyed Canadian men and women saying they are in the gig economy or have participated in the last five years, according to an Angus Reid Institute report in 2019. Supplementing unsteady income or using gig work to provide an income bridge to the next job are feasible solutions to keep your finances afloat.

Online platforms allow people to use their skills to earn a quick buck. “There are websites such as TaskRabbit and UpWork where you can advertise your services and get paid for it,” Choi said.

There are also work-from-home options like freelancing and tutoring, with many online platforms to support that work.  

Keeping track of your expenses with organized line items will give you a better sense of where your cash is going and where you can save. Choi points to budgeting apps like Borrowell which helps track bills, and money-saving apps like Reebee, which shares grocery flyers and sales.

If you’re in an industry that has been deeply impacted by the pandemic and isn’t expected to bounce back any time soon, Choi says it may be time to consider a career change.

“If you don't think your job is going to come back for whatever reason or you've had multiple layoffs in the past, it's probably time to retrain. That either means going back to school, or even taking free courses online.”