We’ve shown you four ways to save on everyday expense while social distancing, but what about the big ticket items that really add up? There are great ways to cut those major costs even when you might be tempted to spend more.
1. Credit cards
With coronavirus restrictions having kept brick-and-mortar stores closed for some time, the online shipping world revved into high gear. That resulted in Canadians using their credit cards almost 30 per cent more than before the pandemic. Unless you pay your credit card balance in full every month, you’ll get dinged for interest charges.
If shoppers use an online payment service like e-Transfer or PayPal, however, they pay no transaction fees or interest charges.
‘Tap’ and mobile payment services don’t involve fees or interest either. Tap enables payment by holding the debit card close to the payment terminal. Mobile payment services like Google Pay, Apple Pay and Samsung Pay (all available to ACU members) allow a shopper to pay by positioning their smartphone near the payment terminal.
Besides charging no fees or interest to consumers, these methods are also forms of contactless payment – which means your hands don’t have to touch the payment terminal or its keypad.
Recognizing COVID-19’s extraordinary economic impact, Canada Mortgage and Housing Corporation (CMHC) has urged consumers to consider various options if they have trouble making mortgage payments due to the pandemic:
- Short-term payment deferral (CMHC says this could be deferred for up to six months due to coronavirus)
- Amortization (extension of the original payment period)
- Arrears (add missed payments to the balance of your mortgage)
- Move from a variable to fixed rate mortgage (to lessen risk from sudden rate hikes)
- Special payment arrangement (at the lender’s discretion, based on the borrower’s financial circumstances)
Although these steps could help you reduce big-ticket expenses and save money in the short term, CMHC points out that deferring mortgage interest “can affect (i.e., increase) the total amount you owe in accordance with the original payment schedule.”
Whether or not your mortgage is insured by CMHC, you can contact your ACU financial advisor to discuss other possible financing and repayment arrangements.
3. Getting the right advice
If you’re concerned about big-ticket expenses or any kind of debt — including your mortgage, credit card balance or anything else — the Manitoba chapter of the Credit Counselling Society of Canada provides free tools and assistance for consolidating debt, negotiating lower interest rates, dealing with creditors, making a budget and creating a household savings plan.
It’s also important to take a step back and review your finances from an objective point of view. Naturally, it can be an emotional task and feel very overwhelming, but there are tips to feel good about your finances.
A great strategy for eliminating debt is to focus on one bill at a time,” says Brent Differ, Financial Advice Leader at ACU. “For example, if you have three outstanding credit card bills, focus on the one with the highest interest rate. Put as much money onto that card as you can while paying the minimum on the others. Once that’s paid off, move on to the next card.”
And of course, ACU is always here to help. Your financial advisor can help map out a plan to cut the big-ticket expenses, reduce future costs, save money and maximize investments to help you stay on course, even when times are tough.
*A comprehensive list of resources (financial and otherwise) for our members can be found here. Since the global pandemic is an evolving situation, check with the sources contained within this article and on our website for the most up-to-date information.