Since early March, I have had the same $50 in my wallet (see the photographic evidence below). In the pandemic economy, electronic payments rule.
Credit cards for online orders and debit or credit cards for those periodic visits to grocery or drugstores. Paying with cash is seen as presenting a risk of transmitting the virus from one person to another – that’s why some retailers that remain open prefer not to accept it. Note: The World Health Organization says there’s no evidence that cash transmits the virus.
Cash still has its fans, even in the pandemic. A Bank of Montreal executive told me in a recent conversation that demand for cash through ATMs has been stable. E-mails from readers suggest people may be withdrawing cash out of fear of an economic disturbance where hard cash is valued above electronic payments. Right now, that is just not something to worry about. The country’s payment systems are functioning well.
The Bank of Canada has asked retailers to continue accepting cash because some people don’t have access to electronic payments and must pay with coins and bills. Fair enough. We can’t limit participation in the economy to people who have chequing accounts and lots of plastic in their wallets.
But the past five weeks have been like a training camp for leading a cash-free life. I may end up depositing that $50 back into my chequing account when this is all over.
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Rob’s personal finance reading list …
Housing looks vulnerable
A tough-minded look at all the factors weighing on the housing market. Not just the pandemic and its impact on the economy, but also the heavy debt loads many people were carrying beforehand.
A financial planner shares her pandemic cash flow plan
Sheila Walkington of Money Coaches Canada on how she found significant savings in her household budget and started adding that money to her emergency savings fund.
The coffee shop experience – at home
If you stop into a coffee shop most days, you’re most likely saving a bit of money as a result of physical distancing. Here are some suggestions on recreating the coffee shop experience at home with just a few cheap ingredients from your weekly shopping excursion. For Globe subscribers, food writer Lucy Waverman explains how to make a whipped coffee thing that is all over social media.
Refinancing your mortgage is getting harder
A thorough summary of how lenders are getting tougher with the terms under which they’ll refinance mortgages. Refinancing has been used a lot by people to consolidate their high-rate debts in their mortgage to get a lower interest rate.
Q: In this environment, how safe are Canadian and global government bond ETFs?
A: Generally speaking, very safe. Remember, governments have the power to increase taxes if necessary to meet obligations to pay interest and redeem bonds when they mature. That said, investors who value security over maximizing returns will stick to the bonds of countries like Canada and the United States, which have strong credit ratings.
Do you have a question for me? Send it my way. Sorry I can’t answer every one personally. Questions and answers are edited for length and clarity.
Today’s financial tool
The COVID-19 Benefits Navigator was created to help people figure out which government benefit programs they might be eligible for. You can specify what province you’re in, whether you’re self-employed and more.
What I’ve been writing about
- How safe are deposits in those high rate savings accounts offered by Manitoba credit unions? (for Globe Unlimited subscribers)
- A banker’s view on personal finance in the pandemic: Credit-card spending plunges, fraud surges
- Amid a long bear market for preferred shares come glimpses of why you might want them in your portfolio (for Globe Unlimited subscribers)
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