Pandemic personal finance tool: How to use those emergency savings

The pandemic’s impact on jobs and incomes has been sharp and unprecedented. While many households have lost income, others are in the fortunate position of being fully employed and have also cut their spending, thanks to physical distancing. This tool shows how money saved during the pandemic can improve your financial situation over the short and long term, if put into savings or investments. Emphasize savings if your job situation is uncertain and consider investments if you’re financially secure.

Rob Carrick's

Pandemic Power-Savings Tool

How to strengthen your finances in uncertain times

Step 1. Calculate your savings as a result of physical distancing to fight the spread of COVID-19

Monthly Spending ($)

Pre-Pandemic

Physical distancing

Groceries

One category where spending may have increased

Restaurant meals

Takeout costs less than eating at restaurants

Buying lunch and coffee at work

Part of the reason why groceries cost more

Utility bills

You might be using more electricity and water by working at home

Gas, vehicle maintenance and/or public transit

Down sharply for many

Vehicle insurance

Some insurers have offered rebates or lower premiums because people are driving less

Subscriptions

Netflix, Spotify et al

Vacations

An opportunity to save if you see a long wait to travel again

Entertainment

No movies, concerts, sports

Personal grooming, haircuts

Buy haircutting scissors or a clipper and you're done

Fitness, sports fees

Buy running shoes or pump up your bike tires

Clothing, notably for work

Every day is casual day when you work at home…no dry cleaning, either

Daycare

A huge savings for parents of young children

Children's activities

Sports, tutoring etc.

Other

Expenses unique to you

Total monthly spending:

Total monthly savings:

Your monthly spending during physical distancing is greater than your pre-pandemic spending by

Step 2. Decide how to put your monthly savings of to work

Estimated number of months you will save this much

Add your own number, or use our default

Cumulative savings:

Option 1. The Savings Option:

Put money away in case of income loss ahead, or for short-term savings goals (within five years) like a house downpayment, a wedding, a trip, upgrading your education and other

Expected annual return

Add your own number, or use our default^*

How many years will you let your savings grow?

Your savings could be worth:

Option 2. The Investing Option:

Put money away for long-term goals (five, or better, 10 years+) like retirement

Expected annual return

Add your own number, or use our default^*

How many years will you let your investments grow?

Your investments could be worth:

* A default of 2 per cent on savings was based on best rates from alternative banks on high rate savings accounts; 5 per cent is a conservative estimate for a balanced portfolio after fees

More on Household Finances

The working person’s pandemic quandary: What to do with all the money being saved in locked-down economy?

While it’s good that normal spending habits are returning, you should deploy your financial windfall smartly

Pandemic Personal Finance

• Three things you can do right now to defend your family finances
• Bank deposits are something you do NOT need to worry about
• Why you should clean out your big-bank savings account
• How the cost of making your mortgage go away for six months could top $2,000
• How to get relief on car payments and free financial planning
• First-time home buyers with job security should get preapproved for a mortgage
• Retirement postponed, plus the coming second wave of money stress
• How to save $1,000 a month by working at home
• The mark of money success in the next 12 months will be how much you save
• A checklist of things you should have done by now to protect or improve your money situation