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Federal measures to help seniors in the pandemic include an emergency aid payment of up to $500 and a modest rollback in the amount that must be withdrawn from registered retirement plans this year.

The list of measures for the rest of the population, notably young adults, is a lot longer. And it’s still growing – the government announced a volunteer service grant last week that would pay up to $5,000 to students and recent grads aged 30 and younger.

Every survey of financial stress that I’ve seen lately backs up the decision to help millennials and Gen Z in particular. The most recent example came earlier this week from the credit-monitoring agency Equifax, which surveyed 1,536 people in late May and found that 18- to 34-year-olds are markedly more worried about their financial future than other age groups.

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Just over 40 per cent of young adults said their job feels less secure because of COVID-19, compared to 25 per cent for people aged 35 and older. Fourteen per cent of young adults said they may need to move home because they cannot pay rent or a mortgage, and 20 per cent said they will need to turn to friends and family for money. Only 9 per cent of older Canadians are in that predicament.

There’s also evidence that young people were less financially solid heading into the pandemic. Forty-one per cent of young adults said they are limiting their spending because they’re already carrying too much debt, compared to 32 per cent for older people.

Young adults are commonly found in the service and retail sectors, which shut down almost instantly when the pandemic hit and are re-opening on a limited basis. They also hold temporary contract jobs in many cases, which leaves them if a short-term contract ends and new work isn’t available.

Seniors were hard-hit in the early phase of the pandemic, when a stock market crash annihilated their retirement savings. But stocks have regained a lot of what they lost, repairing much of the damage in the RRIFs of the nation.

Job prospects for students, recent grads and those trying to start careers are challenging, which is a worry. Without government help, these young adults risk falling into a debt trap it could take decades to escape.

Episode 4 of Stress Test is out today

This week on the podcast, Roma and I discuss how to avoid common money mistakes. We hear from a 36-year-old whose service industry job in Whistler was wiped out by the pandemic. Plus, Roma talks to Vancouver–based financial advisor Julia Chung about everything from TFSAs and RRSPs to credit scores and the worst kinds of debt. If you’re looking for solid financial-planning strategies and information about the savings tools available, this episode is for you.

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Rob’s personal finance reading list…

Wondering why stocks have surged since March?

So is one veteran investing industry executive: “How have we so discounted the unemployment levels and the level of debt?” asks Paul Bowes of FTSE Russell. Great question.

Save money, save your clothes

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A study finds a benefit in washing your clothes on the coldest, shortest cycle – less wear on your clothes, and fewer microfibres released into the environment. Also, you use less water and electricity.

Evan Siddall versus the housing industrial complex

A recap of how Mr. Siddall, CEO of Canada Mortgage and Housing Corp., angered the real estate industry with a forecast that housing prices could fall as much as 18 per cent in the 12 months ahead. My take is that Mr. Siddall is one of the most objective, data-driven voices on real estate in the country.

Interest rates have plunged – should you break your mortgage to take advantage?

Mortgage rates have fallen below 2 per cent in some cases, which raises a question. How much might you benefit if you broke your mortgage to lock into current rates? A lot depends on the size of the penalty for breaking the mortgage.

Ask Rob

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The handiness of the home equity line of credit is one of the personal finance lessons we’ve learned in the pandemic. If you need to borrow money cheaply in an emergency, a HELOC rules.

That’s a big reason why I answered a HELOC question in the last newsletter the way I did. A reader wanted to know the pros and cons of having a HELOC after paying off his mortgage. “Having a HELOC at your disposal is a good idea,” I replied. “A source of cheap funds if you need to borrow for a short period, say a year or less, and for emergencies where you have depleted your savings.”

The main drawback I noted was that a HELOC is like an open invitation to borrow – you have to be able to save it just for strategic or emergency use. A few readers got in touch to point out another disadvantage. You may not qualify for a mortgage-free discount if you have a HELOC on your home.

These discounts can be as much as 15 per cent off your home insurance bill, according to InsuranceHotline.com. Given how expensive house insurance is these days, that’s serious money.

But consider this: If you didn’t have a HELOC and needed one later on, the cost to set it up could run you as much as $500 to $1,000. And then there’s the interest savings. A HELOC set at the prime rate plus 0.5 of a percentage point would have an interest rate of 2.95 per cent. Unsecured credit lines could be twice that rate or more.

If you’ve paid off a mortgage and still have HELOC, there are practical reasons for keeping it in spite of the missed opportunity for a mortgage discount. The sudden economic upheaval of the pandemic highlights the benefit of having an unused HELOC sitting on the shelf, ready to bail you out if needed.

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One final thought from a reader who recently compared HELOC rates at a few lenders. “I found quite a difference in interest rates.”

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

A handbook on how to complain about bad investment advice from a legal firm that represents individual investors looking for redress.

(for Globe Unlimited subscribers)

What I’ve been writing about

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  • Partying like it’s 1999: Young investors trading stocks today no different than the Nortel junkies of 20 years ago
  • Deferring OAS payments: A helpful retirement income strategy with a public relations problem
  • ETFs for investors who have flamed out in trying to pick their own preferred shares (for Globe Unlimited subscribers)

More Carrick and money coverage For more money stories, follow me on Instagram and Twitter, and join the discussion on my Facebook page. Millennial readers, join our Gen Y Money Facebook group. Send us an e-mail to let us know what you think of my newsletter. Want to subscribe? Click here to sign up.

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