MONCTON, New Brunswick (PRWEB) September 16, 2020
Licensed Insolvency Trustee Atlantic Maritimes, Francyne Myers of Allan Marshall & Associates, says her Nova Scotia clients are spending less and saving more. That’s because they are sheltering in place: According to a poll by Narrative Research and the Logit Group, Canadians are pursuing more home-based hobbies during the pandemic. Despite generally spending less money, those who were struggling financially prior to the pandemic, may find it difficult to keep up when deferred payments and other bills come due.
Francyne Myers is concerned that people aren’t aware of one key fact regarding CERB: “It is taxable. A lot of people may not realize that.” So as businesses get back to business and many people return to full employment, they may have a surprise tax bill in the coming year. And it’s not just CERB payments that will be taxed, it’s all the money you may have received. That’s because the government adds up all sources of income, regardless of where it comes from, to derive your tax bill.
In an interview with CTV News Atlantic, Myers, a Licensed Insolvency Trustee with Allan Marshall & Associates, says: “The government sent out the emergency benefit, which was the thing to do to get people going and as a safety net. It’s what we do as Canadians.” It was a fast way to keep the economy bolstered and help those in need. Bur taxes were not deducted.
Canadians Reporting Saving a Little More
Myers, herself a lifelong Canadian, reports that many of the people she sees in her Nova Scotia offices claim that they are actually spending less. In the midst of the mandated slower pace of life, more people are taking up long-forgotten pastimes such as cooking, reading and spending time with family. And who’s doing more baking and cooking than the rest of the country? It’s the residents of Nova Scotia, according to the polls. With nowhere to go and no place to spend money, retail therapy has been replaced with new recipes for no-knead Dutch oven bread.
It’s easier to practice better spending habits when the restaurants and stores are limited and you are confined to home. When clients find that they have surplus funds at the end of the month, Myers encourages them to keep doing whatever they were doing during the pandemic. It comes down to differentiating wants from actual needs… and establishing the habit of curtailing spending.
Plan for Deferred Payments and Tax Bills
Still, for those who were financially stressed before the pandemic, it may be impossible to continue to stay on top of debt once life resumes its normal pace. Eventually those deferred payments — and tax bills — will have to be paid. Myers recommends that consumers develop a realistic budget and financial management plan. The plan should take into consideration all debt, monthly payments, living expenses, as well as any future tax payments.
Take advantage of this reprieve to take stock of your own financial situation. If it seems likely that you will not be able to keep up with your expenses, don’t wait to take action. Once the deferrals stop and the courts resume normal operations, you need to be prepared. You should not rely on credit, either. Myers says that it’s a bad idea to use your credit card as an emergency fund. If incurring additional debt is the only way you can meet your living expenses, consider seeking help from a Licensed Insolvency Trustee in the Maritimes.