Just over 12 months ago, provinces and territories responded to the COVID-19 pandemic by declaring states of emergency. Restrictions and lockdowns have affected Canadians in different ways, and one of the starkest differences involves savings. Some people needed to tap into their savings, while others saw their savings accumulate.

WHEN INCOME DECREASES

Business owners, professionals and employees working in sectors that suffered from shutdowns lost income or even lost their jobs. If government programs didn’t cover the cost of living, funds had to be drawn from somewhere. That’s an easy decision if you have cash reserves in an emergency fund, but otherwise it’s best to consult your advisor. Each person’s best source depends on a variety of factors and could be a non-registered account, Tax-Free Savings Account (TFSA) or line of credit.

Another issue could be whether you should temporarily stop contributing to your registered plans and non-registered account or borrow funds to continue investing. The choice depends on your financial situation and risk tolerance, so you can ask for our advice and guidance.

WHEN SAVINGS INCREASE

Many Canadians whose income has been unaffected by the pandemic have increased savings. After all, shutdowns bring savings on dining out, gym fees, vacations and daycare – and working from home means saving on new clothes and commuting.

When these savings are significant, you’ve got a decision to make. Do you splurge on a luxury item, apply the savings to your wealth plan, or perhaps do both? You can always consult us about the best wealth planning option, whether it’s paying down debt, bolstering education savings, adding to retirement funds or helping to achieve other financial goals.

It’s the pandemic that has made savings a recent issue, but anytime you need to draw on savings or decide how to use extra savings, talk to us about your decision.