Question

Weird question: I live in Canada, single mom of 4 kids and self employed. Haven’t been able to work in just over 2 months because of Covid. I’m used to getting paid every week and always having money to get me through. Now I’m down to one monthly government payment. I get that money. and I start to budget. (Just started TBM method by paycheck) Some of my expenses are paid already because I had a little money in the account to take care of them. Now, it’s payday today. I have my CC nearly maxed out. My bills are paid and I have $641 left. I could pay my CC, I could put money into sinking funds but I just can’t bring myself to tie up that money. It’s almost like I want to hoard that money in my account just in case I need it for something although I have budgeted for every cent that I will need this month. Does anyone else feel this way? I have so many goals. and I have them all written down. But I also have a huge expense coming up when I have to reopen my salon and buy a bunch of PPE and product. I feel lost and trapped! Halp! Am I overthinking it?  

Answer 1

I would pay the minimum on the credit card and save the rest of the $641. Once you are able to return to work full time I wouldn’t stress over paying the cc off. If the money is still sitting there when you return to work, then pay it off

Answer 2

I would continue to make minimum payments until you are back to work making your stable income.  

Answer 3

I highly recommend that once you get through this you work to get the credit card paid off. It is hard to get ahead when that is hanging over your head. We have an done really way with Dave Ramsey’s baby steps. You should also work to separate business and personal money as soon as possible.  

Answer 4

I don’t think you’re overthinking it. I would worry about paying all my bills if I were you but save the extra money until things are more stable. I’m a single mom as well and that’s what I’m doing. im making sure my main bills are current and paying the minimum on my non essential bills and saving everything else. Everyone is different. For me, I need peace of mind above everything. I like knowing that if something unexpected comes up I can handle it.  

Answer 5

I wish there was a magical fairy that could come look at all this stuff I did with the budget blueprint and tell me where I went wrong lol

Answer 6

I’m self employed also got unemployment pay. I’m hoarding all the extra money as emergency fund for now.  

Answer 7

Call some of you creditors. I am working but my hubby got his hours drastically cut so we called and our car loans are shut off for 3 months. No extra fees or high interest. Our insurance premiums were reduced and our cc companies are helping reduce our monthly payments with no added expense. Just call and ask. The worst they can say is no but most know what we are up against and I think they know the government would come after them if they tried to enforce some crazy things.  

Answer 8

I feel like there are so many things that I need to spend this money on but I don’t know if I actually need to or just want to. I have like 10 bins of clothes I want to sell, but in order to sell the clothes, I need to get my camera on my phone fixed which is $170. Then I know I have to order things to restart my business when it’s time. that’s going to be like $1000 But I want to pay off debt like yesterday and build my savings too  

Answer 9

Yes make it work. Pay minimum payment thats it. I’m in the same boat. Never used my credit and I owe quite a bit now but it’s ok! Don’t let it get u down pay the minimum as early as u can and u will be good babe!  

Answer 10

Hey Sarah! Single mom of two here also! It sounds like you are doing a great job. Having all of your bills paid during these crazy times is such a relief (be sure to praise yourself for that! ) and you have extra cash! At the beginning of all of this crazy pandemic I too had some extra cash. At first I “saved” it, then I realized how much interest I was paying on my credit card and how little I was “earning” by saving it. I threw it all at my credit card! Hitting that confirm button made me so nervous  but I told myself, worst case scenario I will need to swipe the card again (obviously with more caution than previously), but for me telling my “extra” cash what to do and lowering my credit card balances was liberating. I’ve got it fully paid off now! That being said, do you have your $1, 000 emergency fund? If not, I would start that before paying off any debts. That is a small security blanket that can help when you’re in a jam. Good luck and celebrate the small victories! You’re doing great!  

Comments

@motoring thank you! I don’t have my emergency fund yet. :that’s what makes me panic I think  

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@nabonidus in the beginning for me it was really hard to stop paying “extra” towards my debts to fund that $1, 000 EF. Now that it’s funded I leave it alone and focus on the debt. But the $1, 000 EF is the 1st baby step. Trust the process, it works (even though it’s scary )! ♥️♥️

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I’m trying! Lol

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@nabonidus it sounds like you’re doing great! Keep up the good work! And best of luck  

Answer 11

Yes, I wanted to hoard when a major life event happened and my income went from predictable to uncertain. It’s a mental game really. At some point realized hoarding wasn’t the best idea  So I told myself that if I have X in my account for “in case anything comes up”, I will feel “safe”. When I have anything above that, I found a home for it. That alleviated the anxiety that was causing my hoarding. My income still fluctuates to this day (10 years later) but I’ve found ways to work on my mindset.  

Answer 12

I would put it towards your phone being fixed and reopening. Who knows when reopening will be, but you want to be prepared to open as soon as you can I'm sure. I'm in Canada, getting CERB as well. Its weird to budget monthly and makes me extra thankful for TBM. Or I would never make it to the next payment from the last one.  

Comments

@grandiose thank you! I want to try and sell some things to make some extra money to help with reopening costs. maybe that’s what I’ll do

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@nabonidus I think that's smart. The camera will hopefully pay for itself very quickly with selling items. And then you can use that aswell towards reopening costs.  

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@grandiose exactly

Answer 13

You guys are seriously the best! I’m so glad I found the courage to post lol I was so scared I would sound ridiculous !  

Answer 14

I would save until things go back to normal with your income. You never know what could happen. With the clothes, can someone take the pics for you? Or you borrow someone else’s camera?  

Answer 15

I’m in Canada too. I’ve been following a couple of people on Twitter that have great information (hoyes-michalos and Gail vaz-oxlade), just in case we lose our jobs. They recommend talking to utility, credit card companies right away and seeing what they can offer you during this time. (Reduces interest and payments). They say banks are going to be tightening their credit, so don’t use it as an emergency fund. As in they could just go in and lower your available credit. They also said not to have a bank account with the same bank you owe money at, as the bank can go in without your permission to take out payments for debt owed to them. They recommend taking any extra funds and putting it in that other account, just in case. Oh. and even though we only have reduced hours, our health insurance premium was reduced, as we can’t go to the dentist. We had to ask. Our car insurance is just sending $100 to everyone, because of reduced driving too.  

Comments

@mancuso47 Can I ask what insurance company you are with? I’m with intact and I haven’t heard this

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@jessamyn20856 commonwealth. I switched from intact years ago. Most are accommodating if you call and discuss your situation.  

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@mancuso47 I will be checking. Thank you  

Answer 16

Oh. and more importantly, our business qualified for the government business loan. Definitely look into it. You apply through your bank. It’s zero interest until December 2022 and then 5% interest for 5 years after that, if it takes you longer. It’s worthwhile to pay off on time though, as they will forgive 25% of the loan if you pay by December 2022. Our bank had a whole webpage devoted to the help the government is offering businesses and how to apply.  

Comments

@mancuso47 I don’t think my business is big enough for that. it’s just me. would be nice tho

Answer 17

I would pay the minimum and save the rest. I’m not sure where you are here in Canada, but in Alberta phase 1 is rolling out.  you can open soon!  

Answer 18

In the US, I get state unemployment (which is shit), and the temporary federal unemployment through July. Both combined is not quite a full paycheck, but it certainly helps. I’m hoarding all I can into savings and sinking funds. And I’m using the rest to pay down my cc balance. I know I should save it ALL, because things are so unknown right now. But in my heart, if I continue to pay down my cc, my minimum payment will be lower and free up more income. I just want to go back to work  

Answer 19

Put your credit cards away, pay the minimum, and protect the rest of the liquid cash for absolute emergencies.  

Answer 20

Ooo I feel ya! I’m a stylist as well and have decided to rent a salon suite because of my preexisting health concerns and all of the new disinfection regulations. It just seems easier to clean and keep as safe as I can! I too want to just hang on to any money I have for dear life until I get back in the shop!  

Answer 21

@nabonidus I also live in Canada, and am receiving the CERB. With that "extra money" that you have, I would put some of it aside ($200-$400 out of each CERB cheque if you can afford it) in a seperate savings account earmarked "CERB Repayment fund". It is the Government afterall, and they are going to want the taxable portion of their money back. By setting some money asside now; you won't be quite as shocked when the Government asks for their money back next tax season

Comments

@hendiadys it's about $360 in taxes

Answer 22

I would put it towards Emergency funds since you have 4 kids

Answer 23

I’m currently not moving any money. I have the money to pay my student loan in full, but I’m not letting go of it until I feel it’s safe.  

Comments

@mika67029 kinda my mind set too

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@nabonidus I just act like I don’t have it. Too many unknowns right now.  

Answer 24

I’m not sure where in Canada you are but I’d save as much of it as possible. no one knows how things will be when they open back up. my husband works for our govn’t COVID team and directly with our CMO on a daily basis and he’s pretty concerned that if schools reopen in September there may be a huge spike and a return to lockdown. Of course no one knows anything for sure, it’s always guesswork but if you can wait out the next few weeks/month or so and see what happens as provinces roll out their reopening plans. if there is a spike it’ll likely be at least few weeks after opening.  

Comments

@salinometer Pretty sure once they open up they won’t be closing. It’s like opening Pandora’s box now and the pushback is going to be insane

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@jessamyn20856 I totally agree. the pushback WOULD be insane, but behind the scenes there’s a threshold of lives lost vs economy damage. which is under wraps and that thought alone is pretty scary. They’re preparing for all possibilities at least within our province’s COVID emergency management team.  

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@salinometer The economy needs to get back working. And the government needs to stop trying to coparent my children. It sounds like the train that hit a pedestrian where I live last night, was intentional due to financial reasons. I personally hope they Canadians will rise up and put their foot down.  

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@jessamyn20856 I absolutely agree, of course the economy needs to get restarted - NO ONE wants it to tank - but honestly I feel like everyone, government included, is between a rock and a hard place right now and no one knows what to do or what will happen. It’s an extremely complicated process behind the scenes, weighing possible deaths from COVID to weighing deaths and other implications from a tanking economy (suicide, food and shelter instability, domestic violence. ). But they have to have a threshold on BOTH sides (how many people will be lost to COVID vs how many people will be lost to suicide, etc) - it wouldn’t be ethical if they didn’t have this threshold - it can’t just be “open things up, it doesn’t matter who will die” OR “keep things closed, doesn’t matter if kids are going hungry or people are committing suicide”. It’s such a delicate balance. who would want to make a decision like that? But regardless of how we feel about the situation personally, in the context of budgeting - no one knows what’s going to happen, if things get bad enough they will have to shut down again and until we know more as things do open up it’s realistically safer to hold on to whatever money we can if possible. One thing I can say though is I’m so glad to live here in Canada - my mum is in Scotland where the mortality rate is 18-20% right now and she has another 16 weeks of quarantine because she has a kidney problem. I have family in Italy who have had a really awful time in an already damaged economy and have dealt with so much death - so I’m thankful we can at least start the process of opening here instead of trying to overcome hurdles like that.  

Answer 25

EF and leave it until this passes.