When life throws us a challenge, it’s a great opportunity to look at the lessons we can learn. The pandemic has, of course, been a challenge in many ways – including financially.
Lockdowns meant many Canadians changed the way they worked. A quarter of working Canadians are delaying their retirement.
But the uncertainty we’ve faced since the pandemic began has had positive financial consequences too. It’s spurred many of us to look at how we manage our money and reconsider what financial security means. What are some of the important financial lessons we’ve learned since the start of the pandemic? Let’s find out.
6 financial lessons learned from the pandemic
1. People who had a financial plan were better off
The reality is most Canadians don’t have a financial plan. But the ones who do fared better during the pandemic. That’s because they had something to fall back on if their income or assets were affected. And that’s not the only positive. Canadians with a plan report higher emotional well-being compared to those who don’t have a plan.
Do you need to start or revisit your plan? Learn about working with an advisor
2. An emergency fund is more important than ever
The pandemic is a good example of why an emergency fund is important. Things that are out of our control can happen. Without an emergency fund, you may have to draw on your RRSP savings or borrow on credit cards. Make sure you can weather difficult financial situations – take steps to build your emergency fund.
3. Life insurance and health insurance are crucial investments
The pandemic showed us how unpredictable life can be. It’s also served as an important reminder to be prepared for the unexpected. That’s where health and life insurance come in. They play a vital role in ensuring the financial security of your family.
4. You might have more money to save for your future
If you’ve been working from home, it’s likely you’ve ended up with some savings. There haven’t been the travel costs, lunches out and dry-cleaning bills. And perhaps your time at home has left you wanting a simpler life. Or maybe you’ve developed healthier spending habits. This could give you extra money to put into your savings plan.
5. Your retirement plans might need to change
The pandemic has affected Canadian’s retirement plans. For some, they had to retire earlier than planned due to job loss. For others, retirement has been pushed out so they can save more money. Now’s a good time to see if you’re on track to reach your retirement goal.
6. It’s a good idea to diversify your portfolio
We’ve seen a lot of volatility in the market due to the pandemic. Diversification is key to giving your investments some protection and to optimize returns. Find out how you can manage risk in your portfolio so you can reach your financial goals.
This article is meant to provide general information only. Sun Life Assurance Company of Canada does not provide legal, accounting, taxation, or other professional advice. Please seek advice from a qualified professional, including a thorough examination of your specific legal, accounting and tax situation.