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How to prioritize payments during COVID-19

By Reg Rocha

Before You Borrow Money

How to prioritize payments during COVID 19

 Our lives are on hold and for a large number of us, so is our income. Millions are now grappling with the reality that expenses and interest charges will continue to pile up as unemployment and social distancing become the new norm.

There’s help on its way through the Government of Canada’s Economic Response Plan, but for most, this will not be enough.

So how do we prioritize our financial well-being in the day, weeks and months ahead?

  1. Assess the situation – How bad are things?

 This isn’t budgeting — This is short term survival, and things are changing fast, so we need to take it one month at a time.

Follow these initial three simple steps…and trust me, I know how frightening this might be, but if you follow this advice, you give yourself the best chance at getting through this period.

Ask yourself, what bills are due in the next 30 days?

Then, list your bills based on the size of the monthly payment.

Once you’ve completed these two steps, determine how much cash do you have on hand?

  1. Who is offering relief?

 I am sure you have already received emails from lenders and banks with a very sympathetic saying that they are here to help.

Don’t wait another moment: Take them up on every relief program they’re offering and do it now.

It’s going to be hard to get through to them but stick with it: Ask for six months payment and interest relief and have all the information on-hand when you call. You will need to explain how your income is impacted by COVID 19. Perhaps you’re unable to work because your employer is closed. Or you’re taking care of a loved one. Both direct and indirect reasons related to COVID19 are reasonable grounds to ask for relief from your creditors.

Make sure you ask your creditors these specific questions:

  • What payment arrangements or hardship programs are available? Be specific about the credit product you are asking about.
  • What are the criteria to apply for payment arrangements or hardship programs?
  • How long does it take for approval, and when will it take effect?
  • Do I need to make payments in the meantime?

Once you know what is available, you should also ask the following questions:

  • What fees are charged for entering the payment arrangements?
  • How is interest being calculated while I’m in payment arrangements or hardship programs?
  • Once the payment arrangement is over, what happens to my payments?
  • What are the implications for my credit score?

Create a spreadsheet of payments or write them down – as you contact the lender/bank write down what was agreed, what the new payment will be and/or when the payment will recommence or return to the full payment. Start with the largest payment first as this will provide the most relief.

  1. Prioritize your family’s needs

 When it comes to prioritizing expenses, housing and food takes priority over everything. Start by checking to see if your province is offering rent assistance and apply immediately. Also, some provinces have temporarily restricted evictions, but this is not a long term strategy nor does anyone know the long-term implications. Just because you can’t be evicted doesn’t mean you shouldn’t pay your rent.

Once restrictions are lifted, landlords might demand all missed payments to stay in the home, so it’s important for you to take care of your immediate needs while keeping an eye on your likely long-term financial commitments.

  1. Available Credit

 Many of us don’t have emergency funds and during these times are looking at available credit as their only financial option. We never want to use credit unless it’s essential, but these are unique times with unique challenges, and there are expenses that you might have no other choice than to put on credit.

Make a list of all your credit providers, review the balances and the available credit.

This will also help you to understand what financial cushion if it becomes necessary to cover your immediate need.


 It’s important to remember; this isn’t financial planning; it is financial survival. This isn’t about setting yourself up for retirement or creating a plan to pay down debt. It’s about creating a plan that gets you through the coming month and then doing the same every month until circumstances turn around.

Things will get better, government programs will provide some temporary help, but we need to plan day by day and adjust our monthly plans when things do change.

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