TORONTO -- As businesses reopen and social gatherings resume, some Canadians may notice they鈥檙e spending more now than they were during the peak of the pandemic.
During the first quarter of 2021, for example, the household savings rate went up to 13.1 per cent 鈥� more than double the rate of 5.1 per cent in the first quarter of 2020.
Even Canadians鈥� credit card debts have been dropping, with rates hitting a six-year low in June due to reduced spending, according to the consumer credit reporting agency Equifax.
鈥淎cross the board in all age groups, we鈥檙e starting to see people pay more than they actually spend on a credit card, which is a real positive behaviour change in terms of consumers,鈥� Rebecca Oakes, assistant vice-president of advanced analytics at Equifax, told The Canadian Press in June.
Despite these positive signs, the temptation to spend more as society reopens can derail these newly adopted saving habits.
To avoid this, finance expert David Lester shared some tips on how Canadians can keep their budgets balanced as pandemic restrictions ease.
KEEP AN EMERGENCY FUND
Lester advised Canadians to try to maintain that 13.1 per cent savings rate they achieved at the start of 2021.
鈥淪o we want to make sure that we fill up our emergency fund. You want to have six to nine months of expenses set up in there,鈥� he told CTV鈥檚 Your Morning on Tuesday.
Next, Lester said they should talk to their financial adviser or accountant for advice on where they should put the rest of their savings.
鈥淚t could go into your TFSA or it could go into your RSP depending on your financial situation, but we should just get used to saving 10 to 15 per cent,鈥� he said.
鈥淚n Australia, it鈥檚 law that you have to save 10 per cent and we should just pretend we鈥檙e Australians and make sure we save that 10 to 15 per cent every single year.鈥�
KEEP INTEREST RATES AT BAY
During the lockdowns it was easy for Canadians to avoid using their credit cards because so many stores were closed, but now that businesses and activities are reopening, Lester said people should plan for their spending.
Lester said Canadians should pre-pay or put down what they鈥檙e planning to spend for the month on their credit card in advance.
鈥淵ou鈥檙e going to keep your credit rate going up, you鈥檙e going to get the points, if there's any problems with the products, you always have the customer service with the credit card, but you won't be going into debt,鈥� he said.
鈥淵ou鈥檒l be paying it first, just like a debit card would be, and then going to zero [balance].鈥�
KEEP A PANDEMIC BUDGET
Lester recommended that Canadians sit down with their families and come up with a list of items or activities they didn鈥檛 really miss during the lockdowns in order to come up with a new budget for these post-restrictions times.
鈥淢aybe it was travel, maybe it was movies, maybe it was having coffee at home, or not buying expensive clothing,鈥� he said.
鈥淪o see what you really don鈥檛 miss and go back through that budget line-by-line and see what you don't have to add back on now that things are opening up. We don鈥檛 want to go back to that bad spending that we were doing before.鈥�
KEEP SUPPORTING 星空传媒
Finally, Lester urged Canadians to continue to support local businesses that were hard-hit during the COVID-19 lockdowns, even as other larger businesses reopen.
鈥淢ake sure that you're always ordering the extra garlic bread when you are ordering a pizza or, you know, dyeing your hair or doing something else just to get more money into these small businesses and shops and salons that have been closed for almost a year now,鈥� he said.
With files from The Canadian Press
