Families have learned some important lessons the last few months

Like many couples, Enoch Omololu and his wife Joy began 2020 by setting goals and making plans for the year ahead. Omololu, a Winnipeg-based veterinarian, wanted to change his 10-year-old car and do some repairs around the house. They had also been planning to increase their mortgage repayments.

Then the COVID-19 pandemic hit, and the parents of 2 realized they would need to make some financial adjustments.

“We've kind of put off those plans for now, because nobody knows how this is going to play out,” Omololu said.

In the months since the health crisis swept the country, Canadians have been rethinking their approach to their finances, cutting down on spending and building up savings. Many have also been investing more and taking a harder look at their retirement and estate plans.

While the pandemic has proven a difficult period, the silver lining is that many Canadians will use the time to think more about their finances, their investments, and their longer-term plans.

Canadians are spending less and saving more

According to Statistics Canada1, the household saving rate for the second quarter of this year, when the pandemic surged, jumped by approximately 70% compared to the previous quarter. The savings rate for the second quarter was nearly triple what it was last year.

People across the country are spending less, partly because there has simply been less to spend on: no dining out, no after-school activities, no need to fill the gas tank. But Omololu, who runs the personal finance blog, Savvy New Canadians, said his readers are consciously saving more, too.

“I get more people asking me what are the best high-interest savings accounts, who is offering the best rates right now so I think a lot of people are putting aside more money,” he said.

Tom Drake, a 42-year-old financial analyst at a major supermarket chain who also runs the blog Maple Money, has had similar inquiries on his website. He said posts about couponing, a common way to save money, have experienced heightened traffic.

He and his wife, Amanda, an esthetician who runs her business out of their Airdrie, Alberta home, have made lifestyle changes as well.

“We definitely cut back on spending,” said Drake, who has 8- and 10-year-old boys. “It's a good time to just take stock of where you are and tighten things up where you can.”

Families are investing more and more thoughtfully

Perhaps what’s even more appealing than saving, for many, is investing.

“I do know more people are investing. I've heard from a stock broker directly that they've had increases in sign-ups over this time,” said Drake, who has added equities to his portfolio.

Omololu said his family keeps a 3-month emergency fund, but since that was already set aside when the pandemic hit, they decided to increase contributions to their investment portfolio. They also took the money saved in unused childcare fees and after-school sports the last few months and contributed to their sons’ Registered Education Savings Plans.

Families that have been able to reduce discretionary spending are looking for ways to put those savings to work.

Parents are taking a harder look at their longer-term plans

COVID-19 motivated many families to make another big change. “The pandemic finally pushed us to create a will,” Omololu said.

Estate services have experienced a surge in activity since March.2 Drake noticed an increase in searches about wills on his blog, too.

And it's not just estate planning on Canadians' minds , they’re also revisiting their retirement plans, given the economic uncertainty.

Omololu believes he and Joy will have to build up a larger portfolio than they had originally planned before being able to retire comfortably, based on the possibility  that the markets and their investments may not perform as well as they had previously expected. He may also need to delay plans to transition to self-employment, which he hopes to do one day.

Even the best-laid plans can change, but that's okay

The pandemic has created economic uncertainty for many Canadians, and they’re responding by reassessing their life plans. Changes may be necessary, but they don’t need to be a source of concern. By revisiting and adjusting their finances, families like Omololu’s and Drake’s will emerge from the crisis even more resilient than before.

You, too, can take steps to feel better prepared. Book some time with an advisor today.