Becoming More-Than Resilient During the COVID-19 Pandemic: 17 Business & Personal Money-Minded Tips
**Last updated June 24, 2020**
Are you familiar with the term "antifragile"?
If you haven’t heard of it, you might think it must mean “sturdy,” “robust,” “resilient.”
Reasonable, but not quite right.
As we know, something that's fragile gets damaged when stressed. And while the robust is difficult to damage, it doesn’t change in any way under stress—neither positively nor negatively.
The antifragile, however, gets better under stress.
The subtitle of Nassim Nicholas Taleb’s 2012 book entitled “Antifragile” defines the term for us: “things that gain from disorder.”
“Disorder” may seem like an underwhelming word for an overwhelming time. But it’s apt. Whether we feel merely a disturbance in our routine or complete chaos, dis-order is present.
So how can we survive financially and maybe even grow as a result of this crisis?
Here are some practical tips and resources to get through this season strong.
If you’re in immediate financial trouble:
1. You may be eligible to defer your mortgage and utility payments.
Until June 19, 2020, Albertans are protected from having their regular utility services interrupted or reduced due to coronavirus-related financial trouble.
You can contact your natural gas or electricity provider to ask for a payment deferral during this time period.
Large banks are also permitting mortgage deferrals for customers impacted by COVID-19. Find your bank’s policy and process by following the appropriate link at the end of this Canadian Bankers Association news page.
While not an official government policy, you can also call loan companies to find out if you can defer payments without penalty.
As this crisis is global, banks and suppliers are similarly trying to make strategic decisions to remain afloat for the long term, so they do not want to lose you as a client.
Now is the time to negotiate.
Though great in the short-term, deferrals will eventually catch up with you. So if you’re strapped for cash, do all you can to...
2. Cut back on business spending that doesn’t directly relate to your business thriving.
If you own a business, you likely started it from the bare bones. Then as your business grew, you began to get fancy (offices, nicer vehicles, machinery, etc.).
It is best for long-term economic health—not to mention socially responsible—to lay-off as few people as possible, so now is a great time to analyze your expenses and see if there is anything you can cut back. Think business meals, those software subscriptions you haven’t been making much use of, even finding ways to use your printer less by keeping things electronic all add up.
And if you’re worried about making ends meet, you’re probably not thinking of investing in any large items at the moment (hopefully). Instead, see if you can return any big purchases you’ve made to help keep the cash flowing.
3. Cut back on any non-essential personal spending.
Staying home and only going out to make purchases when absolutely necessary should naturally decrease spending. But if you want to do a little more, consider temporarily cancelling or postponing some monthly subscriptions.
Read a book or play a game instead of watching one of your all-access streaming services.
Groceries are one of the largest household expenses, aside from mortgages. But you’d be surprised how much food the average household has that remains uneaten.
So go through all the cans and containers of food sitting in the back of your pantry; there’s a good chance you can make a handful of meals out of the stragglers in the forgotten corners of your cupboards, which helps to relieve the burden on your credit card.
4. Get an interest-free business loan through the Canada Emergency Business Account (CEBA).
You can apply for a business loan up to $40,000 directly through your bank or credit union.
Not only is the CEBA interest free until December 31, 2022, but with punctual repayment, you'll be exempt from paying back 25% ($10,000 maximum).
To qualify, small businesses and not-for-profits must show they paid between $20,000 and $1.5 million in total payroll in 2019.
If your 2019 payroll was less than $20,000, it's still possible to qualify if...
- You have a CRA business number,
- You've filed a 2018 or 2019 tax return, and
- You have eligible non-deferrable expenses—rent, property taxes, utilities, insurance, etc.—between $40,000 and $1,500,000 (Make sure these expenses are legitimate, because they could be audited).
5. The CRA has extended the deadline for most tax filing.
The tax-filing deadline for personal income was June 1, 2020. Late-filing penalties or other interest will not be charged until after personal tax payments are due on September 1, 2020—also the date by which self-employed individuals should file their taxes.
Corporations still must file their taxes six months after their year end, but those that would have to pay taxes after March 17, 2020 can delay payment until September 1, 2020
Charities with a tax-filing deadline after March 17th have until the last day of this year to file their returns.
See the CRA's COVID-19 tax update for all tax extension scenarios.
(By the way, if you want some help filing your personal taxes, let us know here.)
Other potential income sources:
6. Be creative and innovative.
Cooperate with your competition (co-opetition) to share ideas and workloads; utilize online tools for meetings and file sharing. Take any extra time you have to learn and strategize to come out of this pandemic stronger than ever.
7. Pick up a temporary job.
While many businesses are being forced to temporarily pause, others, most notably delivery-based services, are overwhelmed with increased demand. So wash your hands, keep your physical distance from others, and help sustain your community's needs with a side hustle.
Of course, government money is really taxpayers’ money, so for the sake of long-term economic health, only get government financial help if you really need it. If not for the economy or for integrity's sake, then at least to avoid penalties.
The CERB is not only for those who have stopped working because of the coronavirus, but also for self-employed and employed individuals who do not expect to earn more than $1,000 (before taxes) for at least 14 consecutive days within each 4-week payment period for which you apply.
The CERB still does not cover those who have voluntarily quit their job or have otherwise lost their job for reasons aside from COVID-19. However, the government has extended the provision of CERB to
- seasonal workers who have used up their EI benefits and cannot regain their regular seasonal work due to COVID-19 and
- workers who cannot find a job because of COVID-19 after recently being on EI.
It might take a while to get through the application process, but remember that the individuals who are facilitating this benefit are going through the same crisis as well. So be kind and give grace.
Bear in mind that just like EI, the CERB is taxable income, so you’ll need to include it on your 2020 personal tax return next year.
9. Continue paying your employees with CEWS.
Canada's Emergency Wage Subsidy (CEWS) is for employers who can demonstrate that their revenue has dropped due to COVID-19 (see the chart below to know how much you'll need to prove).
Through CEWS, you may be eligible to have 75% of employee wages subsidized—up to a maximum of $847 each week between March 15 and June 6, 2020.
Employers can determine which employees are eligible here.
Note that employers who are also receiving benefits from the Temporary Wage (10%) Subsidy for a particular time period would generally see a proportional reduction in their benefit from the Emergency Wage Subsidy.
You are not required to submit an application for the 10% subsidy, but the CRA will not automatically calculate it for you either. You must manually calculate the reduction in your payroll remittances for pay periods (primarily) between March 18 and June 19, 2020.
More money-saving & money-managing resources:
10. Review the Government of Canada’s Economic Response Plan for individuals & business.
This includes several modes of financial assistance, including an increase to the Child Tax Benefit (an extra $300 per child, approx. $550 more for the average family).
Learn or re-familiarize yourself with basic strategies for being in control of the money that flows in and out of your business.
12. Take a money-managing course.
Or even just follow Dave Ramsey's 7 Baby Steps to Financial Freedom.
This budgeting mindset and framework helps individuals and families get out of debt and, as the title says, achieve financial freedom.
A couple takeaways from this resource applicable to both personal and business financial decisions:
(1) Debt induces financial fragility; so avoid it whenever possible, and get out of it as soon as you can. And (2) having 3-6 months of money saved for emergencies (like a pandemic, for instance) is a wise financial goal we’d love to see everyone rest in.
Penultimately, we’d be remiss if we failed to encourage you to…
Be prudent and socially responsible:
13. Stay home anytime you can.
Not because you’re fearful, but to protect the vulnerable and to flatten the curve more efficiently.
14. Keep at least six feet between you and others if you must go out.
15. Wash your hands and sanitize objects and surfaces.
Sanitize anything that may have touched other hands within the last three days, or the last 24 hours for more porous materials like cardboard. This includes anything from computers and cellphones to groceries. Then wash your hands again, because why not?
16. Take this opportunity to help others.
It’s good for your community, your mental health, and promoting kindness can make you stand out as a business or employee.
As one small business owner said, “every crisis is also an opportunity to earn the trust and credibility of our customers, partners, community, and family. . . by helping them deal with the crisis.”
If the coronavirus has affected your financial state little, or maybe even positively affected it (looking at you, Skip the Dishes), now would be a great time to invest in other local businesses and donate to those in need.
Check out this blog post that brainstorms 34 simple ways to be kind during this crisis. A few ideas are specific to our southern neighbours, but they’re still beautifully translatable to our local communities, with the last few homing in on supporting small businesses.
17. Breath. It’s going to be OK.
We know you’ll be resilient in this time of disorder. You’ll recover from this crisis, hopefully even more efficiently with some of these tips. But our hope for you is even more.
As Nassim Nicholas Taleb said, “the resilient resists shocks and stays the same; the antifragile gets better.”
Let’s get better.
In your corner,
The GuYDanS Team