THE SHIFT TO THRIFT
Things we can do to ease financial sting
I realized it was happening when I began turning off lights and lowering the thermostat.
I started making rice pudding from milk edging past its best-before date, and squirrelling spent chicken bones in the freezer for stock. I began rinsing out plastic bags to reuse and mending clothes. Squeezing every speck of toothpaste out of the tube became a grim sport: How long can I make this last?
Only when my husband complained that the oranges we’d bought tasted bitter, and I barked, “We’re gonna eat them anyway,” did I fully realize that I’d turned into my grandfather.
Rest his frugal soul, Grandpa lived through the Great Depression and two wars. The experiences never left him and he became a saver of string, a grower of vegetables and an eater of every last smidgen of porridge in his bowl.
It’s been said the COVID-19 pandemic is our war, one that will mark us forever. With massive job losses and the global economy on its knees, our personal finances are keeping us awake at night. Even when (and if ) the dust settles, it’s doubtful we’ll go back to our profligate ways. Old-fashioned thrift seems here to stay.
By necessity, we’re scrimping and saving to get through this difficult time. I tapped a few people to learn more about the small, “actionable” steps we can take to become thriftier — and feel more in control of our lives.
TAKING CHARGE
Suzanne Presinal was already pinching pennies before the pandemic hit. In November, provincial education cuts cost the artist her job as a “maker” at STEM Learning Lab where she put her creativity to work teaching young students about the creative side of science, technology, engineering and math.
Now with the COVID-19 crisis underway, she’s doubled down on her frugality, shopping the dollar bins at her local No Frills and spending the days in a sunny room of her house, the thermostat set to “chilly.”
“I drive thoughtfully,” says Presinal of her efforts to pare vehicle expenses. “I walk a lot and ride my bike.
“I’m also thoughtful about shopping. I dive deep into my veggie bins to use everything up and I don’t throw out anything. There’s no more toss-out culture like we’d had for many years.”
She and her mom share ingredients, meals and leftovers to save money and keep in touch.
To prepare for whatever lies ahead, Presinal contacted her bank, insurance provider and utility companies to request reductions in payments, and temporarily suspended her automatic RRSP contributions. The resulting savings go into an emergency fund — essentially a financial safety net for life’s curveballs.
Being thrifty has given her a sense of empowerment, something she’s passing on to her 20-something son.
“I told him I’ve had to do some things to take control, and here are some things you can do, step by step,” she says. “Let’s focus on getting your applications in for government help, not on relying on high-interest credit cards.”
MAKING A PLAN
Not everyone is as proactive. “People are in a state of shock right now. They don’t know what to do or where to turn,” says Brian Betz, a counsellor with Money Mentors, a non-profit agency that offers free credit counselling, money coaching and financial planning. “But we are here to help Albertans get through this.”
Paralyzed? Betz suggests starting with Money Mentor’s website (moneymentors.ca) where financial tips, resources and FAQS tackle the COVID-19 crisis. It also has a budget planner to help create an emergency or “wartime” budget. (Banks also offer online tools, and there are freebies like mint.com.)
“Put it down on paper using these tools — so you don’t forget any categories — then you can take a really hard look at it and see where you can cut,” says Betz.
Some of his ideas: if a two-income, two-vehicle family loses one income, park the extra vehicle to
I drive thoughtfully. I walk a lot and ride my bike. I’m also thoughtful about shopping. I dive deep into my veggie bins to use everything up and I don’t throw out anything. There’s no more toss-out culture like we’d had for many years.
—Suzanne Presinal
If you’re able to make your payments, continue to make them. Deferring payments does not eliminate the debt.
BRIAN BETZ
lower gas, parking and insurance costs. Is an alarm system a musthave? Skip the dry-cleaning and launder clothes at home. Switch to a basic account to reduce bank service charges and a “bare” credit card with lower interest rates. Avoid cash so it’s easier to track expenses. Examine insurance policies. Gyms are closed; their membership fees should cease, too. For now, forget about annual expenses such as vacations and Christmas.
Contact landlords, mortgage holders, utilities and municipalities (property taxes) before missing a payment. If necessary, ask to defer payments. But, says Betz, “if you’re able to make your payments, continue to make them. Deferring payments does not eliminate the debt.”
Once a clearer balance sheet of expenses versus income comes into focus, re-channel savings into an emergency fund. Don’t get hung up on having three or six months of living expenses set aside.
“We know that 50 per cent of the population lives paycheque to paycheque,” says Betz. “Whatever you can scrape together for a cash reserve, do it, even if it’s just $200.”
Keep building that emergency fund and financial plan going forward.
“If and when there is a ‘normal’ period after this, we have no idea how things are going to look like next year.”
FINDING UPSIDES
All these small steps add up, says Rose Raimondo, a professional certified coach who was a financial planner for more than 20 years.
“These things are 100 per cent under our control. We don’t have to have anyone’s buy-in. As we start to act by taking these small, experimental steps, adjusting and learning from them, we become more comfortable taking other steps,”
she says. “It’s a good way to modify our behaviours around spending.”
At the same time, other people see us taking measures to control our spending and are inspired to start taking steps of their own.
Raimondo says to avoid getting stuck in “habitually” paying for things. As we scour credit card and bank statements, expense by expense, looking for things to cut, she says it’s important to ask ourselves, “OK, I see the cost of this, but what value am I getting out of it? … What’s enough? ”
She hopes that some good might come out of this pandemic.
“Hard times help us learn, to crystallize what is most important to us and to live life more aligned with that.”
Keeping this upside in mind — and because my grandfather isn’t around anymore to offer me advice on being thrifty — I turned to Renee Billiard. The razor-sharp 98-yearold recalled the Dirty Thirties and its deprivations, when her dad, an accountant, lost his job and had to work digging ditches “with his very soft hands.”
She remembers wearing a handme-down coat that left her neck ringed with dye and her mother serving hamburger and sausages “because they were cheap.” But she never felt cold or hungry.
Billiard says she missed having nylons and butter during and after the Second World War. And, yes, there were coupons and the rationing of meats and sweets.
But mostly, she says, she remembers feeling loved.
“I was brought up through hard times and I had a very happy childhood. It didn’t seem like a hardship, it was just life.”