A personal finance project to complete by mid-year: Test your financial resilience.
Here’s the tool for this job: The new Financial Resilience Score calculator from a group called the Financial Resilience Institute. The calculator weighs your financial stress level and ability to weather unexpected events or financial surprises like the loss of a job or income, or medical costs.
Now’s the time to consider your resilience. We’ve been through four exceptionally disruptive years of volatile interest rate spikes and high inflation. Looking ahead, it’s possible that the slowing economy falls into a recession that causes significant job losses.
Many households are already stressed as a result of high mortgage rates and food costs. A Financial Resilience Index managed by the institute shows that just 34 per cent of people could be classified as financially resilient in February, compared with 36 per cent in June, 2022, and 49 per cent in June, 2021. Thirty per cent were either financially vulnerable or extremely vulnerable in February, compared to 29 per cent in June, 2022, and 18 per cent in June, 2021.
The burden on household finances should ease with inflation declining and interest rates falling/set to fall. But you may need to be more proactive to improve your resilience. Having cash for emergencies is a big help. If you’re swamped by debt, consider contacting a non-profit debt counselling agency. A financial planner can help with big-picture issues like how prepared you are for retirement.
Start with the Financial Resilience Score calculator, though. You’ll get your own score, comparative national average numbers and some guidance on what your score says about your resilience. There’s also a link to some tools and resources to help you manage debt and build savings.
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Rob’s personal finance reading list
What to do about your mortgage
A survey of mortgage brokers on what the best mortgage moves are right now. Among the topics covered are variable versus fixed rate, best term and best rates available. Bookmark this if you’re buying a first home or renewing a mortgage in the next while.
How to forgive yourself for a bad investing mistake
An advice columnist offers some comforting words to someone who lost $150,000 on a bad investment. Everyone makes mistakes with money, though that’s a biggie.
Best provinces for charging an EV
A province-by-province look at the estimated annual cost of charging an electric vehicle. Big variations, according to the local cost of electricity. You’ll also find annual comparisons here of ownership costs for EVs and gasoline powered vehicles. Now for a look at how EV fever is fading – fewer people are open to buying one. Makes me wonder if that’s a buying opportunity – lower demand could mean more dealer flexibility on price.
A pack of gum makes supermarket history
An account of the first use of a scanner in a supermarket in 1974. The purchase: Juicy Fruit gum. Scanners aren’t infallible, but they have sped up checkout lines. Time is money, right?
Reader comment on emergency funds: “I retired in January and guess what happened – my furnace went, at a cost of $7,000. Later, my wife, son and myself all had unexpected dental bills for bridges, crowns, wisdom teeth to the tune of $35,000 not covered under a basic health plan. Yikes! It drained my emergency fund and I now cannot take a vacation for quite a while. But, boy am I glad I had the fund ready for emergencies.”
Do you have a question or comment for me? Send it my way. Sorry I can’t answer every one personally. Questions and answers are edited for length and clarity.
Tools and guides
Five tips for trading exchange-traded funds, including one for people who feel intimidated by the idea of buying and selling ETFs using a trading app or online brokerage account.
In the social sphere
Social media: With all the financial stress out there, what gives with the busy airports and restaurants? I keep asking this myself.
Listen: The best way to pay when travelling outside Canada – cash, credit, debit?
Money-Free Zone: John Fogerty, who just turned 79, performs a darned fine rendition of the Credence Clearwater Revival classic Have You Ever Seen the Rain.
More PF from The Globe
- A guide to what lower rates will mean for mortgages, housing and returns on all those safe parking spots for cash
- By the numbers: How a Bank of Canada rate cut will affect mortgages and other debt payments
- Bridal parties and birthdays draining your account? Here’s how to discuss money with friends
More Rob Carrick and money coverage
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Rob Carrick