How many times have you heard the line, we’re all in this together, when referring to the pandemic? But the idea that everyone has had the same experience over the last year couldn’t be further from the truth.
Women, especially working moms, have seen their finances more dramatically impacted than men. One report shows that since the beginning of the pandemic, the number of women in the workforce has dropped to its lowest level in more than 30 years.
One of the main drivers behind the exodus of women from the job market is increased childcare responsibilities. With daycares and schools closed, many working moms were forced to drop out of the workforce to stay home. This has had a big impact on women’s money and the economy. Even those who have kept their jobs are suffering financially. The recent Manulife Bank Debt Survey shows that a quarter of those surveyed are struggling to keep up with their bills because of COVID-19, and of those in debt, 72% say their debt load has been negatively impacted by the pandemic.
I’m one of those working moms who saw her income reduced due to COVID-19. As a personal finance journalist, I have always promoted the idea of disaster-proofing your money. But nothing could have prepared me for the economic slowdown the pandemic created.
Here’s how I have been managing.
One of the biggest reliefs for my family has been having an emergency fund. As a freelancer, I always operate under the reality that my work could dry up at any time. Since I started freelancing, I have been contributing 20% of my gross income to an emergency fund. If I earn $100, $20 is automatically earmarked for unexpected events. Having this pot of money on the side has helped alleviate a lot of stress. I know that no matter what happens, for at least the short term, my household finances will not be impacted. An emergency fund should have enough money to cover at least three months of your expenses.
Throughout the pandemic, the Federal Government has announced a number of income supports and programs to help Canadians struggling with their finances. A list of what is available today can be found here. I took advantage of government programs because I temporarily had to step back from the workforce, but the bills still needed to be paid. My time was devoted to helping my two kids with virtual school, finding entertaining ways to spend their day, and generally supporting them as we all stayed home.
One way to save money is to keep on top of your debt and use low-cost borrowing options. Manulife One is an excellent product that can help you achieve these goals. It’s an all-in-one solution where your mortgage, chequing, savings, and debts are all in one place. Every dollar you deposit can go towards paying down debt, helping you be debt-free sooner. As well, you have easy access to the equity in your home. When an emergency arises, you also have the option of flexible monthly payments. My husband and I consolidated our car loan into our mortgage. The rate is much better than the offer we were getting from the dealership and our financial situation is simplified by having our debt all in one place.
When my freelance income slowed down, I immediately started looking at where we could cut back as a family. I quickly realized our household expenses had been reduced already. My children's activities were paused, we weren’t going out for dinner, and we canceled our vacation plans. The temptation to spend that money on online shopping or take-away dinners is strong, but I have been saving it. If it ends up that I don’t need these funds to run my household, they will go toward paying down debt.
As a freelancer, I’m always hustling to find work. Now that my children are back in school, I’m once again looking for new opportunities. This means reaching out to all my contacts to see if they can use my services. My efforts are paying off as I land more work in my field. But I am well aware that I am lucky. Thousands of working moms remain out of the workforce as the pandemic continues.
To summarize, I’ve been surviving financially by having an emergency fund, taking advantage of the government programs available to me, and cutting back where possible. One of the best ways I’ve saved is having all my debt in one place because every time I make a deposit, I’m reducing my debt and saving money on interest. There is no doubt working mothers have suffered a big financial blow during the pandemic. I hope by sharing my story, I will inspire others to disaster-proof their finances.
This story is for information purposes only and is not intended to provide specific financial or other advice and should not be relied upon in that regard. Individuals should seek the advice of qualified professionals to ensure that any action taken with respect to this information is appropriate to their specific situation.
Manulife One is offered through Manulife Bank of Canada. Manulife, Manulife Bank, Stylized M Design, Manulife Bank & Stylized M Design, and Manulife One are trademarks of The Manufacturers Life Insurance Company and are used by Manulife Bank of Canada under license.