Get Familiar With Your Financial Accounts
In being proactive and pre-emptively avoiding financial disaster, get acquainted with all of the accounts in your financial household. It’s also vital to know what consequences you may face if you end up not able to repay what you owe.
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For starters, take stock of all of your liquid assets tied to central banks, such as your chequing and savings accounts, RRSPs, and TFSAs. Will your investments be safe in the stock market during a tumultuous time with the financial markets? How quickly could you turn these accounts into cash in hand if you needed to, and would there be tax implications?
Evaluate housing prices too – your home is likely the biggest purchase you’ve made in your life so you need to keep an eye on the real estate market. The same goes for monitoring other asset prices, such as your car, jewellery, collectibles and other valuable possessions. In times of financial trouble, you may need to part with some of your belongings to have extra cash available.
On the other hand, tally up your debts. Do you have credit cards with higher interest rates and can you cope with making payments on these accounts if things go south? Understand your terms and conditions, along with the penalties you may incur for missing payments.
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Be Prepared to Ask for Help
Depending on what may happen, you have many safeguards in place that may offer you some reprieve. For example, if you’re laid off at work, Employment Insurance (EI) could help you cover costs as you look for a new job. If your town is afflicted with a natural disaster or your health takes a turn, your home insurance and medical insurance could provide you with some benefits to help you stay the course.
It’s best to study the insurance policies that you have so that you’re aware of deductibles, coverage amounts, and other factors that come into play.
Another responsible step is to note the contact information of your banks and creditors. If you suddenly can’t keep up with regular payments, it’s worth calling them to notify them of the financial situation you’re grappling with. The sooner you contact them the more options they’ll have available to help you get back on your feet. However, resist entering into a revised payment agreement unless you are absolutely sure you can stick to it.
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