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How to budget your CERB

Millions of Canadians have applied to receive the Federal Government’s CERB, and many are starting to see the cheques appear in their accounts. In unprecedented times such as these, it’s more important than ever to start thinking about how to put together a budget.

Setting up an emergency budget will help you prioritize your spending, and help your CERB cover what matters most. That’s why we’ve put together this short guide to help you navigate these unusual circumstances by setting up an emergency budget.

1. Gather your spending information

The first step is to find all your regular expenses. Take your last two months’ bank statements and comb them line by line. Create a list of every regular payment—insurance, phone bills, cable, rent. Ignore cash withdrawals or other one-offs. You’re only interested in the expenses that repeat month to month.

We know this may seem daunting when you’re feeling uncertain about your finances, but trust us, it’s a vital first step toward putting together an emergency CERB budget and you’ll feel better once it’s done.

2. Categorize your expenses

Next, take the list you’ve made and put each item into one of these three categories:

Essential Spending

Payments you absolutely need to make, such as housing costs, utility bills, transport expenses, and food.

Debt Payments

Your monthly payments on credit cards, loans, and so on.

Discretionary Spending

The money you regularly spend on life’s little luxuries, such as entertainment or leisure subscriptions.

3. Set up your basic budget

To set up a bare-bones budget, add up your total essential spending each month and make a note of the final figure. Do the same for your debt repayments.

Hopefully, the total of the two figures will be below your CERB amount, but it’s sensible to try and reduce the totals in any case.

For the essential expenses, get in touch with the companies supplying your insurance, utilities, and phone, and ask if they have any options for customers who are receiving CERB.

Many businesses have set up emergency COVID-19 plans, and you may be able to negotiate a lower tariff, a payment holiday, or a discount on your usual costs.

4. Deal with debts

If you’ve managed to lower your expenses, make a new total of your essential spending plus debt repayments. If this is still above your CERB amount, reach out to your credit card and loan companies, tell them about your CERB status, and ask if they have any advice. You may be able to negotiate a payment deferral, an interest freeze, or another form of help.

However, don’t take this step lightly, as changing your repayment terms may impact your credit rating. Make sure you understand exactly what you’ll need to do in return for any help, and how much it will cost you in the long run.

5. Treat yourself (to something small)

Hopefully, you’ve now brought your spending figures within your CERB payment. If so, you can add some of your discretionary spending back in—just be real with yourself. Even if it’s as small as a chocolate bar at check-out or a subscription to your favourite podcast streaming service, it’s ok to treat yourself to something that is going to make life a little easier until the crisis passes. Just keep it to a minimum, and do your best to leave a little breathing room rather than pushing your budget to the limit.

The circumstances that have forced you to claim CERB are out of your control, but taking a proactive approach to budgeting will help you get through the crisis in better financial shape.

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