Coronavirus: Financial planner says pandemic shows importance of saving money

Since the novel coronavirus pandemic and subsequent lockdown began in March, Prime Minister Justin Trudeau and his cabinet have regularly unveiled new ways to offer financial support to Canadians.

The measures have been directed at students, small businesses, workers and now large companies.

The scope of the financial package recipients shows how monstrous the economic consequences of the pandemic are.

It also highlights another trend — that Canadians aren’t good at saving money.

Saskatoon-based financial planner Janea Dieno said that’s because we live in a culture dominated by consumerism.

“We’re flooded with ‘buy this, buy that.’ You go to the grocery store for a jug of milk and a loaf of bread and you come back with new shoes,” she said.

Dieno said the pandemic shows how important it is for Canadians to save money.

According to the Organization for Economic Cooperation and Development, a group of mostly rich countries, Canada ranks 21st out of the 35 richest countries in the world for savings.

In 2018, the most recent year for which data is available, the average Canadian saved just 1.49 per cent of their annual disposable income.

The average American saved just under eight per cent.

Dieno said the United States learned its lesson after the 2008 financial crisis.

“Their job losses were much greater than what our job losses were and their financial system was a wreck compared to what our financial system was,” she said.

“I don’t think (Canada) felt it as much as they did and so if you look back, you know if you’re feeling that much pain, going forward you’re going to do something about it.”

Financial pain is something many Canadians are experiencing.

Two million Canadians lost their jobs in April and a recent Statistics Canada poll shows that three in 10 Canadians say the lockdown is having a major to moderate impact on their ability to meet financial obligations.

Dieno said the pandemic shows Canadians need to learn to save more money.

She said another wave of COVID-19 will make financial matters worse and it will be at least a year before the economy starts to recover from the first round of infections.

But University of Regina economist Jason Childs said Canadians saving more money will affect how quickly the economy recovers.

“Are we going to be like school kids getting let out at recess, stampeding back to the restaurants and the bars and opening our wallets really eagerly? If we are, we’ll be able to recover fairly quickly or fairly strongly,” he said.

“If we aren’t — if we’re much more careful and cautious — the recovery’s going to be slower.”

Dieno said Canadians need to worry about their own bank accounts before the wider Canadian economy and Canadians should focus on supporting the local economy when they do purchase items.

“The number one thing is to make sure that your own finances at home are taken care of because ultimately you can’t help anyone else if you can’t help yourself.”

Questions about COVID-19? Here are some things you need to know:

Health officials caution against all international travel. Returning travellers are legally obligated to self-isolate for 14 days, beginning March 26, in case they develop symptoms and to prevent spreading the virus to others. Some provinces and territories have also implemented additional recommendations or enforcement measures to ensure those returning to the area self-isolate.

Symptoms can include fever, cough and difficulty breathing — very similar to a cold or flu. Some people can develop a more severe illness. People most at risk of this include older adults and people with severe chronic medical conditions like heart, lung or kidney disease. If you develop symptoms, contact public health authorities.

To prevent the virus from spreading, experts recommend frequent handwashing and coughing into your sleeve. They also recommend minimizing contact with others, staying home as much as possible and maintaining a distance of two metres from other people if you go out.

For full COVID-19 coverage from Global News, click here.