During these uncertain times, many people are feeling added stress surrounding their financial situation, and unsure of the options that are out there and available to them.

Local Financial Coach and founder of WomenCents Vanessa Stockbrugger says that before making any major changes to your spending or borrowing it is important to know the long term effects.

Stockbrugger says that she`s having more conversations these days about debt deferrals, and while this may be the right option for some, there are a few things to consider when it comes to deferring payments.

She says "If you are still working and can afford to make your debt payments, then do so. It is important to keep up good money habits during this time, if you are able to, rather than delaying payments for an also uncertain future. The lender is still charging you interest on your loan and therefore the loan will end up costing you more if you do defer."

Stockbrugger says that whether to defer debt payments and which debt to defer is not a "one size fits all" answer. She says if you have lost your job or have taken a significant income hit, then a deferral on your debt may be the lifeline you need to help get you through this.

In this case, she suggests that you talk to your lender about an interest rate reduction in conjunction with the deferral.

She says "Debt defferals have provided an opportunity for people who have had their income significantly reduced or perhaps even lost their job to be able to lower their monthly expenses. Some banks are providing a deferral on credit card payments for up to six months and during that time lowering the interest rate in half. That could mean going from 20 percent down to ten percent. If you have that outstanding credit card debt that could be very helpful."

While everyone`s financial situation is specific to their individual circumstance, there can be a sense of overwhelm on how to move forward even if you aren't experiencing a loss in income.

Stockbrugger says that self-isolation also means a change in spending patterns, and for those who aren`t facing a loss or disruption in income it can be a good opportunity to start building on your nest egg.

She says "It's an opportunity to build up the emergency funds or build up savings. For example maxing out or contributing to tax free savings accounts, since that tends to be not fully utilized. If you can cut your expenses than you can save that much more and  protect yourself if things become uncertain for you in the future. If your mortgage is up for renewal now would also be a good time to lock in a lower rate."

Stockbrugger says that it's important to have a list of all of your debt along with their corresponding interest rates, and she recommends that you check your credit score.

She says that while lenders have stated that agreed-upon payment deferrals won't affect your credit score, it's a good idea to do thorough research to check for any errors or miscommunications. 

For more information on how to manage your finances, visit https://womencents.ca/