Some households are saving money while isolating at home. What should they do with it?

Written by:

Anna Sharratt

THE GLOBE AND MAIL

April 13, 2020

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Read an excerpt below.

Financial planners agree that setting aside money in an emergency fund is a top priority. The standard recommendation has been for households to set aside enough liquid cash to cover three months’ worth of living expenses.

But "a global crisis like this isn’t going to resolve itself quickly, and so I would recommend aiming to build up at least a minimum of six months’ worth of household expenses,” says Cindy Marques, a Toronto-based certified financial planner.

She suggests keeping those funds in a high-interest savings account “so that you still get the potential for some growth while avoiding all risk of potential losses.”

If you’re in good shape, employed and with a solid emergency fund, tackle your debt. “By paying off debt, you’re earning an immediate rate of return – 20 per cent in the case of a credit card,” says Morgan Ulmer, a certified financial planner with Caring for Clients in Calgary.