online shopping coronavirus budget

Online Shopping in a Time of Coronavirus

As people around the world continue to stay home and self quarantine to combat COVID-19, technology has proven to be essential in maintaining social and professional relationships. Zoom allows every interaction from business meetings to virtual birthday parties, email and text messaging has all but replaced in-person discussions, and social media platforms have persisted as a vital mode of communication. Yet as many are spending more time online and without work, the temptation to online shop to reduce stress is way higher than usual. In fact, ecommerce sales have reportedly increased 40% since the United States declared a state of emergency on March 13, with Canada following not far behind.

While online shopping for essentials like groceries can be unavoidable, reconsider non-essential online spending before clicking that purchase button. If you have a financial plan, you’ll be better equipped to make positive decisions about how to spend your money throughout the pandemic, and hopefully come out on the other side of this in a secure financial position. 

Is now the right time for your online purchase? How to decide

Feeling unsure about whether or not to make online purchases? Consider your needs in comparison to how much disposable income you currently have.

1. Is this purchase going to significantly change your daily life right now?

For many who lost their jobs due to COVID-19, simply being able to pay rent is a struggle right now. Impulse buys can be fun for a moment, but what purpose are your purchases serving in your quarantine life? For example, updating your wardrobe probably isn’t pressing if you’re working from home and not leaving the house for social activities. 

Purchases that will improve your mood or mental health, like supplies for a hobby, can actually be incredibly rewarding and worth the spend. That being said, ask yourself if you can get the supplies for a cheaper price before going ahead with the purchase, or if you might have supplies around the house that could work just as well. For example, you could use a paper grocery bag or stylized cardboard instead of buying an expensive canvas for a painting day. 

2. Will the purchase help improve your resume for the future?

While any unnecessary purchases during a pandemic can be hard to justify, some will qualify you to make more money once this is over. With extra time on your hands, you can work toward goals you may have had for years but have never had time to complete. Getting certified in a specialty skill online is a great example of this. 

For example, if your work touches the functions of marketing, social media or web design, you can get an Adobe Creative Suite certification that can be a valuable selling point when added to your resume. Anything from Photoshop to InDesign to Illustrator takes time to learn, but could give you an edge when trying to land a future job or take your career in a more lucrative direction.

If you can afford the cost, purchasing educational tools over material goods can be a smart move. 

3. Do you have enough cash on hand to pay your bills?

Before all else, make sure you have enough money to survive right now. This includes budgeting for rent and groceries, not to mention a savings account for unexpected bills, if possible. Online shopping during a pandemic should come second to the essentials, so make sure you have yourself taken care of before moving forward with discretionary purchases. 

If you can avoid going into debt during these uncertain times, you should. Beware of putting purchases on credit cards if it’s at all possible to get by without falling below the red line. Even if you can afford to get by this month, next month could be a different story—increased uncertainty with job security should equate to increased precautions taken with your finances. 

Strategic ways to use your funds

You only have limited funds, how should you be spending to get the most from every dollar? 

1. Build your emergency fund

If you’re able to save any money at all, start working on an emergency fund to give yourself peace of mind. Once you’ve established your new monthly income given any changes incurred by COVID-19, decide if you’re able to put aside a monthly amount. Even $20 a month is better than ending up in a financial bind with no nest egg to fall back on. With the Cashco Mom’s Match Savings Account you can get a match for every $10 you save, up to $120, so those small efforts to save can really start adding up. 

If possible, keep your emergency fund in a savings account and not your chequing account. You’ll want to get a savings account with no or low monthly fees and either a savings incentive or high interest rate. 

2. Keep up with bills

If you’re given the option to get a rent deferral, or forbearance on your mortgage or credit card payments, weigh the pros and cons before going through with that plan. You will be expected to repay the money at some point, meaning that your financial burden will continue to accumulate the longer you push off payments. In fact, some landlords might even require you to pay your total deferred rent the following month plus the new month’s rent. 

If you can cut back on unnecessary lifestyle purchases in favor of keeping up on bills, do it. You’ll thank yourself later. 

3. Grow your money

If you have extra funds, you can use what you have leftover to begin investing. Your online shopping purchases likely won’t increase in value in the future, but if you put your money into investments, it could. You could make a contribution to your RRSP or purchase a Guaranteed Investment Certificate. Even if you can only make a small contribution, every little bit counts, especially when it comes to the compound interest of an RRSP. Never discount the power of investing, even if you feel like what you have to contribute is small. Getting started is a huge accomplishment in itself.