The COVID-19 pandemic has caused tremendous uncertainty and unprecedented volatility in today’s financial markets. These challenging conditions may be causing you significant stress on several fronts, including your personal finances.

More than ever, it’s important to remain focused on a few key tactics and return to financial basics. The following tips can help you stay on track and provide some comfort as we get through these unsettling times.

1. Focus on long-term goals

Take this opportunity to review your personalized financial plan with your advisor. If you do not have a plan yet, work with your advisor to create one. A financial plan can help clarify your objectives and serves as a roadmap for your investments, highlighting how your long-term goals are ultimately not impacted by day-to-day events. Focusing on those goals may help you to be less uneasy about current volatility.

It is also important to revisit your plan regularly to confirm that you are still on track to meet your goals, or if adjustments should be made. While you may believe it is necessary to delay some of your plans given today’s market conditions, a review of your plan may reveal that, despite recent losses, your previous gains have put you ahead and that you are still on target to meet your goals.

2. Undertake a strategic review of your cash flow

Now is an opportune time to review your cash flow, which can be done using a simple exercise where expenses are divided into two categories: discretionary and non-discretionary. Review your expenses and remove or reduce any discretionary (non-essential) costs. Focus on budgeting for the non-discretionary costs that are “needs,” such as groceries, mortgage payments, rent, hydro, etc.

You may find that you are spending less as a result of working from home, not eating out or simply spending more leisure time at home. With these potential savings, consider temporarily pausing any regular withdrawals from your investments. Research has shown that withdrawing at low points during volatile conditions can have a significant impact on your ability to create sustainable cash flow down the road.

Retirees should review the benefits of the federal government’s recent legislation that allows Registered Retirement Income Fund (RRIF) withdrawal amounts to be reduced by 25% (provided you haven’t already withdrawn your annual minimum in 2020). In both cases, if you leave more money working for you in your portfolio, you can participate in the eventual market recovery.

However, if cash flow becomes challenging in the weeks or months ahead, consider reducing discretionary (non-essential) expenses where possible, or postponing large purchases until your financial situation stabilizes. Also, if your employment income has been negatively impacted, explore the various support programs the government and financial institutions have put in place to ease the pressure. You may be eligible for the child benefits, additional GST/HST credits, mortgage and other debt support and a deferral of student loans. *Update: New requests for payment deferrals can no longer be submitted at Scotiabank. For more information, visit the Government of Canada website and the Scotiabank COVID-19 support hub on

3. Keep calm and carry on with your plan

If you have a plan that includes making investments toward longer-term goals – such as retirement, education or a major purchase –continue making regular contributions toward those goals and into registered saving vehicles like Registered Retirement Savings Plans (RRSPs), Tax-Free Savings Accounts (TFSAs) and Registered Education Savings Plans (RESPs), if you are able to.

By doing so, you will not only continue to take advantage of tax-sheltering and government benefits, such as RESP grants, but you can limit market risk through dollar-cost-averaging, where investing regularly may give you a better chance to reap the rewards when the market rebounds.

What is dollar-cost-averaging? Dollar-cost averaging is an investment technique used during volatile markets to help reduce the risk of timing a single lump-sum investment. By investing a fixed-dollar amount on a regular basis, dollar-cost averaging helps control the effect of market volatility by smoothing out the average cost per investment unit purchased. Over time, dollar-cost averaging could result in a lower average cost and a higher return.

Remember, it’s about sticking with your plan. As you review your portfolio with your advisor, you may find opportunities to improve the tax efficiency of your investments. If you do find there is a need to make changes, there may be a benefit to taking losses now in order to offset any capital gains you reported in the last three tax years, or into the future.

4. Be prepare for the unexpected

COVID-19 has us all reevaluating our current situation to ensure our families are protected in the event of an unexpected emergency. Take the time to review your estate plan and ensure your Wills and Powers of Attorney are up to date and reflect your wishes. Remember the importance of life insurance; review your policy to ensure it’s appropriate for you and your family. Finally, always remember to have a cash reserve – money that is easily accessible in an emergency to cover at least three to six months of living expenses.

Would you be able to continue meeting your financial obligations if the unexpected happened? A sudden illness, disability or death can put a substantial strain on a families’ finances. Making regular payments towards a mortgage, credit card, loan or line of credit may become difficult.

Scotia Creditor Insurance is optional protection that can help pay off your debt or cover your monthly payments in the case of death, certain, specified critical illnesses, disability, job loss or a strike or lockout. It can also bring you peace of mind knowing your family is financially protected if the unexpected happens.

Visit to try out our Protection Planner tool to determine if you have sufficient insurance to cover your credit obligations. You can also speak with a Scotiabank advisor, who will explain the available coverage options and recommend the appropriate solution for your specific financial situation.

5. A financial plan is key

Having a financial plan will help you not to react hastily and make emotional decisions during trying times. A financial plan is designed to help answer three fundamental questions:

  • Where are you now financially?
  • Where would you like to be?
  • And how will you get there?

Whether you want to retire comfortably, make a major purchase, or save for your children’s education – having a financial plan is important. With it, you can take better control of your finances and know you have a plan in place to help you achieve your goals.

With our knowledgeable advisors, financial planning tools and range of investment options to choose from, we can help you create a financial plan that’s right for you. Talk to a Scotiabank advisor today.

Acting on these few basic tips may provide you with some confidence and peace of mind during these uncertain times. While we can’t always control what is happening around us, it is essential to stay focused on what is most important to us and what we can control to help alleviate some stress.


This article originally appeared in Advice Matters.


Legal Disclaimer: This article is provided for information purposes only. It is not to be relied upon as financial, tax or investment advice or guarantees about the future, nor should it be considered a recommendation to buy or sell. Information contained in this article, including information relating to interest rates, market conditions, tax rules, and other investment factors are subject to change without notice and The Bank of Nova Scotia is not responsible to update this information. All third party sources are believed to be accurate and reliable as of the date of publication and The Bank of Nova Scotia does not guarantee its accuracy or reliability. Readers should consult their own professional advisor for specific financial, investment and/or tax advice tailored to their needs to ensure that individual circumstances are considered properly and action is taken based on the latest available information.