The working world is becoming more complex with Canadians switching jobs more frequently. Some work more than one part-time job to make ends meet and many are earning their living through contractContract A binding written or verbal agreement that can be enforced by law.+ read full definition employment. According to Statistics Canada, Canada’s part-time workforce has continually grown in the past 5 years with 3,311,200 part-time workers in 2011 compared to 3,072,900 in 2007.
If you enter into a contract role, you will need to figure out how personal finance matters, such as health insuranceHealth insurance Insurance that covers some or all of your medical bills if you get sick or hurt.+ read full definition, retirement contributions and taxes will be taken care of if you find yourself unemployed.
In a 2012 survey, 47% of Canadians surveyed revealed they would face financial hardships if their pay cheque was delayed by a week. (Source: Vanier Institute of the Family)
Even if your job is secure, it may change someday. Prepare financially by following these 5 key steps.
- Plan for emergencies – have enough in emergency savings to pay your bills and living
expenses for 3 to 6 months.
- Pay down debt – the sooner you pay off your debtDebt Money that you have borrowed. You must repay the loan, with interest, by a set date.+ read full definition, the sooner you can investInvest To use money for the purpose of making more money by making an investment. Often involves risk.+ read full definition your money and
- Decide how much money you’ll need if your work situation changes – figure out how you would
replace your income if you had to.
- Learn about your optionsOptions An investment that gives you the right to buy or sell it at a set price by a set date. The buy right is termed a “call” option, and the sell right is termed a “put” option. You buy options on a stock exchange.+ read full definition when you need help replacing income – you may qualify for some
workplace and government programs to help maintain your cash flowCash flow The sums of cash a business gets in and spends out during a set period of time.+ read full definition.
- Know your insurance needs – if your workplace provides personal insurance coverage, such as
life or critical illness insurance, you may need to replace them if your job changes.
Check out these sites for more information:
- Visit Service Canada for details on Employment Insurance.
- Find out more about Ontario Works and its program for those who need temporary financial assistance.
7.3% of Canadians were unemployed in 2012. (Source: Statistics Canada)
5 key points
- Plan for emergencies
- Pay down debt
- Decide how much money you’ll need
- Learn all your options
- Know your insurance needs