Hi everyone,
Hope you’re doing well. This blog post isn’t about politics or the news, about my thoughts about a personal finance article published online in The Globe and Mail regarding working mothers. The article focuses on working mothers because women traditionally share the bigger responsibility of childcare and multiple priorities, such as paid employment in the workforce . I wanted to write about this article because the advice they provided was useful for all people, not just working mothers, and wanted to share that with you here:
To provide context for this article:
We are experiencing a second wave of COVID-19 infections in Canada– this means that although we were successful at decreasing the rate of new infections during the spring and summer, the rate of infections have been steadily increasing again from fall into winter.
Summary:
As a result, there are new quarantine and lockdown measures across the nation. Although women have often borne the burdens of juggling both priorities, the difference now is that working mothers have less support during the pandemic as daycare centers and schools were shut down, which meant that they dedicated themselves to full-time child raising and home-schooling. Now, some have the option of returning to their old positions after being laid off, but are choosing to opt out of the workforce because the expenses of childcare in this pandemic are too high, such as hiring a private nanny or teachers to host a learning pod. The opportunity cost of opting out of the workforce would be lost earnings (along with savings/investments) and career advancement, though the article ultimately applauds women for prioritizing their family during these difficult times, and tries to support that by offering financial advice.
“If you take a leave of absence, if you hire a part-time teacher, if you get fired, then what is your wiggle room for effectively being able to absorb that decline in money and still carry your bills in the household?”
Second COVID-19 wave has parents struggling to decide whether they can afford to not work
The article suggests minimizing obligatory expenses and cutting non-essential ones to see if one salary could cover the fixed expenses, such as food, housing, and transportation.
The second advice I thought was important was in regards to borrowing money to cover expenses. The article stressed that it was important to only borrow the difference needed. “If the household monthly expenses are still higher than the single source of income, then parents will have to borrow money to fill in the gaps – but this should be done strategically, Ms. Ulmer says. Rather than randomly pulling from a line of credit whenever a bill or expense arises, parents should assess the monthly shortfall and withdraw only that amount in debt.”
Second COVID-19 wave has parents struggling to decide whether they can afford to not work
And because the debt would be more predictable (for example, $6,000 a year), parents could build a recovery plan to address how they would repay it.
For the first piece of advice, I think it’s smart to advocate for a more minimalist lifestyle; it’s unfortunate it took a pandemic and economic recession for people to reel back. I also see it as a lifestyle change and mental shift, that perhaps we don’t really need to consume so much to be happy. Perhaps this way of living will be permanent for some people even after an economic recovery. For the second one, I think that’s pragmatic because it acknowledges the reality that people may be in debt right now to cover their living expenses, but tries to make the best out of a difficult situation. Also, making debt more predictable, it also makes personal finance less daunting and gives the person more control by creating a solution too. I really liked this article, and wanted to share this with you. Although you or I may not be a parent or going through difficult times, it was a useful read to understand how we could strengthen our personal finances and promote saving money for a rainy day (or days).
Talk to you soon,
Guest
