‘Winging it is not a plan': How to shore up your finances in uncertain times

CTV News

25-05-2025

Natasha Macmillan, Ratehub.ca's everyday banking expert, seen in this handout photo, says going back to the basics such as budgeting and paying down debt are important to recession-proof finances. THE CANADIAN PRESS/HO-Ratehub.ca **MANDATORY CREDIT**
A myriad of challenges have been plaguing Canadians' personal finances, from the high cost of living to the global trade war that has roiled markets and the economy. It likely has some asking how they can better safeguard — or even recession-proof — their finances.
Experts say while there's no silver bullet, there are several ways people can better position themselves to weather any economic storms.
'People aren't sure what to do with their finances, how to save for themselves, and as we can call it, even recession-proof their finances,' said Natasha Macmillan, Ratehub.ca's everyday banking expert.
'There's a lot of uncertainty and people are feeling uncomfortable.'
Many households are still feeling the pinch from the high cost of living and some are facing or have faced higher mortgage payments upon renewal. On top of that, on-again-off-again tariffs stemming from U.S. President Donald Trump's global trade war have caused disruptions in the world economy and taken a toll on consumer sentiment.
April inflation data from Statistics Canada showed a sharp slowing in the annual rate to 1.7 per cent from 2.3 per cent in March. However, the underlying details signalled stronger price increases. For example, grocery store inflation outpaced the overall consumer price index for a third month in a row.
Elke Rubach, president of Rubach Wealth: Holistic Family Advisors, says recession-proofing is about preparation.
'It's not (about) timing a market but really structuring your life,' she said.
The conversation starts with taking the time to see where a person is headed, Rubach said.
'You can't control the markets. You can control your spending,' she said. 'It starts honestly with being incredibly, brutally honest with a cash flow review.'
Macmillan said she's been relaying to clients the need to go back to basics: reviewing their budget and paying down debt.
Setting a realistic budget, but without being heavily restrictive on spending, could help boost your savings, she said.
Macmillan said it's always good to review your debts and identify any opportunities to save on interest. That can be done by transferring balances from high-interest credit cards to lower-rate options, making additional principal payments if you have extra funds, or negotiating better terms with lenders.
Another step toward recession-proofing your finances is building your emergency fund, Macmillan said.
'Aim to save at least three to six months of essential living costs in an accessible account,' she said.
Macmillan recommended putting emergency funds in a separate high-interest savings account to allow easy access if you need it, but also earns some interest.
'Any extra dollar that you can put away to savings, whether it's cutting on your budget or paying less interest will set you up for success in the long run,' she said.
'Every extra dollar really matters in uncertain times.'
Macmillan said her advice has shifted toward stability and resilience.
'There has been a shift toward low-risk investment strategies that emphasize short-term stability rather than merely pursuing long-term growth,' she said.
Rubach recommends taking stock of what you're invested in.
'We do expect volatility. Can you stomach it? How much can you stomach and for how long?' she asked. If there's a sense of nervousness, she suggests rebalancing the portfolio.
Rubach said permanent life insurance could also add a security blanket when shoring up your financial situation.
'I don't believe that insurance is a solution for everything, but for the right person, a permanent insurance policy can … be a good piggy bank because you build equity over time,' she said.
Overall, she said it's about having a plan that will ultimately be your parachute in difficult circumstances.
'Winging it is not a plan,' she said. 'It's having your house in order, your insurance, your retirement plan, your succession.'
Macmillan said it's important to look at the current economic state and adjust your money decisions.
'We're unsure where we are in the market currently, but it is important to start to build that emergency fund should anything happen in the next few months or quarters,' Macmillan said.
This report by The Canadian Press was first published May 25, 2025.
Ritika Dubey, The Canadian Press