Collect your debts, and set up a rainy-day fund
Collect on money owing
Murdoch has also made a point of getting her billings on track at work. “I’m self-employed,” she says. “I’ve been doing monthly billings on smaller accounts too, rather than waiting and letting the amount owing get bigger. If the economy changes for the worse, there’s always a chance people won’t be able to pay their bills.”
Set up a rainy-day fund
If you don’t already have an emergency fund, it’s time to establish one. That way you’ll be able to cope if you’re confronted with one of life’s costly surprises, from temporary job loss to a necessary car repair. Ideally, says Davis, your fund should enable you to cover three to six months’ worth of expenses. Can’t come up with the cash in the short term? At the very least, make sure you have a line of credit to tide you over in a pinch. “It’s best to get a line of credit while you’re still employed,” points out Davis. “Banks aren’t crazy about handing out money once you’ve lost your job.”
Stay working
Susan Cottrell* of Toronto, 55, works two commission-based jobs in publishing sales, but she’s not sure either of her employers will make it through the current downturn. “I’m actively pursuing other things before the bottom falls out,” she says. “I spend a couple of hours a day on Workopolis and Craigslist, as well as sending out letters and resumés.”
Even if you’re not planning on job hunting, it’s in your best interest to network by attending industry association meetings or seminars, or keeping in touch with former colleagues, advises Rick Richter, an executive recruiter with Wwwork.com in Toronto. “That way if you’re downsized or your company closes, you can hit the ground running. You have some contacts to call on.” He also suggests updating your resumé and applying to any interesting positions posted on a job site like Monster.ca.
Hold on to your home
House prices in Canada have definitely softened since their peak. Nationally, the Canadian Real Estate Association is predicting a 2.1 per cent drop in housing prices in 2009, with areas like B.C. — expecting a 7.8 per cent decline — particularly hard hit. Skelly hasn’t yet seen prices drop dramatically in the downtown Toronto neighbourhood where she sells real estate, but says houses are definitely not moving as quickly. “It used to take a week for a house to sell,” she says. “But I’ve had a house on the market for five weeks now and another for three weeks. People aren’t jumping on things like they did before.”
If you’re looking to cash out your house to pay for retirement, hold off until at least spring, she advises. And if you must sell now, make sure the deal is sealed before you buy another property. “You might have to live in someone’s basement for a while, but that’s better than having to carry two houses,” points out Skelly. “And I’m anticipating it is going to be more difficult to get bridge financing.” On the other hand, she speculates, it’s probably a good time to purchase an investment property. “First of all, there are likely to be more renters out there in future and secondly, with houses sitting on the market longer, you have a better chance of getting a good buy.”
