14 Things You Can Do to Survive the Economic Apocalypse of 2016


Alberta Economy 2016

Things Seem Bad in Alberta

I'm normally one of the most positive, bullish people you'll know. I first moved to Alberta in 1994 and, compared to Saskatchewan at the time, it seemed like the streets were paved with gold. Even in 1997 when oil prices collapsed, I thought things were pretty good. What did I know? I was a student - but I as a student with a job. As this recent article in the Financial Post points out, even though they're low, oil prices alone aren't the cause of Alberta's economic problems at the moment.

But They Could Be Worse

While we're hearing about mass layoffs in Alberta, house prices dropping dramatically in Fort McMurray, and home sales in Calgary down 36.4% in October, and where the only things going up seem to be taxes, the unemployment rate and the suicide rate, things look pretty bleak. It's hard to stay positive when it seems like all the headlines are negative. In fact, it's hard to see an end in sight. As Albertans, who are a hardy people, know, there is always hope. Here's some of the good(ish) news:

What will it take for things to improve?

Higher oil and gas prices? Political bailouts for companies? A miracle?

No. It starts with you. You need a plan. Here's a start:

14 Things You Can Do to Survive the Economic Apocalypse of 2016, Alberta Edition:

  1. Get your financial house in order with a financial plan, budget, cashflow plan.

  2. Cut unnecessary spending and waste. Think Netflix vs. Cable. Think McCafe vs. Starbucks. Think Walmart vs.

  3. Consolidate high interest debts into one loan, one payment, and a lower rate.

  4. If you’re a homeowner with equity, refinance your mortgage to lower your interest rate, or payments, and/or pay off high interest debt. Especially while you still have equity.

  5. Get a personal line of credit to have as an emergency fund in case you need it. (Get it BEFORE you need it, because they won’t approve you when you do need it). If you have a 3 month rainy day savings fund then good for you. Get the line of credit too.

  6. Borrowing Rule #1: Get approved before you need to, because when you need to you can’t get approved. (AKA the “Bank will give you an umbrella when it’s sunny out rule”)

  7. Make sure you have a Will to properly protect your family in case Alberta turns into a scene from Mad Max. A Will is something a lawyer does for you, not something you buy at the registry office and not your really strong neighbour, William.

  8. Get your life and disability coverage up to date. Experts say that coverage from your employer is often insufficient in the case of a tragedy. Experts also say that if you lose your job that coverage disappears.

  9. Purchase Layoff Insurance to help supplement your EI in the case of a job loss due to the economic challenges we’re facing. This is a new, but very timely, product in the market, because, you know, layoffs. Lots of them. Talk to our guy Tyler the CFP about it, or learn more about Layoff Insurance at layoffinsurance.ca.

  10. Get a competitive home and auto insurance quote to see if you can save some money, because saving money is better than not saving money. Making sure your coverage actually covers you is another good thing.

  11. Consider buying a revenue property or two and getting renters to help make the payments for you.

  12. Renovate your existing home by refinancing while interest rates are low. 2-3% interest rates and ~2% inflation means that borrowing money is almost free. See #1 about having a plan though.

  13. Add a legal suite to an existing home to improve your cashflow and the value of your home.

  14. Be opportunistic! If your finances are in good shape, an economic downturn often presents buying opportunities for financial investments and real estate. Many wealthy people have gotten there by buying when the market is slower. If you’re patient and diligent there will be opportunities to seize.

Most of all, never, NEVER, give up.

It always gets better, nothing is forever, and, if worse comes to worst, you can always move to Saskatchewan like Chris Jones. Go Riders!

Let us know in the comments below how you hope to overcome these difficulties, and if you have any suggestions for your fellow Albertans. Let's stick together and get through this.

President of First Foundation Residential Mortgages and First Foundation Insurance. Live in Edmonton but cheer for the Riders. I have lots of kids. Follow me on Twitter @gordmccallum

Learn more about Gordon McCallum