One silver lining in the COVID lockdown earlier this year is that it significantly improved our finances.
Most of the headlines on personal finance in recent months have centred on the income side of the equation – people not working or losing their jobs and seeing their incomes decline in the process. But there is the other side of the financial statement – the balance sheet – and that one actually improved.
Our net worth went down sharply in the first quarter of this year – all of the reduction coming in the last week or two of the quarter as the stock market fell, taking the value of portfolios, RRSPs and pensions with it. But all of reduction was more than recaptured in the second quarter. And we ended up seeing our worth improve.
One of the factors at play was not being able to spend. With many stores and restaurants closed or offering limited service, we ended up saving more and even paying down debt while not adding on more debt. Our debt-to-income ratio ended Q2 at its healthiest point in ten years.
Source: http://www.rbc.com/economics/daily-economic-update/CA_HouseholdDebt_Q2_2020.pdf
