Canada’s inflation rate recently reached 6.7%, which is the fastest increase in over 30 years. As the cost of goods and services rise, many families are apprehensive about what their financial future holds. No matter what your circumstances are, rising inflation will have an impact on your financial situation. However, there are ways to prepare for rising living costs. Take a look at these four top tips and find out how to cope with increasing inflation:
1. Expand Your Knowledge
Terms like ‘inflation’, ‘economy’ and ‘recession’ are used all the time, but it can be hard to determine what they really mean and what impact they have on your day-to-day life. By taking the time to gain a deeper understanding, you’ll have a more accurate idea of how rising inflation will affect you and your family.
With real-life examples, you can establish which costs are expected to rise and by how much. This will give you the opportunity to prepare for increased outgoings and enable you to safeguard your finances as much as possible.
2. Consider What You Can Cut
When inflation rises and the cost-of-living increases, most people need to tighten their belts and cut back on spending. By reducing unnecessary expenditure, you can make savings straight away, so check whether you’re paying for unused subscriptions or outdated services you no longer use. In addition to this, consider which luxuries you’ll be prepared to forego if inflation continues to rise. While you might not need to reduce your spending right away, having a plan in place will make it easier to adjust your expenditure in the future and will give you peace of mind.
3. Create a Contingency Plan
If your disposable income has dropped due to rising costs, you might be dreading an unexpected bill arriving. Unfortunately, unforeseen costs can arise at any time, which is why you need to have a contingency plan in place to deal with them. Paying into an emergency savings account is a good way to prepare for such eventualities, but it can take time to build up enough to cover essential costs.
In the meantime, consider how you’ll deal with emergency expenses if and when they arise. You might decide to get instant loan without credit check in Canada, for example, or you may have family and friends you can ask for assistance.
4. Research Before You Buy
When you want to reduce your spending, do as much research as possible before you make a purchase. Simple things, like comparing retailers instead of going to your regular store can uncover significant savings opportunities and make your money stretch a little further.
Dealing with Financial Stress
Financial worries can impact your physical and mental health, but help is at hand. With professional advice or debt counselling, you can get your finances in order and create a reliable strategy that will help you to achieve your goals. While the current high rate of inflation is affecting millions of Canadians, making relatively moderate changes to your spending habits can be an effective way to protect your financial status and alleviate money worries.
Disclaimer: This content does not necessarily represent the views of IWB.