The word Inflation is everywhere these days; we are facing a hike in the Bank of Canada’s key interest rates; gas prices have risen again and let’s not mention the grocery bill and for some, mortgage cost. Here are 10 tips to help you better cope with inflation that you’re probably feeling in all aspects of your life.
Prepare a Budget: Break down all your sources of income and all your expenses. It is not uncommon for people to find that their budget is in deficit right from the start. It's a difficult but effective exercise.
Set Up an Emergency Fund: Preparing for the future as best as possible and reducing debt will prevent you from having to resort to high-interest loans.
Save Smart: By moving some cash from your chequing account to a high-interest tax-free savings account, you will instantly increase the return, while maintaining access to your money at all times.
Consume Better: Reduce your frequency of consumption where possible. For example, your means of transport, gas, and utilities.
Keep Away from Temptations: Contributing to your TFSA or RRSP will force you to cut back on non-essentials for a few months. In addition to a possible tax refund as well.
Be Consistent!: Research shows that systematic investing is by far the best investment approach and yields long-term results.
Don’t Make Decisions Based on Emotions: When you are feeling worried or overwhelmed with anxiety, it’s best to take a step back from the situation and avoid making impulsive purchases.
Identify Non-Essential Expenses: Discretionary spending, outings, leisure activities, and eating out are expenses that can be cut out.
Find Out More: Finance is like a big piece of the pie, tackling it one piece at a time. Take the time to fully understand and implement good financial practices.
Seek the Service of a Professional: Working with a professional rather than going at it alone had repeatedly demonstrated superior results.
If you have a plan in place – it is likely you have already considered the risk of rising inflation and some of these tips. If you don’t have a plan in place just yet – that’s ok! It’s never too late to start.
Until next time,
