How can Canadians survive high inflationary times

In today’s economy, the cost of living is continually rising, leading to what is known as inflation. Inflation is a general rise in prices meaning that the purchasing power of money is reduced. Canadians are feeling the pinch of increasing premiums, taxes, food and housing costs due to a higher inflation rate (2.8 percent). This means that Canadians will struggle to meet their financial responsibilities and may need to come up with a plan to survive these high inflationary times.

The first step in handling high inflation is understanding the cause of it. There can be multiple influences in increased inflation including rising fuel and energy prices, higher taxes, food supplies, global economic factors, and increased prices charged by businesses. A basic understanding can help Canadians make decisions such as deciding to buy now or wait, which products to purchase, and how to adjust financial plans.

The second step in managing high inflationary times is making sure that you invest and save wisely. Stashing your money into a high yield savings account will help your buying power withstand inflation. The key is choosing an account with the highest rate of return and least inflated fees. Also, if Canadians have a comfortable amount of money saved, investing it in a mutual fund will provide a better rate of return than a regular savings account. Canadians should also switch high-interest debt such as credit cards to ones with lower interest. This helps create a healthy and active plan for dealing with debt payments. Additionally, considering a Certificate of Deposit (CD) investment and monitoring stock markets and discounted earnings can be beneficial in the long run.

Another method of minimizing the effect of inflation on Canadians is to maximize income. The goal is to substantially reduce costs and limit expenses. Canadians should try to reduce discretionary spending by canceling expensive memberships, eating at home, pay with cash, drive low cost cars, and purchase items on sale. In order to further maximize income, Canadians should request a raise from their current employers. Canadians should do extensive research to ensure they are asking for a reasonable amount and back it up with achievement. Additionally, they could look into starting a second job to diversify and therefore increase their income. The second job may have to be in a completely different field and may even require earning a new set of skills. However, this could prove to be a great way to mitigate the effects of rising costs that come with high inflation.

Another money-saving approach would be for Canadians to take a close look at their debt. A great way to achieve financial freedom is to pay off existing debts first. Canadians should consider making early payments on loans, refinancing to smaller loan payments, and entirely avoiding taking on additional debts (such a consumer loans). More often than not, exorbitant credit card bills comprise a considerable part of household debt and it falls upon the indebted Canadians to make a conscious effort to pay them off as soon as possible, to lessen their debt burden. They should especially consider closing existing credit cards lines to dampen the temptation of overspending..

Finally, Canadians should think strategically about where they put their money. Looking for more reliable investments and options is essential. This means that individuals should plan out their investments for the long-term – the stock market, which’s value often drops and rises, can be unpredictable and risky to invest in. To increase stocking power, Canadians should consider putting money in physical assets such as precious metals, commodities, and real estate.

In conclusion, with an increased inflation rate, Canadians are feeling the financial stress and need to develop a plan to best handle this period of economic hardship. By understanding the cause of inflation and establishing habits such as saving and investing to secure existing resources, Canadians can get on the path to financial freedom and increase their ability to survive during high inflationary times.