During periods of high inflation, everyone wants to find creative and simple ways to stretch their income. Unfortunately, many of the traditional income stretching methods, like clipping coupons and cutting back on expenses, no longer work as well as they used to. Don’t worry, there are still plenty of ways to make your money go further. Let’s explore some of the best strategies for dealing with high inflation.
Can’t keep up with the cost of living
As the cost of living in Canada continues to rise, many find it increasingly difficult to make ends meet and stay out of debt. According to a recent study by the Angus Reid Institute, 53% of all Canadians are struggling to keep up with the cost of living.
The study found that increased prices of food, shelter, and clothing are the biggest sources of financial stress. Other stressors were transportation costs, childcare expenses, and rising utility bills.
Over half of respondents reported making at least one major sacrifice to prevent dipping into their savings accounts. Some of the more common sacrifices were eating out less often, delaying major purchases, and taking on more debt.
Consolidated Credit Canada is here to guide and help you with your debt repayment.
Bank of Canada increasing interest rate to fight inflation
Inflation hit 5.1% in January, the highest it has been in 30 years. To keep inflation in check, the Bank of Canada implemented an interest rate hike. This increase will also make borrowing more expensive for consumers and businesses. This could dampen spending, which would, in turn, slow down economic growth.
The interest rate hike is just one of many measures that the Bank of Canada is taking to keep inflation under control. Other steps include selling off its holdings of government bonds and increasing the amount of money that banks must hold as reserves.
Ways to make your income last with high inflation
If you’re worried about high prices eating into your savings money, there are a few things you can do to reduce the effect of inflation and stretch your income,
Cut the cost of your debt
One way to save money is to consolidate all your debts into one loan with a low interest rate. This can be a good option if you can get approved for a consolidation loan with favourable terms.
Another good option, if you’re struggling to make your monthly payments, is to contact your creditors and ask for a lower interest rate. Many creditors are willing to work with customers who are having financial difficulties.
Make use of community resources
Programs offered by the government and non-profit organizations can help with expenses like food and utility. When needed, these resources can stretch your budget and help make it a little easier to weather the storms of high inflation.
Hunt down long-lost money
Sometimes money can be found in unexpected places. A lot of money goes unclaimed every year. There are a few key places to look for any waiting for you to claim it. The first place to check is with the CRA. Taxes can be accidentally overpaid and refunds get missed. If you fall into either one of those scenarios the CRA may owe you money.
Unclaimed bank balances are another good place to look. Did you or a member of your family ever have a federally regulated bank account you’ve neglected to close? It happens. People get busy with their lives and small balances are forgotten.
If the account has been inactive for less than ten years, contact the bank where you opened your account. After ten years, unclaimed balances are transferred to the Bank of Canada, where the money is held for thirty years. Claiming it is simply a matter of filling out an online claim request.
Shop around for lower insurance rates
Shopping around online is a great way to cut down on insurance rates. There are a number of websites that allow you to compare rates from different insurance companies. These websites make it easy to find the best deal on your car, home and even life insurance.
Another way to get lower insurance rates is by contacting a local independent agent. They usually work with several insurance companies and often find you a better rate than if you shopped around on your own.
Redeem your rewards points
If you have a lot of rewards points on credit cards or in customer loyalty programs, now is the time to start using them. With inflation on the rise, the purchasing power of your points will decrease over time. Redeeming your rewards points for things you need or want now will give you the most value.
Before redeeming your points though, take a little time to do some price comparison. Depending on what you find out it may not be worth giving up all those hard-earned points.
Look for discounts on your monthly bills
One way to really help stretch your income is to look for discounts on your monthly bills. There are a couple of good ways to do that.
The first is just asking, Call your service providers and ask for a discount. Many companies are willing to offer a small discount if you ask for it. This could include your cable or phone company, your internet provider, or even your gym membership.
The second is doing a bit of homework. Shop around for better deals. This could mean switching to a cheaper cell phone plan, negotiating a lower rate with your current service provider, or looking for a new insurance company.
Shop online to save money
One way to save money is to search online for deals and coupons. Many online retailers offer sales and discounts on their products. You can also find coupon codes for specific items that you need to purchase. Searching the company name and “coupon code” works well. Or there are many free apps you can install on your computer that will do the searching for you.
With rising inflation, it’s more important than ever to find ways to make your income last. If you’re feeling overwhelmed by rising inflation, don’t worry, we’re here to help. We offer a wide range of services to help you get out of debt for good. If you need assistance managing your finances during these tough times, give us a call today at (844)-402-3073.