Friday, July 8, 2022

It is no secret that the cost of living has drastically gone up in the last few years. Prices have gone up in every aspect from groceries to the skyrocketing price of gas to interest rate hikes. This has caused a lot of alarm and concern for Canadians who are struggling to keep themselves financially stable. At YNCU, we know that you may be looking for advice on how to manage your money during times of rising costs. First, let’s look at the definitions of inflation and deflation:

Inflation: Inflation is essentially when the cost of living rises. Typically it is due to supply; if there is little supply and a high demand, prices go up. Inflation means your money will be able to provide you with fewer goods and services than before. Inflation rates in Canada have risen about 5.1% since 1991.

Deflation: Deflation is when the cost of living goes down. What happens is, as prices start to come down from inflation, customers hold off on buying items in the hopes of the prices decreasing even more. This increases consumer purchasing power as companies want business from the customer to avoid losing profits. Deflation can lead to unemployment as companies are not making enough profit from customers. Many economists are concerned about a deflation that is certain to follow the current inflation.

As inflation continues in Canada, we know it can be stressful waiting for prices to drop. Here are four survival tips for managing rapid price increase and deflation:

Build new spending habits

As the prices of everyday items go up and your monthly income stays the same, it is important to keep track of where your money is going. You need to examine your personal financial goals and your current financial situation. You must ensure your budget is realistic and takes into consideration the skyrocketing price of everyday goods. Keeping a budget helps keep you accountable for reaching your financial goals. Read more on the Budgeting Basics!

Look for deals

A great way to keep within your budget and to stay on track with your financial goals is to look for deals and sales. Taking the extra time to do research and learn where the lowest prices are can save you a lot of money in the long run. For example, if you are making a big purchase for a television, consider waiting until after the holidays when the prices will be marked down. These small changes to the way you spend your money can make a huge impact.

Start saving

We know saving money may be difficult with the massive increase in cost of living but working savings into your financial plan will keep you financially secure. Setting aside even a little money every month will ensure you have savings in case of an emergency. You never know when something will happen and it is always best to be prepared. Including savings into your monthly budget can protect you and keep you financially stable through unforeseen circumstances.

Find the best rates by becoming a member

As interest rates rise, along with cost of living, it is critical that you use a financial institution that provides you with the best rates possible. At YNCU, we put our members first. We believe in honest financial services that the big financial institutions simply can’t deliver on. We understand how concerning the rising cost of living can be and we want to help our members be secure in their financial situation. If you are looking for a financial institution that puts you first and offers the best rates, become a member online!

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