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Sticker shock – Tips to fight inflation.

Sticker shock – Tips to fight inflation.

Unless you’re living off the land deep in the Northeastern BC wilderness, it’s likely that inflation is hitting you in the pocketbook — hard.

Here’s a news flash: inflation — when the demand for goods outpaces supply — is getting worse.

Month-over-month inflation is driving prices higher at the grocery store and gas station, with predictions of $2.50/litre fuel by summer. Consumer goods like furniture, used cars and car rentals, airline fares and hotels are shooting upwards. House prices across BC have jumped significantly. 

Here are some figures to chew on: Statistics Canada reports that the Consumer Price Index, which represents changes in prices as experienced by Canadian consumers, rose 5.7 percent in February from the year earlier — the highest inflation rate in 30 years. Gas prices rose by 30 percent in 2021. Food prices, which increased by 3 to 5 percent in 2021, are expected to leap another 5 to 7 percent this year.

Production shortages and shipment bottlenecks — holdovers from the pandemic — are largely to blame for higher prices. The rise in fuel has a lot to do with what’s happening globally.   

If you’re like most Canadians, you’re feeling the weight of household debt. Inflation is an added burden but you can tackle debt and inflation by creating a budget. It’s simpler than you might think, and if you need help, North Peace Savings & Credit Union is here for you.

Track expenses

  • How much are you spending and where? Inflation will affect areas of spending differently. If you’re a family with kids, more of your income will go towards groceries.
  • Establish “needs” versus “wants.”
    • Needs include: mortgage or rent payments, groceries, utilities, insurance and medications.
    • Wants include: the latest iPhone, new car, dining out, a trip to Mexico — even alcohol.

Create a balanced budget

  • First, establish “needs” in your budget, which gives you a sense of how much leftover income you have for investments as well as “wants.”
  • Current inflationary rates must be taken into account when establishing as budget, as you need to anticipate increases in food, transportation, utilities and clothing.
  • Identify potential savings — even small ones — such as using credit card points to pay down debt or buy gifts etc..
  • Find potential fuel savings by downloading the GasBuddy app.
  • Walk or cycle more to save fuel and get into shape. 
  • Plan on a “staycation” for your summer holiday. No place is more beautiful than Northeastern BC.

Investments

  • Don’t neglect your investments, down payment fund or retirement plans, even though your budget is feeling stretched. Consider putting more into real estate and equities, which provide better protection against inflation in comparison to GICs or bonds.
  • Establish a rainy-day savings fund to help buffer against future price shocks and emergencies: your vehicle breaks down, the furnace dies or Max the dog gets sick.
  • A North Peace Savings & Credit Union Advisors can help you re-balance your investment portfolio or make new investments that reflect your changing financial circumstances.

Credit Card Debt

  • If you have more than one credit card, pay off the one with the highest interest rate first and pay the minimum payments on the others. As soon as you’ve cleared the balance on the first card, increase the payment on the card with the next highest interest rate. Eventually, your cards will be paid off.
  • Talk to a North Peace Savings & Credit Union Advisor about a low-interest line of credit to pay off high-interest cards.

Worried about inflation? Connect with North Peace Savings & Credit Union and let an Advisor help you develop a plan.

Shannon Luscombe

Shannon Luscombe is a Manager, Retail Advisory with North Peace Savings and Credit Union with a decade of experience working within the Credit Union system.   She moved from Vancouver Island in 2019 to be with her husband who works in the Oil & Gas industry, bringing with her, Credit Union knowledge and experience to join the NPSCU team.  She has a passion for helping Members succeed in achieving their financial goals, by sharing strategies and advice gained from a combination of education and experience in the financial industry.

Shannon says “the friendly people of Fort St John have made me feel right at home here and I am loving Northern life. I enjoy exploring the Peace region and all the beauty it has to offer with outdoor hiking, biking, and kayaking.”