Inflation keeps going up. How do you protect yourself from rising prices?
As inflation rates accelerate at the fastest level in 30 years, people may be wondering how they can best protect their personal finances.
According to new data released by Statistics Canada on Wednesday, inflation was 4.8 per cent last month in Canada, up from 4.7 per cent in November. That pace hasn't been seen since September 1991.
In Ontario, inflation was even higher at 5.2 per cent.
CTV News Toronto asked Chief Financial Commentator Patricia Lovett-Reid what this means for people and how they can prepare for what’s ahead.
Lovett-Reid said the most immediate effect will likely be an increase in interest rates.
"It would be hard to find an economist on Bay Street that doesn’t think the bank isn't going to move at least 25 basis points next week," she said.
"We're paying more for just about everything. So, for the first time in a long time, we want the bank to raise interest rates to slow inflation down."
People wearing masks shop at a grocery store in Moncton, N.B., on Wednesday, September, 22, 2021. THE CANADIAN PRESS/Christopher Katsarov
She said raising interest rates will lower people’s ability to spend, and in turn keep inflation rates in check.
"It reduces the purchasing power of people who have variable rate mortgages that are tied to the bank rate, because they have to put more money towards their mortgage,” Lovett-Reid said. “They have less to go out spending."
So what should you do?
Lovett-Reid suggests is people "do their homework" and explore the options with their mortgage.
She said it could be beneficial to "start thinking about moving into fixed-rate mortgages."
While Lovett-Reid said that won't be the solution for everyone, it't important to at least ask questions.
"I think you have proactive at this point," she said. "You don't want to become complacent."
CUT BACK ON SPENDING
Lovett-Reid said during times of high inflation it's important to understand where all your money is being spent and cutback on unnecessary goods.
She said people should ensure they know where each dollar they earn is spent and constantly ensure they're "getting the best bang for their buck."
She said a good example of inflation right now is streaming services. This week, Netflix announced it would be raising it's prices for users.
"They're small amounts, but incremental amounts add up to a lot of over the year," she said.
DON'T PANIC
Lovett-Reid said while the news headlines about inflation can seem scary for people, it's important to understand your own financial situation.
"I think the fact is that you have to understand where your household is at, and what your basket of goods really cost," she said. "For example, we saw inflation tick higher for cars, but you may not be in the market for a car."
She said people need to understand their needs "versus panicking from a headline number."
Overall, Lovett-Reid said there isn’t one single thing that will help save consumers money during this period of high inflation.
"It's going to be a series of doing a lot of little things," she said. "It's not about the big win."
CTVNews.ca Top Stories
BREAKING Alice Munro, Nobel literature winner revered as short story master, dead at 92
Nobel laureate Alice Munro, the Canadian literary giant who became one of the world's most esteemed contemporary authors and one of history's most honoured short story writers, has died at age 92.
Latest updates on air quality alerts, and when the smoke may reach Ontario and Quebec
Wildfires have led Environment Canada to issue air quality advisories for parts of B.C., Alberta, Manitoba, Saskatchewan and the Northwest Territories, as forecasters warn the smoke could drift farther east.
Are these Canada's best restaurants? Annual top 100 list revealed
The annual list of Canada's top restaurants in the country was just released and here are the places that made the 2024 cut.
Attack on prison van in France kills 2 officers, inmate escapes
Armed assailants killed two French prison officers and seriously wounded three others in an attack on a convoy in Normandy on Tuesday and an inmate escaped, officials said.
Maximum payout for LifeLabs class-action drops from $150 estimate to $7.86
Canadian LifeLabs customers who filed an application for a class-action settlement began receiving their payments this week, though at a much lower amount than initially expected.
Steal a car, lose your driver's licence for 10 years under new Ontario proposal
Repeat car thieves may face lengthy licence bans under proposed changes to Ontario’s Highway Traffic Act.
$1.6B parts plant for Honda electric vehicle batteries coming to Niagara Region
A Japanese company has announced it will build an approximately $1.6-billion plant in Ontario's Niagara Region that will make a key electric vehicle battery component as part of Honda's supply chain in the province.
B.C. brings in law on name changes on day that child killer's new identity revealed
The BC NDP have tabled legislation aimed at stopping people who have committed certain heinous acts from changing their names.
Manitoba premier to visit areas impacted by wildfire
Manitoba Premier Wab Kinew will get a close-up look at the devastation from a large wildfire burning in northern Manitoba Tuesday.