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
Half of Canadians have negative opinion of latest Liberal budget: poll
A new poll suggests the Liberals have not won over voters with their latest budget, though there is broad support for their plan to build millions of homes.
Twins from Toronto were Canada's top two female finishers at this year's Boston Marathon
When identical twin sisters Kim and Michelle Krezonoski were invited to compete against some of the world’s most elite female runners at last week’s Boston Marathon, they were in disbelief.
opinion Why you should protect your investments by naming a trusted contact person
Appointing a trusted person to help with financial obligations can give you peace of mind. In his personal finance column for CTVNews.ca, Christopher Liew outlines the key benefits of naming a confidant to take over your financial responsibilities, if the need ever arises.
Ottawa injects another $36M into vaccine injury compensation fund
The federal government has added $36.4 million to a program designed to support people who have been seriously injured or killed by vaccines since the end of 2020.
Senate expenses climbed to $7.2 million in 2023, up nearly 30%
Senators in Canada claimed $7.2 million in expenses in 2023, a nearly 30 per cent increase over the previous year.
'My stomach dropped': Winnipeg man speaks out after being criminally harassed following single online date
A Winnipeg man said a single date gone wrong led to years of criminal harassment, false arrests, stress and depression.
Photographer alleges he was forced to watch Megan Thee Stallion have sex and was unfairly fired
A photographer who worked for Megan Thee Stallion said in a lawsuit filed Tuesday that he was forced to watch her have sex, was unfairly fired soon after and was abused as her employee.
Accused of burglary at stepmother's home, U.S. senator says she wanted her father's ashes: charges
A Minnesota state senator and former broadcast meteorologist told police that she broke into her stepmother's home because her stepmother refused to give her items of sentimental value from her late father, including his ashes, according to burglary charges filed Tuesday.
Australian police arrest 7 alleged teen extremists linked to stabbing of a bishop in a Sydney church
Australian police arrested seven teenagers accused of following a violent extremist ideology in raids across Sydney on Wednesday, as a judge extended a ban on social media platform X sharing video of a knife attack on a bishop that started the criminal investigation.