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 NDP motion regarding Palestinian statehood passes after major Liberal alterations
A motion from the federal New Democrats initially calling on Canada to recognize the 'State of Palestine' passed amid widespread acrimony on Monday, after the Liberals drastically altered its wording to see the government simply work towards that aim as part of a two-state solution.
'He didn't want to die': Family of Calgary man killed in standoff speaks out
Family of a Calgary man killed after a 30-hour standoff with police last week are speaking out, sharing details of the tense and heart-wrenching experience.
Toronto family doctor who called patient's body 'perfect' suspended for 3 months: tribunal
A family doctor in Toronto has been suspended for three months after a disciplinary tribunal found that he failed to follow proper protocols while examining a patient's breasts and made inappropriate comments about her body.
Ohio mom who left toddler alone 10 days when she went on vacation pleads guilty to aggravated murder
An Ohio mother whose 16-month-old daughter died after being left home alone in a playpen for 10 days last summer while she went on vacation was sentenced Monday to life in prison with no chance of parole.
Retired teacher pleads guilty to paying for sex with 15-year-old in Collingwood, Ont.
In a Barrie courtroom on Monday, a retired high school teacher from the Niagara Region pleaded guilty to sexual touching and obtaining sexual services from a 15-year-old boy in Collingwood in 2021.
Hertz CEO out following electric car 'horror show'
The company, which announced in January it was selling 20,000 of the electric vehicles in its fleet, or about a third of the EVs it owned, is now replacing the CEO who helped build up that fleet, giving it the company’s fifth boss in just four years.
5 charged in Calgary kidnappings that targeted women
Calgary police have charged five men in a pair of kidnappings last year that targeted innocent victims.
Demand soars for solar eclipse glasses in Canada. Are they worth buying?
The demand for total solar eclipse glasses used to safely view the rare celestial event has been ramping up as sellers, along with astronomy and eye-care experts in Canada, warn that viewing the eclipse with the naked eye is dangerous.
Canadian commander of volunteer fighter group dies in Ukraine
A Canadian-born commander of the so-called Norman Brigade, a volunteer fighting group in Ukraine, has died.