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
Canadian gov't proposes new foreign influence registry as part of wide-spanning new bill
Prime Minister Justin Trudeau's government is proposing a suite of new measures and law changes aimed at countering foreign interference in Canada, amid extensive scrutiny over past meddling attempts and an ever-evolving threat landscape.
Boeing Starliner capsule's first crewed test flight postponed
The long-awaited first crewed test flight of Boeing's new Starliner space capsule was called off for at least 24 hours over a technical issue that launch teams were unable to resolve in time for the planned Monday night lift-off.
Teacher charged in historical sexual assault of Calgary teenage girl
Calgary police have charged a teacher with the alleged sexual assault of a teenage girl more than 20 years ago.
Winnipeg man admits to killing four women, argues he's not criminally responsible
Defence lawyers of Jeremy Skibicki have admitted in court the accused killed four Indigenous women, but argues he is not criminally responsible for the deaths by way of mental disorder – this latest development has triggered a judge-alone trial rather than a jury trial.
Man banned from owning animals after fatal Calgary dog attack
The owner of three Calgary dogs that got loose and mauled a woman to death in 2022 has been ordered to pay a $15,000 fine within one year and banned from owning any animal for 15 years.
East-end Ottawa family dealing with massive rat infestation
Residents in Ottawa’s Elmridge Gardens complex are dealing with a rat infestation that just won’t go away. Now, after doing everything they can to try to fix the issue, they are pleading with the city to step in and help.
Mediterranean staple may lower your risk of death from dementia, study finds
A daily spoonful of olive oil could lower your risk of dying from dementia, according to a new study by Harvard scientists.
An El Nino-less summer is coming. Here's what that could mean for Canada
As Canadians brace themselves for summer temperatures, forecasters say a weakening El Nino cycle doesn’t mean relief from the heat.
Newfoundland and Labrador latest province to tighten rules on Airbnbs
Newfoundland and Labrador is the latest jurisdiction to bring in stricter rules for short-term rentals, with a coming set of regulations that will force operators to register with the provincial government.