How to deal with the cost-of-living crunch

Hey there, time traveller!
This article was published 13/03/2024 (777 days ago), so information in it may no longer be current.

Dear Money Lady Readers,

Most Canadians would define independence as being debt-free, but how is that possible in a rising interest rate market? If the cost of living and buying the basics becomes more expensive but your income stays the same, you will find it hard to keep up with the cost of living – which is a struggle many Canadians are now facing. According to the 2024 RBC Financial Independence poll, 81 per cent of Canadians are worried about their cash flow and have “money concerns about today vs. tomorrow.”

So, what can we do about it? Perhaps we could help each other with this question. Please email me your ways of saving and coping now that the cost of living has increased. I will share your ideas next month.

To get you started, here are my suggestions:

• Planning is my No. 1 inflation buster. When we plan our future tasks, even our daily events, we take control and are better at ensuring the overall outcome. Try tracking your spending in a paper journal or on your phone for the next 30 days. I know this is a chore, but you will be guaranteed to find some things you can change to trim down your spending. You should also never go to the grocery store without a list. Can you meal-prep and plan your meals for the week so you know exactly what to buy without adding the extras that stretch your wallet and your waistline? Budgeting your spending won’t make the cost of essentials go down, but it can make the higher prices easier to manage.

• Do you have a mortgage up for renewal this year? Normally, I would not want you to increase your amortization on a mortgage renewal, but if it increases your monthly cash flow and makes it easier to cope for a few years, it could be worth it. Please remember to adjust your amortization back to the year you plan to retire once you are more financially stable. For those that not renewing this year whose mortgage in good standing, most financial institutions will allow you to skip one monthly payment per year without penalty.

• Everyone should be taking advantage of the many cashback credit cards and rewards point cards now available. I use these cards continuously and love it when I can pay for groceries with my rewards and cashback offers.

• If you need dental care this year, why not take advantage of the Canadian Dental Care Plan now available to all Canadians who do not have access to dental insurance and have a net household income of less than $90,000. This program has a graduated application schedule, which started in December 2023. If you are over 70, you can apply in March, while those aged 65-69 will be eligible in May 2024. All remaining Canadian residents aged 18-65 will wait till spring 2025. Children under 12, they are eligible now until June 2024, when the program will open to all children under the age of 18.

• The Canada Carbon Rebate, formerly known as the climate action incentive payment, is another good benefit available to residents of Alberta, Manitoba, New Brunswick, Newfoundland and Labrador, Nova Scotia, Ontario, P.E.I>, and Saskatchewan. The remaining benefit payout dates for 2024 are: January 15, April 15, July 15, and October 15.

• Finally, remember the fastest way to improve your situation is your potential to earn income. Why not consider getting a part time job or even a new job all together? Did you know that the Canadian government will help with tuition fees for those Canadians wanting to retrain for a new career. To be eligible you must be between the ages of 26-66 and can claim the tuition fees to an eligible educational institution for courses taken to change your occupation, trade or to obtain professional licensing and certifications.