Credit: YuriArcursPeopleimages via Freepik
After years of soaring inflation, Canadians may get some relief. According to the Bank of Canada, inflation will return to its usual 2%.
Unfortunately, you may have to wait until 2025 for prices on the shelves to reflect this target. Meanwhile, this levelling out won’t reverse the price hikes made in previous years; it will only ensure future increases won’t rise above accepted targets.
As one of the many cash-strapped Canadians who are struggling to make ends meet, you’re probably sick of seeing how inflation cuts your dollar short. Check out these budgeting tips to help you manage this higher cost of living.
Reduce Your Spending
You can only stretch your money so far when prices are high, especially in Ontario, where prices are generally already higher. Don’t overreach your finances by trying to do too many things. At times of high inflation, you need to pare back your spending.
Your priority is to cover all your usual bills before you make splurges on the fun stuff. Be prepared to cut down on unnecessary spending, especially when it comes to entertainment. You can live without having eight streaming services, your meal box deliveries, or weekly takeout.
That said, be realistic about non-essential spending. Few people can live on necessities alone. You should try to keep a bit of your budget available for small splurges to keep your sanity.
You should also apply a forward-thinking philosophy to your budget that accommodates extra spending. After all, swearing off shopping for all clothes won’t help you if you’re going to have to replace your winter coat soon. This unrealistic goal only makes you feel bad about breaking your word when you have to buy a new jacket.
Don’t Cut Out Savings
Why are savings included in this streamlined budget? They factor in how easily you can handle expenses that you can’t predict to be one of your “needs”.
Suppose your tire blows on the drive to work the same week your cat swallows an elastic band. You need to pay for a tire patch and veterinarian care, but these expenses aren’t part of the usual needs you budget for. If they outstrip what you can afford on your own, savings can bail you out.
Don’t panic if you your savings fall short of these urgent expenses. You might be able to get assistance from a lender like Fora. A Fora Credit line of credit may provide a safety net during emergencies when you need more help than your savings can give. If approved, you can draw against your limit as you need it.
Make Big Changes to Your Life
You pare back your budget to essentials and savings, and you still find it hard to make ends meet. What then? It might be time to think about the bigger picture.
If your income doesn’t serve your current cost of living, consider how you can increase your income. Freshen up your resume and learn how to make a winning cover letter. Start applying to new jobs that promise a bigger benefits package and better pay.
Landing a new job isn’t easy these days, and it may take a lot of time and applications before you get an interview. While you wait, think about what you can do to reduce what your essentials cost. Maybe 2024 is the year you downsize, move to a new neighbourhood, or trade your car in for a transit pass.