No one wants to retire in debt. But if you are one of the growing…
If you’ve noticed higher price tags on the products you normally buy, then you’re not alone.
Due to the pandemic, and more recently the war in Ukraine, inflation has exponentially increased the cost of living in Canada over the last two years. The price of essentials such as gas and food are soaring, with many products and services costing twice as much as they used to in 2020.
As a result, many Canadians find themselves running out of savings. They’re even refinancing their homes just to avoid Bankruptcy.
But all is not lost. You can do something to protect yourself against the rising cost of living in Ontario.
First off, let’s discuss…
What is inflation?
Put simply, inflation is when the price of goods and services increase, and the value of the money we use to pay for them decreases.
Inflation over time is inevitable. It’s why your grandparents could pay under a dollar each to get into the movies, but you’re currently looking at well over $10 for just one person.
That said, what we are currently experiencing is more than just regular, good old inflation.
What is the rate of inflation in Canada right now?
Because of the shock of COVID-19 and a shortage in supply due to the European war, we are going through what the Deputy Governor of the Bank of Canada refers to as a “perfect storm.”
How can you protect yourself against the rising cost of living?
High inflation impacts every single one of us, regardless of the financial position you find yourself in.
Your secret weapon against inflation is to have your finances in order.
Because when you’ve got your money matters under control, you’re able to weather hard times such as these.
But what does it mean to have your finances in order?
Typically, it means that:
#1. You track your spending and follow a realistic budget.
By tracking your spending, you understand exactly where your money is going and where you can cut back. By budgeting, you take control of your money and tell it where it needs to go. If you already have a budget in place, you’ll need to adjust it to account for the high inflation we’re currently experiencing.
#2. You save money.
When you find ways to cut your expenses, you have more money to put toward your financial goals. There are plenty of resources and websites that offer tips on saving. For example, negotiate lower monthly phone, internet, or cable bills with your providers. Buy generic or store brands over more expensive name brands at the grocery store. Little savings here and there can add up to hundreds every month.
#3. You pay down your debt.
Your budget should account for some part of your income to go toward debt repayment. The idea is to get yourself out of debt so that you can focus your money on savings.
#4. You build an emergency fund.
Life is full of unexpected twists of fate, like an illness that puts you out of work for a few months or costly car or home repairs. If you have some money set aside for just such emergencies, you eliminate a lot of stress and anxiety about how to cover them.
#5. You invest your money.
Investing is key to keeping up with inflation. Money that is sitting in a low interest savings account cannot possibly grow enough to keep up with the increase in the cost of living. In order to achieve your long-term financial goals, you’ll need to invest your money.
That sounds great, right?
But what happens when you don’t have your money matters under control? What happens if you’re currently struggling to keep your head above water month to month?
How can you get out from under all that debt and start protecting yourself from inflation?
Most Canadians are spiraling deeper into debt to keep up with the high cost of living, and this only makes their problem worse.
You see, most of us haven’t been educated on money matters, so it’s pretty difficult to put an action plan in place without the help of a financial advisor.
If you’re experiencing financial distress you should reach out to a Licensed Insolvency Trustee (LIT) immediately.
Not only are LITs the only financial professionals authorized by the Canadian government to assist debtors with Bankruptcy and Consumer Proposals, but they can advise you of all your debt relief options based on your personal financial circumstances.
Why consult an LIT?
An LIT can help you get out of debt so you can have a fresh financial start.
Licensed Insolvency Trustees are:
- Licensed by the Canadian government and, as such, equipped with the necessary education and credentials to properly advise you.
- Required to adhere to strict ethical obligations, so you know they have your financial interests at heart.
- Accustomed to assisting individuals in nearly every financial situation imaginable.
Your initial visit to an LIT is free. It is during this first meeting that the LIT will do a comprehensive review of your financial situation and advise you of all debt relief options available to you.
Call a Licensed Insolvency Trustee in Ontario
Our seasoned experts can assist you with the full range of debt relief options available, from simple budgeting all the way to Bankruptcy.
The current financial climate we find ourselves in is truly the perfect storm to wreak havoc on our financial health. Your money problems haven’t gone away on their own. It’s time to address them head on.