5 Survival Strategies for Times of High Inflation

High inflation can be a cause of financial stress for many Canadians. Increasing your income to align with prices is one way to hedge against inflation, but that’s easier said than done.

Here are some other ways to manage soaring costs if making extra money isn’t possible right now.

1. Reassess your spending habits

If inflation is making it difficult to stay within budget, take a moment to reassess your cash flow and where it’s going.

Start by determining if there are things you can temporarily do without to ensure essential needs are covered, like housing, groceries, transportation and utilities.

For many, this reassessment may result in pressing pause on non-essential expenses like dining out, subscription services or gym memberships.

2. Take on new debt sparingly (and avoid variable rates)

When interest rates go up, variable-rate debts can suddenly cost more.

To hedge against this sudden increase, you might refinance your variable-rate mortgage into a fixed-rate loan or consolidate high-interest credit card debt into a personal loan with predictable payments.

And be wary of taking on a lot of new debt in general. Even when rates are low or fixed, new debt adds a new monthly payment to your budget, and reduces your financial flexibility.

3. Become a sale shopper

Speaking of essentials, now may be the time to get serious about becoming a bargain hunter.

This doesn’t mean that you need to turn into an extreme couponer; you might just want to pay more attention to sales, and allow them to guide where and when you shop.

Taking advantage of price matching policies is another smart way to save. It may mean being able to score an item you need at a steep discount, or getting reimbursed if a recently purchased item goes on sale later.

4. Maximize loyalty and reward programs

If you're part of a membership program offered by your go-to grocery store, take a few minutes to actually look at your program’s app or website before you go shopping to see what the deals are. Use them to inspire your shopping list and help you earn extra points to put towards future spending.

Don’t forget about credit card points or rewards you’ve accumulated. You may be able to redeem them for cash back, travel discounts and more.

Furthermore, some credit card companies run occasional promos for cashing in points on things like merchandise or gift cards that could come in handy and help you save.

5. Be strategic with savings

Rising prices aren’t the only negative effect of high inflation: it can also mean earning less interest on your savings. If you’re worried about the volatility of investments or don’t like the variable rates of high-interest savings accounts, consider a guaranteed investment certificate.