It’s no secret that life in Canada is getting more expensive. With the cost of rent and necessities rising due to stubborn inflation, many Canadians notice that their paycheques aren’t going as far as they used to. Many analysts are hopeful that inflation will cool down in response to the constant rate hikes from the Bank of Canada. However, until inflation stabilizes, finding ways to better manage finances during this challenging period is critical.
How can you manage your paycheque during periods of high inflation? Here are a few strategies to help you get the most out of your dollars.
Consider Cutting Out a Fixed Expense
The first thing to do is check for leaks in your monthly budget. Is there a fixed expense that you could cut out? Here are a few options to consider here:
- Do you have a gym membership that you don’t have time for?
- Are there any subscription services that you stopped using?
- Could you rely on public transportation instead of driving everywhere?
The goal should be to cut out one fixed expense and add flexibility to your budget. If you could remove $100 from your monthly spending, that would leave more money for groceries and other staples. You could also use these savings to build up your emergency fund, preparing you for unexpected expenses.
Look For Ways to Optimize Your Current Spending
While you may be unable to cut out all expenses, there are ways to optimize some bills. For example, if you’re with a major company like Rogers or Bell, you could bundle your services or ask for a discount. If you drive to work, you could carpool with coworkers and split the cost of gas.
Here are a few other options for optimizing your spending:
- Decrease your subscription level if you’re paying for any premium packages.
- Look for discounts when doing your grocery shopping.
- Ask for discounts or loyalty deals from your insurance company.
- Find a banking account that doesn’t charge fees.
Your goal should be to find ways to limit your spending without compromising the quality of your life.
Take Advantage of a High-Interest Savings Account
With inflation devaluing the Canadian dollar, you should strive to ensure your money isn’t losing too much value. You can do this by finding a decent interest rate for stored funds. You won’t want to leave your money in a checking account that doesn’t earn any interest.
With the Bank of Canada raising rates, you can find promotional offers with high-interest rates on savings accounts at many banking institutions. You can also take advantage of a Tax-Free Savings Account (TFSA) to invest and earn money without worrying about paying taxes on your capital gains or dividend income.
Try to Budget Accordingly
Unfortunately, the prices of groceries and necessities have risen, and they don’t appear to be coming down substantially any time soon. This means you must adjust your budget and change how you spend your paycheques. With some planning, you can find ways to stretch your income.
If you’re ever a little behind on finances in between paydays, access your earned wages early* with Payactiv so that you don’t have to worry about going into debt to get by.
The Final Word
Life’s getting more expensive, and you have to plan accordingly. It’s important to be prepared financially for whatever life may throw at you next.
